Management 4030 - Employee Motivation

Employee Motivation

Definition of Motivation: Factors which energize, direct and sustain employee behavior.

• Motivation is goal directed behavior.• Motivation is NOT the same as Performance.• Performance = Motivation X Ability• Dimensions of Motivation

– Form - Duration

– Direction - Intensity

Management 4030 - Employee Motivation

Theories of Motivation

• Cognitive Theories; POV = The Employee– Expectancy Theory

– Equity Theory

• Behavior Theory; POV = The Manager– Reinforcement theory

• Financial Theory; POV = The Business Owner– Agency Theory

Management 4030 - Employee Motivation

Expectancy Theory (Vroom, 1964)

• People’s Behavior results from conscious choices among alternatives.

• Valence - A person’s preference among various outcomes or rewards. Ex. Do I prefer to achieve a higher performance goal or more leisure time?

• Instrumentality - A person’s belief that a certain level of performance will lead to certain desirable consequences. Ex. If I study 2 hours every day for my finance class, will I earn an A grade?

Management 4030 - Employee Motivation

Expectancy Theory (Cont’d)

• Expectancy - A person’s belief about whether a certain performance outcome is possible. Ex. Can I sell 12 houses this year? Will my team achieve “excellence” in the customer satisfaction survey?

• Assumption - People select to pursue the level of performance they believe will maximize their utility (happiness).

• Motivation = f (V, I, E)

where V, I, E > 0

Management 4030 - Employee Motivation

Expectancy Theory Applications for Managers

• Managing Valence– Rewards must be attractive to each employee

• Managing Instrumentality– High performance levels must result in attractive rewards

(do I want to become a partner in the accounting firm?)– Performance levels must be set at a reasonable level of

difficulty (ex. Sales incentives)

• Managing Expectancy– Coaching and frequent feedback increase expectancies.– Train employees for skill gaps so abilities are good.