Motivational Theory PDF

MOTIVATIONAL, BEHAVIOURAL & ETHICAL ISSUES IN PERFORMANCE EVALUATION TOPIC 5 COURSE LEARNING OUTCOME Integrate the performance management system and reward incentives in business organisations. ( C6 )  GOAL CONGRUENCE The biggest challenge in...

MOTIVATIONAL, BEHAVIOURAL & ETHICAL ISSUES IN PERFORMANCE EVALUATION TOPIC 5 COURSE LEARNING OUTCOME Integrate the performance management system and reward incentives in business organisations. ( C6 )  GOAL CONGRUENCE The biggest challenge in making a decentralized organization function effectively is to obtain goal congruence among the organization’s autonomous managers. To achieve goal congruence, the behavior of managers throughout a decentralized organization must be directed towards achieving organizational goals. 3  GOAL CONGRUENCE One way of doing this is to develop performance targets and reward systems. Performance targets provide direction for managers of decentralized units & used by corporate management to evaluate the performance of a unit and its manager. Reward systems are often tied to a manager’s achievement of targets & provide further incentives for managers to strive towards organizational goals. 4  REWARDING SYSTEMS Reward system – Provide strong positive incentives for managers & employees to strive for higher performance. Employee remuneration may consist of a base salary, performance-related pay & non-financial rewards (such as a better computer or office, overseas travel, or even dinner at a restaurant for the family). It is difficult to reward managers & employees for past actions & decisions while at the same time encouraging them to improve their future performance. 5  MOTIVATION No one can do everything but we nearly be able to achieve more than what we think we can…. 6 What Is Motivation? Direction Intensity Persistence 7  I was saying "I'm the greatest” long before I believed it. Intensity 8  Direction The direction in which education starts a man will Plato (Greek Philosopher) determine his future in life. 9 It's not that I'm so smart, it's just that I stay with problems longer. Persistence 10  Direction Intensity Persistence Key Elements 1. Intensity: how hard a person tries 2. Direction: toward beneficial goal 3. Persistence: how long a person tries 11  MOTIVATION  Motivation – refers to the processes that account for an individual’s intensity, direction & persistence of effort towards attaining goals (Robbins et al. 2004)  Can be divided into: 1. Intrinsic Motivation 2. Extrinsic Motivation 1. Intrinsic motivation  A person’s internal desire to do something, due to such things as interest, challenge, and personal satisfaction.  Involves employees engaging in activities without any external inducement – interest & enjoyment that they associate with their work. 12  INTRINSIC & EXTRINSIC MOTIVATION 2. Extrinsic motivation  Motivation that comes from outside the person, such as pay, bonuses, and other tangible rewards.  Derives from sources outside of the individual, so can be induced by financial rewards, such as pay increase or non- financial rewards such as words of congratulations from senior manager.  Designing systems to encourage extrinsic motivation may only lead to short term performance improvements.  Extrinsic motivation needs to be accompanied by intrinsic motivation to achieve high performance over the long term. 13  THEORIES OF MOTIVATION 1. Hertzberg Theory 2. Vroom Theory 3. Mc Clelland Theory 4. Goal Setting Theory 14 1. Herzberg Theory 15  Herzberg’s Theory  Herzberg’s two-factor theory – suggested that there are two factors that affect employees behavior: a. Hygiene (extrinsic) – factors that provide the necessary setting for motivation but do not themselves motivate employees.  Examples: working conditions, wage levels, rules & regulations, relationships with colleagues & job security. b. Motivators (intrinsic) – factors that relate to job content or outcomes & provide motivation  Examples: achievement, recognition, nature of work, responsibility & opportunity for personal growth (intrinsically rewarding) 16  Hygiene & Motivator Factors Job satisfaction & job dissatisfaction are created by different factors. Hygiene factors: extrinsic (job environment) factors that create job dissatisfaction. Motivators: intrinsic (psychological factors/job content) factors that create job satisfaction. Attempt to explain why job satisfaction does not result in increased performance. What is important to you at work? 17 Contrasting Views of Satisfaction and Dissatisfaction Traditional view Satisfaction Dissatisfaction Herzberg's view Motivators Satisfaction No satisfaction Hygiene Factors No dissatisfaction Dissatisfaction 18 Herzberg’s Two-Factor Theory Dissatisfaction Not dissatisfied Positive and but satisfaction demotivation not motivated and motivation Hygiene Factors Motivational Factors Company policies Achievement Quality of supervision Career advancement Relations with others Personal growth Personal life Job interest Rate of pay Recognition Job security Responsibility Working conditions 19 2. Expectancy Theory 20  Expectancy Theory  States that employee motivation is a function of the strength of expectancy, instrumentality and valence.  Expectancy (effort performance) – individual’s perceptions that the effort he or she puts into a task will lead to certain performance  Instrumentality (performance rewards) – the perception that achieving performance will lead to the attainment of a desired outcome (a reward)  Valence (rewards personal goals) – the degree to which the reward satisfies the individual’s goals & attractiveness of the reward for that individual. 21  Expectancy Theory 22 Motivation will be high when workers believe: – High levels of effort will lead to high performance. – High performance will lead to the attainment of desired outcomes. 13-22  Expectancy Theory Major Factors of Motivation: Expectancy - the belief that effort (input) will result in a certain level of performance Instrumentality - the belief that performance results in the attainment of outcomes Valence - how desirable each of the available outcomes from the job is to a person 23 Expectancy, Instrumentality, and Valence 24  Expectancy Theory Individual 1 Individual 2 Organisational Effort Performance Rewards 3 1. Effort-Performance relationship = Expectancy Personal 2. Performance-Rewards relationship = Instrumentality Goals 3. Rewards-Personal goals relationship = Valence 25 Expectancy Theory 26 27 3. Mc Clelland Theory 28  Mc Clelland Theory  David McClelland built on this work in his 1961 book, "The Achieving Society."  He identified three motivators that he believed we all have: a need for achievement, a need for affiliation, and a need for power.  People will have different characteristics depending on their dominant motivator.  This theory states that human behaviour is affected by three needs - Need for Power, Achievement and Affiliation.  Need for achievement is the urge to excel, to accomplish in relation to a set of standards, to struggle to achieve success.  Need for power is the desire to influence other individual’s behaviour as per your wish. In other words, it is the desire to have control over others and to be influential.  Need for affiliation is a need for open and sociable interpersonal relationships. In other words, it is a desire for relationship based on co-operation and mutual understanding. 29  Mc Clelland Theory Dominant Motivator Characteristics of This Person Has a strong need to set and accomplish challenging goals. Takes calculated risks to accomplish their Achievement goals. Likes to receive regular feedback on their progress and achievements. Often likes to work alone. Wants to belong to the group. Wants to be liked, and will often go along with whatever the rest of the group wants to Affiliation do. Favors collaboration over competition. Doesn't like high risk or uncertainty. Wants to control and influence others. Likes to win arguments. Power Enjoys competition and winning. Enjoys status and recognition. 4. Goal Setting Theory 31  Goal Setting Theory In 1960’s, Edwin Locke put forward the Goal- setting theory of motivation. This theory states that goal setting is essentially linked to task performance. It states that specific and challenging goals along with appropriate feedback contribute to higher and better task performance. In simple words, goals indicate and give direction to an employee about what needs to be done and how much efforts are required to be put in.  Goal Setting Theory Specific and clear goals lead to greater output and better performance. Unambiguous, measurable and clear goals accompanied by a deadline for completion avoids misunderstanding. Goals should be realistic and challenging. This gives an individual a feeling of pride and triumph when he attains them, and sets him up for attainment of next goal. The more challenging the goal, the greater is the reward generally and the more is the passion for achieving it.  Goal Setting Theory Goal setting theory has certain eventualities such as: Self-efficiency- Self-efficiency is the individual’s self-confidence and faith that he has potential of performing the task. Higher the level of self-efficiency, greater will be the efforts put in by the individual when they face challenging tasks. While, lower the level of self-efficiency, less will be the efforts put in by the individual or he might even quit while meeting challenges. Goal commitment- Goal setting theory assumes that the individual is committed to the goal and will not leave the goal. The goal commitment is dependent on the following factors: – Goals are made open, known and broadcasted. – Goals should be set-self by individual rather than designated. – Individual’s set goals should be consistent with the organizational goals and vision. “Trying may not guarantee success but not trying guarantees failure.” 35 INCENTIVE COMPENSATION INCENTIVE COMPENSATION GAIN vs PROFIT SHARING √ JULY 2024 Q2 √ JAN 2024 Q2 √ July 2023 Q2 √ FEB 2023 Q2 √ JULY 2022 Q2