Johns 10e Irm ch05 PDF

CHAPTER 5
THEORIES OF WORK MOTIVATION
CHAPTER LEARNING OBJECTIVES
After reading Chapter 5, students should be able to:
LO5.1. Define motivation, discuss its basic properties, and distinguish it from
performance.
LO5.2. Compare and contrast intrinsic and extrinsic motivation.
LO5.3. Explain and discuss the different factors that predict performance, and define
general cognitive ability and emotional intelligence.
LO5.4. Explain and discuss need theories of motivation and self-determination theory..
LO5.5. Explain and discuss the process theories of motivation.
LO5.6. Discuss the cross-cultural limitations of theories of motivation.
LO5.7. Summarize the relationship among the various theories of motivation,
performance, and job satisfaction.
CHAPTER OUTLINE AND TEACHING NOTES
Why Study Motivation?
People may work because they have to; they may enjoy work; they may work to earn
money, or they may want to meet people. In an ever increasingly competitive business
environment, theories of motivation provide managers with the best insight into the
manner in which human beings respond. Motivation has become even more important in
contemporary organizations as organizations need to increase productivity to be globally
competitive.
What Is Motivation?
Motivation can be formally defined as the extent to which persistent effort is directed
toward a goal. There are several characteristics to this definition.
Basic Characteristics of Motivation

Effort. Effort is the strength of a person’s work-related behaviour or the amount of effort
that a worker displays on the job. This can be reflected by a dock worker carrying heavier
loads or by a researcher working twelve-hour shifts. It involves exerting effort in a
manner that is appropriate to their jobs.
Persistence. Persistence is related to effort in the quantity of energy that is directed

toward meeting goals. This can be measured in the effort given throughout an eight-hour
shift, or the effort that a top performer delivers throughout a career. A sports analogy,
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5-2 Johns/Saks, Organizational Behaviour, Tenth Edition
“He/she comes to play every night,” or “They had an off year...” can be used to illustrate
this point. It has to do with being persistent in the application of effort.
Direction. Direction refers to the manner in which workers channel their energies. Do
workers channel persistent effort in a direction that benefits the organization? While
some workers may seem productive, they may be working hard, but not smart.
Motivation means working smart as well as working hard. While effort and persistence
refer mainly to the quantity of one’s work, direction has more to do with the quality of
one’s work and if it benefits the organization.
Goals. Goals are the direction that all effort is directed. They can be official or stated
goals, such as “You will increase your sales base by 8%,” or unofficial goals similar to
the workers in the Hawthorne studies who maintained “unofficial” productivity quotas.
Employee goals might include high productivity, good attendance, or creative decisions
or they might be contrary to the objectives of the organization such as absenteeism,
sabotage, and embezzlement.
Extrinsic and Intrinsic Motivation

Intrinsic motivation stems from the direct relationship between the worker and the task; it
is usually self-applied. Examples include feelings of accomplishment and achievement.
Extrinsic motivation stems from the work environment external to the task; it is usually
applied by someone other than the person being motivated. Examples include pay and
close supervision.
Although some research has reached the conclusion that the availability of extrinsic
motivators can reduce the intrinsic motivation stemming from the task itself, a review of
research in this area reached the conclusion that the negative effect of extrinsic rewards
on intrinsic motivation occurs only under very limited conditions that are easily
avoidable. Thus, both kinds of rewards are important and compatible in enhancing work
motivation.
Motivation and Performance

Performance is the extent to which an organizational member contributes to achieving
the objectives of the organization. The relationship between motivation and performance
is not one-to-one. A number of factors intervene between the two, including general
cognitive ability, emotional intelligence, personality, task understanding, and chance.
Thus, even if a person is highly motivated, he or she may not be able to perform
effectively.
General Cognitive Ability. General cognitive ability refers to a person’s basic

information processing capacities and cognitive resources. Research has found that
general cognitive ability predicts learning, training, and career success as well as job
performance in all kinds of jobs and occupations including those that involve both
manual and mental tasks. It is an even better predictor of performance for more complex
and higher-level jobs that require the use of more cognitive skills.

Chapter 5 Theories of Work Motivation 5-3
Emotional Intelligence. Emotional intelligence (EI) has to do with an individual’s ability

to understand and manage his or her own and others’ feelings and emotions. Peter
Salovey and John Mayer have developed an EI four-branch model that consists of four
interrelated sets of skills or branches. The four skills represent sequential steps that form
a hierarchy. Beginning from the first and most basic level, the four branches are:
1. Perceiving emotions accurately in oneself and others

2. Using emotions to facilitate thinking
3. Understanding emotions, emotional language, and the signals conveyed by
emotions
4. Managing emotions so as to attain specific goals
Research on EI has found that it predicts performance in a number of areas including

work performance and academic performance. EI has been found to predict job
performance above and beyond cognitive ability and the Big Five personality variables.
EI is particularly important for performance in jobs that require high levels of emotional
labour. One study found that emotional intelligence is most important for the job
performance of employees with lower levels of cognitive ability and of less importance
for the job performance of employees with high levels of cognitive ability.
The Motivation-Performance Relationship

It is possible for performance to be low even when a person is highly motivated. This is
because we cannot consider motivation in isolation; high motivation will not result in
high performance if employees have low general cognitive ability and emotional
intelligence, do not understand their jobs, or encounter unavoidable obstacles over which
they have no control. Motivation interventions will not work if employees are deficient in
important skills and abilities.
Need Theories of Work Motivation
Need theories of motivation attempt to specify the kinds of needs people have and the
conditions under which they will be motivated to satisfy these needs in a way that
contributes to performance. Needs are physiological and psychological wants or desires
that individuals can satisfy by acquiring certain incentives or achieving particular goals.
It is the behaviour stimulated by this acquisition process that reveals the motivational
character of needs:
NEEDS  BEHAVIOUR  INCENTIVES AND GOALS
Need theories are concerned with what motivates workers (needs and their associated
incentives or goals). Process theories on the other hand, are concerned with exactly how
various factors motivate people. The remainder of this section describes three prominent
need theories of motivation.

Maslow’s Hierarchy of Needs

According to Maslow, humans have five sets of needs that are arranged in a hierarchy,
beginning with the most basic and compelling needs. These needs include:
1. Physiological needs. Needs that must be satisfied for the person to survive, including
food and shelter. An organizational factor that satisfies these needs is minimum pay.
2. Safety needs. Needs for security, stability, and a structured and ordered environment.
Relevant organizational factors include safe working conditions and job security.
3. Belongingness needs. Needs for social interaction, affection, love, and friendship.
Relevant organizational factors include friendly and supportive supervision and
opportunity for teamwork.
4. Esteem needs. Needs for feelings of adequacy, independence, and deserved
appreciation and recognition by others. Relevant organizational factors include
promotions and professional recognition.
5. Self-actualization needs. Needs for developing one’s true potential as an individual to
the fullest extent and to express one’s skills, talents, and emotions in a manner that is
most personally fulfilling. Relevant organizational factors include challenging jobs with
potential for creativity and growth, and relaxation of structure to permit self-development
and personal progression.
The motivational premise of Maslow’s hierarchy of needs is that the lowest-level

unsatisfied need category has the greatest motivating potential. Once a need is satisfied,
the individual turns his or her attention to the next higher level, implying that a satisfied
need is no longer an effective motivator. It is only at the self-actualization level that
needs become stronger as they are gratified. Individuals who are in the lower-level need
categories are most susceptible to extrinsic motivation, while intrinsic motivation
becomes important for people who are motivated by the higher-order needs.
Alderfer’s ERG Theory

Alderfer’s ERG theory streamlines Maslow’s need classification and makes some
different assumptions about the relationship between needs and motivation. It is a three-
level hierarchical need theory of motivation (existence, relatedness, and growth needs)
that allows for movement up and down the hierarchy.
1. Existence needs. These needs are satisfied by some material substance or condition.
They correspond to Maslow’s physiological needs and to those safety needs that are
satisfied by material conditions.
2. Relatedness needs. These needs are satisfied by open communication and the
exchange of thoughts and feelings with other organizational members. They
correspond to Maslow’s belongingness needs and to those esteem needs involving
feedback from others.
3. Growth needs. These needs are fulfilled by strong personal involvement in the work
setting. They correspond to Maslow’s self-actualization needs and to some aspects of
his esteem needs.

Alderfer agrees with Maslow that as lower-level needs are satisfied the desire to have
higher-level needs satisfied will increase and that the least concrete needs—growth
needs—become more compelling and more desired as they are fulfilled.
Alderfer’s theory differs from Maslow’s in two ways.
1. ERG theory does not assume that a lower-level need must be gratified before a less
concrete need becomes operative. There is no rigid hierarchy of needs. Which needs
are operative depends on the individual.
2. ERG theory assumes that if the higher-level needs are ungratified, individuals will
increase their desire for the gratification of lower-level needs. Thus, an apparently
satisfied need can act as a motivator by substituting for an unsatisfied need. This of
course is not possible according to Maslow who argues that once a need has been
satisfied it is no longer motivational. In other words, satisfied needs are no longer
motivational according to Maslow.
In summary, there are two major motivational premises of ERG theory.
1. The more lower-level needs are gratified, the more higher-level need satisfaction is
desired.
2. The less higher-level needs are gratified, the more lower-level need satisfaction is
desired.
McClelland’s Theory of Needs

McClelland’s theory of needs is a nonhierarchical need theory of motivation that outlines
the conditions under which certain needs result in particular patterns of motivation.
Needs reflect relatively stable personality characteristics and are the product of early life
experiences and more recent social experience. McClelland was concerned with the
behavioural consequences of needs and predicts that people will be motivated to seek out
and perform well in jobs that match their needs. The three needs that McClelland studied
most have special relevance for organizational behaviour – need for achievement,
affiliation, and power.
Need for achievement is a personality dimension characterized by a strong desire to

perform challenging tasks well. People with a high need for achievement have a
preference for situations in which personal responsibility can be taken for work
outcomes, a tendency to set moderately difficult goals that provide for calculated risks,
and a desire for performance feedback. Thus, individuals high in need for achievement (n
Ach) have a special desire to perform challenging tasks well and to better their own
performance or that of others. n Ach is an example of a growth or self-actualization need.
Need for affiliation (n Aff) is characterized by a strong desire to establish and maintain
friendly, compatible interpersonal relationships. People high in n Aff build social
networks, communicate frequently with others, and avoid conflict and competition. n Aff
is an example of a belongingness or relatedness need.

People high in need for power (n Pow) have a strong desire to influence others, making a
significant impact or impression. They act in a high profile manner in small groups and
seek out situations where they can be influential. N Pow is a complex need because
power can be used in a variety of ways, some of which serve the power seeker and some
of which serve other people or the organization. n Pow corresponds closely to Maslow’s
self-esteem need.
McClelland predicts that people will be motivated to seek out and perform well in jobs
that match their needs. High n Ach persons should perform better when placed in jobs
that provide for personal responsibility, permit individual goal setting, and provide
adequate feedback. They tend to gravitate into jobs and occupations that permit them to
feel a strong sense of achievement, especially sales jobs and entrepreneurial positions.
People high in n Aff seek out and are motivated by jobs such as public relations and
social work that involve establishing good relations with others. Those with a high need
for power seek out and are motivated by jobs such as management and journalism.
McClelland has found that the most effective managers have low n Aff, high n Pow, and
use their power to achieve organizational goals.
Research Support for Need Theories

Research results show that need theories are valid under certain circumstances. Support
for Maslow’s main hypotheses is weak or negative. However, there is fair support for a
simpler two-level need hierarchy comprising the needs toward the top and bottom of
Maslow’s hierarchy. There is also support for several of the predictions of ERG theory
especially confirmation that the frustration of relatedness needs increases the strength of
existence needs. The simplicity and flexibility of ERG theory seems to capture the human
need structure better than the greater complexity and rigidity of Maslow’s theory.
Research on McClelland’s theory is generally supportive of the idea that particular needs
are motivational when the work setting permits the satisfaction of these needs.
Managerial Implications of Need Theories

The managerial implications of need theories are as follows:
Appreciate Diversity. Managers must be adept at evaluating the needs of individual

employees and offering incentives or goals that correspond to these needs. Thus, it is
important to survey employees to find out what their needs are and then offer programs
that meet their needs.
Appreciate Intrinsic Motivation. Managers must recognize the importance of higher-order

needs. Creativity and innovation are basic conditions for organizational survival, and
such behaviour is most likely to occur during the pursuit of higher-order need fulfillment.
Also, the frustration of higher-order needs may prompt demands for greater satisfaction
of lower-order needs, which can lead to a vicious motivational cycle.
Organizations must take advantage of the intrinsic motivation inherent in strong higher
order needs. To do this, lower-order needs must be reasonably gratified. Jobs can be
enriched to be more challenging and career paths can be designed enabling interested

workers to progress through a series of jobs that continue to challenge their higher-order
needs.
Self-Determination Theory (SDT)

Unlike need theories described in the previous section, self-determination theory makes a
distinction between two types of motivation: autonomous (or self-determined) motivation
and controlled (or not self-determined) motivation. Self-determination theory (SDT)
explains what motivates people and whether motivation is autonomous or controlled.
Autonomous motivation is self-motivation or intrinsic motivation and occurs when people

feel they are in control of their motivation, and they are performing a task because it is
interesting, and they have chosen to do it.
Controlled motivation occurs when people are motivated to obtain a desired consequence
or extrinsic reward. When motivation is controlled, individuals feel they are pressured
and have no choice but to engage in a task.
The extent to which a person’s motivation is autonomous or controlled depends on the

satisfaction of basic psychological needs. According to self-determination theory, needs
are universal necessities for psychological health. There are three basic psychological
needs that are important for all individuals: competence, autonomy, and relatedness.
When people have their basic psychological needs for competence, autonomy, and
relatedness satisfied, their motivation will be autonomous. When these needs are not
satisfied, motivation will be controlled.
Research Support for and Managerial Implications of Self-Determination Theory

Research has found that autonomy support is positively related to the satisfaction of the
needs for competence, relatedness, and autonomy as well as autonomous motivation.
Autonomy support involves providing employees with choice and encouragement for
personal initiative. Managers provide employees with autonomy support when they give
a meaningful rationale for performing an activity or task, they emphasize and enable
some choice rather than control, and they understand and acknowledge employees’
feelings and perspectives. Autonomous motivation is related to more effective job
performance, especially on complex tasks as well as more positive job attitudes and
psychological well-being. Controlled motivation is associated with negative outcomes,
such as psychological distress and turnover intentions.
The most important managerial implication of SDT is that organizations need to create
work environments that will satisfy employees’ needs for competence, autonomy, and
relatedness and facilitate autonomous motivation. Thus, managers should provide
employees with autonomy support as well as jobs that are interesting and challenging and
that allow employees some choice.

Process Theories of Work Motivation
Need theories of motivation concentrate on what motivates individuals, while process

theories concentrate on how motivation occurs. Three important process theories of
motivation are expectancy theory, equity theory, and goal setting theory.
Expectancy Theory
Expectancy theory is a process theory that states that motivation is determined by the
outcomes that people expect to occur as a result of their actions on the job.
The basic components of Vroom’s expectancy theory are as follows:
Outcomes are the consequences that follow certain work behaviours. First-level outcomes
are of particular interest to the organization, for example, high productivity versus
average productivity. Second-level outcomes are consequences that follow the attainment
of a particular first-level outcome, and are more personally relevant to an individual
worker and might involve amount of pay, sense of accomplishment, acceptance by peers,
fatigue, and so on.
Instrumentality is the probability that a particular first-level outcome will be followed by

a particular second-level outcome. It is also known as the performance  outcome link.
Valence is the expected values of outcomes; the extent to which they are attractive or
unattractive to an individual. Thus, good pay, peer acceptance, or any other second-level
outcome might be more or less attractive to particular workers. The valence of a
particular first-level outcome is determined by: instrumentalities x second-level valences.
In other words, the valence of a first-level outcome depends on the extent to which it
leads to favourable second-level outcomes.
Expectancy is the probability that a particular first-level outcome can be achieved. It is

also known as the effort  performance link.
Force represents the relative degree of effort that will be directed toward various first-
level outcomes. It is the end product of the other components of the theory and is
calculated as: Force = first-level valence X expectancy.
The motivational premises of expectancy theory are as follows:
1. People will be motivated to engage in those work activities that they find attractive
and feel they can accomplish.
2. The attractiveness of various work activities depends upon the extent to which they
lead to favourable personal consequences.
Note that expectancy theory is based on the perceptual perspective of the individual
worker. Two workers doing the same job could report different expectancies,
instrumentalities, and second-level outcomes and so they will likely exhibit different
patterns of motivation.

It is worth concluding the discussion of expectancy theory by noting that people

implicitly take expectancy, valence, and instrumentality into account as they go about
their daily business of being motivated. Ask students to reflect for a moment on their
behaviour at work or school and show them that they have certain expectancies about
what they can accomplish, the chances that these accomplishments will lead to certain
other outcomes, and the value of these outcomes for them.
Research Support for Expectancy Theory

Research has provided moderately favourable support for expectancy theory. In
particular, there is especially good evidence that the valence of first-level outcomes
depends on the extent to which they lead to favourable second-level consequences.
Experts in motivation generally accept expectancy theory.
Managerial Implications of Expectancy Theory

The managerial implications of expectancy theory involve “juggling the numbers” that
individuals attach to expectancies, instrumentalities, and valences.
Boost Expectancies. Managers should clarify the path to beneficial first-level

outcomes so that employees expect to be able to achieve first-level outcomes that are of
interest to the organization. Expectancies can usually be enhanced by providing proper
equipment and training, demonstrating correct work procedures, explaining how
performance is evaluated, and listening to employee performance problems. The main
point is to clarify the path to beneficial first-level outcomes.
Clarify Reward Contingencies. Managers should ensure that the paths between first- and
second-level outcomes are clear. Employees should be convinced that first-level
outcomes desired by the organization are clearly instrumental in obtaining positive
second-level outcomes and avoiding negative outcomes. To ensure that instrumentalities
are strongly established, they should be clearly stated and then acted on by the manager.
Managers should also provide stimulating, challenging tasks for workers who appear to
be interested in such work.
Appreciate Diverse Needs. Managers should analyze the diverse preferences of particular
employees and attempt to design individualized “motivational packages” to meet their
needs.
Equity Theory
Equity theory states that motivation stems from a comparison of the inputs one invests in
a job and the outcomes one receives in comparison with the inputs and outcomes of
another person or group. That is, workers compare their own job inputs and outcomes
with those of other individuals or groups. Inequity occurs when these ratios are unequal.
As described in Chapter 4, equity or a fair exchange contributes to job satisfaction.
Inequity leads to the experience of job dissatisfaction. Equity theory is also a theory of
motivation because individuals are motivated to maintain an equitable exchange
relationship. Inequity is unpleasant and people will devote energy to reducing it and
achieving equity.

When inequity exists people may adopt the following tactics to reduce this inequity:
• Perceptually distort one’s own inputs or outcomes;
• Perceptually distort the inputs or outcomes of the comparison person or group;
• Choose another comparison person or group;
• Alter one’s inputs or alter one’s outcomes;
• Leave the exchange relationship.
The first three tactics for reducing inequity are essentially psychological, while the last
two involve overt behaviour. The remainder of this section of the text consists of an
example of Terry, a middle man in a consumer products company. Terry compares his
inputs and outcomes to Maxine, a co-worker. In his view, he is underpaid and should be
experiencing inequity. As a result, he is likely to engage in some of the psychological
and/or behavioural tactics to reduce his inequity. Maxine might also experience inequity,
however, her inequity is the result of overpayment. Equity theory is somewhat vague
about when individuals will employ various inequity reduction tactics.
Gender and Equity. Both women and men have some tendency to choose same-sex
comparison persons when judging the fairness of the outcomes that they receive. This
might provide a partial explanation for why women are paid less than men, even for the
same job.
Research Support for Equity Theory

Equity theory has received research support when inequity stems from underpayment.
Hourly underpayment results in a reduction of inputs, while piece rate underpayment
results in a high volume of low quality work. There is also evidence that underpayment
inequity leads to resignation. The theory’s predictions concerning overpayment have
received less support. People perhaps tolerate overpayment more than underpayment or
they use perceptual distortion to reduce overpayment inequity.
Managerial Implications of Equity Theory

Equity theory suggests that perceived underpayment will have negative motivational
consequences for the organization such as low productivity, low quality, theft, or
turnover. Managers must understand that feelings about equity stem from a perceptual
social comparison process in which the worker “controls the equation”—that is,
employees decide what are considered relevant inputs, outcomes, and comparison
persons, and management must be sensitive to these decisions. Therefore, managers must
develop a clear understanding of who employees choose for comparison persons.
Awareness of the comparison people chosen by workers might suggest strategies for
reducing felt inequity. If such choices are unrealistic, it may be necessary to mount an
information campaign to correct misperceptions of the inputs and outcomes of
comparison persons.
Goal Setting Theory

A goal is the object or aim of an action. Organizations have to transform organizational
objectives into individual goals. However, personal performance goals are vague or

nonexistent for many organizational members. Research has demonstrated when and how
goal setting can be effective.
What Kinds of Goals Are Motivational?

Goal setting theory is a process theory that states that goals are motivational when they
are specific, challenging, and when organizational members are committed to them and
feedback about progress toward goal attainment is provided. The positive effects of goals
are due to four mechanisms: direction, effort, persistence, and task strategies.
Goal Specificity. Specific goals specify an exact level of achievement for people to
accomplish in a particular time frame.
Goal Challenge. Goals should be difficult but attainable and based on past performance.
Thus, goal challenge depends on the experience and basic skills of the organizational
member.
Goal Commitment. Goals are not really goals unless they have been consciously accepted
and committed to. Individuals must be committed to specific, challenging goals if the
goals are to have effective motivational properties. The effect of goals on performance is
strongest when individuals have high goal commitment, especially when the goals are
challenging and difficult to achieve.
Goal Feedback. Specific and challenging goals have the most beneficial effect when they
are accompanied by ongoing feedback that enables the person to compare current
performance with the goal. To be most effective, feedback should be accurate, specific,
credible, and timely.
Enhancing Goal Commitment

Some of the factors that might affect commitment to challenging and specific goals are
participation, rewards, and management support.
Participation. Research results are mixed as sometimes participation in goal setting

increases performance and sometimes it does not. If goal commitment is a problem,
participation might be beneficial. Participation can often increase commitment when a
climate of mistrust exists between supervisor and an employee. Also, participation can
increase performance when competition or team spirit increase the difficulty of goals an
employee is willing to attempt to reach. Research indicates that participation can improve
performance by increasing the difficulty of the goals that employees adopt.
Rewards. While there is little doubt that extrinsic rewards like money will increase goal
commitment, there is also ample evidence that simply being challenged to do the job
“right” can improve performance without monetary incentives. Thus, goal setting has led
to performance increases without the introduction of monetary incentives for goal
accomplishment. Nonetheless, goal setting should be compatible with any system that
ties pay to performance.

Supportiveness. There is considerable agreement that a coercive approach to goal setting

on the part of supervisors will reduce commitment to a specific and challenging goal. For
goal setting to work properly, supervisors must demonstrate a desire to assist employees
in goal accomplishment and behave supportively if failure occurs, even adjusting the goal
downward if it proves to be unrealistically high. Trust in the manager who assigns
challenging goals is also important for goals to lead to improved performance.
Goal Orientation
Goal orientation refers to an individual’s goal preferences in achievement situations. It is
a stable individual difference that affects performance. Individuals with a learning goal
orientation are most concerned about learning something new and developing their
competence in an activity by acquiring new skills and mastering new situations.
Individuals with a performance-prove goal orientation are most concerned about
demonstrating their competence in performing a task by seeking favourable judgments
about the outcome of their performance. Individuals with a performance-avoid goal
orientation are most concerned about avoiding negative judgments about the outcome of
their performance. A learning goal orientation has been found to be positively related to
learning as well as academic, task, and job performance, while a performance-avoid
orientation is negatively related to learning and lower task and job performance. A
performance-prove orientation is not related to learning or performance outcomes.
Goal Proximity
Goals can also be distinguished in terms of whether they are distal or proximal goals. A
distal goal is a long-term or end-goal, such as achieving a certain level of sales
performance. A proximal goal is a short-term or sub-goal that is instrumental for
achieving a distal goal. Proximal goals involve breaking down a distal goal into smaller,
more attainable sub-goals that provide clear markers of progress toward a distal goal
because they result in more frequent feedback.
Proximal goals are important for novel and complex tasks and distal goals can have a
negative effect unless they are accompanied with proximal goals. When distal goals are
accompanied with proximal goals they have a significant positive effect on the discovery
and use of task-relevant strategies, self-efficacy, and performance.
Research Support for Goal Setting Theory

Goal setting has led to increased performance on a wide variety of tasks and occupations.
Group goals have also been found to result in higher group performance when the goals
are specific and the group members participate in setting goals. As well, the positive
effects of goal setting appear to persist over a long enough time to have practical value.
However, the effects of goals on performance have been found to depend on a number of
factors. Research has found that when individuals lack the knowledge or skill to perform
a complex task effectively, a specific and challenging performance goal can decrease
rather than increase performance relative to a do-your-best goal. When a task is
straightforward, a specific, high performance goal results in higher performance than a
do-your-best goal. Thus, a high-performance goal is most effective when individuals
have the ability to perform a task. A specific, high learning goal is more effective than a

specific, high performance goal or a do-your-best goal when individuals are learning to
perform a complex task. Recent research on goal setting has found that subconscious
goals can be activated by exposing participants to achievement-related stimuli such as a
word or photograph and that these primed goals also have a positive effect on
performance.
Managerial Implications of Goal Setting Theory

The managerial implications of goal setting theory are straightforward: Set specific and
challenging goals and provide ongoing feedback so that individuals can compare their
performance with their goals. However, special attention must be given to the nature of
the task and the type of goal. For example, when a task is novel or complex and
individuals need to acquire new knowledge and skills for good performance, setting a
specific learning goal will be more effective than setting a high performance goal. High
performance goals will be most effective for simpler jobs and when individuals already
have the ability to perform a task effectively. Proximal goals should be set in conjunction
with distal goals when employees are learning a new task or performing a complex one.
Do Motivation Theories Translate Across Cultures?

There is considerable question about how well motivation theories developed in North
America translate across cultures. This is especially true of the need theories, all of which
seem to be oriented toward more individualistic cultural values rather than collective
values. Thus, need theories face some cultural limitations to their generality. Research on
self-determination theory across various cultures, however, has been largely supportive.
A study of SDT in nine different countries found that the three psychological needs are
positively related to autonomous motivation, although the size of the relationships varied
across countries for competence and autonomy, which suggests that the importance of the
three needs might vary across cultures.
Equity theory implies that people wish to be rewarded according to individual input
rather than equally, an assumption that might not hold in collective cultures. Thus, the
definition of “fairness” is likely to vary across cultures. In collectivist cultures there is a
tendency to favour reward allocation based on equality rather than equity. Due to its
flexibility, expectancy theory translates across cultures fairly well. Setting specific and
challenging goals should also be motivational when applied cross-culturally. However, to
be effective, careful attention is required to adjust the goal-setting process in different
cultures. For example, individual goals are not likely to be accepted or motivational in
collectivist cultures. One limitation to the positive effect of goal setting might occur in
those (mainly Far Eastern) cultures in which saving face is important. That is, a specific
and challenging goal may not be very motivating if it suggests that failure could occur
and if it results in a negative reaction. As well, in the so-called “being-oriented” cultures
where people work only as much as needed to live and avoid continuous work, there
tends to be some resistance to goal setting. Thus, appreciating cultural diversity is critical
in maximizing motivation.

Putting It All Together: Integrating Theories of Work Motivation
Each of the theories of motivation helps us to understand the motivational process and
together they form an integrative model of motivation. For example, expectancy,
instrumentality, and goals that are specific, challenging, and accompanied with feedback
should lead to higher levels of motivation. Motivation (especially autonomous
motivation) along with the intervening factors of personality, general cognitive ability,
emotional intelligence, task understanding, and chance will influence performance. When
performance is followed up with rewards that satisfy workers needs and are positively
valent, they will lead to higher levels of motivation and job satisfaction provided they are
perceived as equitable. However, in accordance with self-determination theory, intrinsic
rewards will influence autonomous motivation while extrinsic rewards will influence
controlled motivation. Also recall from Chapter 4 that job satisfaction can also influence
performance.
SAMPLE ANSWERS TO DISCUSSION QUESTIONS
1. Many millionaires continue to work long, hard hours, sometimes even beyond the
usual age of retirement. Use the ideas developed in the chapter to speculate about the
reasons for this motivational pattern. Is the acquisition of wealth still a motivator for
these individuals?
Clearly, the wealth for which millionaires continue to work is not sought to fulfill basic
needs (Maslow’s physiological and safety or Alderfer’s existence). For millionaires, these
needs are already well satisfied. A certain proportion of such persons may continue to
seek money per se to influence others (power). Most millionaires, however, probably
continue to work because of the intrinsic satisfaction derived from the acquisition process
itself. Money is simply tangible feedback for a job well done, and its symbolic properties
are more important than its fiscal properties. For these people, the acquisition process
itself, rather than the wealth, is the stimulus that motivates them to continue to work.
2. Discuss a time when you were highly motivated to perform well (at work, at school, in
a sports contest) but performed poorly in spite of your high motivation. How do you know
that your motivation was really high? What factors interfered with good performance?
What did you learn from this experience?
High motivation is signaled by high effort, persistent effort over time, and a concerted
attempt to direct one’s effort to achieve a particular goal (effort, persistence, and
direction). High motivation may not be converted into good performance due to low
general cognitive ability, emotional intelligence, personality traits, inadequate task
understanding, or bad luck. Thus, not all highly motivated persons will be good
performers. When individuals perform poorly despite high motivation, they ideally search
for the inhibiting factor and attempt to correct it through education, training, or
discussion with experts such as superiors, teachers, or coaches.
3. What are the implications of goal orientation for motivating a group of employees?
When would it be best to set a learning goal versus a performance goal? When would

it be best to set a proximal versus a distal goal? Describe a situation in which it

would be best to set a learning goal and a situation in which it would be best to set a
performance goal. Describe a situation when it would be best to set a proximal goal
and a situation in which it would be best to set a distal goal.
It is first worth noting that although goal orientation is considered to be a stable
individual difference, there is also evidence that it can be manipulated. When it comes to
motivating employees, the most appropriate goal to set will depend on the task. Learning
goals are particularly important for learning to perform a new or complex task since
individuals need to focus on learning and understanding the task, as well as how to use
task strategies to accomplish the task. Focusing on performance outcomes will be
detrimental to learning, understanding, and the development of task strategies. Learning
goals are also important for complex tasks that require individuals to focus on the process
of doing a task rather than focusing just on outcomes. For more routine tasks in which
employees have a good understanding of how to perform the task, a performance goal is
most likely to be motivational and lead to higher performance. Students should
understand the value of a learning goal when they are learning to do something for the
first time, and that if all they are thinking about is how well they do and how they will
look in front of others, they are probably not going to learn the task and this will be
detrimental to their performance. Thus, students should describe situations where
employees are learning to perform a novel or complex task that will benefit the most
from a learning goal. For a high performance goal, they should describe a routine or
straightforward task in which employees have considerable experience performing it.
A distal goal is a long-term or end-goal, such as achieving a certain level of sales
performance. A proximal goal is a short-term or sub-goal that is instrumental for
achieving a distal goal. Proximal goals are most effective for novel and complex tasks.
Distal goals can have a negative effect on such tasks unless they are accompanied with
proximal goals. Thus, it is best to set a distal goal for tasks that are routine or that an
individual has experience performing. When the task is novel or complex, it is best to set
proximal goals which can be accompanied by distal goals. Thus, students should describe
a new, difficult, or complex task for when it would be best to set a proximal goal. They
should describe a simple, routine, or familiar task as best for setting a distal goal.
4. Describe self-determination theory, and provide an example of when your motivation
was controlled and when it was autonomous. What factors contributed to your
autonomous and controlled motivation, and what effect did your motivation have on
your performance? What effect did it have on your job attitudes and well-being?
Self-determination theory (SDT) has to do with whether motivation is autonomous or
controlled. Autonomous motivation occurs when people are motivated by intrinsic factors
and are in control of their motivation. Controlled motivation occurs when people are
motivated to obtain a desired consequence or extrinsic reward and their motivation is
controlled externally. Furthermore, when people have their basic psychological needs
satisfied (competence, autonomy, and relatedness) their motivation will be autonomous.
For controlled motivation, students should give examples in which they were motivated
by an extrinsic reward (such as money). For autonomous motivation, they should give an
example in which they were motivated by intrinsic factors such as the feeling of
achievement, accomplishment, and challenge that was a direct result of working on a

task. They should also discuss the extent to which their basic psychological needs were
satisfied and the impact it had on their motivation. Students should explain the effect that
their autonomous and controlled motivation had on their motivation and their
performance as well as their job attitudes and well-being. Ask them to explain any
differences in their level of motivation, performance, job attitudes, and well-being. It is
worth noting that autonomous motivation has been found to facilitate performance and is
associated with positive job attitudes and well-being so you might ask students if this was
the case for them and if so why. You might probe students about how long they were
motivated and the long-term effect on their performance and well-being. For controlled
motivation students might have been initially highly motivated but overtime less so as
they see that they are externally controlled. Ask them to describe their job attitudes and
well-being when their motivation was controlled. Those with autonomous motivation
might be more motivated over the long-term and also perform better, have more positive
job attitudes and improved well-being.
5. What is the relationship between cognitive ability and emotional intelligence with job
performance? When would emotional intelligence be most important for a person’s
job performance? When is cognitive ability especially important for job
performance?
Much has been made about the importance of emotional intelligence over the last several
decades and students might get the impression that it is just as important as cognitive
ability when it comes to job performance. However, this is not necessarily the case. As
noted in the chapter, cognitive ability is a strong predictor of job performance in most
jobs, especially those at higher levels that are more complex. Further, one study noted in
the chapter found that emotional intelligence is most strongly related to job performance
when individuals have low levels of cognitive ability. This suggests a compensatory
model which basically says that when job performance is not attained through cognitive
ability, it can be attained through emotional intelligence. Thus, while both cognitive
ability and emotional intelligence are related to job performance, emotional intelligence
is most strongly related to job performance for participants with low cognitive ability. To
put it another way, for individuals who are high on cognitive ability, emotional
intelligence is not as important for their job performance. It is also important to point out
that emotional intelligence will be more important for jobs that require people to use their
emotions and involve a high degree of emotional labour. Thus, jobs vary in terms of the
need for emotional intelligence so emotional intelligence will be more important for job
performance in those jobs where it is an important factor in the performance of the job.
Naturally, in those jobs where emotions and emotional labour are not important,
cognitive ability will be more important for job performance especially for complex jobs.
Finally, it is worth pointing out that a meta-analysis on emotional intelligence found that
EI predicted job performance above and beyond cognitive ability and the Big Five
personality variables. This, it would seem that a higher EI is important for job
performance over and above a person’s cognitive ability.

ADDITIONAL DISCUSSION QUESTIONS AND ANSWERS
1. Use Maslow’s hierarchy of needs and Alderfer’s ERG theory to explain why assembly
line workers and executive vice-presidents might be susceptible to different forms of
motivation.
According to Maslow and Alderfer, vice-presidents would most likely have their basic or
lower-order needs satisfied (physiological and safety, or existence). This is less likely the
case with lower status assembly line workers. Accordingly, vice-presidents would be
more susceptible to motivation through factors that fulfill their higher order needs
(esteem and self-actualization, or growth). Special recognition and challenging tasks
would have this effect. Assembly line workers would more likely be motivated through
money, money surrogates, safety, and job security.
2. Colleen is high in need for achievement, Eugene is high in need for power, and Max
is high in need for affiliation. They are thinking about starting a business partnership.
To maximize the motivation of each, what business should they go into, and who
should assume which roles or jobs?
The business should be anything that will capitalize on their diverse needs by providing
separate roles that correspond to their personalities. How about an executive recruitment
agency? Eugene can be general manager, Colleen can sell the service to businesses, and
Max can interview job candidates.
3. Debate the following statements: Of all the motivational theories we discussed in this
chapter, goal setting theory is the simplest to implement. Goal setting is no more than
doing what a good manager should be doing anyway.
Compared to need theories, expectancy theory, and equity theory, the basic form of goal
setting is simple to implement. It does not require knowledge of individual needs, equity
perceptions, or expectancies and instrumentalities nor does it require radical policy and
structural changes. However, more complex goal setting programs that are implemented
throughout an organization are not so simple to implement. They require much time and
commitment from all involved parties. Although good managers and supervisors should
use goal setting, there is evidence that they often fail to do so. Employees often report
substantial role ambiguity that suggests an absence of clear performance goals and
priorities. Furthermore, the type of goal that should be set will depend on the nature of
the task. Learning goals will be more effective when employees are performing novel or
complex tasks. On such tasks, high performance goals might be harmful. When a task is
straightforward, a specific high performance goal will be most motivational. Thus, while
managers should employ goal setting, goal setting theory is not as simple as it might
appear. The manager also needs to understand the difference between proximal and distal
goals and know when it is best to focus on one or the other or both.
4. Critique the following assertion: People are basically the same. Thus, the motivation
theories discussed in the chapter apply equally around the globe.
Everywhere, people are sensitive to reward contingencies and issues of fairness or equity.
However, what is considered rewarding and what is considered fair may vary greatly
across cultures and this requires tailoring of motivational systems. Further, people’s

needs vary and so will the things that they desire to satisfy them. While goals tend to be
motivational across cultures, cultural differences will dictate the nature of the goal (e.g.,
individual versus group) as well as the goal setting process and the manner in which
goals should be set (e.g., participative versus assigned).
EXTRA DISCUSSION QUESTIONS
1. What is motivation?
2. Compare and contrast the need theories of Maslow, Alderfer, and McClelland.
3. Why do people work? Why do some people work harder than others?
4. Distinguish between extrinsic and intrinsic motivation. How are they related in terms
of their effect on performance? What do they have to do with autonomous and
controlled motivation?
5. Outline the managerial implications of the need theories.
6. What is expectancy theory? Is the theory a realistic one?
7. What can an individual do when perceived inequity exists?
8. How can goal setting be motivational?
9. What is the difference between a learning goal orientation, a performance-avoid goal
orientation, and a performance-prove goal orientation? What kind of goal do you
prefer and why? What is the difference between a proximal and a distal goal?
10. Explain how the theories of work motivation are related.
11. What is the difference between cognitive ability and emotional intelligence and what
role do they play in the motivation – performance relationship?
SAMPLE ANSWERS TO INTEGRATIVE DISCUSSION QUESTIONS
1. Refer to the cross-cultural dimensions of values described in Chapter 4 (i.e., work

centrality, power distance, uncertainty avoidance, masculinity/femininity,
individualism/collectivism, and long-term/short-term orientation) and discuss the
implications of each value for exporting the work motivation theories discussed in
this chapter across cultures. Based on your analysis, how useful are the theories
described in this chapter for understanding and managing motivation across
cultures? What are the implications?
To some extent, all of the theories considered in the chapter can be applied across
cultures. The key is understanding cultural differences and knowing how to tailor the
need theories to specific cultures. Let’s consider the cross-cultural values. First, different
cultures value work differently. People for whom work is a central life interest tend to
work longer hours. In cultures with high work centrality, individuals might be motivated
to fulfill higher-order needs. In cultures with low work centrality, individuals might only
be motivated to fulfill basic physiological needs.
Power distance is the extent to which an unequal distribution of power is accepted by

society members. In small power distance cultures, inequality is minimized, superiors are
accessible, and power differences are downplayed. In large power distance societies,
inequality is accepted as natural, superiors are inaccessible, and power differences are

highlighted. Therefore, what is considered to be equitable in high and low power distance
cultures will differ. Inequity might not be as motivational in cultures that value large
power distance.
Uncertainty avoidance is the extent to which people are uncomfortable with uncertain
and ambiguous situations. Strong uncertainty avoidance cultures stress rules and
regulations, hard work, conformity, and security. Cultures with weak uncertainty
avoidance are less concerned with rules, conformity, and security, and hard work is not
seen as a virtue. Thus, in countries that value uncertainty avoidance, clear goals along
with strong expectancies and instrumentalities might be more motivational since
individuals do not like uncertainty.
More masculine cultures clearly differentiate gender roles, support the dominance of
men, and stress economic performance. More feminine cultures accept fluid gender roles,
stress sexual equality, and stress quality of life. Thus, concerns about equity will likely
differ between masculine and feminine cultures.
Individualistic cultures stress independence, individual initiative and privacy. Collective

cultures favour interdependence and loyalty to family or clan. Thus, goals need to focus
on individuals in individualistic cultures and the collective or group in collectivist
cultures.
Cultures with a long-term orientation tend to stress persistence, perseverance, thrift, and
close attention to status differences. Cultures with a short-term orientation stress personal
steadiness and stability, face-saving, and social niceties. Thus, motivational theories that
focus on persistence such as goal setting and expectancy theory might be most effective
in cultures with a long-term orientation.
In summary, when applying motivation theories across cultures, one has to understand
the effect of cultural values on: 1. People’s needs and those needs they seek to fulfill; 2.
How important equity is and what type of equity is valued; 3. The extent to which people
need to know what is expected of them (expectancy) and what they will receive in return
for what they do (instrumentality); and 4. What types of goals people value and will be
most motivational (e.g., individual or group goals).
2. Consider the basic characteristics of motivation in relation to operant learning

theory and social cognitive theory. What are the implications of operant learning
theory and social cognitive theory for motivation, and how do they compare to the
theories of work motivation described in this chapter?
Motivation is the extent to which persistent effort is directed toward a goal. These basic
characteristics, persistence, effort, and goals, are all relevant in terms of operant learning
theory and social cognitive theory. Students may think that these theories only apply to
learning. Thus, it is helpful to demonstrate that they also have implications for
motivation. For example, to the extent that some form of reward or positive
reinforcement is contingent on certain behaviours, individuals will be motivated to
perform the behaviour. That is, they will devote considerable effort and persist towards

achieving a goal if it is reinforced. In terms of social cognitive theory, there are

motivational implications that stem from observation, self-efficacy, and self-regulation.
For example, people will be motivated to imitate the behaviour of others if they observe a
connection between the behaviour and positive consequences. High self-efficacy is
motivational because people with high self-efficacy are more likely to persist in the
pursuit of a goal. Finally, self-regulation is motivational to the extent that people set goals
(goal setting theory) and reward themselves for goal accomplishment. In terms of the
motivation theories described in the chapter, self-efficacy is similar to the expectancy
component in expectancy theory; positive reinforcement is similar to instrumentality in
expectancy theory; and self-regulation involves both goal setting and rewards and
positive reinforcement.
SAMPLE ANSWER TO ON-THE-JOB CHALLENGE QUESTION: EMPLOYEE

TIME THEFT
Why are employees motivated to steal from their organization? Use the theories of
motivation discussed in the chapter to answer this question. What can organizations do to
prevent employee time theft? Consider the implications of each theory of motivation for
preventing all forms of employee theft.
The first theory that seems relevant for this issue and in fact any situation where
employee theft is involved is equity theory. According to equity theory, motivation stems
from a comparison of the inputs one invests in a job and the outcomes one receives in
comparison with the inputs and outcomes of another person or group. That is, workers
compare their own job inputs and outcomes with those of other individuals or groups.
Inequity occurs when these ratios are unequal. When inequity exists people may adopt a
number of tactics to reduce inequity such as perceptual distortion of one’s own inputs or
outcomes, perceptual distortion of the inputs or outcomes of the comparison person or
group, choose another comparison person or group, alter one’s inputs or outcomes, or
leave the exchange relationship. Based on equity theory, employees are motivated to steal
in order to reduce inequity. In effect, what they are doing is increasing the outcomes they
receive from the organization by stealing. Equity theory suggests that perceived
underpayment will have negative consequences for the organization and stealing is one of
them. Therefore, to prevent employee time theft according to equity theory, managers
need to understand that feelings about equity stem from a perceptual social comparison
process in which the worker “controls the equation”—that is, employees decide what are
considered relevant inputs, outcomes, and comparison persons, and management must be
sensitive to these decisions and the importance of employee perceptions about equity and
inequity and correct misperceptions of the inputs and outcomes of comparison persons.
They should also try to ensure that the outputs employees receive are comparable to
similar jobs in other organizations and across their own organization.
Need theory can also be considered as relevant for this question. If employees are not
able to fulfill their needs from their job, then time theft and stealing might provide them
the additional means of doing so. Therefore, organizations need to be aware of employee

needs and provide them with incentives that will enable them to fulfill at least their lower
level needs. Expectancy theory can also be used to explain employee motivation to steal
time and material things. If any of the links are weak (low expectancy, low
instrumentality, or low valence of second-level outcomes), then stealing might be a way
for employees to deal with their inability to obtain desired rewards from their job. Thus,
organizations should ensure that all of the linkages in the theory are strong such that
employees can perform at a level that will lead to desired outcomes. If they can’t, then
the motivation to steal will be greater.
With respect to time theft in particular, it might also be a means for employees to derive
greater intrinsic rewards from a job that is otherwise not very interesting or intrinsically
motivating. Therefore, providing employees with intrinsic motivators through work that
is challenging might be an effective means to curtail time theft.
TEACHING NOTES FOR WHAT IS YOUR GOAL ORIENTATION?

EXPERIENTIAL EXERCISE
This Goal Orientation scale was designed and validated by Zweig and Webster (2004). In
a series of four studies with over 900 participants, they demonstrated the reliability,
validity, and factor structure of a tri-dimensional measure of goal orientation. Their
findings indicate that goal orientation should be partitioned into three distinct factors.
Students should be asked to complete the Goal Orientation scale prior to class. They can
score and interpret their results by following the directions provided in the text on page
183. Given the link between goal orientation and performance, students are likely to be
very interested in their score and what it means.
For the discussion questions in the text, students should focus on the following:
1. Students should first identify their goal orientation scores. Based on their scores, they
should identify their primary goal orientation. Group members can compare their
scores and identify differences in goal orientation between members of the group.
2. Students should consider if there is a relationship between goal orientation and grade
average (academic performance) and what goal orientation is important for grades
and job performance. To facilitate this, you might have students submit their primary
goal orientation and grade average (be sure to indicate the scale so that they are the
same GPA or percentage for example) and then you can compare the average grade
for each of the three goal orientations. A discussion should focus on whether or not
goal orientation is related to and important for one’s grade average and the reasons
for this. As indicated in the text, a learning goal orientation has been found to be
related to learning as well as academic, task, and job performance while a
performance-avoid orientation is negatively related to learning and lower task and job
performance. A performance-prove orientation is not related to learning or
performance.

3. Students should consider the type of goal they will set for themselves in the future,
especially now that they know what their primary goal orientation is. Students should
indicate when it would be best for them to set a learning goal versus a performance
goal and how it can affect their academic and job performance.
4. Now that students have learned about their goal orientation, they should consider how
they can use this knowledge in the future to improve their academic and job
performance. Ask students what they should do and if they need to try and change
their goal orientation. Students should try to understand that they might want to set
learning goals in certain situations and that always having a performance-prove or
performance-avoid goal can be detrimental to their academic and job performance.
5. In concluding the exercise, ask students to describe what they have learned about
themselves and how knowledge of their goal orientation can help them to set goals in
the future that will have a positive effect on their learning and performance.
To help students better understand the meaning of goal orientation and the three kinds of
goal orientation, class discussion might revolve around the following issues:
1. What is a goal orientation and what are the different goal orientations?
2. How is goal orientation relevant for motivation and performance?
3. How might your goal orientation scores influence your grades?
4. How might your goal orientation influence your job performance and career?
5. Is it important for people to know about their goal orientation? Why?
TEACHING NOTES FOR A NIGHT AT THE OFFICE CASE

INCIDENT
1. Do you think it was a good idea for Professor Hackenbush to use goal setting to
motivate the TAs? How effective was this motivational strategy?
Goal setting theory suggests that goals are most motivational when they are specific
and challenging and when organizational members are committed to them. In
addition, feedback about progress toward goal attainment should be provided. Goals
with these characteristics have been found to be motivational and to increase
performance because they direct attention toward goal-relevant activities, they lead to
greater effort, they increase and prolong persistence, and they lead to the discovery
and use of task-relevant strategies for goal attainment. Thus, goal setting has the
potential to be highly motivational and improve performance. Given that the
professor wanted students to complete the grading of exams by a particular deadline it
was appropriate to use goal setting to motivate them. However, for a number of
reasons it turned out not to be a very effective strategy as the students did not do a
good job grading the exams. In effect, they met the goal for quantity (getting the
exams graded on time) but they did a poor job in terms of the quality of their grading.

2. Use goal setting theory to explain why setting goals for the TAs was not very effective
and how it could have been more effective.
As indicated in response to question #1, goals are motivational when they are specific
and challenging and when organizational members are committed to them. In
addition, feedback about progress toward goal attainment should be provided.
Although the goal that the professor set was very specific (in terms of the number of
exams to be graded by a certain time), he failed to ensure that the goal had the other
characteristics that make goal setting effective. For starters, the goal he set was too
hard and unrealistic. For goals to be motivational, they should be challenging
meaning that they should not be too easy or too difficult. He assigned a very difficult
and some would say impossible goal. As indicated in the text, when goals become so
difficult that they are perceived as impossible to achieve, they will lose their potential
to motivate. Thus, goal challenge should be pegged to the competence of the
individuals which the professor did not do. Given that they took too long to grade
tests and exams during the term, the professor should have been more aware of what
they are capable of and what would be a challenging but not too difficult goal. Thus,
he should have assigned a goal based on their past performance. Second, because he
assigned the goal without any discussion or input from the students with respect to
their own exams and schedule, it is questionable if they were actually committed to
the goal. As noted in the text, the effect of goals is strongest when individuals have
high goal commitment as goals really are not goals and cannot improve performance
unless an individual accepts them and is committed to working toward them. This is
especially important when goals are challenging and difficult to achieve.
Furthermore, if goal commitment is a potential problem (and in this case it was
because of the difficulty of the goal), then participation in setting the goal is most
likely to be beneficial. Furthermore, participation is also called for and more likely to
facilitate performance when it provides information that assists in the establishment
of fair, realistic goals. And third, the professor did not provide the students with any
feedback about their grading and performance. As indicated in the text, specific and
challenging goals have the most beneficial effect when they are accompanied by
ongoing feedback that enables the person to compare current performance with the
goal. The goal would have been more effective if it was more realistic and not so
difficult, if the students had some input and participation into the deadline for
completing the grading so that they would be more committed to the goal, and if the
professor had met with them a few times before the deadline to review their work and
provide them with feedback. This would have ensured that they not only stayed on
track in terms of the timeline but also that the quality of the work met the professor’s
standards. The goal itself should have also incorporated a quality component rather
than just focusing on the quantity of exams to be graded. The students focused on
getting all the exams graded and returned to the professor by the deadline rather than
the quality of their work. As a result, the professor got what he asked for (the exams
graded by the deadline) but the grading itself was of low quality.

3. What advice would you give Professor Hackenbush next time he needs to motivate his
TAs to mark exams? Refer to the different theories of motivation to answer this
question.
As indicated in response to question #2, if the professor uses goals to motivate TAs in
the future he should ensure that the goals are challenging but not impossible and he
should also consider the students have some input and participation in the setting of
goals and provide them with feedback. He should also focus on quality in addition to
quantity when setting a goal. With respect to the other theories of motivation,
expectancy theory would also be useful. For example, he should first make sure that
there is a high probability that the students will be able to achieve a particular level of
performance (e.g., number of exams to be graded by a given deadline), and that there
is a high probability that the students will obtain something that is highly valent to
them (i.e. instrumentality) if they achieve that level of performance. Perhaps the
professor can promise additional TA and /or RA opportunities or even take the
students out for lunch if the exams are graded on time.
ADDITIONAL CASE INCIDENT: MAYFIELD DEPARTMENT STORES
As competition in the retail market began to heat up, it became necessary to find ways to
motivate the sales staff of Mayfield Department Stores to increase sales. Therefore, a
motivational program was developed with the help of a consulting firm. Each month,
employees in the department with the highest sales would have a chance to win a trip to
Mexico. At the end of the year, the names of all employees in those departments that had
the highest sales for at least one month would have their name entered into a draw and
three names would be chosen to win a one-week trip to Mexico paid for by Mayfield.
1. According to need theories of motivation and goal setting theory, will this program be
motivational? Explain your answer.
2. Discuss the motivational potential of the program according to expectancy theory and
equity theory. Will the program motivate the sales staff and improve sales?
3. How would you change the program to make it more effective for motivating
employees? Use expectancy theory, equity theory, and goal setting theory to support
your plan to make the program more effective.
TEACHING NOTES FOR MAYFIELD DEPARTMENT STORES CASE

INCIDENT
1. According to need theories of motivation and goal setting theory, will this program be
motivational? Explain your answer.
From a need theory perspective, the motivational effects of the program might be limited.
This is because the reward may not be something that will fulfill the needs of some of the
employees. It might be motivational for employees who like to travel, and in particular,
would like to go to Mexico. For employees who are not interested in a trip to Mexico, the

program will not be motivational at all. In terms of goal setting, there are no clear goals.
Employees only know that if their department has the highest sales for at least one month,
they will have a chance to win the trip. However, it is not clear what “highest” actually
means in terms of sales figures. Thus, from a goal setting perspective, the program does
not provide employees with specific goals or any goals for that matter. What is required
is some idea of what “high” means in terms of sales. Then each department can set
individual and department goals.
2. Discuss the motivational potential of the program according to expectancy theory

and equity theory. Will the program motivate the sales staff and improve sales?
From an expectancy theory perspective, it is unlikely that the program will motivate sales
staff and improve sales. This is evident by looking at each component of the theory. First,
it is not clear if employees will have a high expectancy that they can achieve a high level
of sales. This is because it is unclear exactly what “high” actually means in terms of a
sales figure, and more importantly, the focus is on department sales. Thus, while an
individual might be able to improve his or her sales, it might not make a difference if the
department as a whole does not perform at a high level. Furthermore, there are factors
beyond employees’ control that will also impact their sales such as the economy and the
type of goods in their department. Some departments will have higher sales regardless of
anything an employee does. The instrumentality component will also be low. That is, the
probability that high sales will result in the trip to Mexico is relatively low. This is
because department sales must be higher than the other departments to be entered into the
draw (thus an improvement in sales might not be enough if other departments do even
better), and even if you do have the highest sales and are entered into the draw, you have
a relatively low chance of winning the trip to Mexico because only three names will be
drawn. Thus, there is a relatively low probability that high sales will result in a trip to
Mexico. Finally, the valence of a trip to Mexico might not be attractive to all of the
employees. To the extent it is not attractive they are unlikely to be motivated to improve
their sales. This combined with the low instrumentality and low expectancy, means that
the program is not likely to improve motivation or sales.
In terms of equity theory, the program is not likely to be motivational. To begin with,
because the basis of the program is department sales, all members of a department will or
will not have their names entered into the draw regardless of individual performance or
inputs. To make matters worse, only three people can win the trip and winning has no
connection to one’s actual inputs. As a result, many employees are likely to experience
inequity. In fact, given that only three employees will win, there will be many more
employees who perceive inequity given that every employee who does not win is likely
to question the inputs of those who do win and perceive their own inputs as similar if not
greater. Thus, from an equity theory perspective, the program is not likely to be
motivational or to improve sales and might actually make things worse. Individual
employees will see no merit in increasing their own inputs and might actually lower
them.

3. How would you change the program to make it more effective for motivating
employees? Use expectancy theory, equity theory, and goal setting theory to support
your plan to make the program more effective.
The program would be more effective simply be adhering to the theories of motivation.
In terms of the valence of second-level outcomes of expectancy theory, the incentive
should be something that would be appealing and highly valent to employees. This may
or may not be a trip to Mexico. Second, there should be specific and challenging goals for
sales levels per department. This might be based on each department’s prior sales in order
not to disadvantage those departments whose sales are always lower as a function of the
items they sell. This would also ensure that the expectancy component of expectancy
theory is high. Third, the instrumentality component of expectancy theory should be high
such that there is a high probability that the attainment of the sales goal (first-level
outcome) will result in the second-level outcome. Finally, since sales are made at the
department level and communication and coordination among co-workers is important,
the program should focus on department sales rather than individual sales. This would
avoid infighting and conflict among co-workers within a department and encourage
teamwork. Thus, if a department achieves their goal, then all members of the department
are entitled to the prize not just a select few. The best way to ensure equity is for all
members of the department with the highest sales to receive the prize and not just a select
few that are randomly chosen.
TEACHING NOTES FOR KYLE EVANS AT RUFFIAN APPAREL: STAFFING A

RETIAL ESTABLISHMENT CASE STUDY
1. Discuss the motivation and the motivational strategies being used at Ruffian Apparel
for each group of employees (store manager, assistant manager, part-time and full-
time associates). How motivated are employees, and what are they motivated to do?
How do the theories of motivation help us understand employees’ motivation and
performance and the effectiveness of the motivational strategies?
First, it is helpful to review what the employees were expected to do in their role
besides help customers and sell the stores’ products. They were also expected to go
above and beyond when it came to understanding customer needs, providing advice
and opinions when necessary, and generally making the shopping experience an
exceptionally pleasant one. It was considered critical for all employees not just part-
timers to be trained in such a manner. Full-time associates had additional
responsibilities such as opening and closing the store, managing part-time employees
when the manager and assistant manager were not working, and conducting returns
and stock transfers. The assistant managers’ duties included these same
responsibilities along with shrinkage checks and payroll duties. The store manager
was required to do all store tasks including the majority of paperwork for inventory
control as well as human resource duties such as hiring, scheduling, training,
termination, performance evaluations, etc.).

Employees at Ruffian Apparel received an hourly wage and had opportunities to

make commissions on sales that met sales goals. The pay level was relatively low
compared to similar positions at other companies. The motivational strategies
involved commissions tied to goals in addition to an hourly rate. For example, part-
time employees are paid minimum wage but could make a commission of four-
percent with a goal that translated into sales of just over $200 per hour during a shift.
However, achieving this goal seemed to depend just as much on store location and the
day and time of the shift worked as it did on the sales ability of the employee. The
sales goals were typically assigned by the store manager. However, it became a
standard within the company for an employee to sell $100 per hour. Full-time
employees and assistant managers had a slightly higher hourly rate and were also
guaranteed a commission that was two percent of all sales which could add anywhere
between $60 and $200 a week to their pay. Sales goals for full-time employees and
assistant managers were similar and sometimes slightly higher than the $100 per hour
required of part-time employees. Store managers received a salary and had no
opportunity to make commissions on their sales. Their salary was negotiable and
could range from $650 to $1,150 a week. Sales goals for store managers were usually
lower than those full-time employees and assistant managers ($80 to $100 per hour).
Performance goals for low price point accessories, high price point accessories, and
for selling “multiples” were also used to motivate employees to sell additional
products. They were meant to motivate employees to up-sell and to provide sufficient
customer service to all customers.
In terms of employee motivation, it does not seem to be very high. In his observations
at the Kelowna store, Evans observes employees who are not only lack experience,
but are not at all concerned with up-selling or attempting to move accessories. And
even though employees are supposed to mention these additional items and
accessories while in the midst of a sale or at the cash register, at no time did it occur
while he was observing the store which explains in part why sales and performance
goals were not being met. And when Evans tells Edwards about his observations with
respect to sales and performance goals, Edwards points out that you can’t blame the
part-timers because up-selling is difficult for various reasons (e.g., lack of selection)
and as far as the sales commissions go, they rarely hit the sales goals and it has
nothing to do with being good at sales, and the multiples sales can easily be
manipulated. Thus, it would seem that employees and managers are not too motivated
when it comes to the sales or performance goals.
In terms of the motivational theories, this case primarily involves goal setting which
is not very effective. The following questions will also use need theories, equity
theory, and expectancy theory to explain why the employees are not motivated and
how this affects store sales and performance.

2. Discuss the use of goals at Ruffian Apparel. How effective are the sales goals and
performance goals for employee motivation and performance? Use goal setting
theory to explain your answer. Based on goal setting theory, how would you improve
the goal setting process and the motivational potential of goals?
There are two kinds of goals being used to motivate employees to increase their sales
and ultimately to improve store sales and performance. Sales goals have to be meet
for employees to receive additional pay through commissions. In addition to the sales
goals, there are also performance goals for up-selling. In particular, the performance
goals are for low price point accessories, high price point accessories, and for selling
“multiples.” These performance goals were meant to ensure that employees were up-
selling and providing sufficient customer service to all customers. These goals were
based on the results of the previous year. However, a four-hour shift usually had the
goal of two low print accessories, one high price point accessory, and 60 percent
multiples. The stores and employees were judged by their ability to meet these goals
and verbal and written warnings were used if goals were not met and managers would
push employees to meet their goals.
These goals, however, are not very effective for motivating employees and increasing
their sales. As indicated in the text, goals are motivational when they are specific and
challenging and when organizational members are committed to them. In addition,
feedback about progress toward goal attainment should be provided. Although the
sales goals and commissions are specific, they do not have the other characteristics
that make goal setting effective. For starters, the goals seem to be too difficult and
unrealistic and almost impossible to achieve. For goals to be motivational, they
should be challenging meaning that they should not be too easy or too difficult. For
many of the stores, it is rare for them to achieve the sales goals and obtain additional
pay. As indicated in the text, when goals become so difficult that they are perceived
as impossible to achieve, they will lose their potential to motivate and this seems to
be what has happened. Furthermore, goal challenge should be pegged to the
competence of the individuals and this does seem to be happening as the goals are the
same for all employees regardless of experience and in all stores regardless of
location. Thus, goals should be based on past performance. For many employees, the
goals are just not realistic or possible to attain. Second, because employees have no
input or participation in the goal setting process, it is questionable if they were
actually committed to the goal. As noted in the text, the effect of goals is strongest
when individuals have high goal commitment as goals really are not goals and cannot
improve performance unless an individual accepts them and is committed to working
toward them. This is especially important when goals are challenging and difficult to
achieve. Furthermore, if goal commitment is a potential problem (and in this case it
was because of the difficulty of the goal), then participation in setting the goal is most
likely to be beneficial. Furthermore, participation is also called for and more likely to
facilitate performance when it provides information that assists in the establishment
of fair, realistic goals. And third, employees do not receive any feedback about their
performance. As indicated in the text, specific and challenging goals have the most
beneficial effect when they are accompanied by ongoing feedback that enables the
person to compare current performance with the goal. The goal would have been

more effective if it was more realistic and not so difficult, if employees had some
input and participation in the goal setting process so that they would be more
committed to the goal, and if store managers providing them with feedback on their
performance.
The problem with the sales goals and commissions is noted several times in the case
such as when Nathan Edwards tells Evans: “We don’t pay enough, and the
commission is a joke. Part-timers rarely ever sell $200 per hour worth of product in
Kelowna. Maybe they make commission all the time in Vancouver, but not here. And
management doesn’t get paid much better. Any comparable job in the mall makes at
least a couple hundred more a month than this place. You might want to look into that
if you want to fill this spot quickly.” With respect to the performance goals, he says
that they are irrelevant as there are not repercussions for not meeting them. “I’ve hit
my goals and I’ve missed my goals, and I don’t receive any praise or criticism. I see
no reason in forcing the part-timers to hit these goals if I don’t care about them and
they don’t mean anything.” And when they meet, Edwards tells him they rarely hit
their sales goals and it has nothing to do with being good at sales, and the multiples
sales can easily be manipulated. After speaking with other managers, Evans realizes
that Edwards has some legitimate complaints and that store location is often an
accurate predictor of sales levels, even above the salesmanship skills of the staff at a
given store. And while some people did hit commission more than others, it was rare
for stores outside the Vancouver area to hit their commission mark. And with respect
to the performance goals for accessories and multiples, most stores appeared to have
this under control, however, the across-the-board policy for up-selling products was a
sore spot with many of the employees as trying to sell a pair of sunglasses in the
winter or a belt to someone who wasn’t buying jeans was a difficult task for the best
of salespeople.
Thus, the goals were specific but they were too difficult, employees were not
committed to them, and they did receive any feedback about their performance and
some employees had little experience and training. As a result, the goals failed to
motivate employees and were not a very effective method of motivation. The goal
setting process would have been more effective if the goals were more realistic and
attainable for employees and they had some involvement in the goal setting process
so that they were committed to the goals. Providing employees with feedback on their
performance would also help so that they can improve their performance and reach
their goals.
3. Consider the needs of employees at Ruffian Apparel. What are their primary needs
and what is most likely to motivate them? How important are intrinsic and extrinsic
motivators? Based on your answers, what do you recommend for improving
employees’ motivation?
The store employees tended to reflect the store’s target market which consisted of
relatively young individuals who met minimal hiring standards and were willing to

work for relatively low wages. Thus, Ruffian Apparel tended to employ male and
female part-time sales associates ranging in age from 15 to 25 years old. They were
willing to work for minimum wage as they had little advanced education or
experience and were unable to acquire more prestigious positions in the workforce.
The job requirements included soft skills more than hard skills and the hiring process
was informal and subjective. The majority of full-time employees, assistant
managers, and store managers were promoted from within or were found in similar
stores doing similar work. The majority of the managers had little post-secondary
education and usually worked their way up the ranks. The average age of the full-time
employees and managers was close to that of the part-time employees, usually
between 22 and 30. For these employees given their age, education, and experience,
satisfying their physiological or lower-level extrinsic needs is what will be most
motivational to them. In fact, throughout the case there are examples of employees
leaving for other jobs that pay more money (e.g., Mark Asselhoff made it clear he
plans to change jobs to make more money; Jennifer Sands quit for a job that paid her
significantly more money), and even examples of employees who are not that
interested in taking on manager roles. These employees will be motivated with money
which is what the company has been using as a motivational strategy. The problem,
however, is that it is very difficult for employees to make more money working for
Ruffian Apparel. The pay is lower than other companies for employees and managers
and it is very difficult for most employees to reach the sales goal and make
commissions. Thus, the problem is not what they are using to motivate employees
(money), it is the process they are using to motivate them. This provides a good way
to make the distinction between need theories and process theories. Clearly,
employees will be motivated by extrinsic rewards to satisfy their lower level needs.
The problem is that it is very difficult for them to do this because of the difficult goals
they must attain to receive commissions on their sales combined with the low pay.
Therefore, to improve employees’ motivation they need to work on the motivational
process and system which is addressed in the next questions which deals with the
process theories of motivation.
4. Use expectancy theory and equity theory to explain the motivation of employees at
Ruffian Apparel. What do these theories say about the effectiveness of the current
motivational system and how to improve it?
The process theories of motivation help to further shed light on why employees are
not motivated to increase their sales. Question #3 has already explained why the goal
setting process was not effective. We can also use expectancy theory which explains
the problem primarily in terms of the expectancy component which refers to the
probability that a worker can achieve a particular first-level outcome. We know from
the previous question that money will be highly valent to the employees and we also
know that the probability employees will receive more pay or the commission is high
if they reach the sales goal (high instrumentality). The problem is that there is low
probability they can achieve the performance goal or level of performance required to
receive the commission. Thus, from an expectancy theory perspective, the expectancy
theory component needs to be increased which will probably require some additional
training as well as adjustment the level of performance required to obtain

commissions (increase the expectancy component). Equity theory also helps to

explain the motivation of store employees. With respect to inputs and outcomes,
employees who compare themselves to employees in other stores will perceive
inequity given the lower pay and low commissions obtained by most employees. A
good example of equity theory in action is the fact that one of the stores (Ruffian
Vernon) had a shrinkage loss of $30,000, the majority of which was thought to be due
to internal theft which suggests that employees are stealing to increase their
outcomes. Another example of equity theory in action is the relatively high turnover
rate for employees and managers who leave for higher paying jobs. Internal inequity
is also evident to the extent that meeting sales goals and obtaining commissions are
more likely in certain stores and more a function of store location than sales skills.
Thus, most employees will perceive themselves in a state of inequity and will be
motivated to restore that inequity either through theft or leaving for a higher paying
job. Therefore, there needs to be some action to change these perceptions which will
require some adjustment to the input/outcome ratio. This can be achieved by
increasing the low pay so that it is more in line with other stores and by adjusting the
sales goal as a function of store location so that employees in all stores have an equal
chance of meeting sales goals and receiving more commissions thereby increasing
their outcomes. The way things now stand employees who contribute the same input
into their job will receive different outcomes as a function of the store they work in
and its location.
Thus, both expectancy theory and equity theory help us to understand why the
motivational system is not very effective and employees are not motivated to improve
their sales.
5. What factors do you think contribute to the performance of the employees at Ruffian
Kelowna? Refer to Exhibit 5.1 to explain your answer. Based on your analysis, what
needs to be done to improve employee and store performance?
Exhibit 5.1 shows that in addition to motivation, personality, general cognitive
ability, emotional intelligence, as well as understanding of the task or luck and chance
factors also affect the performance. The performance of the employees at Ruffian
Kelowna is probably due to a number of factors. For starters, many are new to the job
and lack experience and sufficient training. This surely affects their ability to serve
customers and their sales. Recall Evans observation that the two part-time staff
members appeared confused and constantly in need of advice or assistance. However,
he also observed that they were not at all concerned with up-selling or attempting to
move accessories and they never mentioned additional items or accessories to
customers. Thus, it would seem that motivation is also a factor that is contributing to
poor sales and performance of the store. Therefore, the existing employees need
additional training and a better motivational system is also required to improve
employee and store performance.

6. Using the theories of motivation, what advice would you give Kyle Evans on how to
motivate employees at Ruffian Kelowna? Be sure to refer to the need theories and the
process theories of motivation.
As already noted, the need theories suggest that the focus should be extrinsic rewards
to satisfy lower-level needs. So money is likely to be the best motivator for these
employees. The process theories suggest that the sales goals should be more realistic
and this probably means setting them based on what is realistic for each store given
its location, amount of traffic, and sales potential. This will not only help in setting a
more realistic goal, but will also increase the expectancy component of expectancy
theory. In addition, if employees at all stores have an equal chance of attaining sales
goals and making commissions, then there will a higher perception of equity from
store to store. Thus, sales should be a function of a person’s effort and skill not store
location. In addition, it might also help to link the performance goals associated with
up-selling to additional commissions. Employees will be more motivated to mention
and push additional items and accessories if they receive additional compensation for
doing so. As indicated in the text, although there is evidence that goal setting can lead
to performance increases without monetary incentives, extrinsic rewards can increase
goal commitment and goal setting should be compatible with systems that tie pay to
performance. Thus, the performance goals will probably be more motivational by
linking them with commissions which in effect creates an additional strong
instrumentality link in terms of expectancy theory. Overall, making the sales goals
more realistic and attainable will have the effect of improving goal setting, increasing
expectancy, and improving the perception of equity which should increase the
motivation of employees. It might also be helpful to consider group incentives at the
store level for achieving store sales goals which again should be specific to each store
given its location and past sales.
7. What should Kyle do to get Ruffian Kelowna back on track and improve sales? Do
you think it is as simple as hiring a new store manager? Explain your answer. If not,
what other changes should he make? Be specific in terms of what he should do to
meet the store’s sales and performance goals.
It should be clear from the answers to the other questions and the information in the
case that simply hiring a new store manager is not going to solve the problems and
improve sales. As indicated in the case, the store has seen numerous store managers
come and go and hiring and retaining a new one will not be easy. And even if he does
hire a new manager who stays longer than previous ones, he still has the problem of
inexperienced and unmotivated employees. Therefore, several major changes will be
required. First, a new store manager is required but in order to find and retain a good
one he is going to have to provide a competitive salary relative to other stores and
competitors. Second, he is going to have to provide training for the current employees
and consider hiring some experienced sales people. Third, the motivational system
will have to be improved along the lines discussed in the other questions. That is, the
sales goals must be achievable for employees so that it is possible and even likely that
they will be able to achieve them and receive commissions for doing so. Thus, the
goal setting process has to be adjusted and the goal itself has to be challenging but not

too difficult. This should help to obtain employees’ commitment to the goal. In
addition, they should be provided with feedback about their performance. This will
also help to increase the expectancy component of expectancy theory and create
higher perceptions of external and internal equity. He should also considering
providing commissions for reaching the performance goals which currently are not
being pursued and do not provide any rewards. A group or store incentive might also
help to increase cooperation and encourage team work within the store. Finally, he
might also consider increasing the hourly rate of pay for all employees given that it is
lower than other stores, the low unemployment rate in the area, and it contributes to
employee turnover and perceptions of inequity. However, such an increase might
have to be uniform across all stores.
ADDITIONAL CASE STUDY: DATATRONIC
DATATRONIC is a company started by George Pandry and Rolin Martin, two friends
who had just graduated with degrees in business administration and saw an opportunity to
start their own business. With an increasing number of organizations conducting
employee attitude surveys, they saw a need for data input and analyses as well as for the
design of Web-based surveys. With a loan from their parents, they rented space,
purchased 20 used computers, and set up shop. They hired some students they knew at
the university and began advertising their services. Employees were paid minimum wage
and usually worked three-hour shifts in the mornings and afternoons several days a week.
The assignment of projects to employees was fairly straightforward. Whenever a new

project was accepted by DATATRONIC, Rolin would review the job and then set a
deadline for completion based on the nature of the project and the customer’s needs.
While some employees only worked on Web-based surveys, all employees were able to
input data and conduct some basic data analyses. If a project required more advanced
data analysis, it was assigned to one of a handful of employees who were able to do it. It
was George’s responsibility to check on the progress of projects and make sure they were
completed by the deadline. Once a project was completed, Rolin would review it and
check for mistakes and errors. If a project was found to have errors, Rolin would send it
back to the employee who worked on it, with instructions on what needed to be corrected
and the new deadline. If the corrections were minor, then the employee would be asked to
do them immediately and put aside what he or she was currently working on. If the
corrections were more substantial, then the employee’s current project would be given to
another employee so that the employee could work on the project that required
corrections.
Within a relatively short period of time, DATATRONIC was having trouble keeping
up with demand. In fact, business was so good they had to hire more employees and
purchase more computers. After about six months, however, they began to notice some
problems. An increasing number of projects were not being completed on time, and
customers were beginning to complain. In some cases, George and Rolin had to give big
discounts to customers who threatened to take their business elsewhere.

In order to try to deal with the increasing missed deadlines, George decided to keep a
close eye on employees during their shifts. He soon came to the conclusion that many of
them were friends and spent too much time chatting and socializing while they were
supposed to be working.
After discussing the problem with Rolin, it was decided that the best thing to do was
to keep a closer eye on employees while they worked. So the next day, George began
watching employees and even standing over them while they worked. Whenever some of
the employees began to talk with each other, George rushed over to remind them that
they were there to work and not to talk. Some of the employees were surprised at this
sudden change and didn’t understand what the problem was. George told them that too
many projects were not being completed on time and that talking would no longer be
tolerated while employees are working. “You get paid for working here, not socializing
and talking to your friends,” George was often heard saying. “Stop talking and get back
to work.”
By the end of the month, however, things still had not improved. While the
employees were no longer talking to each other when George was watching over them,
many projects were still not being completed on time. George and Rolin decided that they
should focus on those employees who were the main source of the problem. After
reviewing the records of all employees, they made a list showing the number of projects
each employee had completed on time as well as the number that were late. They then
posted the list on a large board at the front of the room. Employees were told that from
now on, George and Rolin would be keeping track of how many employees’ projects
were completed on time and that they would fire people who were late completing more
than one project a month.
This did not sit well with the employees. Many of them complained that it was unfair
to blame them for being late because some projects were much more demanding than
others and the deadlines were often unreasonable. However, George and Rolin insisted
that the deadlines were based on the size and difficulty of the projects.
Many of the students relied on the extra money they made from DATATRONIC to
pay for their books, supplies, and the occasional dinner or night out, so being fired was a
concern to them. Within a few weeks, almost all projects were being completed on time.
George and Rolin concluded that their latest strategy was working, and the list of
employees at the front of the room was showing a marked increase in projects completed
on time for all employees.
However, by the end of the month a new problem became apparent. Many of the
completed data files were full of mistakes, the data analysis was often incomplete and
incorrect, and the Web-based surveys were often missing questions and contained all
sorts of errors. As a result, almost 50 percent (15 jobs per month) of all jobs had to be
completely redone. This turned out to be a rather costly problem. Each job took between
10 and 50 hours and cost DATATRONIC hundreds of dollars to fix. This also meant that
projects were not being completed on time because they had to be redone and checked

after the deadline. More and more customers began to complain and to demand a
reduction in the cost of their projects.
To make matters worse, some of the best employees decided to quit. Over a period of
three months, DATATRONIC lost an average of three employees a month. Every time an
employee quit, they had to replace him or her, and the cost of replacement was beginning
to be a problem. The cost of advertising, interviewing, and hiring a new employee was
estimated to be about $5000.
While employees were at one time bringing their friends to work DATATRONIC,
this was no longer enough to fill all the jobs. As a result, it became increasingly difficult
to find and hire new workers. In desperation, George and Rolin decided to increase the
pay to new hires to above minimum wage. This, however, did not sit well with current
employees, some of whom had been with DATATRONIC since it first began. Some of
DATATRONIC’s experienced employees threatened to quit if they did not receive a pay
increase. George and Rolin did not see how they could increase the pay of all their
current employees. However, they realized that something had to be done—and fast.
They came up with a three-pronged approach. First, they decided to give those
employees who were threatening to quit a pay increase equal to what new hires were
receiving. Second, they decided to offer a $100 bonus at the end of every month to the
employee who performed best on completion time and quality. The employee with the
most projects completed with the fewest errors would receive the bonus. And third, they
decided that employees who turned in projects with substantial errors would be required
to correct them on their own time, without pay.
When the employees heard about these changes they became less cooperative with
each other and less willing to offer help and assistance. Before the announcement,
although employees engaged in less socializing during working hours, they maintained a
friendly and collegial atmosphere, with workers frequently asking each other for help and
providing assistance to new hires. However, with the new bonus program and the
possibility of having to correct errors without pay, this was no longer the case.
Employees not only stopped talking to each other, they also stopped helping each other.
This was especially hard on the new hires who often needed help and advice from the
more experienced employees.
At the end of the first month under the new bonus program, George and Rolin called
a meeting and told the employees that Mika Salomn had completed three projects and had
made only one error. She happily accepted her bonus of $100 and was congratulated for
her excellent performance. Some of the other employees clapped and congratulated her,
but others seemed less enthused. Nonetheless, the number of mistakes and projects that
had to be returned to workers for corrections began to decline.
George and Rolin felt that they had finally found the solution to solving the problems
at DATATRONIC. However, by the end of the week, three other employees began
demanding a pay increase and several others complained that they should have received

the bonus because their performance was just as good as Mika’s. To make matters worse,
three new hires and two of DATATRONIC’s most experienced employees decided to
quit.
George and Rolin couldn’t understand how something so good had become so bad.
They wondered whether they should give all employees a pay increase equal to the new
hires or perhaps they need to do something about the bonus program. They were at a loss
as to what to do next and wondered if maybe they needed to hire a consultant to provide
some advice and direction.
Questions
1. What factors do you think contribute to the performance of the employees at

DATATRONIC? Refer to Exhibit 5.1 to explain your answer.
2. Consider the needs of the employees at DATATRONIC. What is most likely to
motivate them? How important are intrinsic and extrinsic motivators? Is their
motivation autonomous or controlled?
3. Discuss the motivational strategies being used at DATATRONIC. What are
employees motivated to do? How do the theories of motivation help us understand
employees’ motivation and performance and the effectiveness of the motivational
strategies?
4. Using the theories of motivation, what advice would you give George and Rolin on
how to motivate employees at DATATRONIC? Be sure to refer to the need theories
and the process theories of motivation.
5. What would you do to motivate DATATRONIC employees? Be specific in terms of
how to motivate them to complete projects on time, to complete projects without
errors, and to continue to work at DATATRONIC. Justify your answers using the
theories of motivation.
TEACHING NOTES FOR DATATRONIC CASE STUDY
1. What factors do you think contribute to the performance of the employees at

DATATRONIC? Refer to Exhibit 5.1 to explain your answer.
Given the nature of the work (e.g., data input) which is fairly routine and basic,
motivation is likely to be a key factor for the performance of the employees at
DATATRONIC. The tasks are easy to understand and perform. Cognitive ability is not
very important for the performance of this job. Given that the tasks do not involve
emotional labour, emotional intelligence is also not that important for job performance.
As for personality, some of the Big 5 factors such as conscientiousness are probably
related to performance. That is, more conscientious employees will be more likely to
meet deadlines and probably make fewer errors. However, for the most part this is a job
where motivation is likely to be an important contributor to employees’ job performance.
.

2. Consider the needs of the employees at DATATRONIC. What is most likely to

motivate them? How important are intrinsic and extrinsic motivators? Is their
motivation autonomous or controlled?
The employees at DATATRONIC are students who are working part time to earn some
extra money. The needs of these employees are primarily physiological/existence and
money is most likely to satisfy their needs and motivate them. Clearly, what matters the
most to these workers is extrinsic rewards. Intrinsic rewards are not likely to be as
important or important at all given their need to fulfill their physiological or existence
needs. They are there primarily for the money. Given that it is the money that motivates
them to be there in the first place, their motivation is controlled. It is becomes even more
controlled with George’s close supervision and the threats of being fired if they fail to
meet project deadlines.
3. Discuss the motivational strategies being used at DATATRONIC. What are

employees motivated to do? How do the theories of motivation help us understand
employees’ motivation and performance and the effectiveness of motivational
strategies?
The motivational strategies used at DATATRONIC are not every effective. The pay is
minimum wage and that simply motivates people to show up for work. As for the
motivational strategies to get people to actually work once they are there, they are not
very effective. Let’s consider each of the strategies and what the motivational theories
say about them:
George’s close supervision: All this does is prevent workers from talking to each other
and socializing. It upsets workers to be so closely watched which does not seem
warranted. This is more extrinsic and controlled motivation. It motivated the workers to
stop socializing but many projects were still not being completed on time.
List of employees completed projects. This was an attempt to keep track and monitor
each employee’s performance. It is another example of extrinsic and controlled
motivation. This strategy also included the threat of being fired if more than one project
per month was not completed by the deadline. This was upsetting to employees who
needed the extra money and now faced the threat of losing it. This was perceived by
employees as unfair because some projects were more demanding and some deadlines
were unreasonable. With this strategy, the best employees could hope for is not to be
fired. However, this strategy did result in more projects being completed on time as
employees were motivated to avoid being late for fear of being fired. The motivation to
meet the deadline resulted in an increase in mistakes and errors. Thus, the focus on
getting projects completed on time resulted in a decrease in the quality of completed
projects. And the increased time needed to correct the mistakes just meant that projects
continued to be completed after the deadline. Following this strategy, some of
DATATRONIC’s best employees quit.
Increase pay above minimum wage to new hires. This was useful for motivating students
to work at DATATRONIC. However, it was not fair for current employees who were
quick to react to the perceived inequity. From an equity theory perspective, it is obvious

how this motivated existing employees to quit. After all, their tenure in the organization
and experience was greater than new hires who were now receiving greater outcomes as a
result of the increase in pay for new hires. Not surprisingly, experienced employees
threatened to quit if they did not receive a pay increase.
Three-pronged strategy. The final three-pronged strategy was to first increase the pay of
those employees who had threatened to quit to what new hires were being paid. In terms
of motivation, all this does is motivate the experienced workers to stay on the job and not
quit. It does not address the need to motivate workers to meet deadlines and complete
projects without errors. However, the inequity will now be even greater for experienced
employees who did not threaten to quit and did not receive the increase. Now they
receive lower pay than new hires as well as co-workers with the same experience. Thus,
there is now a group of experienced employees who will perceive their outcomes as
lower than new hires as well as other experienced co-workers even though their inputs
are greater than new hires and the same as the higher-paid experienced employees. The
second component of this strategy was to offer a $100 bonus at the end of every month to
the employee who performs best on completion of projects on time and in terms of
quality. This is the first strategy that has been employed to actually motivate the workers
to complete their projects on time and without mistakes by offering a consequence that
fulfills employees’ needs and is highly valent (i.e., money). The problem is that only one
worker per month will receive the bonus. This means that even if an employee shows an
improvement and meets most deadlines and has few mistakes, he/she might not get the
bonus. Thus, from an expectancy theory perspective, the instrumentality is very weak
because the probability of a first level outcome (meeting deadlines and few mistakes)
resulting in a second level outcome (bonus) is not very high. The third component of the
strategy is to make employees correct their mistakes on their own time without pay. This
is another example of controlled motivation.
From a need theory perspective, none of these strategies is motivational (except for the
$100 bonus but you have to compete with others to get it) because they do not provide an
incentive or a way for employees to fulfill their needs. In fact, the only thing that
employees can bank on is not getting fired if they meet their project deadlines or not have
to correct errors on their own time without pay. In terms of expectancy theory, employees
get minimum wage for coming to work (except for new hires and some experienced
workers who now get more than minimum wage) but cannot do any better than that
regardless of how well they perform unless they the get the monthly bonus but as
indicated above, the instrumentality linkage for this is weak because only one employee a
month can get it. Thus, in terms of expectancy theory, there is not a strong link between
level of performance and a desirable second-level outcome (instrumentality). It is also
possible that some employees are unable to meet some of the deadlines thereby making
the expectancy linkage low. And in terms of equity theory, employees get the same
minimum wage regardless of how well they perform and new hires and some experienced
workers are being paid more than experienced workers who did not threaten to quit.
Although the deadlines and few mistakes can be seen as specific goals, they are enforced
in what has become a negative work climate where there is little support from

management. Thus, employees are not likely to be very committed to these goals which
at best only results in not being fired.
Thus, the theories of motivation all suggest that the motivational strategies are ineffective
for motivating employees at DATATRONIC. Furthermore, there is no reason for
employees to work faster or better to meet deadlines or improve the quality of their work
as their pay, which is the most desired and highly valent incentive given their needs, will
not change. It would seem that employees are at best, motivated to show up for work and
just do what they have to do to get paid and not fired.
4. Using the theories of motivation, what advice would you give George and Rolin on
how to motivate employees at DATATRONIC? Be sure to refer to the need theories
and the process theories of motivation.
For starters, George and Rolin need to understand the importance of money as a
motivator for their employees who are primarily interested in fulfilling their basic
physiological/existence needs and who will consider money to be highly valent. Second,
there needs to be a strong connection (i.e., instrumentality) between meeting deadlines
and work quality (few mistakes and errors) and pay. In other words, employees should
receive additional pay for meeting project deadlines and for the quality of their work.
Thus, rather than threatening to fire people who do not meet deadlines, they should
provide a bonus for meeting deadlines and for quality work and this should be available
to all employees.
George and Rolin should also understand the importance of fairness and pay equity.
Clearly, new hires should not be paid more than experienced employees. If they want to
pay new hires above the minimum wage then they should pay experienced employees
more. A good approach might be to increase the hourly pay at certain periods of tenure so
that the longer one has been working at DATATRONIC then the higher will be their
hourly pay. This will help to create greater perceptions of equity. In addition, to the
extent that the procedures for rewarding projects that meet deadlines and are of high
quality are fair and employees who do meet their deadlines and whose work is without
errors receive more outcomes, then this should also create greater perceptions of equity.
Finally, the goal setting process with respect to meeting deadlines and work quality might
be formalized such that specific goals are set for each project with respect to the deadline
and work quality. It might be a good idea to use participation to set these goals especially
given the current state of affairs in which some employees believe that the deadlines and
work demands are not always reasonable. If employees participate in setting goals they
will be more committed to them. Goals will then become motivational and also increase
the expectancy component of expectancy theory.
Thus, all of the motivational theories can be used to explain to George and Rolin how to
motivate their employees: need theories: focus on providing additional pay; expectancy
theory: instrumentality should be high such that if one achieves a first level outcome
(deadline and work quality) there is a high probability of getting more money; equity
theory: hourly wage should be based on tenure at DATATRONIC (note that it could also

vary according to the work that an employee does; for example, an employee whose job
is mostly to do advanced statistics might be paid more than an employee who just inputs
data); goal setting theory: use participation with employees for each project to set a goal
for project completion time and work quality and provide feedback on each project.
5. What would you do to motivate DATATRONIC employees? Be specific in terms of

how to motivate them to complete projects on time, to complete projects without
errors, and to continue to work at DATATRONIC. Justify your answers using the
theories of motivation.
Students’ answers are likely to vary and it might be interesting to hear the various ideas
they have about this and how they relate to it. Whatever they suggest, it is important that
their suggestions are based on the motivation theories and that they can explain their
strategy from a theoretical perspective. In addition, they should be clear about what it is
that they are focusing on when it comes to motivating employees. In other words, they
need to be clear about what they are motivating employees to do and how they would
motivate them to do whatever it is they want them to do. As indicated in the answer to
question 5, to motivate employees to complete projects on time and without errors one
can ensure that the linkages in expectancy theory are strong such that employees are
capable of achieving the first level outcomes expected of them (deadline and work
quality), and that there is a high probably that the first level outcome will result in
additional pay (instrumentality). Setting specific goals for the deadline and quality of
each project will also be motivational and even more so if meeting the goal results in
extra pay. Both of these suggestions might also help to retain employees given the
opportunity to earn extra money by meeting first level outcomes/goals. An additional
strategy aimed at retaining employees is to increase the hourly pay with tenure at
DATATRONIC. In other words, employees will be motivated to stay if they their hourly
pay increases with greater tenure at DATATRONIC (perhaps every 4 or 6 months
depending on when employees tend to quit.) Thus, the use of pay as a motivator can be
made contingent on the outcome that one wants to achieve be it project deadlines, work
quality, and/or retention.
ADDITIONAL CASE STUDY: LINCOLN ELECTRIC COMPANY
On the surface, the Lincoln Electric Company might look like a motivational disaster.
The firm, located near Cleveland, Ohio, offers employees no paid sick days and no paid
holidays. Lincoln employees have to pay their own health insurance and overtime work
and unexpected job reassignments are mandatory. If older workers lower their
productivity, they receive less pay. Management does not take seniority into account in
promotions. Lincoln managers receive no executive “perks”—no cars, no executive
dining room, no club memberships, no management seminars, and no reserved parking.
Despite these apparently draconian policies, Lincoln has become something of a mecca
for visiting managers (from Ford, GM, TRW, 3M, Motorola, and McDonnell Douglas),
who flock to Cleveland to learn something about motivation. Lincoln is the world’s

largest producer of arc welding equipment, and it also makes electric motors. The firm
has turned a handsome profit every quarter for over 50 years and has not laid anyone off
for over 40 years. In 1995, the company celebrated its centennial year by posting record
sales of $1.03 billion. Employee turnover is extremely low, and Lincoln workers are
estimated to be roughly twice as productive as other manufacturing workers. This
productivity is an important key to Lincoln’s success because it is not dealing in high-
tech products, and it does not compete strongly on price.
What is the secret to Lincoln’s motivational success? In a word, money. Lots of it. In
addition to its leadership position in the manufacture of arc welding equipment, Lincoln
Electric is also known for its innovative incentive system. Lincoln Electric offers what
some say are the best paid factory jobs in the world. At the core of the system is an
intricate piece-rate pay plan that rewards workers for what they produce and a merit-
based profit-sharing plan that provides a yearly bonus. This bonus, which can approach
100 percent of regular earnings, is also allocated on merit to managers and staff. Each
employee is regularly evaluated by his or her immediate supervisor on a number of
dimensions (e.g., quality and cooperation). The size of the bonus pool is based on the
company’s economic performance. In other words, the more profitable the company the
larger will be the dollar pool from which the bonuses are paid. The total bonus received
by each employee is based on his or her evaluation. As a result, there is a direct
connection between an employee’s performance and the bonus paid out to that employee
at the end of the year. Employees who do better than average receive a higher bonus and
those who do worse than average receive a lower bonus. Year end bonuses normally
range from 60 to 150 percent of regular salary. The average production worker has
earned $45,000 in recent years, with some earning well over $85,000!
If workers think up a way to increase productivity, the company does not adjust the
piece-rate to cap potential wages. Also, they cannot work themselves out of a job, since
Lincoln has a no-layoff policy. Effectively, this amounts to lifetime employment.
Employees are guaranteed 30 hours a week, and work is shared instead of laying people
off. Employees are so keen to get working that the company enforces a policy prohibiting
them from coming in too early. The company is also known for having fewer supervisors
per worker than most organizations, with a ratio of 1:100. Training programs are
frequently available on all aspects of business and factory life including communication
skills, teamwork programs, and math courses.
When the company had its first big hiring in years, it received 27,000 applications. Life at
Lincoln, however, is not for everyone. Some managers would resent the lack of perks.
Some new production workers cannot take the fast pace and quit shortly after hiring. In
fact, out of the 27,000 applications, 2,000 were eventually hired, but over 1,000 left in the
first 90 days. Many never even apply because of Lincoln’s non-union status.
In recent years, Lincoln Electric has expanded internationally. And although the
company’s arc welding equipment is used in the same way everywhere, this has not been
the case for the company’s motivational system. According to Donald Hastings,
Chairman Emeritus and former CEO, “In many cases we didn’t truly understand the

cultures of those countries we expanded. For example, we had an incentive program that
was based on the belief that everybody in the world would be willing to work a little
harder to enhance their lives and their families and their incomes. It was an erroneous
assumption. It simply didn’t work in Germany, for example. Ten years from now, it
might, because Germans are changing their thought patterns, getting away from a
completely socialized economy where the quality of life is much more important than the
monetary returns. But for now, they don’t really want to put in the extra time and effort
that Americans, Canadians, and Australians do.” Although Lincoln Electric still sells
their products in Germany, the manufacturing operation has been closed down.
Sources: Hodgetts, R.M. (1997, Winter). A conversation with Donald F. Hastings of the
Lincoln Electric Company. Organizational Dynamics, pp. 68–74; 60 Minutes, Lincoln
Electric Company, 1993; Epstein, G. (1989, October). Inspire your team. Success, p. 12;
Perry, N.J. (1988, December 19). Here come richer, riskier pay plans. Fortune, 50–58;
Sharplin, A. D. (1990). Lincoln Electric Company, 1989. In A. A. Thompson, Jr., &
A. J. Strickland, III. Strategic management: Concepts and cases. Homewood, IL:
BPI/Irwin.
1. Describe the practices that Lincoln Electric uses to motivate employees. What are
some of the consequences of these practices for employees and the company?
2. Discuss the motivational system at Lincoln Electric, using each of the need theories of
motivation. What does each theory say about the motivational practices at Lincoln
Electric and which theory works best for explaining employees’ motivation?
3. Consider the motivational system at Lincoln Electric in terms of the process theories
of motivation. What does each theory say about the company’s motivational
practices? In other words, can we understand the system and its effectiveness in terms
of expectancy theory, equity theory, and goal setting theory?
4. Some have said that the methods of motivation used at Lincoln Electric should be
used by all organizations to motivate their employees. Do you believe this to be true?
Explain your reasoning.
5. Comment on the cross-cultural limitations of Lincoln Electric’s motivational system.
How do the theories of work motivation help us to understand why the company’s
incentive program did not work in Germany but does work in North America and
Australia? What does this tell us about the cross-cultural limitations of the theories of
motivation?
6. What can other organizations learn about motivation from Lincoln Electric? What do
you recommend that organizations do to motivate employees based on your
knowledge of the Lincoln Electric motivational system and on your understanding of
motivation?

TEACHING NOTES FOR LINCOLN ELECTRIC CASE STUDY
1. Describe the practices that Lincoln Electric uses to motivate employees. What are
some of the consequences of these practices for employees and the company?
The motivational practices at Lincoln Electric include a piece-rate pay plan that rewards
workers for what they produce, a merit-based profit-sharing plan that provides a yearly
bonus, a no-layoff policy that amounts to life-time employment, and a guaranteed 30
hours a week of work. The consequences for employees have been higher than average
pay making them among the best paid factory workers in the world. For the company, the
consequences of these practices include a handsome profit every quarter for over 50
years, productivity that is twice that of other manufacturing workers, and extremely low
turnover.
2. Discuss the motivational system at Lincoln Electric, using each of the need theories of
motivation. What does each theory say about the motivational practices at Lincoln
Electric and which theory works best for explaining employees’ motivation?
According to need theories, people’s needs motivate them to obtain incentives that will
satisfy their needs. Thus, employees are motivated to behave in a certain way in order to
obtain the incentives required to fulfill their needs. Maslow’s Hierarchy of Needs posits
that the lowest-level unsatisfied need has the greatest motivating potential and that once it
has been satisfied, it will no longer be motivational, and the next highest-level need in the
hierarchy will then become motivational. Thus, according to Maslow, employees at
Lincoln Electric should not be motivated so much by money once they have fulfilled their
physiological needs (although money also has symbolic value and can fulfill self-esteem
needs). However, employees at Lincoln Electric continue to be motivated by money
which is inconsistent with the main propositions of Maslow’s theory. ERG theory also
posits that once lower-level needs are gratified, higher-level need satisfaction is desired.
However, it also allows for the possibility that the less higher-level needs are gratified,
the more lower-level need satisfaction is desired. This seems to better represent the
motivation of employees at Lincoln Electric than does Maslow’s more rigid and lock-step
hierarchy. That is, employees at Lincoln Electric are not likely to be fulfilling higher-
level needs and they continue to be motivated by money and the satisfaction of lower-
level needs. Finally, it would seem that in terms of McClelland’s Theory of Needs,
employees at Lincoln Electric would have a high need for achievement. They have
personal responsibility for their outcomes; they can pursue moderately difficult goals in
order to produce more units and make more money; and they get feedback in that for
every quality unit produced they get paid. Need for affiliation and need for power are less
likely to be fulfilled then need for achievement. Thus, persons with a high need for
achievement are more likely to be motivated and perform well at Lincoln Electric.
3. Consider the motivational system at Lincoln Electric in terms of the process theories
of motivation. What does each theory say about the company’s motivational
practices? In other words, can we understand the system and its effectiveness in terms
of expectancy theory, equity theory, and goal setting theory?
The process theories work especially well in explaining the effectiveness of the
motivational system at Lincoln Electric. In terms of expectancy theory, workers have

control over what they do and what they will produce each day. This, combined with the
fact training programs in numerous areas are frequently available, means that the
expectancy component of expectancy theory is high. In other words, workers believe they
can achieve high levels of productivity. In addition, because pay is based on what you
produce, the instrumentality component is also high. In other words, there is a high
probability that if you achieve a particular first-level outcome, it will lead to a second-
level outcome which in this case is money, something that is obviously highly-valent to
Lincoln Electric employees. Equity theory also works well because there is a perfect
relation between inputs and outcomes. Employees get paid (outcome) for every unit
produced (input). Therefore, grater inputs result in greater outcomes for everybody. As a
result, the equity ratios should be equal. Finally, because employees get paid for what
they produce, they can set very specific and challenging goals for what they want to
produce. Thus, all three process theories do a good job in explaining the effectiveness of
the motivational system at Lincoln Electric. Incidentally, this also applies to the merit-
based profit sharing plan which allocates bonuses based on an evaluation system. Thus,
how well you perform is directly related to the bonus you receive. This means that
instrumentality should be strong and equity ratios should be equal.
4. Some have said that the methods of motivation used at Lincoln Electric should be
used by all organizations to motivate their employees. Do you believe this to be true?
Explain your reasoning.
It is tempting to see the success of Lincoln Electric’s motivational system and simply
assume that it can be generalized to other organizations. What people are probably
thinking when they say that all organizations should do what Lincoln Electric does is that
pay should be tied to performance. However, the actual piece-rate system at Lincoln
Electric would not work so well for jobs that do not result in objective performance
outcomes. In addition, it is important to realize that the employees at Lincoln Electric are
motivated by money, something that you cannot assume to be the case for all employees.
Many employees today want more than money from their jobs. Thus, the motivational
system at Lincoln Electric works not only because it links pay to performance, but
because of the employees and the type of work they do. Further, the merit-based profit
sharing system works because Lincoln Electric has consistently made a profit and
employees can receive significant lump sum bonuses.
5. Comment on the cross-cultural limitations of Lincoln Electric’s motivational system.

How do the theories of work motivation help us to understand why the company’s
incentive program did not work in Germany but does work in North America and
Australia? What does this tell us about the cross-cultural limitations of the theories of
motivation?
The fact that Lincoln’s motivational system did not work in Germany is a good example
of how the effectiveness of motivational practices are culture-bound. The system has
been effective in North America and Australia. The limitations probably have more to do
with differences in needs than anything to do with equity, expectancy, or goals. In North
America and Australia, employees are motivated by money which fulfills important
needs. Thus, money is highly valent and employees are willing to work hard to make
more of it. In Germany, however, the quality of life is more important than money. As a

result, employees in Germany are not motivated to make more money and work harder at
the expense of the quality of their life. As noted by the former CEO of Lincoln, “…we
had an incentive program that was based on the belief that everybody in the world would
be willing to work a little harder to enhance their lives and their families and their
incomes. It was an erroneous assumption.” He goes on to note that the quality of life in
Germany is much more important than money. Interestingly, what happened in Germany
appears to be consistent with Maslow’s theory. That is, once employees fulfilled their
physiological needs, they were no longer motivated to work harder to obtain more
money. It is also worth noting that cultures differ in the extent to which they value
achievement as it is defined in North America. The German employees at Lincoln
Electric might not have the same high need for achievement and the desire to fulfill it by
working harder and making more money. In terms of expectancy theory, the mistake that
Lincoln made was assuming that money would be as highly valent to German employees
as it is to employees in North America.
6. What can other organizations learn about motivation from Lincoln Electric? What do
you recommend that organizations do to motivate employees based on your
knowledge of the Lincoln Electric motivational system and on your understanding of
motivation?
There are a number of things that organizations can learn from Lincoln Electric about
motivating employees. First, it is important to understand employees’ needs and what
they consider to be highly valent in terms of second-level outcomes. Employees are
motivated to obtain incentives that fulfill their needs and are attractive. Second,
employees should be capable of performing at high levels and provided with the
resources and training to improve their performance (high expectancy). Third, there
should be a strong and clear link between performance and second-level outcomes
(instrumentality). That is, pay and other incentives should be tied to performance. Fourth,
the provision of pay and rewards should be equitable such that employee inputs and
outcomes are equitable when compared to others. Fifth, goals are motivational and
employees should be able to set goals themselves or with their supervisor, that are
specific and challenging and are accompanied with feedback. In general, the motivational
system at Lincoln Electric demonstrates that pay for performance systems can be
effective for motivating employees, increasing productivity and profits, and lowering
turnover. What is critical to their success is a performance evaluation system that is used
to measure employees’ performance, and a fair and equitable system that ensures that pay
is strongly tied to a person’s performance. Thus, it is recommended that other
organizations tie pay or other incentives that are attractive to employees to performance,
and use a valid system of measurement to evaluate employees’ performance.
Finally, it is important for organizations to understand the importance of fit and balance
with respect to motivational practices. The practices should fit the organization’s culture
and strategy, and they should be balanced in that they enable employees and the
organization to achieve their goals. Effective motivational practices have to be tailored to
employees’ needs, the task, characteristics of the organization, and the desired
motivational outcomes. At Lincoln Electric, the motivational system works because
money is motivational to employees; the task enables employees to produce as little or as

much as they want; the organization’s culture and strategy supports productivity and
profits; and goal of employees and the organization is to maximize productivity.

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CHAPTER 5

THEORIES OF WORK MOTIVATION

CHAPTER LEARNING OBJECTIVES

After reading Chapter 5, students should be able to:

CHAPTER OUTLINE AND TEACHING NOTES

Why Study Motivation?

Basic Characteristics of Motivation

Persistence. Persistence is related to effort in the quantity of energy that is directed

Copyright © 2017 Pearson Canada Inc.

Extrinsic and Intrinsic Motivation

Motivation and Performance

General Cognitive Ability. General cognitive ability refers to a person’s basic

Copyright © 2017 Pearson Canada Inc.

Emotional Intelligence. Emotional intelligence (EI) has to do with an individual’s ability

1. Perceiving emotions accurately in oneself and others

Research on EI has found that it predicts performance in a number of areas including

The Motivation-Performance Relationship

Need Theories of Work Motivation

NEEDS  BEHAVIOUR  INCENTIVES AND GOALS

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Maslow’s Hierarchy of Needs

The motivational premise of Maslow’s hierarchy of needs is that the lowest-level

Alderfer’s ERG Theory

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Alderfer’s theory differs from Maslow’s in two ways.

In summary, there are two major motivational premises of ERG theory.

McClelland’s Theory of Needs

Need for achievement is a personality dimension characterized by a strong desire to

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Research Support for Need Theories

Managerial Implications of Need Theories

Appreciate Diversity. Managers must be adept at evaluating the needs of individual

Appreciate Intrinsic Motivation. Managers must recognize the importance of higher-order

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Self-Determination Theory (SDT)

Autonomous motivation is self-motivation or intrinsic motivation and occurs when people

The extent to which a person’s motivation is autonomous or controlled depends on the

Research Support for and Managerial Implications of Self-Determination Theory

Copyright © 2017 Pearson Canada Inc.

Process Theories of Work Motivation

Need theories of motivation concentrate on what motivates individuals, while process

Instrumentality is the probability that a particular first-level outcome will be followed by

Expectancy is the probability that a particular first-level outcome can be achieved. It is

The motivational premises of expectancy theory are as follows:

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It is worth concluding the discussion of expectancy theory by noting that people

Research Support for Expectancy Theory

Managerial Implications of Expectancy Theory

Boost Expectancies. Managers should clarify the path to beneficial first-level

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Research Support for Equity Theory

Managerial Implications of Equity Theory

Goal Setting Theory

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What Kinds of Goals Are Motivational?

Enhancing Goal Commitment

Participation. Research results are mixed as sometimes participation in goal setting

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Supportiveness. There is considerable agreement that a coercive approach to goal setting

Research Support for Goal Setting Theory

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Managerial Implications of Goal Setting Theory

Do Motivation Theories Translate Across Cultures?