Unit 2: Human Resource

Management
2.4 Motivation and Demotivation

By: Miss Kath Estrella

Activity: Motivating Employees

TASK:
Supposed you are a manager of a certain
company. What strategies would you employ
to motivate your employees?
Activity: Motivating Employees

DIRECTIONS:
1. Group activity
2. Explain the strategy that you will adopt to
motivate your workers. Include the following
in your presentation:
- Nature of your organization
- Explanation of your strategy/policy
- Rationale behind your strategy/policy
Outline:
✓Motivation theories (AO3)
✓Labor turn over (AO2, AO4)
✓Types of Appraisals (AO2)
✓Methods of Recruitment (AO2)
✓Internal and External Recruitment Salary (AO3)
✓Types of Financial Rewards (AO2)
✓Types of Non-Financial Rewards (AO2)
✓Types of Training (AO2)
Motivation versus
Demotivation
 Motivation
refers to the desire, effort and passion to
achieve something. It is the willingness to
complete a task or job with intent and
purpose.
Demotivation
lack of interest and enthusiasm about
work
What will be the benefits of
increased workers
motivation?
Generic benefits of increased workers motivation

✓Higher staff morale and job satisfaction

✓Better industrial relations
✓Lower absenteeism
✓Lower staff turnover
✓Improves corporate image
✓Higher profitability (generated from
combining the above benefits).
MOTIVATION
THEORIES
 Motivation Theories

1. Taylor's scientific management theory of

motivation
2. Maslow’s hierarchy of needs
3. Herzberg’s two factor theory (motivation-
hygiene theory)
4. McClelland’s acquired needs theory
5. Deci and Ryan’s self-determination theory
6. Equity and expectancy theory
Activity: Motivation Theories
TASK:
1. Choose your partner,
2. Each pair will watch the following videos regarding different
motivation theories
3. Outline your learning with the following information:
a. Motivation Theory
b. Name of Proponent
c. Main argument and other features
d. Criticisms and limitations
4. Do the activity in word or google docs. Each pair will submit the same
file with file name- NAMESOFPAIR-MOTIVATION THEORIES
Taylor's scientific management theory of motivation

Source: https://www.youtube.com/watch?v=z4qdXvodZaE
Maslow’s hierarchy of needs

Source: https://www.youtube.com/watch?v=3St5OoLYTJ0
Herzberg’s two factor theory (motivation-hygiene theory)

Source: https://www.youtube.com/watch?v=jnIuBktpwaM
McClelland’s acquired needs theory

Source: https://www.youtube.com/watch?v=f-qbGAvR4EU
Deci and Ryan’s self-determination theory

Source
Equity Theory

Source: https://www.youtube.com/watch?v=ZYlcy2geMkI
Expectancy Theory

Source: https://www.youtube.com/watch?v=WDgF7Avijlc
 Taylor's scientific management theory of motivation
▪ advocated the use of piece-rate payment systems suggesting that
“what the workmen want from employers beyond anything else is
higher wages.”

▪ Differentiated piece rate- workers are paid a standard level of output

and receive a higher rate if they exceed that level.

▪ Manager's Duty- Taylor believed it was a manager's duty to decide

how each and every individual task should be completed

▪ promoted the use of division of labour

 Criticism/ Limitations on Taylor’s theory

▪Ignores non-financial factors.

▪Does not recognize that people can be
independent thinkers.
▪Difficult to measure the output of
professionals that focus on mental output,
rather than physical output.
▪Can lead to repetitive and monotonous
tasks.
 Maslow’s hierarchy of needs
▪Maslow focused on the psychological
(emotional and mental) needs of workers
as he believed people are motivated by
more than just their pay.

▪He suggested that people would need to

be satisfied with their lower level needs
before they could progress to higher level
needs.
Maslow’s hierarchy of needs
Maslow’s hierarchy of needs
 Criticisms on Maslow’s hierarchy of needs

▪Identification of workers’ needs is

difficult.
▪Not everyone has the same five
needs.
▪Self-actualization needs are rarely
permanently achieved.
 Herzberg’s two factor theory
(motivation-hygiene theory)
▪Herzberg focused on the sociological and
psychological aspects of work
▪He investigated the factors that caused
satisfaction and dissatisfaction at work
▪Two categories of factors affecting the level of
motivation in the workplace:
- hygiene factors (mainly physical aspects)
- motivators (mainly psychological aspects)
Herzberg’s two factor theory
(motivation-hygiene theory)
Herzberg’s two factor theory
(motivation-hygiene theory)
 Criticisms on Herzberg’s two factor theory
(motivation-hygiene theory)

▪Hygiene factors can be taken for

granted.
▪Does not apply to low skilled jobs (the
study was limited to engineers and
accountants).
▪Employees may not want the extra
responsibility and stress from having
enriched / more demanding jobs.
 McClelland’s acquired needs theory
▪ McClelland’s acquired needs theory suggests that there are three types of
needs that must be satisfied to boost motivation and productivity.

Need for Achievement Need for Power Need for Affiliation

(n-Ach) (n-Pow) (n-Aff)
• N-Ach people are moderate • N-Pow people tend to be • N-Aff people seek to have a
risk takers as they feel a strong-willed as they like to good social and working
sense of achievement if a influence the behaviour of relationship with colleagues.
task is not too hard or too others. • They are motivated by
difficult. • People who seek institutional working in teams or customer
• They are more interested in power (instead of personal relations instead of working
personal success rather power) bring the best out in alone.
than extrinsic rewards. their teams to achieve
organizational objectives.
 Deci and Ryan’s self-determination theory
▪ Self-determination theory by Deci and Ryan suggests that the drive
to flourish relies on three core requirements:
- Autonomy- means having control over our own lives and
decisions.
- Competence- having the knowledge and confidence to learn
and do things well
- Relatedness-is about our connections with other people in
society.
 Equity theory by Adams
▪ Equity theory and expectancy theory are both
examples of process theories of motivation.
This category of motivation theory considers
how motivation occurs, rather than what
motivates people
▪ Adams suggests what motivates employees is
whether they feel outputs are equal or relative
to their inputs. i.e. is the workplace and/or
remuneration equitable?
▪ Therefore, workers will only be motivated if
their remunerations and recognitions are:
- Commensurate with their efforts AND
- Fair in relation to other employees
performing similar jobs.
Equity theory by Adams
Equity theory by Adams
Equity theory by Adams
 Expectancy theory by Vroom
▪ Expectancy theory put forward by Vroom suggests that people
only put in the effort to do a task if they expect they will achieve
the required result.
▪ Vroom suggests when faced with options, people choose the one
with the greatest motivation consisting of three parts:
- expectancy
- instrumentality
- valence
Expectancy theory by Vroom
SUMMARY OF MOTIVATION THEORIES
LABOR TURN OVER
 Labor Turn Over

▪Labor turnover measures the percentage of the

workforce that leaves the organization in a given
time period (usually one year).
 Cost of High Labor Turn Over
▪ Recruiting new (replacement) workers.
▪ Inducting and training new staff.
▪ Management time during the recruitment process.
▪ Lost productivity during the time between the loss of employees
and hiring replacement workers.
▪ Getting workers familiarized with the operations and corporate
culture of the organization, such as adjustment to the new working
environment, and company policies, procedures and processes.
▪ Negative impact on remaining workforce, e.g. overburdening
existing staff, poor morale, and lower productivity.
▪ Negative publicity if the organization struggles to retain its workers.
TYPES OF APPRAISAL
 Performance management using appraisals
▪An appraisal is the
formal assessment of
an employee’s
performance in
fulfilling a job based
on the tasks and
responsibilities set
out in the job
description.
 Performance management using appraisals
▪ Appraisals are conducted in order to:

1. provide feedback to the employer and employee on the latter’s

performance
2. help the employee improve his/her performance at work
3. hold employees accountable
4. improve the employee’s motivation and job satisfaction
5. identify specific training and development needs to support the employee
6. help with decisions about salary increases
7. identify potential workers for promotion
8. meet workforce planning needs of the organization.
Methods of Appraisal
Advantages and Disadvantages of Appraisal
METHODS OF
RECRUITMENT
Recruitment process

Source: https://www.youtube.com/watch?v=OJNcYZvToGY&t=53s
Recruitment and selection process
 Recruitment and selection process

▪When a job
becomes available
and the firm has
decided on the
details of the vacant
position, the job
needs to be
advertised.
 Recruitment and selection process
• Applications usually comprise of:
• Application form
• Curriculum vitae
• Cover letter
• Interviews are conducted of a shortlist of suitable candidates.
• Testing may be required in the form of:
• Psychometric tests
• Aptitude tests
• Intelligence tests
• Trade tests
• References are used as a final safety check to ensure the candidate is suitable for
the position.
INTERNAL AND
EXTERNAL
RECRUITMENT
 Internal Recruitment

▪This involves hiring people who already work

for the business to fill a vacant post.
▪Internal posts are usually advertised on staff
noticeboards, in newsletters or via staff emails.
Advantages and Disadvantages of Internal
Recruitment
 External Recruitment

▪This is the process of hiring people from

outside the business.
▪Methods used to recruit externally include:
- Newspaper advertising
- Employment agencies
- Job centres
- Headhunting
Advantages and Disadvantages of External
Recruitment
 FINANCIAL and NON
FINANCIAL REWARDS
TYPES OF FINANCIAL
REWARDS
 Types of Financial Rewards

▪Salaries
▪Wages (time and piece rates)
▪Commission
▪Profit-related pay
▪Performance-related pay (PRP)
▪Employee share ownership schemes, and
▪Fringe benefits
 Salaries
▪are financial rewards Benefits Drawbacks
set at a fixed annual
Useful for when output
rate but paid on a or productivity is
It is not easy to
distinguish the efforts
regular basis. difficult to measure
or outputs of different
and/or where linking
workers. Therefore, it is
pay with speed may
difficult to reward those
▪For example, a person lead to lower standards
(e.g., teachers and
who are more efficient
earning $36,000 per doctors)
and productive.
year is paid $3,000 per There is little, if any,
month or $1,500 Better for a firm’s cash incentive to work hard
flow due to monthly since people are paid
fortnightly. payments. the same amount for
their time.
 Wages (Time and Piece rates)
▪ Wages are the reward for labor
services usually expressed as an Benefits Drawbacks
hourly rate (time) or as a
measurable quantity of output Hourly rates are used to
Using an hourly wage
(piece rate). rate is an easily
reward workers for their
▪ Wage earners are oſten paid an time not effort, which
understood payment
overtime rate for the hours they may encourage poor
system.
work over and above their productivity.
contracted hours. Quality of products may
▪ It is common for the overtime deteriorate thus close
rate to be paid at time and a half Piece rate incentivizes supervision is necessary.
(50% extra pay per hour) or workers to work harder. Workers may be
double pay (100% extra pay per
hour) to compensate the demotivated if there is a
employee for sacrificing more machinery failure.
leisure time
Source: https://worldpopulationreview.com/country-rankings/minimum-
wage-by-country
 Wages (Piece rates)

▪Piece rate is a payment system that can get

around the problem of time-based wages by
rewarding more productive workers.
▪payment systems reward workers based on their
output or productivity
 Commission
▪pays workers based on Benefits Drawbacks
a proportion Speed and aggressive selling
(percentage) of sales or techniques do not correlate
output contributed by a with high quality.

worker. Puts added pressure on

workers.
Overcomes the
▪For example, real estate disadvantages of Tasks can be repetitive or
agents might get paid output-based monotonous.
1% (the commission) a systems such as
wages.
Lack of security for
$500,000 property employees as they do not
know what their salary will
would earn $5,000 in be.
commission. There may be a need to hire
more quality controllers.
 Practice question

▪A health insurance broker earns a base salary of

$500 per month and 1.35% commission on the
value of each insurance policy sold. Calculate
her total pay is she sells $26,000 worth of health
insurance this month. [2 marks].
•Total pay = Base pay + Commission
•Total pay = $500 + ($26,000 × 1.35%) = $500 + $351
•Hence, total pay this month = $851
 Performance-related Pay (PRP)
▪ rewards employees (as individuals,
teams or as a whole workforce) who Benefits Drawbacks
meet certain goals.
It creates incentives for
Targets may be unrealistic
▪ PRP can be paid in various ways: staff to work better.
- Pay rise - an increase in a person’s Workers will work better Stress can be caused by
remuneration due to meeting or the pressure of meeting
exceeding pre-determined and pre- with clear targets.
targets.
agreed performance targets.
Fair as hard work is Non-financial motivators
- Performance bonus - paid as a one-off
reward to workers who have reached or rewarded. are ignored.
exceeded output or quality targets
- Gratuity - paid to staff who complete PRP is not appropriate for
Creates a system of
their employment contracts. some professions where
performance
quality is seen as more
management
important than quantity.
 Profit-related Pay (PRP)
▪is a type of financial Benefits Drawbacks
reward system which
remunerates workers a Strengthens employee
The share of the profits
made is usually too
certain percentage of the loyalty and encourages
small to provide an
annual profits that the team working.
incentive to work
business earns. It is Boosts labour efficiency Individual efforts are not
rewarded on top of an and limits labour recognized by this
employee’s normal pay conflict. reward scheme
(wages or salaries) Breaks down a ‘them
It is more beneficial to
▪Profit-related pay is and us’ culture since
senior management as
employees lower down
usually paid as an annual everyone is working
in the hierarchy feel that
bonus. together to achieve high
profits
they have no influence
over profits
 Employee share ownership scheme
▪ An employee share ownership
scheme is a type of financial Benefits Drawbacks
payment system that involves Staff will have a direct Impractical to
giving workers shares in the interest in the well- implement for
company they work for. being of the employees other than
▪ This comes in two main organization by being a those in senior
forms: shareholder. management.
- The company gives employees a Majority of employees
number of shares, freely without do not qualify for
any charge share ownership.
Lower rates of
- Employees are offered the absenteeism and staff Typically the dividends
opportunity to purchase shares at turnover. distributed are not
a discounted price
sufficient enough to
act as incentives.
 Fringe Payments
▪(also known as financial perks) are the monetary
benefits to employees in addition to their wages
or salaries. Examples: Benefits Drawbacks

Helps to meet an
employee’s safety
needs. Can be hugely
They can also make expensive, especially
employees feel more for senior executives
valued as the employer who benefit from the
is looking after the most generous perks.
well-being of the
employee
 TYPES OF NON-
FINANCIAL REWARDS
 Types of Non- Financial Rewards

▪Job enrichment
▪Job rotation
▪Job enlargement
▪Empowerment
▪Purpose/the opportunity to make a
difference
▪Teamwork
 Job Enrichment
▪about enhancing the Benefits Drawbacks
experiences of workers,
giving workers a wide range Workers may feel
of challenging tasks and Gives employees a forced into the extra
more responsibility at work. challenge. work and may not
respond to incentives.
▪entails more training, There may disputes
upskilling and encouraging Encourages employees
to be more productive.
about the payment for
workers to take part in extra responsibilities.
decision-making. Workers Employees feel Job enrichment has
are involved in a wider rewarded. been found to be most
variety of tasks, which Extra tasks could lead
beneficial in
require new skills. to future promotion.
administration and
technical roles.
Non Financial Reward at restaurant
Non Financial Reward at restaurant
 Job Rotation
▪is an operational Benefits Drawbacks

management Gains in productivity by

better motivation may
technique and form Reduces boredom from be lost due to a fall in
of non-financial overspecialization. output as the
employees settle into
motivation that their new roles.
involves workers Makes it easier to cover
Greater training costs.
switching between for absent colleagues.

jobs (tasks) for a An employer will

benefit from a more
Some employees see
period of time. widely trained
this as merely adding
to their workload.
workforce.
Example of Job Rotation
 Job Enlargement
▪is a type of non-financial Benefits Drawbacks
motivation that takes
place when more tasks May reduce
or activities are added to productivity as the
employee may be less
a worker’s job efficient at completing
description. the whole task.
▪These tasks are usually Prevents boredom with Employees may view
of a similar level of skill, repetitive tasks. this as a way to get
which is why job them to do more work
for the same pay.
enlargement is
sometimes referred to as Workloads may
become unmanageable
horizontal loading. for employees.
Example of Job Enlargement
 Empowerment

▪is the delegation of decision-making power

to workers, thereby helping to boost their
morale. It involves granting workers the
autonomy and authority to be in charge of
their own jobs and to execute their own
ideas
 Empowerment

▪Successful empowerment in the workplace

requires effective:
- Delegation
- Autonomy
- Employee participation
- Continuous professional Development
(CPD)
Purpose (the opportunity to make a difference)

▪is an intrinsic, non-financial type of

motivation because people believe they do
genuinely meaningful work. Non-financial
motivation often involves to having
opportunities to make a difference, be it on
a personal, professional or social level.
 Teamwork

▪refers to the combined efforts of a group of

workers to achieve of an organizational goal.
▪As a form of non-financial motivation,
teamwork can be a rewarding experience as
employees can support each other to
achieve a common objective.
Teamwork
TYPES OF TRAINING
 Training
▪ The generic objectives of training include:

✓Enabling new or less experienced employees to reach the level of

experienced employees

✓Ensuring there is a broad base of skills and expertise available to the

organization to meet the firm’s current and future HR needs

✓Developing a knowledgeable, competent and committed workforce

✓Building a workforce that can deliver high quality products and

services, thus meeting the needs of customers.
 Types of Training

▪Induction training

▪On the job training

▪Off the job training

 Induction Training
▪is a type of training Benefits Drawbacks
aimed at introducing Establishes clear expectations Time consuming to plan,
new employees to the and working habits from the delivery and oversee an
organization. start induction program

▪the purpose of Help new recruits understand Disruptive to trainers’ own

induction training is corporate culture of the firm work
to help new recruits Information overload is
to settle in quicker so Settling in quickly means new
recruits can contribute to the
common and
they feel self-assured firm more promptly
counterproductive for new
and supported in staff
their new job Morale boost from new staff Induction programmes can be
feeling welcomed and too long and tiresome for new
confident in being competent employees eager to start
in their new jobs working
 On the Job Training
▪refers to training Benefits Drawbacks
carried out whilst at
the workplace. Establishes clear expectations
and working habits from the
Time consuming to plan,
delivery and oversee an
▪Common examples: start induction program

- Demonstration Help new recruits understand

corporate culture of the firm
Disruptive to trainers’ own
work
- Shadowing Information overload is
Settling in quickly means new
- Mentoring recruits can contribute to the
common and
counterproductive for new
- Job Rotation firm more promptly
staff
- Practice Simulation Morale boost from new staff Induction programmes can be
feeling welcomed and too long and tiresome for
confident in being competent new employees eager to start
in their new jobs working
 Off the Job Training

▪refers to training Benefits Drawbacks

Potential loss of output as

conducted off- Access to expert trainers workers are away from
workplace
site, such as at a Expensive to pay for trainers,
A wider range of training can training venue and potential
tertiary college be provided (e.g. first aid). hotel and travel expenses for
employees
or hotel No distractions or disruptions
Not all skills and knowledge
learned is relevant and/or
conference from colleagues or customers
transferred to the workplace

center. Business networking can take

Finding time for staff to
disseminate knowledge from
place training courses can be
difficult
SAMPLE IA AND EE
QUESTIONS (based on
the lesson)
 Sample IA questions related to the Lesson

1. To what extent has Pointwell Ltd.'s use of

non-financial motivation reduced its
labour turnover rate? (key concept-
creativity)
2. How far is Goldman Sachs's change in
vacation policy useful to reduce the
company's labour turnover rate? (key
concept-change)
 Sample EE questions related to the Lesson

1. To what extent has Google LLC’s

leadership style and corporate culture
contributed to the motivation of its
employees in the USA?
2. To what extent can the continual decline
in profits at Foxconn be contributed to
poor motivation in the workplace?