Importance of Motivation

Motivation is a valuable tool for all firms as it helps to:

• Increase employee satisfaction ; this reduces friction amongst the workforce and also means less time is taken off work
• Increase production; happy workers are willing to work harder, therefor producing more
• Improve quality; workers who are satisfied will take responsibility for their part of the production process

Maslow's Hierarchy

Abraham Maslow came up with the 'Hierarchy of Needs' to explain motivation in 1968. This claimed that there were levels of needs that each worker had, which would motivate them. Once the most basic needs had been fulfilled, then the worker would look to the next need to motivate them. If managers were aware of this, they could work out how to best motivate the different workers in their companies.

Taylor's Scientific Principle

Taylor’s scientific theory claims that workers are motivated by being skilled in one particular area. They can produce a lot more this way, through specialisation. By producing more, they would get paid more; a scheme known as performance-related pay In many ways, Taylor sees people as being cogs in a big machine.

Herzberg's Two Factor Theory

Herzberg's theory differentiates between two separate groups; motivators and demotivators (which he calls Hygiene Factors). If a company had fantastic hygiene factors (such as job security) this does not mean they are motivated to work hard; however, if they do not look after the hygiene factors, then they will be demotivated and produce much less.

On the other hand, motivational factors are independant from hygiene factors; by rewarding workers, challenging them and giving them recognition for their efforts, they will be motivated to work harder and produce more. Motivational factors are not related to salary.

McGregor's Theory X and Theory Y

McGregor argues that managers can be split into two camps: X and Y

Theory X Managers

• Believe workers are lazy and have no motivation
• Believe workers need to be controlled and managede
• Managers should be autocratic to enforce greater production

Theory Y Managers

• Believe workers have many motivations
• Believe workers should be delegated more power
• Believe a democratic /paternalistic approach encourages more production

Methods of Motivation

There are many ways to motivate workers - Figure 3 shows the financial ways a company can encourage more production.

However, there are also non-financial methods of motivation, including:

• Free Company Cars
• Health Insurance
• Increased holidays
• Greater flexibility
• Free lunches

These benefits above are often known as perks.

Job Satisfaction

Job satisfaction are ways in which managers can improve motivation by changing the nature of the job that the employees are performing. There are three ways this may be done:

1. Job Enlargement - this is giving the worker more jobs and additional responsibilities, so that they feel valued and their work is not as boring
2. Job Enrichment - this is making the work that the worker does more challenging so that they feel stimulated and challenged enough to want to work harder.
3. Teamwork - this is allowing workers to work together so that they have ideas to bounce off, and it adds a social element to work.