Foundations of

Employee
Motivation

McShane-Olekalns-Travaglione OB Pacific Rim 3e 1 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Employee Motivation and
Engagement at Standard Chartered

Through goal setting, strengths-based feedback, community

involvement, and fun activities in the workplace, Standard
Chartered Bank has significantly improved employee
engagement and motivation throughout its operations, most
of which are in Asia and India.

McShane-Olekalns-Travaglione OB Pacific Rim 3e 2 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Motivation Defined

 The forces within a person that

affect the direction, intensity,
and persistence of voluntary
behaviour

 Exerting particular effort level

(intensity), for a certain amount
of time (persistence), toward a
particular goal (direction)

McShane-Olekalns-Travaglione OB Pacific Rim 3e 3 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Employee Engagement

Emotional and cognitive

motivation, self-efficacy to
perform the job, a clear
understanding of one’s role in
the organisation’s vision and a
belief that one has the resources
to perform the job.

McShane-Olekalns-Travaglione OB Pacific Rim 3e 4 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Drives and Needs
 Drives (primary needs, fundamental needs, innate
motives)
• Neural states that energise individuals to correct deficiencies
or maintain an internal equilibrium
• Prime movers of behaviour by activating emotions

Self-concept, social norms,

and past experience

Drives Decisions and

(primary needs) Needs
behaviour
and emotions

McShane-Olekalns-Travaglione OB Pacific Rim 3e 5 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Drives and Needs
 Needs
• Goal-directed forces that people experience
• Drive-generated emotions directed toward goals
• Goals formed by self-concept, social norms, and experience

Self-concept, social norms,

and past experience

Drives Decisions and

(primary needs) Needs
behaviour
and emotions

McShane-Olekalns-Travaglione OB Pacific Rim 3e 6 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Maslow’s Needs Hierarchy Theory

Seven categories Need to

capture most needs know
Self-
actualisati
Five categories placed on Need for
in a hierarchy beauty
Esteem

Belongingness

Safety

Physiological

McShane-Olekalns-Travaglione OB Pacific Rim 3e 7 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Maslow’s Needs Hierarchy Theory

Need to
know  Lowest unmet need has
Self-
actual-
strongest effect
isation Need for
beauty  When lower need is
Esteem satisfied, next higher need
becomes the primary
Belongingness motivator
 Self-actualisation – a growth
Safety
need because people desire
more rather than less of it
Physiological when satisfied

McShane-Olekalns-Travaglione OB Pacific Rim 3e 8 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Evaluating Maslow’s Theory

Need to
know  Lack of support for theory
Self-
actual-
isation Need for
 People have different
beauty hierarchies – don’t progress
Esteem through needs in the same
order
Belongingness
 Needs change more rapidly
than Maslow stated
Safety

Physiological

McShane-Olekalns-Travaglione OB Pacific Rim 3e 9 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 What Maslow Contributed to
Motivation Theory
 More holistic
• Integrative view of needs

 More humanistic
• Influence of social
dynamics, not just instinct

 More affirmational
• Pay attention to strengths,
not just deficiencies

Abraham Maslow

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 What’s Wrong with Needs Hierarchy
Models?
 Wrongly assume that
everyone has the same
(universal) needs hierarchy
 Instead, it is likely that each
person has a unique needs
hierarchy
• Shaped by our self-concept –
values and social identity

Abraham Maslow

McShane-Olekalns-Travaglione OB Pacific Rim 3e 11 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Learned Needs Theory

 Needs are amplified or suppressed through

self-concept, social norms, and past
experience

 Therefore, needs can be ‘learned’ (ie.

strengthened or weakened through training)

McShane-Olekalns-Travaglione OB Pacific Rim 3e 12 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Three Learned Needs
Need for achievement
• Need to reach goals, take responsibility
• Want reasonably challenging goals

Need for affiliation

• Desire to seek approval, conform to others’ wishes,
avoid conflict
• Effective executives have lower need for social approval

Need for power

• Desire to control one’s environment
• Personalised versus socialised power

McShane-Olekalns-Travaglione OB Pacific Rim 3e 13 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Four-Drive Theory

• Drive to take/keep objects and

Drive to acquire experiences
• Basis of hierarchy and status

• Drive to form relationships and

Drive to bond social commitments
• Basis of social identity

• Drive to satisfy curiosity and

Drive to learn
resolve conflicting information

• Need to protect ourselves

Drive to defend • Reactive (not proactive) drive
• Basis of fight or flight

McShane-Olekalns-Travaglione OB Pacific Rim 3e 14 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Features of Four Drives

Innate and hardwired

• Everyone has them

Independent of each other

• No hierarchy of drives

Complete set
• No drives are excluded from the model

McShane-Olekalns-Travaglione OB Pacific Rim 3e 15 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 How Four Drives Affect Motivation

1. Four drives determine which emotions are

automatically tagged to incoming information
2. Drives generate independent and often
competing emotions that demand our
attention
3. Mental skill set relies on social norms,
personal values, and experience to transform
drive-based emotions into goal-directed
choice and effort

McShane-Olekalns-Travaglione OB Pacific Rim 3e 16 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Four Drive Theory of Motivation

Drive to Social Personal Past

acquire norms values experience

Drive to
bond
Mental skill set resolves Goal-directed
competing drive demands choice and effort
Drive to
learn

Drive to
defend

Social norms, personal values, and

experience transform drive-based emotions
into goal-directed choice and effort.

McShane-Olekalns-Travaglione OB Pacific Rim 3e 17 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Implications of Four Drive Theory

Provide a balanced opportunity for employees to

fulfil all four drives
• Employees continually seek fulfilment of drives
• Avoid having conditions support one drive more than
others

McShane-Olekalns-Travaglione OB Pacific Rim 3e 18 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Expectancy Theory of Motivation

E-to-P P-to-O Outcomes

expectancy expectancy & valences

Outcome 1
+ or -

Outcome 2
Effort Performance + or -

Outcome 3
+ or -

McShane-Olekalns-Travaglione OB Pacific Rim 3e 19 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Increasing E-to-P and P-to-O
Expectancies
 Increasing E-to-P Expectancies
• Assuring employees they have competencies
• Person-job matching
• Provide role clarification and sufficient resources
• Behavioural modelling
 Increasing P-to-O Expectancies
• Measure performance accurately
• More rewards for good performance
• Explain how rewards are linked to performance

McShane-Olekalns-Travaglione OB Pacific Rim 3e 20 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Increasing Outcome Valences

 Ensure that rewards are valued

 Individualise rewards
 Minimise countervalent outcomes

McShane-Olekalns-Travaglione OB Pacific Rim 3e 21 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Goal Setting

The process of motivating

employees and clarifying their
role perceptions by
establishing performance
objectives.

McShane-Olekalns-Travaglione OB Pacific Rim 3e 22 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Effective Goal Setting
Characteristics
1. Specific – measureable change within a time
frame
2. Relevant – within employee’s control and
responsibilities
3. Challenging – raise level of effort
4. Accepted (commitment) – motivated to
accomplish the goal
5. Participative (sometimes) – improves acceptance
and goal quality
6. Feedback – information available about progress
toward goal

McShane-Olekalns-Travaglione OB Pacific Rim 3e 23 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Characteristics of Effective
Feedback
1. Specific – connected to goal details
2. Relevant – relates to person’s behaviour
3. Timely – to improve link from behaviour to
outcomes
4. Sufficiently frequent
• Employee’s knowledge/experience
• Task cycle
5. Credible – trustworthy source

McShane-Olekalns-Travaglione OB Pacific Rim 3e 24 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Trouble Keeping Score in NZ
Hospitals
The New Zealand government
introduced a balanced
scorecard system to measure
and improve performance of
public hospitals, but many
public health staff experienced
philosophical and practical
problems with this goal setting
and feedback process.

McShane-Olekalns-Travaglione OB Pacific Rim 3e 25 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Balanced Scorecard

 Organisational-level goal
setting and feedback
 Attempts to include
measurable performance
goals related to financial,
customer, internal, and
learning/growth (i.e. human
capital) processes
 Usually includes several
goals within each process

McShane-Olekalns-Travaglione OB Pacific Rim 3e 26 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Feedback Through Strengths-Based
Coaching
 Maximising the person’s potential by focusing
on their strengths rather than weaknesses
 Motivational because:
• People inherently seek feedback about their
strengths, not their flaws
• Person’s interests, preferences, and competencies
stabilise over time

McShane-Olekalns-Travaglione OB Pacific Rim 3e 27 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Multisource Feedback

 Received from a full circle of people around

the employee
 Provides more complete and accurate
information
 Several challenges
• Expensive and time-consuming
• Ambiguous and conflicting feedback
• Inflated rather than accurate feedback
• Stronger emotional reaction to multiple feedback

McShane-Olekalns-Travaglione OB Pacific Rim 3e 28 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Evaluating Goal Setting and
Feedback
 Goal setting has high validity and usefulness
 Goal setting/feedback limitations:
• Focuses employees on measurable performance
• Motivates employees to set easy goals (when tied to
pay)
• Goal setting interferes with learning process in new,
complex jobs

McShane-Olekalns-Travaglione OB Pacific Rim 3e 29 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
Keeping Pay Equitable at Costco

Costco Wholesale CEO Jim Sinegal

(see photo) thinks the large wage
gap between many executives and
employees is blatantly unfair.
“Having an individual who is making
100 or 200 or 300 times more than
the average person working on the
floor is wrong,” says Sinegal, whose
salary and bonus are a much
smaller multiple of what his staff
earn.
 Organisational Justice

Distributive justice
• Perceived fairness in
outcomes we receive relative
to our contributions and the
outcomes and contributions of
others
Procedural justice
• Perceived fairness of the
procedures used to decide the
distribution of resources

McShane-Olekalns-Travaglione OB Pacific Rim 3e 31 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Elements of Equity Theory

Outcome/input ratio
• inputs – what employee contributes (eg. skill)
• outcomes – what employee receives (eg. pay)
Comparison other
• person/people against whom we compare our ratio
• not easily identifiable
Equity evaluation
• compare outcome/input ratio with the comparison
other

McShane-Olekalns-Travaglione OB Pacific Rim 3e 32 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Correcting Inequity Feelings

Actions to correct inequity Example

Reduce our inputs Less organisational citizenship

Increase our outcomes Ask for pay increase

Increase others’ inputs Ask coworker to work harder

Ask boss to stop giving others preferred

Reduce others’ outputs
treatment
Start thinking that others’ perks aren’t really
Change our perceptions
so valuable
Compare self to someone closer to your
Change comparison other
situation

Leave the field Quit job

McShane-Olekalns-Travaglione OB Pacific Rim 3e 33 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Equity Sensitivity

 Outcome/input preferences and reaction to

various outcome/input ratios
 Benevolents
• tolerant of being underrewarded
 Equity Sensitives
• want ratio to be equal to the comparison other
 Entitleds
• prefer proportionately more than others

McShane-Olekalns-Travaglione OB Pacific Rim 3e 34 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Evaluating Equity Theory

 Good at predicting situations involving unfair

distribution of pay/rewards
 Difficult to put into practice
• Doesn’t identify comparison other
• Doesn’t indicate relevant inputs or outcomes

 Equity theory explains only some feelings of

fairness
• Procedural justice is as important as distributive
justice

McShane-Olekalns-Travaglione OB Pacific Rim 3e 35 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Procedural Justice

 Perceived fairness of procedures used to

decide the distribution of resources
 Higher procedural fairness with:
• Voice
• Unbiased decision maker
• Decision based on all information
• Existing policies applied consistently
• Decision maker listens to all sides
• Those who complain are treated respectfully
• Those who complain are given full explanation

McShane-Olekalns-Travaglione OB Pacific Rim 3e 36 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
 Foundations of
Employee
Motivation

McShane-Olekalns-Travaglione OB Pacific Rim 3e 37 © 2010 The McGraw-Hill Companies, Inc. All rights reserved