Foundations of Employee Motivation: C H A P T E R

C H A P T E R 5
Foundations of
Employee
Motivation
McShane/ Von Glinow 2/e Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Motivation at Capital One
Capital One has a motivated

workforce by hiring people
with an entrepreneurial spirit,
challenging them through
stretch goals, and continually
evaluating individual and
organizational performance. © J. Mahoney/ Richmond Times Dispatch
Challenges of Motivating Employees
• Layoffs, restructuring
• Damaged trust, commitment
• Flatter organizations
• Fewer supervisors to monitor
performance
• Changing workforce
• Younger staff have different © J. Mahoney/ Richmond Times Dispatch
needs
• Diverse workforce variety of
motivation practices
Content vs. Process Motivation Theories
• Content theories
• explain why people have different needs at
different times
• Process theories
• describe the processes through which needs are
translated into behavior
Needs Hierarchy Theory
Needs Hierarchy
Theory
Self- • Maslow arranged five needs in a

Actualization hierarchy
Esteem • Satisfaction-progression process
• People who experience
Belongingness self-actualization desire more
rather than less of this need
Safety
Physiological
ERG Theory
Needs Hierarchy ERG
Theory Theory
Self- • Alderfer’s model has

Actualization three sets of needs
Growth
Esteem • Adds
frustration-regression
process to Maslow’s
Belongingness Relatedness
model
Safety
Existence
Physiological
Content Theories of Motivation
Needs Hierarchy ERG Motivator--Hygiene McClelland’s
Theory Theory Theory Learned Needs
Self- Need for

Actualization Achievement
Growth Motivators
Need for
Esteem
Power
Need for
Belongingness Relatedness
Affiliation
Safety Hygienes
Existence
Physiological
Pamela Grof’s Need for Achievement
Pamela Grof’s high need for

achievement is apparent from
her many business initiatives
since the age of 12. “I come
from a very entrepreneurial
family,” explains Grof, who
founded web design company
InterVisual in Calgary, © K. Morison/Calgary Herald
Canada.
Creating a Company of Entrepreneurs
Companies support
entrepreneurship by:
• clarifying the firm’s purpose
and shared values
• supporting and reinforcing
entrepreneurial behavior
• creating small businesses
within the larger organization © K. Morison/Calgary Herald
Implications of Content Theories
• Match rewards with employee needs

• Offer employees a choice of rewards
• people have different needs at different
times
• Limit use of financial rewards as a

source of motivation
Expectancy Theory of Motivation
E-to-P P-to-O Outcomes
Expectancy Expectancy & Valences
Outcome 1
+ or -
Outcome 2
Effort Performance + or -
Outcome 3
+ or -
Expectancy Theory in Practice
• Increasing the E-to-P expectancy

• training, selection, resources, clarify roles, provide
coaching and feedback
• Increasing the P-to-O expectancy

• Measure performance accurately, explain how
rewards are based on past performance
• Increasing outcome valences

• Use valued rewards, individualize rewards,
minimize countervalent outcomes
Elements of Equity Theory
• Outcome/input ratio
• inputs -- what employee contributes (e.g. skill)
• outcomes -- what employees receive (e.g. pay)
• Comparison other
• person/people we compare ratio with
• not easily identifiable
• Equity evaluation
• compare outcome/input ratio with
the comparison other
Overreward vs Underreward Inequity
Comparison
You
Other
Overreward Outcomes
Outcomes
Inequity
Inputs Inputs
Underreward Outcomes
Inequity Outcomes
Inputs Inputs
Consequences of Inequity
• Change inputs
• Change outcomes
• Change perceptions
• Leave the field
• Act on the comparison other
• Change the comparison other
Equity Sensitivity
• Benevolents
• Tolerant of being underrewarded
• Equity Sensitives
• Want ratio to be equal to the
comparison other
• Entitleds
• Prefer receiving proportionately more
than others
Goal Setting at CDW Computer Centers
CDW Computer Centers has

become a leading direct
marketer of computers and
peripherals by setting specific,
challenging goals for its
employees. “We set BHAGS --
which are big, hairy aggressive © J. Robinson/ Chicago Tribune
goals,” says CEO John A.

Edwardson (shown here).
Effective Goal Setting
Specific
Relevant
Challenging
Task Task
Effort Performance
Commitment
Participation
Challenging
Effect of Goal Difficulty on Performance
High
Task Performance
Area of
Optimal
Goal
Difficulty
Low Moderate Challenging Impossible
Goal Difficulty
C H A P T E R 5
Foundations of
Employee
Motivation

Foundations of Employee Motivation: C H A P T E R

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C H A P T E R 5

Capital One has a motivated

Self- • Maslow arranged five needs in a

Self- • Alderfer’s model has

Self- Need for

Pamela Grof’s high need for

• Match rewards with employee needs

• Limit use of financial rewards as a

• Increasing the E-to-P expectancy

• Increasing the P-to-O expectancy

• Increasing outcome valences

CDW Computer Centers has

goals,” says CEO John A.

Low Moderate Challenging Impossible

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