ERG Theory

Existence: At the lowest level is the need to stay alive and safe, now and in the
foreseeable future. When we have satisfied existence needs, we feel safe and
physically comfortable. This includes Maslow's Physiological and Safety needs.

Relatedness: At the next level, once we are safe and secure, we consider our social
needs. We are now interested in relationships with other people and what they
think of us. When we are related, we feel a sense of identity and position within
our immediate society. This encompasses Maslow's Love/belonging and Esteem
needs.

Growth: At the highest level, we seek to grow, be creative for ourselves and for our
environment. When we are successfully growing, we feel a sense of wholeness,
achievement and fulfillment. This covers Maslow's Self-actualization and
Transcendence.

Expectancy Theory

Description: As we constantly are predicting likely futures, we create expectations about

future events. If things seem reasonably likely and attractive, we know how to get there
and we believe we can 'make the difference' then this will motivate us to act to make this
future come true.

Motivation is thus a combination of:

• Valence: The value of the perceived outcome (What's in it for me?)

• Instrumentality: The belief that if I complete certain actions then I will achieve
the outcome. (Clear path?)
• Expectancy: The belief that I am able to complete the actions. (My capability?)

Expectancy Theory is also called Valence-Instrumentality-Expectancy Theory or VIE

Theory. Motivate people to do something by showing them something desirable.

Frederick Herzberg's Motivation-Hygiene Theory

(Two Factor Theory)

He published his findings in the 1959 book The Motivation to Work. The studies
included interviews in which employees where asked what pleased and displeased them
about their work. Herzberg found that the factors causing job satisfaction (and
presumably motivation) were different from those causing job dissatisfaction. He
developed the motivation-hygiene theory to explain these results. He called the satisfiers
motivators and the dissatisfiers’ hygiene factors, using the term "hygiene" in the sense
that they are considered maintenance factors that are necessary to avoid dissatisfaction
but that by themselves do not provide satisfaction.
The following table presents the top six factors causing dissatisfaction and the top six
factors causing satisfaction, listed in the order of higher to lower importance.

Factors Affecting Job Attitudes

Leading to Dissatisfaction Leading to Satisfaction
• Company policy • Achievement
• Supervision • Recognition
• Relationship w/Boss • Work itself
• Work conditions • Responsibility
• Salary • Advancement

• Relationship w/Peers • Growth

Herzberg reasoned that because the factors causing satisfaction are different from those
causing dissatisfaction, the two feelings cannot simply be treated as opposites of one
another. The opposite of satisfaction is not dissatisfaction, but rather, no satisfaction.
Similarly, the opposite of dissatisfaction is no dissatisfaction.

While at first glance this distinction between the two opposites may sound like a play on
words, Herzberg argued that there are two distinct human needs portrayed. First, there are
physiological needs that can be fulfilled by money, for example, to purchase food and
shelter. Second, there is the psychological need to achieve and grow, and this need is
fulfilled by activities that cause one to grow.

Herzberg often referred to these hygiene factors as "KITA" factors, where KITA is an
acronym for Kick In The A..., the process of providing incentives or a threat of
punishment to cause someone to do something. Herzberg argues that these provide only
short-run success because the motivator factors that determine whether there is
satisfaction or no satisfaction are intrinsic to the job itself, and do not result from carrot
and stick incentives.

Implications for Management: If the motivation-hygiene theory holds, management not

only must provide hygiene factors to avoid employee dissatisfaction, but also
must provide factors intrinsic to the work itself in order for employees to be
satisfied with their jobs.

Maslow's Hierarchy

In 1943 Abraham Maslow, one of the founding fathers of humanist approaches to

management.

• Physiological needs are to do with the maintenance of the human body. If we are
unwell, then little else matters until we recover.
 • Safety needs are about putting a roof over our heads and keeping us from harm. If
we are rich, strong and powerful, or have good friends, we can make ourselves
safe.
• Belonging needs introduce our tribal nature. If we are helpful and kind to others
they will want us as friends.
• Esteem needs are for a higher position within a group. If people respect us, we
have greater power.
• Self-actualization needs are to 'become what we are capable of becoming', which
would our greatest achievement.

Equity Theory

Theory on job motivation in 1963. When people feel fairly or advantageously treated they
are more likely to be motivated; when they feel unfairly treated they are highly prone to
feelings of disaffection and demotivation. The way that people measure this sense of
fairness is at the heart of Equity Theory.

Equity, and the sense of fairness which commonly underpins motivation, is dependent on
the comparison a person makes between his or here reward/investment ratio with the ratio
enjoyed (or suffered) by others considered to be in a similar situation.

2-Adams called personal efforts and rewards and other similar 'give and take' issues at
work respectively 'inputs' and 'outputs'.
 inputs equity outputs
dependent on comparing
own ratio of input/output
with ratios of 'referent'
others

Inputs are typically: effort,
loyalty, hard work,
commitment, skill, ability,
adaptability, flexibility,
tolerance, determination,
heart and soul, enthusiasm,
trust in our boss and
superiors, support of
colleagues and subordinates,
personal sacrifice, etc.
People need to feel that Outputs are typically all
there is a fair balance financial rewards - pay, salary,
between inputs and expenses, perks, benefits,
outputs. Crucially pension arrangements, bonus
fairness is measured by and commission - plus
comparing one's own intangibles - recognition,
balance or ratio between reputation, praise and thanks,
inputs and outputs, with interest, responsibility, stimulus,
the ratio enjoyed or travel, training, development,
endured by relevant sense of achievement and
('referent') others. advancement, promotion, etc.

If inputs = output (rewarded) by outputs, then generally we are happier in our work and
more motivated to continue inputting at the same level.

If inputs < outputs (less beneficial), than the ratio enjoyed by referent others, then we
become demotivated in relation to our job and employer.

Theory X and Theory Y

In his 1960 Douglas McGregor proposed two theories by which to view employee
motivation. He avoided descriptive labels and simply called the theories Theory X and
Theory Y.

Theory X

• Dislikes work and attempts to avoid it.

• Has no ambition, wants no responsibility, and would rather follow than lead.
• Is self-centered and therefore does not care about organizational goals.
• Resists change.
• Is gullible and not particularly intelligent.

Essentially, Theory X assumes that people work only for money and security.

Theory Y
 • Work can be as natural as play and rest.
• People will be self-directed to meet their work objectives if they are committed to
them.
• People will be committed to their objectives if rewards are in places that address
higher needs such as self-fulfillment.
• Under these conditions, people will seek responsibility.
• Most people can handle responsibility because creativity and ingenuity are
common in the population.

Theory Y Management Implications: If Theory Y holds, the firm can do many things
to harness the motivational energy of its employees:

• Decentralization and Delegation

• Job Enlargement.
• Participative Management
• Performance Appraisals