Motivational Theories (Cambridge (CIE) IGCSE Business)

An Introduction to Motivational Theories

• Motivation theories offer varied perspectives on the role of money in motivating staff and how non-financial factors may drive workers to improve their effort and output

• The main theories include

  • Maslow's Hierarchy of Needs Theory which argues that people move through levels of needs that motivate them and once a need is met it no longer serves to motivate

  • Taylor's Scientific Management Theory which states that workers are motivated mainly by pay and need tightly-defined tasks and close supervision

  • Herzberg's Two Factor Theory which believes that money is not a motivator but that the lack of money leads to dissatisfaction, whereas workers are motivated by factors such as the opportunity to develop their skills

Maslow's Hierarchy of Human Needs

• Maslow's Hierarchy of Needs outlines five tiers of human needs that must be met for individuals to reach their full potential

• Once a tier of needs has been met it is unlikely to continue to motivate 

  • For example, once safety needs are met through satisfactory pay employees will look for the next set of needs - love & belonging needs - to be met
    

Diagram: Maslow's hierarchy of needs

Physiological needs

• Businesses can provide necessities for their employees e.g comfortable work environment, access to clean water and food, and adequate rest breaks
  

Safety needs

• Businesses can provide job security, fair pay, benefits, and safe working conditions for their employees
  

Love and belonging needs

• Businesses can encourage teamwork and generate a sense of community and belonging within the workplace
  

Esteem needs

• Businesses can provide recognition for employees' accomplishments, and provide a positive work culture that values individual contributions
  

Self-actualisation needs

• Businesses can help employees achieve this need by offering opportunities for employees to pursue their passions and interests

• For example, Barclays Bank is known for supporting elite sportspeople by allowing them time off work in the day to continue their training (the focus was on getting the job done, not having to be present at work at a certain time)

The Advantages & Disadvantages to Business of Applying Maslow's Hierarchy

Taylor 's Scientific Management Theory

• Developed by Frederick Taylor in the early 20th century

• It focuses on breaking down complex tasks into simpler ones, standardising work processes and providing workers with clear instructions and training to achieve maximum efficiency

• Many manufacturing businesses use Taylor's principles to structure their staff benefits

  • Piece rate pay systems link output to financial rewards

  • Production lines involving human labour are often set up based on these principles

Diagram to show Taylor's theory of motivation

Taylor's method starts with a scientific analysis of what is involved in a job and then breaks it down into parts for which employees can be trained 

1. Study and analyse the work process

• Carefully analyse each step of the work process

• Break down complex tasks into simpler ones and identify the most efficient and effective way to perform each task

2. Standardise the work process

• This involves creating detailed procedures and instructions for each task so that workers can follow these procedures consistently

3. Select and train workers

• Workers should be carefully selected based on their skills and abilities

• Train workers to perform their tasks efficiently and effectively

  • This training includes both technical skills and the proper attitudes/behaviours required to be successful (e.g patience in a repetitive task)

4. Provide incentives for performance

• Scientific management emphasises the use of incentives to motivate workers

  • This may include bonuses or piece-rate pay

An Evaluation of Taylor's Motivation Theory

Herzberg's Motivation Theory

• Herzberg's theory suggests that there are two influencers that determine employee motivation and job satisfaction - hygiene factors and motivators

  • Hygiene factors are elements that do not necessarily lead to job satisfaction, but their absence can cause dissatisfaction which decreases motivation e.g poor teamwork in the workplace

  • Motivators are elements that lead to job satisfaction and motivation e.g. increased responsibility

Diagram to show Herzberg's Two-factor Theory

An explanation of how the lack of hygiene factors causes dissatisfaction while addressing the motivators increases satisfaction. Increased satisfaction leads to increased productivity and profitability

Using hygiene factors to decrease dissatisfaction

• Pay fair wages/salaries

  • If an employee is not paid a fair wage for their work they may become dissatisfied and demotivated

• Offer excellent working conditions

  • If the workplace is dirty, unsafe or uncomfortable employees may become dissatisfied and demotivated

  • Google has a reputation for providing amazing workplaces which include gourmet restaurants, laundry services and dog care

• Offer employment contracts which provide job security

  • If employees feel that their job is not secure they may become anxious and demotivated and contribute less to the business goals

Using motivating factors to increase satisfaction

• Build a recognition and rewards culture

  • When employees are recognised and rewarded for their hard work they are motivated to continue performing well

  • Examples include sales person of the month award, regular staff social events

• Offer opportunities for growth and development

  • When employees are given opportunities to learn new skills and advance in their careers they are motivated to continue working for the company

  • Examples may include personalised growth plans which help workers achieve professional goals or sabbaticals which allow workers to periodically pursue a valued interest

• Provide challenging work which requires problem solving

  • When employees are given challenging work that allows them to use their skills and abilities they are motivated to continue performing well

  • Examples may include job rotation or job enlargement through delegation