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Daft
at Indian School of Business, Hyderabad from August 28 - October 01, 2017
 OVIDIUS UNIVERSITY ANNALS

ECONOMIC SCIENCES SERIES

Volume XIII
Issue 1

2013

Reproduced with Permission from the Copyright holder for use only in Managing Teams_[Term 4 - PGP] taught by Richard Daft
at Indian School of Business, Hyderabad from August 28 - October 01, 2017

Employee Motivation Theories and their Applications in Modern
Organizations
Drogomyretska Mariana
Faculty of Economics and Management
Poltava University of Economics and Trade, Higher Educational Establishment of the
Ukrainian Central Union of Consumer Societies
mariana.puet@mail.ru
Abstract
The essay is dedicated to the
determination of the essence of employee
motivation in todays business environment.
The main need-based and process-based
theories of motivation and the possibility of
their application in modern organizations
are considered. The existence of the
relationship between employee motivation
and organizational effectiveness is proved by
author.
Key words: motivation, content theories of
employee motivation, process-based theories
of motivation,
JEL classification: M54.
1. Introduction
Employee motivation is the most burning
problem faced by employers in todays fast-
moving business environment. The thing is
that unmotivated employees prefer to spend
little or no effort in their jobs, produce low
quality work and leave their job in an
organization for better proposals. On the
other hand, employees who feel motivated to
work are likely to be creative, enthusiastic
and productive, turning out high quality work
that they willingly undertake.
That is why the given essay is dedicated
to the development of better understanding of
various employee motivation theories and the
determination of possibility of their using in
modern organizations.
2. Defining Employee Motivation
The Websters online dictionary defines
motivation as the psychological feature that
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only in Managing Teams_[Term 4 - PGP] taught by Richard Daft
at Indian School of Business, Hyderabad from August 28 - October 01, 2017
Ovidius University Annals, Economic Sciences Series
Volume XIII, Issue 1/ 2013
arouses an organism to action toward a
desired goal; the reason for action; that which
gives purpose and direction to behavior [1]. It
goes without saying that motivation is the
willingness to work at a certain level of
effort. Every employee has different ways to
become motivated. For this reason employers
need to get to know their employees very
well and use different tactics to motivate
each of them based on their personal wants
and needs, values and goals, intentions and
expectations.
According to Edwin A. Locke and Gary
P. Latham [2], the concept of motivation
refers to internal factors that impel action and
to external factors that can act as
inducements to action. We can safely assume
that the internal motivational factors are
created from within the human itself and can
be affected by the wish to perform or self-
development. Instead, the external motivation
factors are created from the outside and are
outside control of an individual. These could
include organizational policies and practices,
working conditions, salary, interpersonal
relationships etc. Obviously, motivation can
influence not only the acquirement of
persons skills and abilities, but also the way
and the degree in which these skills and
abilities are exploited.
We identified that in the whole world
there are numerous definitions of motivation,
which is logical, because there are many
different personalities, interested in doing
research in this broad subject area, as well as
various motivation theories and programs
exist in organizations at all times.
We completely agree with Dwight D.
Eisenhower [3], famous as the thirty-fourth
President of the USA, that motivation is the
art of getting people to do what you want to
do because they want to do it. Moreover, we

have every reason to believe that motivation
is an effective and dynamic instrument in the
hands of every manager for inspiring the
workforce and creating confidence in them.
Through the employee motivation,
management creates will to work which is
necessary for the achievement of
organizational goals.
3. Historical Overview of the Field of
Employee Motivation
Its important to keep in mind that
historical views on motivation, although not
always accurate, are of interest for several
reasons. For one thing, these approaches
provide a foundation for contemporary
thinking about motivation. For another,
because they generally were based on
common sense and intuition, an appreciation
of their strengths and weaknesses can help
managers gain useful insights into employee
motivation in the workplace.
One of the first writers to address work
motivation over a century ago was Frederick
Winslow Taylor (1856 1915), an American
mechanical engineer who believed that
workers are mainly motivated by the
paycheck and they dont like working at all
[4]. Taylor suggested that workers would
need very close supervision and that
production should be broken down into small
but measurable tasks in order to ensure the
highest possible output from workers [5].
Over time workers got bored with the routine
nature of their repetitive tasks, they wanted
something more than just pay. From these
and similar observations we may generalize
and say that Frederick Taylor was right at the
point he started but wrong on where he
believed the need for motivation stopped.
3.1. Content Theory Approach to
Employee Motivation and the Possibility
of its Application Nowadays
By the 1950s, several new models of
work motivation emerged, which collectively
have been referred to as content theories.
Often criticized as being descriptive, these
theories focus on what motivates employees
to choose certain behaviors.
The most recognized of all the content
theories of motivation is Maslows Need
Hierarchy Theory, which suggests that as
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at Indian School of Business, Hyderabad from August 28 - October 01, 2017
Ovidius University Annals, Economic Sciences Series
Volume XIII, Issue 1/ 2013
individuals develop, they work their way up a
hierarchy based on the fulfillment of a series
of prioritized needs (see Figure 1).
Self-actualization
Esteem needs
Belongingness and Love needs
Security / Safety needs
Physiological and Biological needs
Figure 1. Maslows Hierarchy of Needs,
an original five-stage model [6]
On the basis of the given model we can
assume that physiological needs are the basic
needs for sustaining human life. These needs
include food, shelter, clothing, rest, air,
water, sleep etc. They lie at the lowest level
in the hierarchy of needs as they have priority
over all other individual needs. Unless and
until these basic physiological needs are
satisfied to the required extent, other needs
do not motivate an employee in organization.
Speaking about security or safety needs, it
should be mentioned that these are the needs
connected with the psychological fear of loss
of job, property, natural calamities or
hazards. An employee wants protection from
such types of fear. He prefers adequate safety
or security in this regard i.e. protection from
physical danger, security of job, pension for
old age, insurance cover for life and so on.
The safety needs come after meeting the
physiological needs.
Social needs, which include such things as
love and belongingness, occupy the third
position in the hierarchy of needs. Being the
most prominent psychologist of the 20th
century, Abraham Maslow (1908 1970)
suggested that an employee is a human being,
which desires to belong to one or another
group, regardless if these groups are large or
small. By the way, Abraham Maslow argued
that esteem needs include the need to be
respected by others, need to be appreciated
by others, need to have power and finally
prestigious position. Once the previous needs

are satisfied, a person feels to be held in
esteem both by himself and also by others.
And, finally, self-actualization needs. This
is the highest among the needs of the
hierarchy of needs advocated by A. Maslow.
Self-actualization is the desire to become
what one is capable of becoming. It is a
growth need. Here, a person feels that he
should accomplish something in his life. He
or she wants to utilize his/her potentials to
the maximum extent and desires to become
what one is capable of becoming. Though
everyone is capable of self-actualization,
many do not reach this stage.
Practically, physiological needs of
employees in modern organizations can be
met by offering a fair competitive wage and
lunch/coffee breaks so that the employee
feels comfortable that his/her basic needs are
satisfied. Next, an organization can ensure
that the work facility is safe, so that
employees feel physically safe. Modern
organization can also have a fair progressive
discipline policy ensuring job security.
Besides, managers can encourage employees
to participate on work teams and/or sponsor
informal gatherings so employees may
socialize to help meet their social needs. A
reward and recognition program for good
performance or perfect attendance could help
managers to satisfy the employees esteem
needs. Finally, to help satisfy employees
self-actualization needs, organizations can
offer in-house development, or offer
reimbursement for tuition or relevant training
seminars.
On the whole, however, Maslows theory
of motivation is widely accepted but there is
little empirical evidence to support it in
modern organizations. The pattern of
hierarchy of needs may not be applicable
uniformly to all categories of employees,
because each person has plenty of needs to be
satisfied, which may not necessarily follow
Maslows need hierarchy.
To bring Maslows need hierarchy theory
of motivation in synchronization with
empirical research, American psychologist
Clayton Alderfer (born in 1940) redefined it
in his own terms [7]. His rework is called as
ERG theory of motivation. Instead of the
five needs that are hierarchically organized,
Alderfer proposed that basic human needs
may be grouped into three categories, namely
existence (E), relatedness (R) and
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Ovidius University Annals, Economic Sciences Series
Volume XIII, Issue 1/ 2013
growth (G). Actually, existence
corresponds to Maslows physiological and
safety needs, relatedness corresponds to
social needs, and growth refers to Maslows
esteem needs and self-actualization [8].
Alderfer believed that needs are met in no
specific order, while Maslows theory states
that needs are met one by one and in a
specific order.
Another content theory of the same period
is Herzbergs Two Factor Theory, also
known as the Motivation-Hygiene Theory,
which postulates that there are certain factors
in the workplace that cause job satisfaction,
while a separate set of factors cause
dissatisfaction [9]. Famous American
psychologist Frederick Herzberg (1923
2000) classified these job factors into two
categories: hygiene and motivational factors.
Hygiene factors are those job factors
which are essential for existence of
motivation at workplace. These do not lead to
positive satisfaction for long-term. But if
these factors are non-existent at workplace,
they lead to dissatisfaction. On the contrary,
motivational factors motivate employees for
a superior performance. The motivators
symbolized the psychological needs that
were perceived as an additional benefit [10].
Generally, Herzbergs Two Factor Theory
can be a valuable aid to managers of modern
organizations because it points out that
improving the environment in which the job
is performed goes only so far in motivating
employees [11].
Furthermore, McClellands acquired-
needs theory is the one content theory of
employee motivation that received the
greatest amount of support in modern
organizations. According to this scientific
approach, individuals acquire three types of
needs as a result of their life experiences
[12]: the need for achievement, the need for
affiliation and the need for power. All
individuals possess a combination of these
needs, and the dominant needs are thought to
drive employee behavior.
Actually, David McClelland (1917
1998), an American psychological theorist,
stated that most people do not possess a
strong achievement-based motivation. Those
people, who do, display a consistent behavior
in setting goals. That is why oorganizations
meet achievement needs by providing
employees with challenging assignments,

competitions and rewards for excellent work.
Power needs may be met by offering
opportunities for advancement and increased
responsibility. And employers can meet
affiliation needs by creating a team
environment that is safe and respectful for all
employees.
Acquired needs theory indicates the
following characteristics and attitudes of
achievement-motivated people in modern
organizations:
achievement of objectives matters more
than material or financial reward;
greater personal satisfaction is felt by
achieving the goal than from receiving praise
or recognition;
money is regarded as a measure of
success, but not the end in itself;
neither status nor security are prime
motivations;
achievement-motivated people constantly
looking for ways of doing things better;
achievement-motivated people will
gravitate towards jobs and responsibilities
that challenge them and satisfy their needs -
for example sales and business leadership
and management;
achievement-motivated people have the
capacity to set high personal goals that they
believe to be attainable [13].
Its self-evident that all four of these
content theories are helpful in understanding
employee motivation on the basis of needs.
However, other theories of motivation also
have been posited and require consideration.
3.2. Process-Based Theories of Employee
Motivation, Widely Used in Modern
Organizations
Process-based theories of employee
motivation are concerned with how
motivation takes place. They focus on why
people choose certain behavioral options to
fulfill their needs and how they evaluate their
satisfaction after they have attained their
goals. Two of the most recently popular
process theories with a cognitive perspective
are the Expectancy and the Equity Theories
of Motivation.
Thus, Expectancy Theory is based on how
we want something and how likely we think
we are to get it. The formal framework of
expectancy theory was developed by Victor
Vroom, a business school professor at the
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Ovidius University Annals, Economic Sciences Series
Volume XIII, Issue 1/ 2013
Yale School of Management, who was born
in 1932 in Montreal, Canada.
This motivation theory states that if an
individual believes he or she can do
something then he or she is more likely to
accomplish it. Thoughts and efforts are vital
to this theory because if someone does not
think they are able to do a task, he or she is
not likely to put forth much effort. Therefore,
motivation is decreased. Failure does not
motivate a person to try harder. Successes,
even if they are small, motivate people to
improve [13].
In deciding how much effort to put into a
work behavior, individuals are likely to
consider:
their expectancy, meaning the degree to
which they believe that putting forth effort
will lead to a given level of performance;
their instrumentality, or the degree to
which they believe that a given level of
performance will result in certain outcomes
or rewards;
their valence, which is the extent to which
the expected outcomes are attractive or
unattractive.
On the contrary, Equity Theory attempts
relational satisfaction in terms of perceptions
of fair/unfair distributions of resources within
interpersonal relationships. It was first
developed in 1963 by John Stacy Adams, a
workplace and behavioral psychologist, who
asserted that employees seek to maintain
equity between the inputs that they bring a
job and the outcomes that they receive from
against the perceived inputs and outcomes of
others [14]. It is worthwhile to mention that
inputs are logically what we give or put into
our work. Outputs are everything we take out
in return. These terms help emphasize that
what people put into their work includes
many factors besides working hours, and that
what people receive from their work includes
many things aside from money [15].
In short, we each seek a fair balance
between what we put into our job and what
we got out of it. But how do we decide what
balance can be considered as a fair. The
answer lies in Equity Theory. What matters
here is that the three primary assumptions
applied to most applications of Equity
Theory in modern organizations can be
summarized as follows [14]:
employees expect a fair return for what
they contribute to their jobs, a concept

referred to as the equity norm;
employees determine what their equitable
return should be after comparing their inputs
and outcomes with those of their coworkers.
This concept is referred to as social
comparison;
employees who perceive themselves as
being in an inequitable situation will seek to
reduce the inequity either by distorting inputs
and/or outcomes in their own minds
(cognitive distortion), by directly altering
inputs and/or outputs, or by leaving the
organization.
4. Conclusions
Coming to the conclusion, it is important
to note that most organizations which operate
in different fields are spending so much
money trying to inspire employees that they
have spawned an industry, often called as
the motivation industry. Its a multibillion-
dollar business in which top gurus command
fees of up to $65,000 for a speech. Billions of
dollars of rewards are sold to companies
from T-shirts to exotic vacations to be
dangled in front of workers to boost
performance. Trouble is, there has been
exhaustive academic research trying to find
out what motivates workers, and it has turned
up almost no evidence that motivational
spending makes any difference.
In general, motivation offers several
benefits to organizations and their
employees: higher efficiency, reduce of
absenteeism, reduce of employee turnover,
improvement of a corporate image and good
relations and encouraging of initiative and
innovation. Thus, we cant disagree with
Rick Pitino [16], highly successful and noted
American basketball coach, who said: The
only way to get people to like working hard
is to motivate them. Today, people must
understand why theyre working hard. Every
individual in an organization is motivated by
something different.
5. References
[1] Websters Online Dictionary with
Multilingual Thesaurus Translation.
Definition: motivation. Retrieved from
http://www.websters-online-dictionary.org/def
inition/motivation
[2] Edwin A. Locke, Gary P. Latham. What
Reproduced with Permission from the Copyright holder for use785
only in Managing Teams_[Term 4 - PGP] taught by Richard Daft
at Indian School of Business, Hyderabad from August 28 - October 01, 2017
Ovidius University Annals, Economic Sciences Series
Volume XIII, Issue 1/ 2013
should we do about motivation theory? Six
recommendations for the twenty-first
century. Academy of Management Review,
Academy of Management, United States of
America, 2004, Vol. 29, # 3, pp. 388-403.
Retrieved from http://www.jstor.org/discover/
10.2307/20159050?uid=2&uid=4&sid=21102
167429047
[3] Inspirational Quotes for Business and Work
About Motivation by Susan M. Heathfield,
About.com Guide (2013). Retrieved from
http://humanresources.about.com/od/inspiratio
nalquotations/a/quotes_motivate.htm
[4] Frederick Taylor and Scientific Management.
Understanding Taylirism and Early
Management Theory. Retrieved from
http://www.mindtools.com/pages/article/newT
MM_Taylor.htm
[5] What is Motivation? Motivation Society for
motivators and those who are looking for
motivation. Retrieved from http://www.motiv
ationsociety.com/
[6] Saul McLeod (2012). Maslows Hierarchy of
Needs. Simply Psychology. Retrieved from
http://www.simplypsychology.org/maslow.ht
ml
[7] ERG Theory of Motivation. Retrieved
from http://www.managementstudyguide.com
/erg-theory-motivation.htm
[8] Mason Carpenter, Talya Baner, Berrin
Erdogan (2009). Principles of Management.
Web Books Publishing. Retrieved from
http://www.web-books.com/eLibrary/ON/B0/
B58/085MB58.html
[9] Two Factor Theory or Herzbergs Motivation
Hygiene Theory. Retrieved from
http://www.slideshare.net/tasmeen/two-factor-
theory
[10] Herzbergs Two-Factor Theory of
Motivation. Retrieved from http://faculty.mu.e
du.sa/shawayes/HerzbergTheory
[11] Motivating Employees. Need-Based
Theories of Motivation. Retrieved from http://
www.saylor.org/site/wp-content/uploads/2011
/06/BUS208-5.3.pdf
[12] Acquired needs theory. Strategies for
Managing Change. Retrieved from http://ww
w.strategies-for-managing-change.com/acquir
ed-needs-theory.html
[13] A-Level Psychology Notes. Motivation.
Retrieved from http://studyguide.pk/?p=2087
[14] Information about Equity Theory.
Retrieved from http://english.turkcebilgi.com/
Equity+theory
[15] John Stacey Adams Equity Theory on
Job Motivation. Retrieved from http://www.bu
sinessballs.com/adamsequitytheory.htm
[16] Quotes by Pitino, Rick. Retrieved from
http://quotationsbook.com/quotes/author/5727