Employee Motivation

By
Bao Chiem
Maria Lainez
Ernesto Miranda
H. Alan Tang
Adrian Tarango

Principles of Management
MHR 301 Section 06
13:00 14:50

Dr. Sharifzida

Table of Contents

I.

Introduction

pp. 3 - 4

II.

Review of Literature

pp. 4 - 8

III.

Interviews

pp. 9 - 12

IV.

Survey

p. 13

V.

Compiled Survey Results

pp. 14 - 17

VI.

Conclusion

p. 18

VII.

References

pp. 19 - 20

I. Introduction

The ability to motivate employees is a fundamental requirement of effective management

in the workplace. Just mention the word motivation and managers immediately think of
motivational theories such as Maslows theory on the hierarchy of needs and Herzbergs twofactor theory. Maslows famous pyramid of human needs, which ranges from physiological
to self-actualization, is usually the first thing that comes to mind. In fact, most executives
offices in the 1970s and 1980s almost always contained a little model pyramid on the desk.
(1, 8) Maslows theory on the hierarchy of needs and Herzbergs two-factor theory provide
managers with valuable insight into the motivation and needs of employees. However, these
are just two of the many perspectives that are available to help managers gain a complete
understanding of employee motivation.
Our textbook states that motivation refers to the forces that energize, direct, and sustain
a persons efforts. But, it is important to understand that when we speak of motivation, we
are referring to the forces that drive an individual to put forth their best endeavors in the
workplace. We are talking about the factors that bring about high performance in employees.
When we examine motivation we are referring to what makes the difference between doing
as little as you can get away with and doing everything that you possibly can. (2, 3)
Managers use many different techniques to motivate their employees, but motivating
people is hard work. It takes thought, attention to detail, know-how, and, perhaps most of all,
flexibility. (3, 8) Among the more traditional means of employee motivation are bonus
incentives and/or pay increases. True, money is a wonderful communicator, a great
attention-getter, and an excellent recruiter. (4, 10) But numerous studies have indicated
that money is not a primary motivator among employees or an especially effective one. (5,
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158) In fact, when it comes to motivating employees, growth opportunities and challenges,
recognition, and other non-cash rewards are more effective motivators than money.

II. Review of Literature

According to Herzberg's two-factor theory of motivation, money isnt even a motivator.

(6, 6) Today's workforce is becoming more and more skillful and technologically inclined.
Managers have to think of new ways to manage this knowledge workforce. With knowledge
and skills come higher salary demands. These knowledge workers will no longer work for
beans. According to Maslow's hierarchy of needs, people have physical, security, social,
ego and self-actualization needs. People are motivated to fulfill lower-level needs before
they move on to fulfill higher-level needs, such as ego (esteem) and self-actualization. (7,
111) Knowing what people need can help us understand how to motivate today's knowledge
workers. Given the fact that these workers command high-paying jobs, we can infer that
money alone doesn't provide enough of an incentive as a motivator for performance. This is,
of course, an element of Herzberg's theory of motivation.
Managers need to provide challenging jobs in order to better motivate today's
knowledge workers. Because the physical or material, and social needs that come with the
jobs are already fulfilled, these knowledge workers tend to move on to higher-level of needs
such as ego (esteem) and self-actualization. The survey we conducted suggests growth
opportunities and challenges have a positive effect on a persons motivation in the work
place. The majority of people we surveyed rank growth opportunities higher than pay when
it comes to job motivation. Most of the people in the survey answered that they would take a
high-profile job with more responsibilities but without any pay increase when given the
opportunity. This behavior suggests that people prefer recognition associated with the job.
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Also, the behavior in choosing the job with more responsibilities suggests that people are not
afraid of challenges associated with the job when they are presented in the right context. In
this case, by taking on the challenges, people may expect a certain amount of recognition.
Managers should keep this in mind when assigning work to their employees.
Work itself is a motivator according to Herzberg's two-factor theory. A worker
derives a sense of self-worth in the process of performing the job and, upon completion of
that job, a sense of accomplishment. Studies have shown that satisfied workers are more
productive. (8, 120) In dealing with today's knowledge workforce, managers need to design
jobs that are both challenging and satisfying. In order to design the right job for the right
person, the job designing process needs to involve employees because their needs have to be
addressed. A significant number of jobs in the workplace are apparently not very
challenging. In situations like these, managers can set goals and objectives so employees
know what is expected of them. These goals and objectives need to be specifically stated in
order to have most motivating effect. (9, 161) Having a clear goal can make a previously
routine job become more of a challenge. With this view, the worker becomes more
motivated in order to achieve that goal. Whether the job is by design or by goal setting, a
highly motivated worker is likely to be one who has the necessary skills and supplies to
accomplish the job.
The survey we've conducted shows that a majority of the respondents consider the
opportunity for growth to be more of a factor in job motivation than pay. Today's knowledge
workers also demand growth opportunities from their work place. These workers value new
knowledge and new skills. Companies that can provide these growth opportunities reap the
benefits of having a motivated workforce with improved skills. These growth opportunities
can involve on-the-job training or company-paid technical training.
Managers need to understand that challenging work and opportunities for growth
really go hand in hand. Workers who routinely perform challenging work inherit personal
5

growth and thus become even more motivated and productive. Designing challenging work
and providing growth opportunities can be cost-effective ways to boost employee motivation.
Non-cash rewards also play an important role in any organization, as rewards for
exceptional performance are vital for employee motivation. Employees want and need
recognition on the job, and an effective way of satisfying this need is through non-cash
rewards. Non-cash rewards appeal to employees on a personal level.
Because non-cash rewards have proven to be effective motivators, companies that
want rewards to be cost-effective but memorable are seeking the services of firms that
specialize in employee recognition, such as O.C. Tanner. Increasingly, says, Kent Murdock,
its chief executive, companies want to give Rolex watches or crystal knick-knacks to reward
special performance. Spend $3,500 on a bonus for a valuable employee, and he is unlikely to
weep for joy; spend the same on a fancy watch, and he just might. (10, 57) These non-cash
rewards can range from anything like tickets to a local sporting event or amusement park to
extra time off. As Thomas G. Kelley has noted, We must go beyond the paycheck and
recognize our employees. This will demonstrate that we truly value their contribution and
their individual impact on productivity and profitability.
According to Workforce Magazine Non-Cash rewards and incentives- ranging from
a post-it note that says, Good Job to a set of golf clubs or a vacation package can be not
only cost effective, but also valuable tools that can help raise morale, increase productivity,
improve quality, and improve safety standards and customer service. Employees like to be
applauded for doing a great job for the simple fact that it is a good feeling.
According to the survey we conducted, 94% of those surveyed felt that non-cash
rewards can be very effective in motivating employees. This seems to demonstrate that
money is not everything when it comes to motivating a person on the job. Non-cash awards
play an important role in employee motivation and knowing their contributions count is vital
to employee performance.
6

As previously mentioned, recognition is another important factor that managers must

identify in motivating their employees. According to an interview we conducted with Dennis
Foster, COO of LOR Management Services, some of the most effective methods he uses to
motivate employees are establishing high expectations, setting goals and objectives with
and not for the people, coaching them (rather than scolding), and recognizing them for work
well done. Employees want to feel like they are making a contribution to their organization
with their efforts.
Recognition can come in many forms, most of them with little or no real cost to a
company. A compliment such as a simple thank you still goes a long way in motivating
employees. (11, 1) Or it can be more formal such as an employee of the month award.
The value of recognition is the attention they receive (12, 2).
Saul W. Gellerman states in his book, Motivation in the Real World: The Art of
Getting Extra Effort From Everyone Including Yourself, If you are dealing with
individuals who, regardless of their demographics, want to take charge of their own life, at
least to the extent that circumstances permit them to do that, you can motivate them. What
that kind of person needs is plenty of opportunity for achievement and recognition. (13,
194) Employees, and people in general, want to feel like they are individuals and that they
can distinguish themselves by doing an exceptional or outstanding job. This concept would
relate to the level of ego in Maslows theory on the hierarchy of needs, which deals with
independence, achievement, freedom, status, recognition, and self-esteem. As one of the
vice-presidents of IBM asserts,
My best guess as to the unfulfilled needs that motivate a majority of Americans, and
to which most American motivation systems do not respond effectively, are these: First, most
Americans prefer to be dealt with separately as distinct individuals, rather than as one among
many. While they may or may not succeed in distinguishing themselves, they consider it
important that they have a chance to do so. To make a name for oneself, to leave a mark, to be
singled out for some kind of favorable recognition; these are all deep-seated needs that are
bred in abundance by the American culture. (14, 297)

By acknowledging the excellence and well-performed activities of employees,

managers can determine the type of recognition required. The level of appreciation from
recognition rises if it is an honest and well-deserve recognition because if employees
believe you're a fair, honest and caring boss, most of them will remain loyal and respond in
kind. (15, 2)

III. Interviews

Effective Employee Motivation

Interview #1
Definition of motivation: The forces that motivate employees to put forth their best efforts
in the workplace. The factors that improve job performance and push employees to go above
and beyond the call of duty.
1) Please indicate your name and your current position within the company
Dennis Foster, COO, LOR Management
2) Can you tell me a little bit about your experience in the field of management
7 years of project management in engineering and operations, 7 years as a
manager/director in management consulting (Deloitte), 3 years as president of a
company ($15M/year revenue).
3) What are some factors that have motivated you to achieve your current position?
Challenge, growth, creativity and financial independence.
4) What, if any, are some factors that have had a de-motivating effect on you in the
workplace?
Politics, bureaucracy and administrative duties.
5) There are many methods that can be used to motivate an employee, what method or
methods do you find to be the most effective?
Establishing high expectations; setting goals and objectives with not for people;
coaching them (rather than scolding); and recognizing for work well done.
6) What, if any, additional methods have you used to motivate your employees?
Only things that didnt work.
7) Do you agree with the following statement? In the absence of challenging,
measured work goals, high performance has little or nothing to do with level of pay.
9

Why or why not?

True, the issue with pay is simply one of being able to attract and retain the talent
needed to get the job done. Jack Welch is highly self-motivated, but it will cost you
a fortune to hire him!
8) How about this statement? Motivating people is hard work. It takes thought,
attention to detail, know-how, and, perhaps most of all, flexibility.
Clearly true. That is why it is illusive. It takes a little understanding of the human
condition and experience that can only come with time (and failures). And the
motivating factors do vary by individual and type of task (e.g., you motivate your
sales team slightly different than your engineering team).
9) Why or why not?
See above.
10) We recently did a survey of employees and found the following results. What do you
make of them? (See employee survey data attachment)
Nice job. Why the focus on volunteer work? Also, I am sure you understand that
good compensation is necessary, but not sufficient for high performance. And
good compensation is defined by the market place. Market-based compensation is
necessary to attract and retain high performers at any level (otherwise they will leave
and go somewhere else if you attempt to short them here). But money is shortlived in terms of a motivator since expectations become reset with each raise or
bonus. Hope this makes sense. Keep up the good work.

10

Effective Employee Motivation

Interview #2
Definition of motivation: The forces that motivate employees to put forth their best efforts
in the workplace. The factors that improve job performance and push employees to go above
and beyond the call of duty.
1) Please indicate your name and your current position within the company
2) Phil Jablonski - CTO
3) Can you tell me a little bit about your experience in the field of management
4) Most recently, I have managed two type of teams. One is a team of technical
programmers and the other is a team of accountants and accounting associates.
5) What are some factors that have motivated you to achieve your current position?
6) Mainly, the challenge of building a company from scratch and being a part of
something as it grows.
7) What, if any, are some factors that have had a de-motivating effect on you in the
workplace? When there are a list of impossible tasks and no time to get them done, I
will get de-motivated.
8) There are many methods that can be used to motivate an employee, what method or
methods do you find to be the most effective? I mainly try and work with the person
to determine what it is that they want out of a job. I talk to them to determine what
their own personal goals are and then work that person to help them achieve them.
9) What, if any, additional methods have you used to motivate your employees?
Everyone wants to be recognized for his or her contribution. I go out of my way to
give someone else credit for what has been accomplished. In this way the individual
sees that upper management is noticing their actions. It is usually their goal to earn
more money, so a lot of praise to upper management makes it easier to give that
person a raise when the time comes.
11

10) Do you agree with the following statement? In the absence of challenging,
measured work goals, high performance has little or nothing to do with level of pay.
Why or why not? People always want to make more money. To do that the person
must be an outstanding employee for the company. They want it known that they are
working hard and are making a difference in the company.
11) How about this statement? Motivating people is hard work. It takes thought,
attention to detail, know-how, and, perhaps most of all, flexibility. It has been said
the person who is the most flexible in a system, will control the system. Motivating
people is hard if you are not used to doing it. Once you learn how people as well as a
specific individual work, it is easier to motivate them.
12) Why or why not?
13) We recently did a survey of employees and found the following results. What do you
make of them? (See employee survey data attachment) Looks right to me.

Interview #3
Brian Regan, CEO of LOR Management Services, LLC was interviewed with a microcassette recorder. A copy of the interview is available upon request.

12

IV. Employee Survey Questions

Definition of motivation. Forces that energize, direct, and sustain a persons effort.
1. What motivates you to put forth you best effort in the workplace? (Rank 1 4)
___ Recognition
___ Opportunity for growth
___ Pay
___ Challenging work
2. Do you think non-cash rewards (i.e. gifts from the company, extra vacation time, tickets to an
amusement park, etc.) can be effective in motivating employees to be more productive?
Yes
No
3. Why or Why not? (Refer to question #2)
4. Given the following scenarios, which one would you prefer?
A. $50 bonus
B. a certificate for employee of the year presented at a company dinner?
5. Your employer offers you a high-profile job position. The position entails more
responsibility and requires making key decisions with regard to departmental policy.
However, this jobs pay rate is the same as your current position. Do you take it?
Yes
No
6. Why or Why not? (Refer to question #5)

7. Which of the following jobs would you prefer? (Choose one)

A. Highly paying job but with no recognition or appreciation of your efforts
B. Moderately paying job with recognition and appreciation of your efforts
8. Have you ever done volunteer work? (Circle one)
Yes
No
9. Why did you volunteer to do the work?
A.
B.
C.
D.
E.

For the challenge

Public recognition
Personal satisfaction
Meet new people
Other

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V. Survey Results

Motivation in the WorkPlace

25

25

Num ber of People

20

15

18
16

24

19
15

18 18
16

16

19
16

13

12

Recognition
Opportunity for Grow th

10

Pay

Challenging Work

0
Best (1)

Medium High (2) Medium Low (3)

Low (4)

Level of Motivation

Non-Cash Rewards = Effective Motivator?

Yes
94%

No
6%

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Scenarios

Certificate of Employee
of the Year
40%

$150 cash bonus

60%

High-Profile Job

Do not Take It
40%

Take it
60%

15

What Job Would You Prefer?

39
40

Num ber of People

35

26

30
25
20
15
10
5
0

High Pay w ith No Recognition

Moderate Pay w ith Recognition

Volunteer Work

No
23%

Yes
77%

16

Reasons for Volunteer Work

30

26

Num ber of people

25
20

12

15
10

0
For the
Challenge

Public
Recognition

Personal
Satisfaction

Meet New
People

Other

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VI. Conclusion

If managers wish to be effective, they need to have at least a basic understanding of

motivation and the different motivational theories that try to explain the concept of
motivation. They must be able to grasp the key components of theories such as Maslows
hierarchy of needs, and Herzbergs two-factor theory and make an effort to truly understand
their employees. It is only by grasping these concepts that they can hope to effectively bring
about continual high performance in their workers.
Our research, survey results, and interviews have given us some valuable insight into
motivation and its role in the workplace. Managers need to provide growth opportunity and
challenging jobs in order to better motivate today's workers. Without these challenges and
opportunities for growth, employees may not see a need to perform highly at work. We have
seen that recognition plays a major role in employee motivation and that it is a very effective
motivator. Employees want and need to feel that their contributions make a difference and
recognition is one way to satisfy those wants or needs. Our research and interviews have
confirmed that the use of non-cash rewards can be an effective and cost-efficient way to
motivate employees, and the majority of our survey respondents agree with this statement. In
conclusion, when it comes to bringing out the best performance of employees, growth
opportunities and challenges, recognition and non-cash rewards are more effective motivators
than money.

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VII. References

1.Maddock, Richard C., and Richard L. Fulton. Motivation, Emotions, and Leadership: The
Silent Side of Management. Quorum Books - Westport 1998.
2.Gellerman, Saul W. Motivation in the Real World: The Art of Getting Extra Effort from
Everyone-Including Yourself. Dutton - New York 1992.
3.Gellerman, Saul W. Motivation in the Real World: The Art of Getting Extra Effort from
Everyone-Including Yourself. Dutton - New York 1992.
4.Gellerman, Saul W. Motivation in the Real World: The Art of Getting Extra Effort from
Everyone-Including Yourself. Dutton - New York 1992.
5.Green, Thad B., and Raymond T. Butkus. Motivation, Beliefs, and Organizational
Transformation. Quorum Books - Westport 1999.
6.Herzberg, Frederick. One more time: How do you motivate employees? Harvard
Business Review No. 90010. Boston, Massachusetts.
7.Herzberg, Frederick. One more time: How do you motivate employees? Harvard
Business Review No. 90010. Boston, Massachusetts.
8.Schermerhorn, Hunt, Osborn. Organizational Behavior 8th Ed., John Wiley & Sons, Inc.:
New York, NY. 2003
9.Schermerhorn, Hunt, Osborn. Organizational Behavior 8th Ed., John Wiley & Sons, Inc.:
New York, NY. 2003
10.The Economist, Vol. 362 Issue 8258, 02/02/2002

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11.Kelly, Thomas G. Recognition and RewardIt Takes More Than Just a Paycheck.
http://www.orcpa.org/press_room/hot_news/emplyeerewards.htm

References (continued)

12.Wiscombe, Janet. WorkForce, April 2002 Vol. 81 Issue 4

13.Gellerman, Saul W. Motivation in the Real World: The Art of Getting Extra Effort from
Everyone-Including Yourself. Dutton - New York 1992.
14.Gellerman, Saul W. Motivation in the Real World: The Art of Getting Extra Effort from
Everyone-Including Yourself. Dutton - New York 1992.
15.Wiscombe, Janet. WorkForce, April 2002 Vol. 81 Issue 4

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