The document discusses various motivational theories including: 1. Maslow's hierarchy of needs which categorizes human needs into physiological, safety, social, esteem, and self-actualization needs that must be satisfied in order. 2. Herzberg's two-factor theory which distinguishes between hygiene factors like pay and working conditions that prevent dissatisfaction and motivational factors like achievement and recognition that encourage satisfaction. 3. McGregor's Theory X and Theory Y which propose two views of employee motivation - Theory X assumes employees dislike work and need close supervision while Theory Y assumes employees can exercise self-direction and commitment to objectives.

1. SUNDARA B N
(M.com, NET, KSET, PGDFM)
Assistant Professor
M.Com Course Coordinator
MOTIVATIONAL THEORIES

2. Motivation
The force within us that activates our behavior.
It is a function of three distinct components,
Intensity, Direction, and Persistence.
The force within us that activates our behavior.
It is a function of three distinct components,
Intensity, Direction, and Persistence.
Intensity PersistenceDirection
MotivationMotivation
2

3. Motivation - Intensity
Intensity refers to the amount of mental and
physical effort put forth by the person.
Intensity refers to the amount of mental and
physical effort put forth by the person.
PersistenceDirection
MotivationMotivation
Intensity
3

4. Motivation - Direction
The extent to which an individual determines
and chooses efforts focused on a particular
goal.
The extent to which an individual determines
and chooses efforts focused on a particular
goal.
Intensity PersistenceDirection
MotivationMotivation
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5. Motivation - Persistence
The extent to which the goal-directed effort is
put forth over time.
The extent to which the goal-directed effort is
put forth over time.
Intensity PersistenceDirection
MotivationMotivation
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6. The Person
– Human Needs
– Theory X and Y
– Liking of the task
The Environment
– Enriched Job Tasks
– Goal setting interventions
– Leader behavior
– Group Norms and Organizational Culture
Where Does It Come From?

7. 3
Motivation: Its Basic Components
Desire to
make a good
impression
ArousalArousal DirectionDirection MaintenanceMaintenance GoalGoal
Good
impression
made
Compliment work
Persist
Work extra hard Persist
Do special favors
Persist

8. Motivation
Energizes Behavior
Directs Behavior
Goals
Organization of Effort
Reaching Equilibrium
Drives
Compulsions
Deprivation/
Disequilibrium
Sustains Behavior
Maintaining motivation
Persistance
Ability to change course
Importance of Feedback
Equilibrium
NeedSatisfaction
Drive

9. Two Types of Motivation:
Intrinsic vs. Extrinsic
• Intrinsic
When doing
the job is
inherently
motivating
• Extrinsic
When rewards
such as pay
and formal
recognition act
as motivators
• Extrinsic
When rewards
such as pay
and formal
recognition act
as motivators
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10. Types of Rewards
Intrinsic Extrinsic
Motivation
Pay
Promotion
Sense of
Accomplishment
Sense of
Accomplishment
Personal Growth
Opportunities
Recognition
Job security
10

11. Two Basic Categories of Rewards
Compensation Rewards:
Those given in return for acceptable
performance or effort. They can not include
nonfinancial compensation.
Non-Compensation Rewards:
Those beneficial factors related to the work
situation and well-being of each person.
11

12. MOTIVATION THEORIES
INTRODUCTION
Motivation is one of the key factors driving us
towards achieving something. Without
motivation, we will do nothing.
Therefore, motivation is one of the key aspects
when it comes to corporate management. In
order to achieve the best business results, the
organization needs to keep employees motivated.

13. Classification of Motivational Theory
Early Theories of Motivation
Hierarchy of Needs theory
Theory X and Theory Y
Hygiene theory
Contemporary theories of motivation
ERG Theory
Three needs theory
Cognitive evaluation theory
Goal Setting Theory
Expectancy theory
Equity Theory
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14. Following are 20 main motivational
theories practiced in the modern world
The Theories:
(1) Acquired Needs Theory: According to
this theory, people are motivated by the
greed for power, achievement and
affiliation. By offering empowerment, titles
and other related tokens, people can be
motivated for doing their work.

15. [2] Activation Theory: Humans can be aroused
by their nature, In this motivation theory, the
arousal is used for keeping the people motivated.
Take an army as an example. The arousal for
eliminating the enemy is a good motivation factor.
[3] Affect Perseverance: Let’s take an example.
An employee is attracted to a company due to its
reputation. Once the employee starts working, he/she
develops loyalty towards the company. Later, due to
some issue, the company loses its reputation,
but employee’s loyalty remains.

16. [4] Attitude-Behaviour Consistency: In this
motivation theory, the alignment of attitude and
behavior is used for motivating people.
[5] Attribution Theory: The urge people have to
attribute is used as a motivational factor. Usually,
people like to attribute oneself as well as others in
different context. This need is used for motivation in
this theory. As an example, getting one’s name
published in a magazine is a good motivation for the
same person to engage further in writing.

17. [6] Cognitive Dissonance: This theory
emphasizes the fact that the non-alignment to
something could make people uncomfortable
and eventually motivate them to do the right
thing.

18. [7] Cognitive Evolution Theory: This could be
considered as the most widely use motivation theory
across many domains. When we select tasks to
complete, we chunk them down to be doable tasks.
The person is motivated to do the tasks as they as
simply doable.
[8] Consistency Theory: This theory uses our
internal values for keeping us motivated. As an
example, if we promise to do something, we will feel
bad about not doing it.

19. [9] Control Theory: Giving the control to someone is one of
the best ways to motivate them. People are thrilled to have
control over things.
[10] Disconfirmation Bias: People can be motivated by
keeping them in an environment which is in
allignment with what they believe.
[11] Drive Theory: People’s need to satisfy their needs is
used in this theory. As an example, imagine a case where
a person is hungry in an unknown house and find some food
under the staircase. When the same person feels hungry at
some other unknown issue house, the person may look under
the staircase.

20. [12] Endowed Progress Effect: This motivation theory
uses the progress as the motivation factor.
[13] Escape Theory: Keeping the person in the wrong
place may motivate that person to escape from that Place.
This is sometimes used in corporate environments for
employees to find where they really belong.
[14] Extrinsic Motivation: This is also one of the most
used theories in the corporate world. The
employee is motivated through rewards.
[15] Goal Setting Theory: Desire to achieve goals is
the driving force behind this motivation theory.

21. [16] Investment Model: The organization gets the employees
to invest on certain things. If you have invested on something,
you will be motivated to enhance and improve it.
[17] Positive Psychology: This way, employees are motivated
by making them happy when it comes to environment, rewards,
personal space etc.
[18] Reactance Theory: reducing the salary of a low
performer and later setting goals to get the salary back is one of
the examples for this type of motivation.

22. 5-22
Early Theories of Motivation
Maslow’s Hierarchy of Needs
Theory
McGregor’s Theory X and
Theory Y
Herzberg’s Two-Factor
(Motivation-Hygiene) Theory
McClelland’s Theory of Needs
(Three Needs Theory)

23. 19 Moslow’s Motivation Theory
Learn How to Motivate Your Team

24. Maslow’s Hierarchy
Each individual has needs, or feelings of
deficiency that drive their behavior
Once a need is satisficed, then it is no
longer motivating
Needs are in a hierarchy that an individual
moves up as they satisfy levels of needs

25. Levels of Needs
Physiological/Survival needs
– Food, Clothing, Shelter, Air
Security
– Feel safe, absence of pain, threat, or illness
Affiliation
– friendship, company, love, belonging
– first clear step up from physical needs

26. Need levels (cont.)
Esteem Needs
– self-respect, achievement, recognition, prestige
– cues a persons worth
Self-Actualization
– personal growth, self-fulfillment, realization of
full potential
– Where are YOU on the hierarchy???

27. Maslow’s hierarchy of needs (1)
Maslow stated that workers have unsatisfied
needs that must be met in order to motivate them.

28. Maslow’s hierarchy of needs (2)Maslow said that people start by meeting the
needs at the bottom of the pyramid. Once they
have sorted out those needs, they can move on
to the needs of the next level up.
Physiological needs- basic life
needs- air, food, drinks, shelter, warmth,
sex sleep, water etc
Safety needs-protection, security, order,
law, limits, stability
Social needs-belongingness and love
needs- family, affection, relationships,
workgroup, etc
Esteem needs- achievement, status,
responsibility, reputation
Self-actualisation needs- personal
growth and fulfilment

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30. Herzberg's main theory and its
significance
Herzberg was the first to show that satisfaction and dissatisfaction at
work nearly always arose from different factors, and were not
simply opposing reactions to the same factors, as had always
previously been (and still now by the unenlightened) believed.
In 1959 Herzberg wrote the following useful little phrase, which
helps explain this fundamental part of his theory, i.e., that the
factors which motivate people at work are different to and not
simply the opposite of the factors which cause dissatisfaction:
"We can expand ... by stating that the job satisfiers deal with the
factors involved in doing the job, whereas the job dissatisfiers deal
with the factors which define the job context.“

31. Herzberg’s Two Factor Theory
Some variable prevent job dissatisfaction and some
variables produce motivation
Hygiene factors-basic needs that will prevent
dissatisfaction
– light, temperature, pay, parking
Motivators
– when present cause high levels of motivation
– interesting work, advancement, growth, etc.

32. Herzberg’s Two-Factor Theory
These don’t motivate as such, but if they are not good, workers will be
unhappy:
Hygiene Factor - work condition related to dissatisfaction caused by discomfort or
pain
– maintenance factor
– contributes to employee’s feeling not dissatisfied
– contributes to absence of complaints
For example, a worker expects good working conditions. If they are in place they
do not motivate but if they are poor then dissatisfaction occurs.
These factors do motivate, but only if the hygiene factors are in place:
Motivation Factor - work condition related to the satisfaction of the need for
psychological growth
– job enrichment
– leads to superior performance & effort

33. Motivation–HygieneMotivation–Hygiene
tHeory of MotivationtHeory of Motivation
Hygiene factors avoid
job dissatisfaction
• Company policy and
administration
• Supervision
• Interpersonal relations
• Working conditions
• Salary
• Status
• Security
• Achievement
• Achievement recognition
• Work itself
• Responsibility
• Advancement
• Growth
• Salary?
Motivation factors
increase job satisfaction

34. 5-34
Herzberg’s Two-Factor Theory
• Quality ofQuality of
supervisionsupervision
• PayPay
• Company policiesCompany policies
• Physical workingPhysical working
conditionsconditions
• RelationshipsRelationships
• Job securityJob security
• Quality ofQuality of
supervisionsupervision
• PayPay
• Company policiesCompany policies
• Physical workingPhysical working
conditionsconditions
• RelationshipsRelationships
• Job securityJob security
Dissatisfied
Not Dissatisfied
• PromotionalPromotional
opportunitiesopportunities
• Opportunities forOpportunities for
personal growthpersonal growth
• RecognitionRecognition
• ResponsibilityResponsibility
• AchievementAchievement
• PromotionalPromotional
opportunitiesopportunities
• Opportunities forOpportunities for
personal growthpersonal growth
• RecognitionRecognition
• ResponsibilityResponsibility
• AchievementAchievement
MotivationFactorsMotivationFactors
Satisfied
Not Satisfied

35. Motivation-Hygiene Combinations
High M Low M
High H high motivation
few complaints
low motivation
few complaints
Low H high motivation
many complaints
low motivation
many complaints
(Motivation = M, Hygiene = H)

36. Douglas McGregor’s theory X and
theory Y (1)
Theory X and theory Y are theories of motivation
created by Douglas McGregor in the 1960’s. They
describe two different management viewpoints of the
workforce and how it impacts motivation.
Theory Y - a set of
assumptions of how to
manage individuals
motivated by higher
order needs
Theory X - a set of
assumptions of how to
manage individuals
motivated by lower order
needs

37. Douglas McGregor’s theory X and
theory Y (2)
tHeory ‘X’ Managers believe
eMployees:
Need to be controlled
Don’t like work
Need to be pushed to be more productive
Need incentive schemes
Have to be directed to do things they don’t
enjoy

38. Douglas McGregor’s theory X and
theory Y (3)
tHeory ‘y’ Managers believe
eMployees:
Want to be involved
Can think for themselves and make decisions
Share ownership of tasks
Will find work more rewarding if given
responsibility and a variety of tasks
Have good ideas
Can engage in some form of self-management

39. Douglas McGregor’s Assumptions
About People Based on Theory X
Assumptions of Theory X are based on manager’s perception of the nature of
employees or workers in the workplace the assumptions of Theory X are as follows
Naturally indolent
Lack of ambition, dislike responsibility, and prefer to be led
Inherently self-centered and indifferent to organizational needs
Gullible, not bright, ready dupes
Assumptions of Theory X
Employees does not like work and always try to escape from work whenever
possible
Theory X employees show high resist towards change and these people generally
dislike responsibilities.
A close supervision is necessary for them in order to make them productive
High degree of control and continuous supervision is necessary at energy step of
the work
People must be threatened and directed in an authoritarian style

40. Douglas McGregor’s Assumptions
About People Based on Theory Y
Assumptions of Theory Y
Theory Y employees perceive that their jobs are quite normal and relaxing
Skills and capabilities can make them more productive
They utilize their potentiality in reaching the individual and organizational
goals
Employees never completely satisfy in fulfilling self-esteem and self-
actualization needs
Experiences in organizations result in passive and resistant behaviors; they are
not inherent
Motivation, development potential, capacity for assuming responsibility,
readiness to direct behavior toward organizational goals are present in people
Management’s task—arrange conditions and operational methods so people can
achieve their own goals by directing efforts to organizational goals
Link individual behavior with organization behavior
Work like play

41. Douglas McGregor’s theory X and
theory Y (4)
☹Theory X workers tend to
be unhappy in the workplace.
☺Theory Y workers are more
productive and motivated.

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ERG theory
Developed by Clayton Alderfer.
– Consolidates Maslow needs theory into 3 categories
– Three need levels:
• Existence needs — desires for physiological and material well-being.
• Relatedness needs — desires for satisfying interpersonal relationships.
• Growth needs — desires for continued psychological growth and
development.
– Any/all needs can influence behavior at one time.
– Frustration-regression principle.
• An already satisfied lower-level need becomes reactivated when a higher-
level need is frustrated.

45. ERG Model of Motivation
Frustration-Regression Satisfaction-Progression
Growth Needs
Relatedness Needs
Existence Needs
14.4

46. Frustration-Regression
Differs from Maslow
When unable to satisfy upper level needs, the
individual will revert to satisfying lower level
needs
Interesting point from research....growth
stimulates growth

47. ERG Theory (Aldefer)
Relatedness Needs
Growth NeedsExistence Needs
Satisfaction/Progression
Frustration/Regression
Satisfaction/Strengthening

48. 4
Need Theories: A Comparison
1. Physiological needs
2. Safety needs
3. Social needs
Deficiency Needs
4. Esteem needs
5. Self-actualization needs
Growth needs
• Growth needs
• Relatedness needs
• Existence needs
Maslow’s need hierarchy theoryMaslow’s need hierarchy theory Alderfer’s ERG theoryAlderfer’s ERG theory

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McClelland’s Need Theory:
Acquired needs theory
– Developed by David McClelland in 1940s
– People acquire needs through their life
experiences.
– Needs that are acquired:
• Need for Achievement (nAch)
• Need for Power (nPower)
• Need for Affiliation (nAff)

50. Need for Achievement –(nAch)
The drive to excel. A manifest (easily
perceived) need that concerns individuals’
issues of excellence, competition,
challenging goals, persistence, and
overcoming difficulties.
Desire to do something better or more
efficiently, to solve problems, or to master
complex tasks.
People high in (nAch) prefer work that:
 Involves individual responsibility for
results.
 Involves achievable but challenging goals.
 Provides feedback on performance.

51. Need for Power (nPow)
The need to make others behave in a
way they would not have behaved otherwise.
a manifest (easily perceived) need that concerns
an individual’s need to make an impact on
others, influence others, change people or events,
and make a difference in life.
Desire to control other persons, to influence their
behavior, or to be responsible for other
people.Personal power versus social power.
People high in (nPower) prefer work that:
• Involves control over other persons.
• Has an impact on people and events.
• Brings public recognition and
attention.

52. Need for Affiliation (nAff)
The desire for friendly and close
interpersonal relationships
a manifest (easily perceived) need that
concerns an individual’s need to establish
and maintain warm, close, intimate
relationships with other people.
Desire to establish and maintain friendly
and warm relations with other persons.
People high in (nAff) prefer work that:
Involves interpersonal
relationships.
Provides for companionship
Brings social approval.

53. 5-53
McClelland's High Achievers
High achievers prefer jobs with:
– Personal responsibility
– Feedback
– Intermediate degree of risk (50/50)
High achievers are not necessarily
good managers
High nPow and low nAff is
related to managerial success

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55. Alderfer’s
ERG Theory
Maslow’s
Need Hierarchy
Content Theories of Motivation
Self-
Actualization
EsteemEsteem
BelongingnessBelongingness
SafetySafety
PhysiologicalPhysiological
Growth
ExistenceExistence
Herzberg’s
Theory
Motivators
HygienesHygienes
Need for
Achievement
Need forNeed for
PowerPower
Need forNeed for
AffiliationAffiliation
McClelland’s
Learned Needs
RelatednessRelatedness

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57. Cognitive Evaluation Theory
Cognitive Evaluation theory origionally put
forth by Deci (1975) and later redeveloped
with Ryan (Deci and Ryan, 1985)
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60. Cognitive Evaluation Theory
The introduction of extrinsic rewards for
work effort that was previously rewarded
intrinsically will tend to decrease the
overall level of a person’s motivation.
Intrinsic Motivators
– A person’s internal desire to do something, due to such things as
interest, challenge, and personal satisfaction.
Extrinsic Motivators
– Motivation that comes from outside the person, such as pay,
bonuses, and other tangible rewards.

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66. Langton, Robbins and
Judge, Organizational
Behaviour, Fifth Cdn.
Four Key Rewards to Increase
Intrinsic Motivation
1.Sense of choice
2.Sense of competence
3.Sense of meaningfulness
4.Sense of progress
Managers can act in ways that will build these
intrinsic rewards for their employees.

67. 5-67
Self-Efficacy or Social Learning
Theory
Individual’s belief that he or she is
capable of performing a task
Self-efficacy increased by:
– Enactive mastery – gain experience
– Vicarious modeling – see someone else
do the task
– Verbal persuasion – someone convinces
you that you have the skills
– Arousal – get energized

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Goal-setting theory
– Developed by Edwin Locke.
– Properly set and well-managed task goals can be highly
motivating.
– Motivational effects of task goals:
• Provide direction to people in their work.
• Clarify performance expectations.
• Establish a frame of reference for feedback.
• Provide a foundation for behavioral self-management.

69. 5-69
Goal-Setting Theory
Goals increase performance when the goals
are:
– Specific
– Difficult, but accepted by employees
– Accompanied by feedback (especially self-
generated feedback)
Contingencies in goal-setting theory:
– Goal Commitment – public goals better!
– Task Characteristics – simple & familiar better!
– National Culture – Western culture suits best!

70. Management - Chapter 14 70
Key issues and principles in the goal-
setting process:
– Set specific goals.
– Set challenging goals.
– Build goal acceptance and commitment.
– Clarify goal priorities.
– Provide feedback on goal accomplishment.
– Reward goal accomplishment.

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Goal-setting theory
– Participation in goal setting …
• Unlocks the motivational potential of goal setting.
• Management by objectives (MBO) promotes
participation.
• When participation is not possible, workers will
respond positively if supervisory trust and support
exist.

72. 5-72
Management by Objectives (MBO)
Converts overall organizational
objectives into specific objectives for
work units and individuals
Common ingredients:
– Goal specificity
– Explicit time period
– Performance feedback
– Participation in decision making

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Expectancy theory
– Developed by Victor Vroom.
– Key expectancy theory variables:
• Expectancy — belief that working hard will result
in desired level of performance.
• Instrumentality — belief that successful
performance will be followed by rewards.
• Valence — value a person assigns to rewards and
other work related outcomes.

74. 5-74
Three key relationships in Expectancy Theory
1. Effort-Performance: perceived probability that exerting
effort leads to successful performance
2. Performance-Reward: the belief that successful
performance leads to desired outcome
3. Rewards-Personal Goals: the attractiveness of
organizational outcome (reward) to the individual

75. 75
Elements in the expectancy theory of
motivation.

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Expectancy theory
– Motivation (M), expectancy (E),
instrumentality (I), and valence (V) are related
to one another in a multiplicative fashion:
M = E x I x V
– If either E, I, or V is low, motivation will
be low.

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Managerial implications of expectancy
theory.

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Equity theory
– Developed by J. Stacy Adams.
– When people believe that they have been
treated unfairly in comparison to others, they
try to eliminate the discomfort and restore a
perceived sense of equity to the situation.
• Perceived inequity.
• Perceived equity.

79. 5-79
Equity Theory
Employees weigh what they put into a job
situation (input) against what they get from it
(outcome).
They compare their input-outcome ratio with
the input-outcome ratio of relevant others.
Your OutputYour Output
Your InputYour Input
My OutputMy Output
My InputMy Input

80. If Inputs = Outputs Satisfaction
Effort,
Motivation,
Performance,
Skills,
Expertise
Rewards
Bonus
Promotions
Pay Raise
Recognition
O
I
= 1

81. Compare I/O ratios to others
Self
Outcome
Input
Other
Outcome
Input
= Satisfaction

82. Examples of Equity
Other
4
4
Self
4
4
1. 2.
Self
4
4
Other
8
8
3. Self
4
2
Other
4
2

83. Examples of Inequity
1. Underpayment = Self O/I < Other O/I
Example
Self Other
4 8
4 4
2. Overpayment = Self O/I < Other O/I
Example
Self Other
4 2
4 4

84. 14
POSSIBLE REACTIONS TO INEQUITY:
A SUMMARY
Type of InequityType of Inequity
BehavioralBehavioral
(what you can do is...)(what you can do is...)
PsychologicalPsychological
(what you can think is...)(what you can think is...)
Overpayment Raise your inputs (e.g., work Convince yourself that your
inequity harder), or lower your outcomes outcomes are deserved
(e.g. work through a paid based on your inputs (e.g.,
vacation) rationalize that you work
harder than others and so
you deserve more pay)
Underpayment Lower your inputs (e.g., reduce Convince yourself that oth-
inequity effort), or raise your outcomes ers’ inputs are really higher
e.g., get a raise in pay) than your own (e.g., ration-
alize that the comparison
worker is really more quali-
fied and so deserves
higher outcomes)
TYPE OF REACTIONTYPE OF REACTION

85. 5-85
Equity Theory and Reactions to
Inequitable Pay
Employees are:
Paid by:
Piece Time
Over-Rewarded
Will produce
fewer, but higher-
quality units
Will produce more
Under-Rewarded
Produce large
number of low
quality units
Produce less output
or output of poorer
quality
Employee reactions in comparison to equitably-paid
employees

86. 15
Employee Theft: A Reaction to Underpayment
Employees of the factories in which there was a pay cutEmployees of the factories in which there was a pay cut
Employees of the factories in which there was no pay cutEmployees of the factories in which there was no pay cut
TheftRateTheftRate
percentageofunaccountedforlossofproperty
0
1
2
3
4
5
6
7
8
9
BeforeBefore
Pay CutPay Cut
DuringDuring
Pay CutPay Cut
AfterAfter
Pay CutPay Cut
Theft rates were
identical before
pay was cut in
one of them.
Employee theft was
greatest in factories
whose employees
experienced a cut
in their pay.
Theft rates were
identical after pay
was restored to
normal levels.

87. Motivational Theory of Social Exchange
Equity Outcomes = Outcomes
Inputs Inputs
Negative Outcomes < Outcomes
Inequity Inputs Inputs
Positive Outcomes > Outcomes
Inequity Inputs Inputs
Person Comparison
other

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Equity theory and the role of social
comparison.

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Equity theory
– People respond to perceived negative inequity
by changing …
• Work inputs.
• Rewards received.
• Comparison points.
• Situation.

90. Strategies for
Resolution of Inequity
Alter the person’s outcomes
Alter the person’s inputs
Alter the comparison other’s outputs
Alter the comparison other’s inputs
Change who is used as a comparison other
Rationalize the inequity
Leave the organizational situation

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Managerial implications of equity theory—
– Underpaid people experience anger.
– Overpaid people experience guilt.
– Perceptions of rewards determine motivational
outcomes.
– Negative consequences of equity comparisons should
be minimized, if not eliminated.
– Do not underestimate the impact of pay as a source of
equity controversies in the workplace.
• Gender equity.
• Comparable worth.

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What are the challenges of motivation in the
new workplace?
 Pay for performance
– Paying people for performance is consistent with:
• Equity theory.
• Expectancy theory.
• Reinforcement theory.
– Merit pay
• Awards a pay increase in proportion to individual performance
contributions.
• Provides performance contingent reinforcement.
• May not succeed due to weakness in performance appraisal
system or lack of consistency in application.

93. Management - Chapter 14 93
What are the challenges of motivation in the
new workplace?
Incentive compensation systems:
– Skill-based pay.
• Links pay to the number of job-relevant skills an
employee masters.
– Bonus pay plans.
• One-time or lump-sum payments based on the
accomplishment of specific performance targets or
some extraordinary contribution.

94. Management - Chapter 14 94
What are the challenges of motivation in the
new workplace?
Incentive compensation systems:
– Profit-sharing plans.
• Some or all employees receive a proportion of net
profits earned by the organization.
– Gain-sharing plans.
• Groups of employees share in any savings realized through
their efforts to reduce costs and increase productivity.
– Employee stock ownership plans.
• Employees own stock in the company that employs them.

95. CONCLUSION
Motivation Theories suggest many ways ofMotivation Theories suggest many ways of
keeping the employees motivated on what theykeeping the employees motivated on what they
do. Although, a manager is not required to learndo. Although, a manager is not required to learn
all these motivation theories, having an idea ofall these motivation theories, having an idea of
certain theories may be an advantage for day-tocertain theories may be an advantage for day-to
day activities.day activities.
These theories give the managers a set ofThese theories give the managers a set of
techniques that they can try out in thetechniques that they can try out in the
corporate environments. Some of thesecorporate environments. Some of these
theories have been used in business fortheories have been used in business for
decades, although we do not know themdecades, although we do not know them
Explicitly.Explicitly.
Please use them to motivate your staff for greater productivity throughPlease use them to motivate your staff for greater productivity through
enhanced performanceenhanced performance

96. Thanks for Listening Thanks for Listening
2012 CMD Performance Report
96