Theories of Motivation in Business Management

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Motivation is the factors that determine the grounds for engagement in a particular behavior by a person or persons. It attached with the beginning, route, the level of involvement and the sustaining at a particular level of behavior of a person. The grounds for a particular behavior may include the determinants which are varying from basic human needs to higher level of social needs. Motivation can be reflected through the energy and commitment of the individual or group to perform a certain task or tasks (Joseph 1989).

The employee motivation is a crucial factor for every business at a same or sometimes at a higher level with compared to other businesses. It affects the every aspects of the business. The basic level of the motivation is reflected by the hard working work force. At this stage the productivity will be high and hence the cost of labor per unit will be reduced. However the mere improvements in productivity will not be the single factor that a firm can achieve by motivating its workforce. Motivated employees are performing to a high standard level of performance where favorable impacts over the customer satisfaction and the shareholder value can be gained. The motivated employees are less likely to engage in industrial actions or such other violence actions against the company. The employee conflicts and grievances may lower. Further the motivated employees would work effectively under minimum supervision. They will be enthusiastically learning new things relating to their jobs that would enhance the quality of performance.

Building or creating motivated employee force is a difficult task by which a high amount of effort and money are absorbed. More importantly the culture, leadership style and the management style affect the employee motivation. Therefore the motivated employee force is becoming a competitive source to the company. There are various theories that are built regarding employee motivation. Various philosophers have presented various models on employee motivation. Their efforts and numerous case studies on this topic show the importance of the subject matter to the today’s business context. This assignment will present an introduction of those theories and the practice of those theories in the today’s business environment with relevant case studies.

Motivation Theories

There are several theories of motivation of various philosophers such as Abraham Maslow’s Hierarchy of Needs Theory, Herzberg’s Two Factor Theory, Douglas McGregor’s Theory X and Theory Y, Kurt Lewin’s Force Field Theory, Victor Vroom’s Expectancy Theory, F.W. Taylor’s Scientific Management, etc.

At lower levels of the Maslow’s hierarchy of Needs theory the monetary benefits are considered to be the motivation factor. At the higher level of the hierarchy factors such as social respect, recognition, sense of belonging and empowerment are powerful than the monetary factor of motivation. Accordingly Maslow suggested that the money is a lowest important factor as a motivator of employees. McGregor has included money in his Theory X category and explained it as a poor motivator and in theory Y category he has placed social recognition and praise suggesting that they are strong motivators other than money. This section of the assignment will present explanations of those important theories of motivation before understand the practical usage of those theories to generate a motivated workforce (Werther and Davis 1985).

Maslow’s Hierarchy of Needs Theory

This theory composed of two parts; classification of human needs and relating classes to each other. The classes of needs are as follows.

The theory explains the order of the fulfilling needs as follows.

Person begin from the bottom line of the hierarchy and will try to satisfy the very basic physical needs of hunger, thirsty, shelter, etc.

When he has satisfied these needs then they are not motivators further. Hence he moves upward of the hierarchy. Then the person would seek for the safety at work, job security, etc to ensure his survival at workplace.

Having ensured that he is safe his curiosity then will search for social needs such as belongingness, love, friendships, etc. the person would seek for colleagues to work with, share information, team work, communication, etc.

Then the esteem needs will come forward. This is the need for being praised, given recognition or evaluation for a job well-done. The people normally seek for respect of others while sharing the happy and sorrow.

Self-actualization is the way a person perceives himself. It measured by the extent of success and the amount of challenge of work.

There are several problems attached with this model where as it has greater potential to appeal in the business world such as,

It is no clear when would be a certain level is considered as “satisfied”

Individuals may respond differently regarding the same need

Sometimes individual behavior reflects the reaction for more than one need

Model has ignored several conditions such as bearing a low-pay by an employee expecting future benefits

Some critics argue that this model explain the behavior of middle-class workers in UK and USA (Forshaw and Korn 2010)

Herzberg’s Two Factor Theory

This is a content theory of motivation whereas the main theory is the Maslow’ Hierarchy of Needs. Herzberg carried out a research utilizing 200 engineers and accountants. They were asked to memorize the situations when that they felt positive or negative feelings at their job and the reasons there of. According to his findings he presented a two-steps approach to understand employee motivation and satisfaction which are called as Hygiene factors and Motivator factors.

There are several factors that can be used to eliminate the unpleasant working conditions at work. These fcators are called a Hygeine factors. These factors may include one or all of the following factors.

Working conditions

Company policies


Quality and the way of supervision

Eetent of inter-personal relationships

Salaries, wages and other financial benefits

The job security

The individual’s need for personal growth determines the motivaor factors of the particular person. Motivator factors actively create job satisfaction when they exist. If those factors are effective then the individual’s performance would be of above-average. The motivator factors may,

Opportunity for growth in the job

Entrusted responsibility

Social status

Recognition among others

Challenging work

Sense of achievement

(Stephen 2002)

Herzberg model more identical to the Maslow’s theory yet it focus specially on the higher levels of the hierarchy of needs. The factors in the lower level of the hierarchy are considered as generating dissatisfaction only when they are not met with.

Motivator factors are specific to the job itself such as how interesting the work is and how much of responsibility whether it assumes. The hygiene factors are considering the factors that are related to the environment of the job such as the safety working environment and the resources to complete the job assigned. These factors facilitate or able the employees to perform the job rather motivate to do the job with an extra effort and interest. Herzberg identified pay as a Hygiene factor. According to his theory the businesses are required to adopt the democratic approaches to motivate employees. These approaches may include one or more of the followings.

Job Enlargement: Employees are given a range of tasks that are in various areas of the business or fields. However these tasks must not assume much responsibility if so the motivation to the tasks would less.

Job Enrichment: this assigns the employees with more complex tasks which are attached with the completion of full work unit. The tasks will be of more challenging and interesting. And at the end the employee will feel a sense of achievement.

Employee Empowerment: Here the employees are delegated with more power to make decisions on the areas attached to their jobs. The responsibility of the decisions made also to be held by them.

(Musselwhite 2004)

F.W. Taylor’s Scientific Management

Taylor has formed several assumptions about the human behavior at work base on observations of the research he carried out participating US steelworkers.

Man is a rational economic animal who concerned with maximizing his economic growth.

People respond as individuals and not as groups.

People can be treated as standardized machines

Taylor simply described that the motivation factor of people at work is money. He suggested that the pay based on the rates produced by an each worker will induce him to produce more and more to earn more. Further the employees who do not achieve target of a daily production should be paid less in order to induce them to meet daily target. And the employees who exceed the target production should be paid more to induce them to keep that productivity and to motivate others. Accordingly manager’s job is to tell the employees what to do and the employees target is to complete that and to be paid according to their production (Tripathi 1991)

When presenting this theory Taylor has ignored that there are many individual differences which would affect the motivator factors of the employees.

However his methods were highly implemented by the business world which experienced a higher productivity and lower unit cost. It also gave the beginning kick to the mass production. Workers were unhappy with the Taylor’s methods since it assigned them with boring, repetitive work that required them to effort greatly to maximize the earnings. The employees were treated as machines and business people redounded employees as the productivity grew. These situations lead many industrial disputes and industrial actions by the workers (Mathis and Jackson 2000).

This model is closely related with the autocratic leadership style.

Douglas McGregor’s Theory X and Theory Y

This theory presents two extremes of the behavior of people at work as theory X and theory Y. No individual would be necessarily categorized into one category but the whole behaviors will be in between the ends of X and Y.

The characteristics of the two categories are as follows.

Theory X Workers

Theory Y Workers

Dislike Work and avoid working as much as possible

Who are lackof ambition

Willing to be led by someone else than taking risk

Highly seek for security and self-survival

Managers will have to impose a management system of coercion, control and punishment to achieve the business objectives through such employees

Highly interested in working and enjoy it

Interested in taking risks and responsibilities

Like to try new things and take challenges

Work is considered as a source of satisfaction or punishment depending on the working conditions

The management would face a challenge of creating a working environment that enable these employees to show their creativity and responsibility

Elton Mayo

Mayo suggested that employees are not mere considering the money and can be better motivated by giving them the opportunity to meet the social needs of the individuals. This is the Human Relationship Scholl of thought by which the managers are focused on considering more about the peoples relationship aspect understanding the how workers enjoy interactions. Mayo’s theory based on the extended research carried out in the Hawthorne factory of the Western Electric Company in Chicago. From that research Mayo came into conclusion that employees can be better motivated by;

Effective communication among managers and workers

Greater manager involvement in employee’s working life

Working in groups or teams

Accordingly it is suggested that the greater use of team work, high involvement of managers in the worker’s working life, and encouraged two way communication would be benefiting the companies. The Mayo’s theory is more closely running with the paternalistic management style.

( on 03/05/2011)

Role of Other Factors

It is highly considered that the way of motivating employees is the financial rewards. However there are many other aspects of the scenario that would be considered by the managers and executives to motivate their subordinates. The factors would be different on the individual basis which will need to put more effort into their work. Such factors may include followings.

Organization Culture

The organizational culture has a direct relationship with the employees’ performance and level of motivation. If the elements of the culture fit with individual’s background, values, beliefs, norms and expectations then the employees are automatically willing to work in the organization. If the corporate culture is built on the teamwork, encouragement, collaboration, evaluation, then the employees is likely to be motivated to put more efforts to bring the organizational objectives accomplished. More often employees seek for their leader’s direction and support, and at the same time they look for the collaboration of teammates and co-workers (Werther, Davis, Shwind, Das and Miner 1985).

Relationship with Leaders

The leadership style can be significantly influence the motivation of employees. The qualities of the leader will determine the extent to which the e employees are contributed to the organization. If the leader is unfair, do not provide clear instructions, and negatively look at the things then the employees will lose their desire to work hard to accomplish the goals. The organization’s leaders must communicate with its employees openly so that the employees are clear about the things that they are required to do.

(Source:, (Accessed on 01/05/2011)

Management Style

The organizational culture, the situation and the expectations and personality of the subordinates will determine the suitable style of a manager. The characteristics of the manager’s style would be of no fit with the changes in the organization and the cultural changes accompanied by that change. As an example in past the authoritarian style of the managers was appreciated with the bureaucratic organizations, but today the interest is more focused on participative or empowered managers who admire the democratic policies of management. Many of the management theories are supporting the that sort of management styles such as Total Quality Management, Management by Objective, employee empowerment, self-managed work teams, etc. A comprehensive review of the management styles and their contribution to motivated work force will be presented below.

Management Style


Participative Management


Share information with employees and participate them in the decision making process

Employees are entrusted with the responsibility of running their own departments and determine the appropriate policies and procedures

Contribution to Motivated Work Force:

Not suitable to adapted by every organizations and at every levels

This is a remedy to the poor morale and low productivity that gain the results very soon to the organization

Redistributed power will enhance the willingness to work

If the culture supports and if the employees are competent enough then the participation will result in effective decisions and productive operations.

Giving the employees recognition as they are important as the mangers and the stakeholders will satisfy their esteem needs.

Theory X and Theory Y


These theories are based on several assumptions.

It explains two extremes of the involvement and utilizing efforts and energy to accomplish tasks by the employees

Theory X explains the negative side of the performance and theory Y represents the positive side of the performance

Contribution to Motivated Work Force:

Considering the poor performance as the total fault of the employee by Theory X and therefore employees are motivated by the extrinsic rewards such as money, promotion, appraises, etc.

The low productivity is considered as the fault of the management.

Theory Z


It represents the good characteristics of the both Japanese management and the Western management styles.

The theory has combined those features of the management at every level of the organizations.

The characteristics of this theory included long-term employment, less specialized career path, group decision making, informal control, etc.

Concerns the all levels of needs of the employees.

Concerning the employee well-being satisfies the physical and security needs of the employees.

Contribution to Motivated Work Force:

Team work and group decision making satisfy the social needs

Encouragement to take risks and responsibilities will satisfy the higher level of needs such as self-esteem and self-actualization

Management By Walking Around


Managers can gather as much as possible information regarding the policies, procedures, employee matters, and other work related information

Manager can maintain proper relationship with employees so that he would be considered as a counselor or advisor by the employees

Contribution to Motivated Work Force:

Leaving decision making responsibility with the employees will achieve the fastest response time

Close relationship with manager will let the employees to present their suggestions, complaints and grievances as soon as they occur

Self-Managed Work Teams


This is a derivation of the employee empowerment

Contribution to Motivated Work Force: The teams will comprise of about 10-15 employees who require minimum supervision

Delegates the authority to decide on simple work related aspects such as how to spend money, what work to undertaken, etc

Total Quality Management


The all functions of the management are integrated to achieve a high quality product

Quality is the responsibility of all employees and teamwork

Contribution to Motivated Work Force:

The customer satisfaction is highly recognized

Recognition is given from CEO to lower level employees to maintain quality

Shared commitment to achieve the organizational objectives

Encourages employees to grow, learn and participate in the business operations actively

Encourages the continuing change and adaptation to the changing environment

Management by objective


Employees are participated in the establishing goals and objectives

Overall organizational objectives are converted into employee objectives

Steps are setting goals, participative decision making, implementing plans and performance feedback

High involvement of the employees in decision making and goal setting related to their jobs

Contribution to Motivated Work Force:

Managers are empowered to implement, control their plans and performance. This motivate the managers to work hard for the company

Periodical review of the employees’ performance will give the employees a sense of completion and will let them know what the areas to be improved more are. This will induce them to take more efforts to achieve the goals established with their participation

Employee Empowerment


The organization structures are change and the decision making is lapsed with the lowest levels of the organization

The objectives of the empowerment is to speed up the decision making and giving solutions to problems regarding the business operations, give employees the opportunity to grow, and to lower organizational cost to managers by assigning them to various other projects

Contribution to Motivated Work Force:

Employees will be trained to take high responsibilities and make more accurate, effective decisions quickly

A sense of belongingness of the work they are engaged in will generate within the employees

They think that the company is their own one and work hard to attain day-to-day work successfully 5387352 definition-employee-motivation.html, (Accessed on 02/05/2011)

The managers are obliged to select the suitable style for managing their subordinates and work which is suited to them, their subordinated personalities and general characteristics, the department they are assigned with and in general to the whole organizational setting and its culture. Management style highly correlated with the level of performance of the employees and outcome of the operations under their control. Managers must be delegated with the certain amount of authority and then their role becomes a nature of a leader. Then he must use suitable leadership traits to motivate and direct their subordinates to achieve the departmental/organizational objectives or outcome (Mathis and Jackson 2000).

Reward System

A properly designed reward system must be there in the organization by which the employees can attain such benefits. Employees must have the confidence that they can be rewarded with established performance criteria of the job. Further the rewards must be fairly distributed so that the employees can clearly identified that there is no any discrepancy over them. If the rewards are based on the performance evaluation procedure then all processes may transparent and the employees must clearly see that the evaluations are put on regularly and fairly (Joseph 1989)

Job Title

The job title will give the respective employee an idea about his role within the company, the extent to which he can contribute the accomplishment of organizational objectives. When the employees are aware about their importance to the organization they are automatically motivated to work hard to make their job effective (Deming 1986)

Monetary Benefits

Whether the money is being derecognized as a positive motivator it has proven to be more effective in practice. Selecting the right remuneration package for the employees is a challenge for nowadays. A number of ways are in use to motivate employees over their work such as;

Time-rate pay

Peace-rate pay

Performance related pay

Shares and share options




There are several aspects of money to be an important motivator such as;

Pay helps to satisfy many other needs of person such as esteem needs, safety needs, etc

It is an important cost to the company

It helps to attract competent employees

It helps to retain skilled and competent employees

It is subjected to various legislations such as National Minimum Wage

(Cherrington 1994)

Motivation in Practice – Case Examples

The Tesco Plc

The UK giant retailer, Tesco Plc has provided its large workforce to join the company as prospective shareholders. Staff is enabled to be a part of the Tesco’s profit by share allocation based on their performance. The number of shares allocated to each employee is determined by the number of days worked in an each period.

The Department of Education

The UK Departmental Education Sector is in the view that the teachers’ pay must be linked to their performance. In 2002 the British government introduces a performance based bonus scheme to give rise to the teacher’s pay and to retain the existing staff and to attract new staff to the teaching sector.

Nuclear Decommissioning Authority

The NDA has utilized many theoretical perspectives of the employee motivation to motivate its employees. The ‘NDA Way’ shows that several phenomena which is based on the fulfillment of Maslow’s Hierarchy of Needs as follows.

Always acting safely and responsibly

Building talent and teams

Challenging themselves

Learning from experience

Being open and transparent

Confronting problems

Delivering whet they promised

The NDA implemented the strategies like job enrichment, job enlargement, and job rotation, empowerment to effectively affect the employees’ motivation to carry out the organizational objectives effectively and efficiently. Its focus was to ensure that the employees are acquiring a range of skills and proficiency making the work is more interesting and challenging. Further the company introduced the flexibility into the workforce.

The NDA involved in wide range of projects which are each project is of a unique challenge. Hence the authority required people with flexible people to work in teams and willing to learn continually and to take responsibility. Their team work and relationships were based on the Mayo’s Human Relations School of motivation. The NDA build relationships on a win-win basis. The staff encouraged to build necessary skills and competencies to adapt the variety of the work involved by the authority. The employees are delegated with Personal Development plans with SMART objectives and provide the path to professional development as well.


Motivation is crucial factor of the success of the organization these days. There are various theories have been presented by various philosophers regarding the motivation of employees. Management, leadership, and organizational culture are key determinants among the factors affecting employee motivation. Every job has the probability of motivation or demotivation the employee. Motivation affects the every aspects of the business and strongly affects the level of productivity.

Whether some philosophers have considered money as a low motivator it has a high influence of person’s life and hence still it is valid as motivator. The reward system, job title, periodical performance reviews can also be considered as motivators.

Many organizations have adapted the teachings of theories like Mayo, McGregor to create a motivated employee force. A motivated employee force would benefit the company by lowering the unit cost, high productivity, maintaining quality, etc. the motivation is simply the work harder to accomplish the organizational goals effectively and efficiently by its workforce. Only a motivated workforce will be able to bring the organization to a successful position in the today’s dynamic competitive market environment.

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