Master of Business Management (MBA)

Motivation, Satisfaction &

Performance

Dr. Sampath Kappagoda

Department of Human Resource Management
Faculty of Management Studies
Rajarata University of Sri Lanka
LEARNING OBJECTIVES
AFTER READING THIS CHAPTER, YOU SHOULD BE ABLE
TO

1. Characterize the nature of motivation including its importance.

2. Identify and describe the major content/need theories on

motivation.

3. Identify and describe the major process theories on motivation.

4. Identify and describe popular motivational strategies.

5. Understand what is job satisfaction, its dimensions and
measurements
6. Describe what is job performance and its dimension
What is Motivation?
Motivation
-The set of forces that cause people to
behave in certain ways.
-The forces that help to enhance the
enthusiasm/interest to do work
-The desire/ want/wish to do work.
 Importance of Motivation
Individuals performance is generally
determined by three things.
-Motivation(The desire to do the
work)
-Ability(The capacity to do the job)
-Work environment (The tools,
materials and information needed to do
the job)
 Importance of Motivation..

-Employee lacks ability- The manager can

provide training or replace/exchange the
worker
-Environmental problem – The manger can
make adjustment to promote higher
performance.
-If the motivation is the problem – The
task for the manager is more challenging.
 Motivation Job Satisfaction

Job turnover Absenteeism Organizational

Commitment

Task performance Job

Contextual performance Performance

Customer
Satisfaction

Organizational
Performance
Motivators/Types of Motivation
Intrinsic/basic/essential/inherent
A person’s internal desire to do
something, due to such things as
interest, challenge, and personal
satisfaction.
Dr. Rathnayake is a retired doctor from the government service.
He is known in the country as a leader of saving the “Baire Lake”
in Colombo. Despite his old age, he is very active in his campaign.
He said that lake in the Colombo is the beauty of the city. This has
to be protected for future generation. Therefore, I feel grate
satisfaction from this involvement. My campaign is to see a clean,
beautiful lake in Colombo city.
Extrinsic/ outside
Motivation that comes from outside the
person, such as pay, bonuses, and other
tangible rewards.
Needs Theories of Motivation/
Content Models

Basic idea:
-Approaches to motivation
that try to answer the
question, what factor or
factors motivate people?

-Focus on needs and need

deficiencies.
Needs theories of motivation........

1. Maslow’s hierarchy of needs

2. Herzberg’s two factor theory
(motivation-hygiene theory)
3. Alderfer’s ERG theory
4. McClelland’s theory of needs
 Maslow’s Need Hierarchy Theory
•Maslow’s hierarchy suggest that human
needs can be classified into five categories
and that categories can be arranged in a
hierarchy of importance.
•A manger should understand that an
employee may not be satisfied with only a
salary and benefits. He\She may also need
challenging job opportunities to experience
self growth and satisfaction.
Maslow’s Need Hierarchy Theory

Self
-
actualization

Esteem

Social

Safety

Physiological/physical/ bodily
Maslow’s Need Hierarchy Theory.....
Physiological
Includes hunger, thirst, shelter, sex and other
bodily needs

Safety
Includes security and protection from physical
and emotional harm

Social
Includes affection/love/ attachment/ interest,
belongingness/fit, acceptance, and friendship
Maslow’s Need Hierarchy Theory

Self-Esteem
Includes internal esteem factors such as
self-respect, autonomy/independence,
and achievement; and external esteem
factors such as status, recognition, and
attention

Self-actualization
The drive to become what one is capable
of becoming; includes growth, achieving
one’s potential, and self-fulfillment
 Alderfer’s ERG Theory

A theory of motivation that suggest that

people’s needs are grouped into three
possibly overlapping/meeting categories.
-Existence
-Relatedness/affiliation
-Growth
Alderfer’s ERG Theory
Clayton Alfred reworked
Maslow’s Need Hierarchy .
Existence
It is concerned with providing basic
material existence requirements (lower-
order needs)
Relatedness
The desire for maintaining important
interpersonal relationship
Growth
An intrinsic/basic desire for personal
development
Alderfer’s ERG Theory...........
How is it different from
Maslow’s Need Needs Hierarchy
Theory
ERG
Theory
Hierarchy theory?
Self-
Actualization
1. Multiple needs may Growth
operate at the same Esteem

time
Belongingness Relatedness
2. No rigid hierarchy:
Personal backgrounds Safety
Existence
and cultural environment Physiological
determine the relative
importance of three
needs
 Two factor theory
-Frederick Hezberg developed
-The two factor theory suggest that job
satisfaction has two different dimensions.
A manager who tries to motivate an
employee using only hygiene factor such as
pay and good working conditions will likely
not succeed.
 Two factor theory

To motivate employees and produce a high

level of satisfaction, Managers must always
offer factors such as responsibility and the
opportunity for advancement (Motivation
factor)
Two factor theory..........
Hygiene factors/Extrinsic Factors
(outside)

-The factors presumed to cause

dissatisfaction.

Motivational factors/Intrinsic (basic)

factors

-Factors that lead to job

satisfaction.
Two factor theory..........

Hygiene Factors Motivational Factors

• Quality of supervision
• Career Advancement
• Rate of pay
• Company policies • Personal growth
• Working conditions • Recognition
• Relations with others
• Responsibility
• Job security
•Status • Achievement

High Job Dissatisfaction 0 Job Satisfaction High

Contrasting Views of Satisfaction and
Dissatisfaction
Traditional view

Satisfaction Dissatisfaction

Herzberg's view
Motivators
Satisfaction No satisfaction
Hygiene Factors
No dissatisfaction Dissatisfaction
Summarizing the Various Needs Theories

ERG Maslow Two factor

Theory Theory Theory
Self-
Actualization
Growth Motivators
Esteem

Relatedness Social

Safety Hygiene
Existence
Physiological
McClelland’s theory of needs
Three important needs that help explain
motivation
•Need for achievement
The desire to accomplish a goal or
task more effectively than in the past.
•Need for power
The desire to be influential in a group
and to control one’s environment.
•Need for affiliation
The desire for friendly and close
interpersonal relationships
Matching Content Models

Needs Hierarchy ERG Theory Motivator-Hygiene McClelland’s

Model Theory of Needs
Self-
Actualization Motivators
Growth * advancement Need for
* growth Achievement
* achievement
Esteem

Need for
Power
Social Relatedness
Hygiene
* job security
* salary Need for
Safety * working Affiliation
conditions
Existence

Physiological
Managerial implications of need
theories
Managers must be adopt at evaluating
needs of individual employees and offering
incentives or goals that correspond to
their own needs.
 Process theory of Motivation

• Process theories look at the psychological and

behavioral processes that affect individual’s
motivation.
• The theory says that by understanding these
processes it’s possible to understand the actions,
interactions that motivate individuals’
behaviors.
Process Theories of Motivation
Expectancy theory
Motivation depends upon how much you want
something (valence of outcomes) and how
likely you think you can get it (expectancy
and instrumentality).
Expectancy: The relationship between
Effort and Performance
Instrumentality: The relationship between
Performance and Outcome
Valence: The attractiveness of Outcome
Expectancy theory.........
The theory focuses on three relationships:
Effort-performance relationship
The individual’s perception of the
probability that his or her effort will
lead to high performance.
If I give a maximum effort, will it be
recognized in my performance appraisal?
Performance-reward relationship
The degree to which the individual
believes that performing at a particular
level will lead to a desired outcome.
If I get a good performance appraisal, will it
lead to organizational rewards?
Expectancy theory........
Rewards-personal goals relationship

The degree to which organizational

rewards satisfy an individual’s personal
goals or needs and are attractive to
the individual.

If I am rewarded, are the rewards ones that

I find personally attractive?
 The Porter- Lawler Extension
-The Porter Lawler extension of expectance
theory suggest that if performance results
in equitable rewards, people will be more
satisfied.
-Performance can lead to satisfaction .
-Managers must therefore be sure that any
system of motivation include rewards that
are fair or equitable for all.
Expectancy theory predicts that employees in an
organisation will be motivated when they believe that:

•putting in more effort will yield better job performance

•better job performance will lead to organisational

rewards, such as an increase in salary or benefits

•these predicted organisational rewards are valued by

the employee in question
 Porter and Lawler theory
• The Porter and Lawler theory of motivation is based on
the assumption that rewards cause satisfaction and that
performance produces reward.
• They hypothesize that the relationship between
performance and satisfaction is linked by another variable
rewards.
• They see good- performance leading to reward which lead
to satisfaction.
• It is a multi-variable model and explains the complex of
relationship among motivation, performance and
satisfaction.
• They argue that satisfaction does not always lead to
performance. Rather is reverse is true, 
 The Porter- Lawler Extension
Intrinsic
reward
(Outcomes)

Performance Perceived
equity Satisfaction

Extrinsic
reward
(Outcomes)
Steps to Increasing Motivation at Work
place, Using Expectancy Theory
Improving Expectancy (Improve the ability
of the individual to perform)
Training, selection, resources, clarify
roles, provide coaching and feedback.
Improving Instrumentality (performance).
(Increase the individual belief that
Performance will lead to reward)
Measure performance accurately, explain
how rewards are based on past
performance.
Cont.......
Improving Valence (Make sure that the
reward is meaningful to the individual)

Make sure that the total system is

equitable (fair to all)
Equity Theory
•Individuals compare their job inputs and
outcomes with those of others and then
respond so as to eliminate any inequities.
•Equity theory recognizes that
individuals are concerned not only with
the absolute amount of rewards for
their efforts, but also with the
relationship of this amount to what
others receive.
 The process of comparison

Outcomes (Self) Outcomes (Others)

=
Input (Self) Input (Others)
 Inputs Outputs

Outputs are typically all financial

Inputs are typically: effort, People need to feel that
rewards - pay, salary, expenses,
loyalty, hard work, there is a fair balance
bonus and commission - plus
commitment, skill, ability, between inputs and
intangibles - recognition, reputation,
adaptability, flexibility, etc. outputs.
praise, promotion, etc.
Examples of Inputs and Outcomes in
Organizations
INPUTS OUTCOMES
• Age • Challenging job assignments
• Attendance • Fringe benefits
• Interpersonal skills • Job perquisites (parking space or
• Communication skills office location)
• Job effort (long hours) • Job security
• Level of education • Monotony/keep as same
• Past experience • Promotion
• Performance • Recognition
• Personal appearance • Responsibility
• Seniority • Salary
• Social status • Seniority benefits
• Technical skills • Status symbols
• Training • Working conditions
Responses to Inequity/ Why Adam’s Equity Theory is
Important to the Workplace

•Decrease inputs (give less time, do less work)

•Push for more output from the company (more pay,
authority)
•Go into survival mode (do their job and little more)
•Become resistant (act out on other issues)
•Become overly competitive (focus on reducing the
outputs of others)
•Quit
 Implication for managers
Most important idea for managers to
remember from equity theory is that if
rewards are to motivate employees, they
must be perceived as being equitable and fair.

The second implication is that mangers needs

to consider the nature of the others to whom
the employee is comparing herself or himself.
Goal-Setting Theory
Locke: providing work-related goals for people is an
extremely effective way to stimulate motivation
The theory that specific and difficult goals lead to
higher performance.
Clear, particular and difficult goals are greater
motivating factors than easy, general and vague
goals.

WHAT KINDS OF GOALS ARE MOTIVATIONAL?

(1) Specific, quantifiable, measurable/computable
(2) Challenging but attainable
(3) Acceptable; participation
(4) Time deadline
(5) Feedback
Effect of Goal Difficulty on Performance
High
Task Performance

Area of
Optimal
Goal
Difficulty

Low Moderate Challenging Impossible

Goal Difficulty
Other Theories
Theory X and Theory Y
Theory X
The assumption that employees dislike
work, are lazy, dislike responsibility, and
must be coerced to perform
Lower-order needs dominate individuals
Theory Y
The assumption that employees like
work, are creative, seek responsibility,
and can exercise self-direction
Higher-order needs dominate individuals
Theory X and Theory Y....
Little Ambition/motivation

Theory X Dislike Work

Workers
Avoid Responsibility

Self-Directed

Theory Y Enjoy Work

Workers
Accept Responsibility
Motivational Strategies
Motivation: Applications.........

•Organizations attempt to motivate their

employees in two ways.
•Monetary rewards
•Non-monetary rewards (Socio-emotional
rewards)
Practices of Monetary Motivation
Role of Money
Money is most commonly used reward in
organizations

Money certainly helps some needs get met

But, money is not all employees’ top
priority
Practices of Monetary Motivation.....

1. Job-Based Pay
2. Variable-Pay Programs
3. Skill-Based Pay
Practices of Monetary Motivation........
•Job-Based Pay (Fixed Pay Program):
Employee’s pay level is determined by job position
occupied by the employee.
E.g. public sector - Accountant, HR manager, teachers

Variable Pay Program (Pay-for-Performance

Rewards):
Employee’s pay level depends upon other factors than
position.
-Piece-rate pay: Depending upon units you produced
- Profit sharing: Depending upon a company’s
profitability
- Gain sharing: Depending upon productivity
Practices of Monetary Motivation........
Variable Pay Program-Application of
Expectancy theory
Individuals should perceive a strong relationship
between their performance and reward.
Employees expect to get more when they
perform better
•Skill-Based Pay Plans:
Employee’s pay level is determined by the number
of skills possessed by the employee or the number
of jobs can be performed by the employee.
Eg. Specialized Doctor, production manager etc.
Skill-Based Pay Plans-Application of
ERG theory (needs for growth)
McClleland’s theory (needs for
achievement)
Reinforcement theory (reinforcing the
skills)
Equity theory (a fair output/input ratio)
all explain why skill-based plans can
motivate employees
Practices of Non-Monetary Motivation
There are several programs of non-monetary
motivation used by organizations
1. MBO (Management By Objectives)
2. Employee Recognition Programs
3. Employee Involvement Programs
4. Flexible Benefits Programs
5.Modified workweek
6.Flexible work schedule
Practices of Non-Monetary Motivation
1. Management By Objectives (MBO):
•What is MBO, Management by objectives at its core is the
process of employers/supervisors attempting to manage their
subordinates by introducing a set of specific goals that both the
employee and the company strive to achieve in the near future, and
working to meet those goals accordingly.
MBO includes Five steps:
•Review organizational goal
•Set worker objective
•Monitor progress
•Evaluation
•Give reward
1. Based on Goal-Setting Theory - The theory that
specific and difficult goals lead to higher
performance.
WHAT KINDS OF GOALS ARE MOTIVATIONAL?
 Specific, measurable/computable
 Challenging but attainable
 Acceptable; participation
 Time deadline
 Feedback

2. Four Key elements

-Goal specificity
-Participative decision making
-Explicit/clear time period
-Performance feedback
2. Employee Recognition Programs
Programs that use multiple sources and recognizes both individual
and group accomplishments

In contrast to most other motivators, recognizing an employee’s

superior performance often costs little or no money, making them
highly attractive to industry.

COMMONLY USE METHODS:

Years of Service Award
Employee Appreciation Day
Annual Bonus
Quarterly Bonus
Spot Bonus
Gold Stars
Verbal Appreciation
Employee Recognition.......
Application of
Reinforcement theory
Recognition as reward and reinforcement
This theory predicts that if the program will be
much powerful if the reinforcement is given
immediately after the behaviors
Hierarchy of need theory
Social and esteem (e.g., social recognition)
become the dominant need after people have
been satisfied with the safety and physiological
needs
3. Employee involvement Programs
A participative process that uses the entire capacity of
employees and is designed to encourage increased
commitment to organization’s success.
Efforts to involve employees in meaningful ways include:
•Self-managed work teams
•Employee committees or task forces
•Continuous improvement teams
•Participative decision making
•Employee suggestion forums, such as a suggestion box and
monthly meetings
Examples
Participative management
A process in which subordinates share a
significant degree of decision making
power with their immediate superiors
It indicates a kind of recognition
Participation provides intrinsic rewards
for some employees
Research showed that it has only modest
effects on productivity, motivation, and
job satisfaction
Examples
Representative participation
Workers participate in organizational
decision making through a small group of
representative employees
It has been called “the most widely
legislated form of employee involvement
around the world”
Examples
Quality circles
A work group of employees who meet
regularly to discuss their quality
problems, investigate causes, recommend
solutions, and take corrective actions

Research revealed that they are much

more likely to positively affect
productivity but has little or no effect
on employee satisfaction
Examples
Employee stock/standard/routine ownership
plans
Company-established benefit plans in which
employees acquire stock as part of their
benefits

Research indicates it increase job satisfaction,

but no clear impact on job performance

It increases performance when used together

with participative style of management
The theories relevant to Employee
Involvement Programme (EIP)

The two factor theory indicates that

participation and involvement are
motivational factors

Needs theories also suggests that having

opportunity of decision making help satisfy
an employee’s needs for responsibility,
achievement, recognition, growth, and
enhanced self-esteem.
4. Flexible Benefits Programs
Employees tailor/fit their benefit program to meet
their personal needs by picking and choosing from menu
of benefit options.
The have a high degree of freedom to decide the
benefits package to their personal needs, as different
employees may have different needs.
Different employees may have different needs
Employees with children tend to choose benefits such
as education allowance, new couples tend to choose
housing allowance, those with physical problems tend to
choose health insurance, etc.
E.g.. Transportation allowance, meal allowance, clothing
vouchers, medical plan – employee and dependents,
pension, free medical checkups, insurance coverage,
vehicle allowance, servant salary, scholarships for child,
free air tickets and journey, housing allowances or free
house with furniture etc.
Flexible Benefits Programs-Application of
Expectancy theory
The organizational rewards must be
consistent with the employees’ personal
goals, that must be attractive.

As different individuals have different

personal goals, the flexibility increases
the likelihood that the organization
offers rewards that satisfy the personal
goals
 Job Satisfaction(JS)

The collection of feeling and belief that people have

about their current jobs.
-George and
Jones ,1996-
A collection of attitudes that workers have about their
Jobs.
-Johns,1992-
An individual’s general attitudes, to his or her job. A
person with high JS holds positive attitudes towards
the job, and one who is dissatisfied with it has
negative attitudes towards it.
-Robbins et al, 2003-
 What Determines Job Satisfaction?

•coworkers, pay, supervision, kind of work, personal

growth and promotion prospects
-Cook, Hepworth, Wall and Warr, 1981-
•present job, present pay, opportunities for
promotion, supervision on present job, people on
present job. -Luthan 2002-
•pay, promotion, supervision, benefits, contingent
rewards, operating procedures, coworkers, nature of
work and communication. -Spector
1997-
 Cont….
Two main areas
personal determinants
race, gender, educational level, tenure, age
and marital status

organizational determinants
work itself, remuneration/pay, supervision,
promotion opportunities, coworkers, and job
status and job level
-Nel et al., 2004 -
 Cont….
satisfactional factors
growth, advancement, responsibility, work
itself, recognition, and achievement

Dissatisfactional factors
Security, status, relationship with peers,
salary, and work condition, relationship with
supervisors, supervision, company policy and
administration
-Fredrick Herzberg ,1959 -
Emotional Intelligence
Psychological Capital
Empathy Job
Gratitude Satisfaction
Forgiveness
Mindfulness
Work Itself

Pay

Promotion Job Satisfaction

Co worker

Supervision

Working
Condition
 Psychological Factors
• Psychological Capital
– an individual`s positive psychological state of
development characterised by self-efficacy, hope,
optimism and resilience
• Emotional Intelligence
• Self Awareness
– the competencies that enable individual to recognize their own emotions.
• Self Management
– The ability to manage your emotions
• Social Awareness
– The ability to understand the others emotions
• Relationship Management
– The ability to inspire, influences, and develops others while managing conflicts
 Assessing Job Satisfaction

How can we assess employees’ attitude?

Attitude surveys

Eliciting responses from employees through

questionnaires about how they feel about their jobs,
work groups, supervisors, and the organization.
 Measuring Job Satisfaction

The two most widely used approaches are

1. Single global rating

2. Summation score method
 Single Global Rating

• This method is nothing more than asking individuals

to respond to one question such as All things
considered, how satisfied are you with your job?
• Respondents then reply by circling a number
between one and five that corresponds with answers
from “Highly Satisfied” to “Highly Dissatisfied”
 Single Global Rating………

Sample Questionnaire

Please put x
mark on the appropriate box
Question Rating
1.Do you satisfied with your job? Highly satisfied ‫ٱ‬
Satisfied ‫ٱ‬
Neither satisfied nor dissatisfied ‫ٱ‬
Dissatisfied
‫ٱ‬
Highly dissatisfied ‫ٱ‬
 Summation Score Method 

This identifies key elements in a job

•Nature of Work
•Supervision
•Present pay
•Promotion Opportunities
•Relation with Co-workers and the employees
feeling /attitude about each
Work it self
When I conduct my job, I have a personal freedom.
When I conduct my job, I have various chances to engage with other
activities also
I have opportunities to learn new things for work life and personal
life.
Pay/salary
I am satisfied my basic salary.
When compared to similar jobs at other organization
I understand how my base salary is determined
 Organizational Job Customer
Commitment Performance Satisfaction

Life Job
WLB
Satisfaction Satisfaction

Absenteeism Job Organizational

Turnover Performance
 Job Performance
• According Moorhead and Griffin (1999) job
performance is made up of all work – related
behavior. Job performance is the accomplishment
of those tasks that comprise a person’s job (Porter
and Lawler, 1968). It means execution of total set
of job related tasks. The tasks that should be
performed are different from one job to another.
• Borman and Motowidlo (1993) suggested that
performance can be divided into two parts, task
and contextual performance.
• Task performance involves the effectiveness
which employees perform the activities that are
formally part of their job.
• Contextual performance includes activities such
as helping, cooperating with others, and
volunteering, which are not formally part of the
job but can be important for all jobs.
Organizational Citizenship Behaviour
(OCB)

OCB
Employee behaviour that goes above and
beyond the call of duty, is not part of an
employee’s formal job requirements, is
not formally rewarded, and contributes to
organizational effectiveness.
 Forms of OCB

Altruism
helping out when a coworker is no
feeling well
Conscientiousness
staying late to finish a project
Civic Virtue
Volunteering for a community program
to represent the firm
 Cont….

Sportsmanship
Sharing failure of a team project that
would have been successful by
following the members advice
Courtesy
being understanding and empathetic
even when provoked
-Thank You-