Study on, “Work Motivation and Rewards”
A project submitted to the
Amrita Vishwa Vidyapeetham
in partial fulfilment of the requirements
for the award of the degree of
MASTERS OF BUSINESS ADMINISTRATION
Submitted by
NITHILA .M. NAIR
Course Facilitator
Dr. VATSAL SINGH
DEPARTMENT OF MANAGEMENT
AMRITA SCHOOL OF BUSINESS
AMRITA VISHWA VIDYAPEETHAM
BANGALORE CAMPUS
AUGUST 2010
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TABLE OF CONTENTS
Appendix - A
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WORK MOTIVATION AND REWARDS
Motivation refers to the processes that account for an individual’s willingness to exert high levels of
effort to reach organizational goals and the ability to satisfy some individual needs. It is the
activation of goal-oriented behaviour.
Motivation is said to be intrinsic or extrinsic. Intrinsic motivation refers to the motivation that is
driven by an interest or enjoyment in the task itself, and exists within the individual rather than
relying on any external pressure.
Extrinsic motivation comes from outside of the individual. Common extrinsic motivations are
rewards like money and grades. Competition is in general extrinsic because it encourages the
performer to win and beat others. A crowd cheering on the individual and trophies are also extrinsic
incentives.
Motivation Theories
o Early Theories
Maslow’s Hierarchy of needs theory
Herzberg’s Theory
McGregor’s Theory (X & Y)
o Contemporary Theories
Equity Theory
Goal Setting Theory
Skinner’s Reinforcement Theory
McClelland’s Needs Theory
Expectancy Theory
Maslow’s Hierarchy of needs theory
Maslow's hierarchy of needs is a theory proposed by Abraham Maslow. Maslow's needs hierarchy
suggests that a person's motivational needs can be arranged in a hierarchical manner. He developed a
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model in which basic, low -level needs such as physiological requirements and safety must be satisfied
before higher-level needs such as self-fulfillment are pursued. Once a given level of need is satisfied, it
no longer serves as a motivating factor. A higher level need or one at the next level is triggered and
motivates the individual further. Maslow’s Hierarchy of needs is shown in the following diagram :
Physiological Needs
Physiological Needs are those required to sustain life, such as air, water, nourishment and
[Link] to Maslow’s theory, if such needs are not satisfied then one’s motivation will arise from
the quest to satisfy them. Higher needs such as social needs and esteem are not felt until one has met
the needs basic to one’s bodily functioning.
Safety
Once physiological needs are met, one’s attention turns to safety and security in order to be free from
the threat of physical and emotional harm. Such needs might be fulfilled by livince a perzg in a safe area,
medical insurance, job secutiy and financial [Link] to Maslow’s hierarchy, if a person feels
that he or she is in harm’s way, higher needs will not receive much attention.
Social Needs
Once a person has met the lower level physiological and safety needs, higher level needs become
important, the first of which are social needs. Social needs are those related to interaction with other
people and may include need of friends, need for belonging, need to give and receive love.
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Esteem
Once a person feels a sense of belonging, the need to feel important arises. Esteem needs may be
classified as internal or external. Internal esteem needs are those related to self-esteem such as self
respect and achievement. External esteem needs are those such as social status and recognition, Some
esteem needs are self respect, achievement, attention, recognition and reputation.
Self-Actualization
Self-Actualization is the summit of Maslow’s hierarchy of needs. It is the quest of reaching one’s full
potential as a person. Unlike lower level needs, this need is never fully satisfied, as one grows
psychologically there are always new opportunities to continue to grow. Such people tend to have needs
such as truth, justice, wisdom, meaning etc. They have frequent occurrences of energized moments of
profound happiness and harmony. According to Maslow, only a small percentage of the population
reaches the level of self-actualization.
Herzberg’s Theory
This theory is sometimes called the "Motivator-Hygiene Theory" or "The Dual Structure Theory."
Herzberg's two-factor theory identifies two aspects which are necessary for job satisfaction - hygiene
factors and motivators.
Motivators: which give positive satisfaction
Hygiene factors: that do not motivate if present, but, if absent, results in demotivation.
Hygiene factors include factors like working conditions, pay, fringe benefits, etc. Motivators include
factors like achievement, recognition, advancement and growth.
McGregor’s Theory (X & Y)
Theory X and Theory Y are theories developed by Douglas McGregor. Both of these theories begin with
the premise that management’s role is to assemble the factors of production, including people, for the
economic benefit of the firm. Beyond this point, the two theories of management diverge.
Theory X assumes that the average person:
• Dislikes work and attempts to avoid it.
• Has no ambition, wants no responsibility, and would rather follow than lead.
• Is self-centred and therefore does not care about organizational goals.
• Resists change.
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Essentially, Theory X assumes that people work only for money and security. Under theory X,
management approaches can range from a hard approach to a soft approach. Hard approach relies on
implicit threats and tight control, essentially an environment of command and control. The soft
approach is to seek harmony with the hope that in return employees will cooperate when asked to do
so. However, neither of these extremes is optimal. McGregor asserts that neither approach is
appropriate because the assumptions of Theory X are not correct.
Theory Y makes the following general assumptions:
• Work can be as natural as play and rest.
• People will be self-directed to meet their work objectives if they are committed to them.
• People will be committed to their objectives if rewards are in place that addresses higher needs such
as self-fulfillment.
• Under these conditions, people will seek responsibility.
• Most people can handle responsibility because creativity and ingenuity are common in the population.
Under these assumptions, there is an opportunity to align personal goals with organizational goals by
using the employee’s own quest for fulfillment as the motivator. McGregor stressed that
Theory Y management does not imply a soft approach. McGregor recognized that some people may not
have reached the level of maturity assumed by Theory Y and therefore may need tighter controls that
can be relaxed as the employee develops.
Equity Theory
The Equity Theory of employee motivation describes the relationship between how fairly an employee
perceives he is treated and how hard he is motivated to work. Thus it is based on perceived outcome-
input ratios. The equity theory states that employees compare their outcome-input ratio with that of
others. If they perceive the ratio of their outcomes and inputs to be equal to that of their peers and
others, a state of equity exists. Otherwise, a state of equity tension or inequity is created. According to
the Equity Theory, the most highly motivated employee is the one who perceives his rewards are equal
to his contributions. If he feels that he is working and being rewarded at about the same rate as his
peers, then he will judge that he is being treated fairly.
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Goal Setting Theory
Goal setting is a powerful process for thinking about your ideal future, and for motivating yourself to
turn this vision of the future into reality. Hard goals are more motivating than easy goals, because it's
much more of an accomplishment to achieve something that you have to work for.
To motivate, goals must have:
1. Clarity.
2. Challenge.
3. Commitment.
4. Feedback.
5. Task complexity.
Clarity
When a goal is clear and specific, with a definite time set for completion, there is less misunderstanding
about what behaviors will be rewarded. You know what's expected, and you can use the specific result
as a source of motivation. When you use the SMART acronym to help you set goals, you ensure the
clarity of the goal by making it Specific, Measurable and Time-bound.
Challenge
One of the most important characteristics of goals is the level of challenge. People are often motivated
by achievement, and they'll judge a goal based on the significance of the anticipated accomplishment.
Commitment
If the employees are to see the goals through, commitment to it is extremely important. Employees are
committed to the goal if they feel they have been active participants in its creation. Most companies
encourage participative management which believes in involving the employees in the process of goal
setting and decision making.
Feedback
The feedback process is crucial to goal setting. At regular intervals, you need to get together with your
team and check on their progress. These are important questions that need to be answered every now
and then. This activity will not only help you see where your team stands, but they will also be able to
evaluate their own position.
Task Complexity
Task Complexity is that last characteristic in the goal setting theory. If your goals are extremely complex,
you need to make sure that your employees aren't feeling too overwhelmed. If the task becomes too
overwhelming for them, there are chances that your employees may feel a little bewildered or
demoralized. Once that happens, the goal may seem frustrating and they may develop resistance
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towards attaining it. To avoid this, ensure that your team or employee is given a reasonable amount of
time to achieve the target. It would also be a good idea to arrange for trainings or learning sessions
where you can equip the employee with necessary skills.
Skinner’s Reinforcement Theory
Reinforcement theory is the process of shaping behavior by controlling the consequences of the
behavior. In reinforcement theory a combination of rewards or punishments is used to reinforce desired
behavior. Any behavior that elicits a consequence is called operant behavior. Reinforcement theory
concentrates on the relationship between the operant behavior and the associated consequences. The
most important principle of reinforcement theory is reinforcement. There are two types of
reinforcement: positive and negative.
Positive reinforcement results when the occurrence of a valued behavioral consequence has the effect
of strengthening the probability of the behavior being repeated. An example of positive reinforcement
might be a salesperson that exerts extra effort to meet a sales quota and is then rewarded with a bonus.
Negative reinforcement is often confused with punishment, but they are not the same. Punishment
attempts to decrease the probability of specific behaviors; negative reinforcement attempts to increase
desired behavior. Thus, both positive and negative reinforcement have the effect of increasing the
probability that a particular behavior will be learned and repeated.
McClelland’s Needs Theory
It is proposed that an individual’s specific needs are acquired over time and are shaped by one’s life
experiences. Most of these needs can be classed as either achievement, affiliation or power.
Achievement
People with a high need for achievement seek to excel and thus tend to avoid both low-risk and high-
risk situations. They need regular feedback in order to monitor the progress. They prefer to work either
alone or with other high individuals.
Affiliation
Those with a high need for affiliation need harmonious relationships with other people and need to feel
accepted by other people. They tend to conform to the norms of their work group.
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Power
A person’s need for power can be one of two types – personal and institutional. Those who need
personal power want to direct others, and this need often is perceived as undesirable. Persons who
need institutional power want to organize the efforts of others to further the goals of the organization.
Expectancy Theory
In order for a person to be motivated effort, performance and motivation must be linked. He proposes
three variables to account for this, which he calls Valence, Expectancy and Instrumentality.
Expectancy is the belief that increased effort will lead to increased performance. This is affected by such
things as:
Having the right resources available
Having the right skills to do the job
Having the necessary support to get the job done
Instrumentality is the belief that if you perform well that a valued outcome will be received .This is
affected by such things as:
Clear understanding of the relationship between performance and outcomes
Trust in the people who will take the decisions on who gets what outcome
Transparency of the process that decides who gets what outcome
Valence is the importance that the individual places upon the expected outcome.
The individual then changes their level of effort according to the value they place on the outcomes they
receive from the process and on their perception of the strength of the links between effort and
outcome.
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Special Motivational Techniques
Motivation comes from a wide variety of sources, but one of the greatest is simply love what you do.
Success in any endeavor demands that you love doing what you are doing. So if passion is the key, then
having fun is the way to activate that passion.
Promotion and incentives are extremely attractive to employees as they get the benefit quickly
and in concrete terms. Recognition of good work at an appropriate time gives encouragement to
employees to show better performance in future. As an appreciation of good work, prizes,
rewards, promotions, etc. should be given.
Employees should be given varied training facilities. Every employee has a desire to grow,
develop and rise higher.
Due to delegation of authority, a subordinate employee feels that superior has faith in him and
also in his ability to use authority in a proper manner. Employees get mental satisfaction when
authority is given to them. They take interest and initiative in the work and try to prove that
they are competent to work at the higher levels.
Employees should be given various facilities and conveniences at the work place. The work
environment should be pleasant and safe. This creates desire to work efficiently.
The helpful attitude of management towards its employees creates a sense of affinity for the
Organization. Fair treatment to workers creates better understanding among workers. Cordial
industrial relations also motivate employees.
Fair opportunity of promotion to all eligible workers is one more method useful for motivating
employees. They take interest in the work as they feel that they will be rewarded in the form of
promotions. Training facility should be provided to employees in order to make them eligible for
promotion.
Labor participation in management is useful for the motivation of employees. Workers get
higher status and better scope for expressing their views through such participation. Even the
formation of quality circles or joint management councils is useful for motivating employees.
When an employee is provided with a better designation, it adds to his status. Employees are
proud to reveal their attractive and high-sounding designations.
Survey of my batch mates as to what motivated them to choose MBA
The world is changing. It is getting bigger, better, tougher and faster and students need to change
accordingly to meet the challenges. Students have more interest in a subject that deals with goals
they see as important in their lives. Incentives or rewards can stimulate motivation. Incentives such
as good grades, awards, or selection as a distinguished graduate motivate students who want
to achieve. Achievement is a strong desire, a longing, an aim, a goal, or a desired
objective.
As I asked my various friends about why they chose MBA, I got to know that they were motivated by
different factors. For some it was the career prospects and monitory benefits that motivated them. It is
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especially beneficial to get jobs in high level positions such as managerial and executive level jobs. .For a
few it was to achieve their long term goal of starting their own business and being an entrepreneur. An
MBA course equips students with the essential knowledge required for starting their own businesses.
The course teaches the students about business management and how a company should be run .Some
were so passionate about certain fields like marketing and wanted to make a career in it. According to
them they would enjoy their job and would be more productive if they worked in the field they were
passionate about. One of them wanted to be a lecturer in finance and she felt good fundamentals in
finance would help her become an effective lecturer. A few felt that the under graduate programme was
more diversified and this MBA programme is more focused and will prepare them for a real time work.
And finally people with work experience were of the view that an MBA programme ensures more job
security. It also makes them understand well as to where they fit in an organization.
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