THE EFFECT OF MOTIVATION ON ORGANIZATION PERFORMANCE

CHAPTER TWO

LITERATURE REVIEW

2.1 MOTIVATION - AN OVERVIEW

Given the given emphasis in recent years on people as a key source of competitive advantage, it is not surprising to see corporate initiatives introduced to “buy” employee commitment. (Mick Marchington and Arden Wilkson, 2008).To motivate is to create a desire or willingness to perform in the manner in which managers want to get the work done which is distinct from the capacity to work. Mullins (1996) states that „‟the underlying concept of motivation is some driving force within individuals by which they attempt to achieve some goals in order to fulfill certain needs‟‟. It is a feeling or an urge to do or not to do a thing to fulfill certain need. It is important for management to know and understand what motivates people as it affect work performance, recruitment and retention. Also employees must think through what expectations they have of work and whether they are happy with their lot

2.1.1 DEFINITIONS

The term motivation was originally derived from the Latin word “Movere” which means, “to move”.

Kreitner (2001) defines motivation as the psychological process that gives behavior purpose and direction.

Robert Kreitner and Ageloo Kinicki (2001) explain motivation as those psychological processes that cause the arousal, direction and persistence of voluntary actions that are goal directed.

A motive is a reason for doing something. Motivation is concerned with the factors that influence people to behave in certain ways. The three components of motivation as identifed by Arnold et al (1991) are:

Direction: What the person is trying to do.

Effort: How hard a person is trying.

Persistence: How long a person keeps on trying. (Armstrong, 2006)

2.1.2 SOURCES OF MOTIVATION

1. INTRINSIC MOTIVATION

This stems from direct relationship between the worker and the task and is usually applied. Feelings of achievement, accomplishment, challenge and competence derived from performing ones job are examples of intrinsic motivators. A sheer interest in the job itself.

1. EXTRINSIC MOTIVATION

This stems from work environment external to the task and is usually applied by someone other than the person being motivated. Pay, fringe benefits, company policies and various forms of supervision are examples of extrinsic motivation.

1. MOTIVATIONAL IMPLICATIONS OF INTRINSIC ANDEXTRINSIC REWARDS

According to Steers and Porter (1987), although most people work for some mix of intrinsic and extrinsic rewards, people clearly differ as to which is the more

Compelling motivational force. If a manager always praises an achievement, the motivated individual who excels largely for the feelings of intrinsic satisfaction, will begin to look on his manager as fake. Even within the extrinsic rewards arena, people look for different types of reward. Praise may be perfectly acceptable to the person motivated by the relatedness needs or affiliation, but may do nothing for the person expecting a more tangible pay-off.

Research initiated by Deci (1971) offers evidence that when too many extrinsic rewards are provided, work effort may decline. He found that the introduction of extrinsic rewards for work previously performed for intrinsic pleasure tends to reduce motivation. Over- abundant extrinsic rewards are likely to lessen the need to seek intrinsic satisfaction. People may perceive extrinsic rewards as diminishing their control of the work situation. However, if rewards serve primarily as feedback, this negative effect is minimal.

To get the best from their people, managers should emphasize anticipated reward value, whether extrinsic or intrinsic (Bratt, 1991). The manager‟s job is to strengthen effort performance-reward expectancies. For employees who have difficulty attributing outcomes to their performance, managers must make sure they realize performance-reward connections and provide performance feedback.

2.1.3 CHARACTERISTICS OF MOTIVATION

Mitchell (1982) quartered by Mullins (2005) identified four characteristics, which underline the definition of motivation namely:

• Motivation is typified as an individual phenomenon: Every person is unique and all the major theories of motivation allow for this uniqueness to be demonstrated in one way or the other
• Motivation is usually intentional: Motivation is assumed to be under the control of the worker, and behaviors that are influenced by motivation such as effort expended, are seen as choices of action.
• Motivation is multifaceted: The two factors of greatest importance.
• What get people activated?
• The force of an individual to engage in desired behavior.
• The purpose of motivational theories is to predict behavior motivation is not behavior itself and it is not performance. Motivation concerns actions and internal and external forces, which influence a person‟s choice of action.

2.2 HISTORICAL ROOTS OF MODERN MOTIVATION THEORIES

According to Wren (1987) historically, efforts to motivate people fell into three categories and upon close inspection, appear to have changed only in application but not in theory, up to the present day. The offering („the carrot‟), negative sanctions and efforts to build a new

“factory ethos” became the methods for providing motivation and discipline.

The “carrot” was the opportunity to earn more money through wage incentives; thus the employee‟s pay was based on output or performance. This notion of wage incentives represented a major break with tradition. Economists of the seventeenth and eighteenth centuries of the “mercantilist”, school of Economics believed that income and the supply of were negatively related, that is, as wage rose, less labour would be forth coming. This preindustrial revolution‟s point of view justified keeping wages low to ensure an abundant and motivated workforce.

On the contrary, however, the classical economist such as Adam Smith disagreed with the tradition that the worker must be kept at the subsistence level and that the best worker was the hungriest one. Rather he thought that monetary incentives brought out the best in people and that they would work harder to get more (Steers and porter, 1997).

Often called the “economic man” assumption, this smithian break with mercantilisation theory brought the opportunity for individual rewards based on initiative and efforts.

The “stick”, negative sanctions became a practice for which the early industrial system was frequently criticized. Graduated fines were common methods of discipline to get workers to do the right thing.

The third method of motivation had a general conception and was oriented toward creating a new factory ethos. The goal was to use religious morals and values to create the proper work attitudes. The encouragement of moral education, even on company time and reading of “the good book”, regular church attendance and exhortations to avoid the deadly sins of laziness, sloth and avarice were methods of inculcating in the working population the right habits of industry.

According to Kreitner and Kinicki (1992), most contemporary theories of motivation are rooted partially in the principle of hedonism, which states that “people are motivated to consciously seek pleasure and avoid pain”.

Kreithner and Kinicki(1992),suggested that four ways of explaining behavior are; needs reinforcement, cognition and job characteristics, which underlie the evolution of modern theories of human motivation.

1. Needs: Needs theories are based on the promise that individuals are motivated by unsatisfied needs. Dissatisfaction with one‟s social life, for example, a 1930 psychologist, was the first behavioral scientist to propose a list of needs thought to underlie goal-directed behavior.
2. Reinforcement: Reinforce theorists such as Edward L.Thorndike and BF Skinner (1961), proposed that behavior is controlled by the consequences, and not by the result of hypothetical Internal States such as instincts, drives or needs. This preposition was based on research data demonstrating that people repeat behaviors followed by favorable consequences and avoid behaviors resulting unfavorable consequence.
3. Cognitions: Uncomfortable with the idea that behavior is shaped completely by environmental consequences, cognitive motivation theorists contend that behavior is a function of beliefs, expectations, values and other mental conditions. Behavior is therefore viewed as a result of rational and conscious choices among alternative courses of action.
4. Job Characteristics: According to this motivation theory, the task itself is said to be the key to employee motivation.

Specifically, a boring and monotonous job stifles motivation. Three ingredients of a more challenging job are variety, autonomy and decision authority. Two popular ways of adding variety and challenge to routine jobs are job enrichment (or job design) and job rotation.

2.3 MOTIVATION THEORIES

2.3.1 INSTRUMENTALITY THEORY:

Instrumentality theory is the belief that if we do one thing it will lead to another. Instrumentality theory states that people work for money. The theory emerged in the second half of the nineteenth century with its emphasis on the need to rationalize work and on economic outcomes. It assumes that a person will be motivated to work if rewards and penalties are tied directly to his or her performance, thus the awards are contingent upon effective performance.

Instrumentality theory has its roots in taylorism, i.e. the scientific management of methods of F.W. Taylor (1911), who wrote: “it‟s impossible, through any long period of time, to get workmen to work much harder than the average men around them unless they are assured a large and permanent increase in their pay.”

This theory is based on the principle of reinforcement as influenced by skinners (1974) concept of conditioning-the theory that people can be “conditioned” to act in certain ways if they are rewarded for behaving as required. It is also called the law of effect. Motivation using this approach has been, and still is widely adopted and can be successful in some circumstances. But it is based exclusively on a system of external controls and fails to recognize a number of other human needs.

It also fails to appreciate the fact that the formal control system can be seriously affected by the informal relationship existing between workers.

2.3.2 CONTENT (NEEDS) THEORY OF MOTIVATION

Most content theories of motivation revolve around the notion that employees influence motivation. Needs are physiological or psychological deficiencies that arouse behavior. They can be strong or weak and are influenced by environmental factors. Thus human needs vary over time and place. The general idea behind need theories of motivation is that unmet needs motivate people to satisfy them.

2.3.1 MASLOW’S NEED HEIRACHY THEORY

In 1943, psychologist Abraham Maslow published his now famous need theory of motivation. Although the theory was based on clinical observation of few neurotic individuals, it has subsequently been used to explain the entire spectrum of human behavior.

Maslow proposed that motivation is a function of the basic needs. These needs are:

1. Physiological: The need to have oxygen (air), food, water and sex.
2. Safety: Consists of the needs to be safe from physical and psychological harm.
3. Social: The need for love, affection and acceptance as belonging to a group.
4. Esteem: Need for reputation, prestige and recognition from others. Also contains need for self confidence and strength.
5. Self Actualization: Desire for self fulfillment. The need to develop potentialities and skills to become what one believes one is capable of becoming.

FIG. 1 A DIAGRAMATIC REPRESENTATION OF MASLOWS HIERACHY

OF NEEDS

Maslow‟s theory of motivation states that when a lower need is satisfied, the next highest becomes dominant and the individuals attention is tuned to satisfying this higher need. The need for self-fulfillment however can never be satisfied. He said that “man is a wanting animal” only unsatisfied need can motivate behavior and the dominant need is the prime motivation of behavior.

One of the implications of Maslow‟s theory is that the higher order needs foresteem and self fulfillment provide the greatest impetus to motivation. They grow in strength when they are satisfied, while the lower needs decline in strength on satisfaction. But the people do will not necessarily satisfy their needs, especially when they are routine.

2.4 MOTIVATION AND PRODUCTIVITY

A Companies productivity level is a reflection of its success and this depends on the motivation of workers. Productivity has been an essential contribution to corporate success. This is a result of its direct translation into cost savings and profitability. Productivity has always been a key to long-term growth and sustainable improvement in economic growth and development. It generates non-inflationary increases in wages and salaries. (Mojahed 2005). An enhance productivity as a positive effect on a gross domestic product (GDP) of every nation.

It is often said that the best businesses have the best-motivatedworkers. Well-motivated employees are usually characterized by:

• Higher productivity (i.e. they produce more for a given level of resources than poorly motivated workers do.)
• Better quality work with less wastage, A greater sense of urgency (things happen quicker when they need to),
• More employee feedback and suggestions made for improvements. (motivated workers take more ownership of their work),
• More feedback demanded from supervisors and management, Working at 80%-95% of their ability. (Dipak Kumar Bhattacharyya, 2007)

Productivity is a measure of performance that indicates how many inputs it takes to produce or create an output.

This can be mathematically express as follows:

Productivity = Output

Input (Heizer and Render, 1999)

For companies, higher productivity that is doing more withless, results in lower costs. In turn doing more with less can lead to lower prices, fast services, higher market share and higher profits. (Chuck Williams)

Increasing payroll costs and competition in the global market place have caused managers to search for ways to increase productivity by linking compensation to employees‟ performance. High performance requires much more than motivation.

Ability, adequate equipment, good physical working condition, effective leadership and management, health, safety and other conditions allhelp raise performance levels but employees‟ motivation to work harder and better is obviously an important factor.

(Ivancevich, 2004).

Motivation either through intrinsic or extrinsic reinforcers, contributes to employeeSatisfaction or thus enhances performance and productivity. The level of motivation of workers represents the potential human energy available for production purposes. The mobilization and channelization of this energy makes it imperative for the management to activate its source by the application of incentives .The magnitude of incentives required is negatively related to the motivation level, the higher the level of motivation of workers, the higher their productivity potential. Suppose there are two workers with different levels of motivation but almost identical levels of ability. The worker with the higher level of motivation will require less incentive than the other to achieve the same level of productivity. The nature of incentives required will also vary in type‟s terms of the types of needs predominant among people. Accordingly, to provide optimal incentives for people at work to achieve desirable results, the management must understand the prevailing level and the nature of motives. Without such information, it would not be possible to use suitable incentives, both tangible and intangible, to effectively mobilize and direct human efforts toward the attainment of organizational goals.