Theories of Motivation in Business

Theories of Motivation in Business


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            Motivation is what drives humans to act and behave in a certain way. Several theories that discuss motivation have come about and these are applicable in the corporate world, particularly in employee management. Theories such as Maslow’s Hierarchy of Needs, Achievement Motivation, Expectancy Theory, Equity Theory, Dual Theory and Money motivation are discussed and linked with one another and to employee behavior, and business practices.


            It is said that every man has a reason for doing something. Some people may know their reasons and some may not, but whatever the case maybe there is always something that drives the actions and behavior of man. This drive is called motivation. In psychology, motivation is defined to be the “reason for engaging in a particular behavior” (Green, 1994) and refers to the initiation, direction, intensity, and persistence of human behavior (ibid). Humans may be driven by their basic needs such as food, shelter, clothing, or by their material wants, their goals and ideals, or by a state of being or feeling such as a need to be loved or to give back to society or sometimes even by religion or morality.

            Many managers, psychologists and academics have been interested about the different kinds of motivation of people. Some people are willing to do hard work and some are not, some are willing to take on challenges on a daily basis in their work while others avoid it, some see money as the main motivator while for others it is seeking happiness, some are motivated by the prestige of what they are or will be doing while some are even motivated in the seemingly small things. Several theories of motivation have arose in trying to explain why people act the way they do and their explanations range from the needs and interests of a person to their self-determination, goals and even unconscious motivations. These theories will be discussed and how they are applied in business management.

Maslow’s Hierarchy of Needs

            Abraham Maslow proposed that the satisfaction of certain needs of individuals were the main sources of motivation for their actions. These needs for Maslow were also best seen in a five-level hierarchy that is typically depicted in a pyramid with the most basic need emerging at the bottom and the most sophisticated need at the top; and as one need in the hierarchy is satisfied the individual would pursue the next type of need in the hierarchy (Allen, 1998; Whaba & Bridgewell, 1976).

            The first level in Maslow’s Hierarchy of Needs are the physiological needs, which deals with the most basic human needs such as food, water, sleep, warmth, sex and other bodily needs and takes the highest priority since it equates to the basics of survival (Whaba & Bridgewell, 1976). If you’re rushing to go to the bathroom, this is the need that drives you to run and go to the bathroom; if you are getting irritable because you have not gotten any sleep or because you did not get to eat a proper meal, this is the need that drives your behavior.

            The second level is the safety and security needs and is connected with the yearning for an orderly world. It has much to do with personal security from crime; financial security; security of health, resources, morality, family and property (ibid). The third level is the need for love and belongingness or the social needs of a person. These social needs are connected with being cared for, having affiliations and relationships with people; it is about having a supportive and communicative family and friends, and to be in an intimate relationship to avoid the feelings of loneliness, depression and social anxiety (ibid; Green, 1994). The fourth level is the esteem needs or the need to be respected by others, to have respect for your own self, and to have recognition from others, and sometimes for some people the need for aesthetics (Allen, 1998; Whaba & Bridgewell, 1976). It is the need of individuals to engage in activities that will give them confidence, recognition or a sense of contribution, to feel valued; it is sometimes seeking fame or glory for others (Whaba & Bridgewell, 1976).

            The last level is the need for self-transcendence; it is a need that goes beyond self-actualization, which deals more on the need for creativity, cognition, and morality (ibid). Self-transcendence is when the individual seeks satisfaction from helping others; it is having the “comprehensive understanding of worldviews regarding the meaning of life” (Koltko-Rivera, 2007); having altruism, wisdom and seeking for social progress; it is understanding religion and integrating it with psychology; it is when the individual tries to go beyond one’s self (ibid).

Achievement Motivation Theory

            David McClelland theorized that a person only has a need for three things – need for achievement, need for power, and need for affiliation, all of which have varying degrees to which it influences behavior (Green, 1994). The need for achievement motivates people to pursue and attain goals they set for themselves; the need for power motivates individuals to have control and to see almost every situation as an opportunity to influence others, change situations and to assert themselves when decisions have to be made; lastly, the need for affiliation and this motivates people to be friendly and socialize with others, and to appeal for cooperation, unity or teamwork (Allen, 1998).

Herzberg’s Dual Factor Theory

            Frederick Herzberg examined motivation in the light of job content and contest, and hypothesized that motivating employees is a two-step process that revolves around satisfaction and dissatisfaction (ibid). Satisfaction comes from motivators that are related to job content such as achievement, recognition, advancement, responsibility, job responsibilities, growth, and challenge (ibid; Green, 1994). These job motivators are needed for improvements in work performance and correspond to the higher-level needs of Maslow. Dissatisfaction comes from what Herzberg likes to call hygiene factors, which are not present in the actual work and are extrinsically related to it such as status, fringe benefits, pay (Green, 1994), job security, working conditions, peer relations, company policy, and supervision; these hygiene factors are preventive in nature and will not produce work performance motivation per se if present but their absence can create employee dissatisfaction and affect job performance (BBC, 2004; Allen, 1998).

Expectancy Theory

            In 1964, Victor Vroom said that people are driven by the chance of genuine successes in achieving particular objectives and people choose among alternative behaviors since they anticipate that a certain behavior will lead to one or more desired outcomes and other behaviors will lead to undesirable results (BBC, 2004; Allen, 1998). In the workplace, managers need to motivate those under them to succeed and to do so they need to connect the task to be performed to the likelihood of better results, they need to set expectations that there are positive benefits to the employee in achieving those results, and lastly they need to ensure that those benefits are valuable to the employee (BBC, 2004).  This is so since the theory predicts that “the probability of an individual to act a particular manner will increase when an employee associates it strongly with a given attractive outcome” (Ferguson, 2000).

Equity Theory

            In 1965, John Stacy Adams posited a theory that looks at how motivation was affected by the degree of fairness within an organization (ibid) particularly when it involves rewards. Employees will compare the rewards they receive with those of their colleagues and the efforts that they have exerted, and if an inequity is seen to exist, the employees will consciously or unconsciously withhold their contributions or efforts to bring a better balance to how they think things should be (Allen, 1998). This is one of the reasons why favoritisms should be avoided whether in the workplace, at home or at school.

Theory X and Theory Y

            The Theory X and Theory Y of motivation, which is commonly used in management practice was thought by Douglas McGregor in 1960 and shows the two ways in which management plays a part in motivating their staff. He said that conventional managerial assumptions are that “employees are lazy, are incapable of self-direction and autonomous work behavior, and have little to offer in terms of organizational problem solving” (Kopelman, Prottas & Davis, 2008) and called this Theory X. The essential opposite of Theory X is the positive Theory Y, which assumes that employees are not inherently lazy, are capable of self-direction and self-control, and are capable of providing important ideas/suggestions that may improve organizational effectiveness (ibid; BBC, 2004).

Unconscious Motivation

            The theory of unconscious motivation stems from psychoanalysis, which has often demonstrated that the relationship between a conscious desire and ultimate unconscious aims that underlies it does not have to be direct at all (Maslow, 1970). Reasons for automatic behavior cannot always be pointed out directly and are not available in a person’s conscious mind such as when an individual readily blames others for faults the he/she has done, which could be a defense mechanism of that person; or when some people gain so much weight because of eating too much which may result from their anxiety or depression; or when a worker breaks equipments unintentionally due to unconscious feelings of aggression towards authority figures (ibid).  This unconscious motivation makes it hard to interpret behavior and what may hinder a worker from working optimally or behaving more appropriate.

 Money Motivation

            Money is the most basic motivation tool (Lim, 2003) and according to this theory, all works are motivated primarily motivated by their need for money, and that employers should pay their staff more because of money being a primary motivator (BBC, 2004). This theory is applicable in enterprises with performance-related pay, incentives, bonuses and promotions (ibid). In China, however, Confucian work ethic is positively associated with the budged dimensions of work and negatively associated with the retention dimensions that money provides.

Motivation Theories and Business Management

            Motivation theories are commonly used by managers and employers to understand what drives employees. Money for instance is an initial motivation especially when hiring someone. It “represents a command over goods and services necessary to advance individual self-interest in a market economy” (Walker & Thomas, 1992) and its “uses by individual family members reflect emotions, values, habits, and past experiences” (ibid). Money is therefore used by some individuals to consider which company to work for not since there are some companies who pay higher than their industry counterparts.

            Money can also be applied with the equity theory, particularly in paying salaries for people who are in the same position, have the same qualifications, and contribute the same amount. If someone is paid higher than another who has equally the same attributes and output as the one who receives a higher pay, the other employee would feel disadvantage and may be less motivated to work. Also, money can be used as a form of reward especially in cases where performance is equated to work success like in sales-driven work. Money is a “powerful motivator of human behavior, money can trigger greed and envy, impair and distort relationships, and symbolize a broad range of psychological satisfactions” (ibid) since money can afford food, water, shelter, clothing, and guarantee financial security. It can easily satisfy the first two levels of Maslow’s Hierarchy of Needs.

            Aside from monetary considerations, companies should also look at the extrinsic factors of their company, the job satisfaction they give and what their employees expect, how their management view employee work habits, the career advancement options they offer, and the rewards and recognition system that they have.

            If the working conditions within the company are poor such as bad lighting, uncomfortable chairs, unfriendly colleagues, minimal benefits and absence of a rewards and recognition system some employees would be dissatisfied and could work poorly. Maslow’s esteem needs are connected with getting recognition, which is also connected with the achievement-motivation and the expectancy theory that are also connected with performance-reward and effort-performance linkages. Without these a company can definitely expect their employees to work poorly (Ferguson, 200). Theory X will not help nowadays also since some individuals feel the need to exercise their creativity, intellect, and independence in doing tasks and not have a boss breathing down their back telling them each and every step of what they would be doing. It will also give them a feeling of satisfaction knowing that they have contributed something valuable to the company which in the future would motivate them to work even harder especially if they are recognized and promoted for their efforts.


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