The following theories are considered contemporary, since they represent the current state of the art in explaining employee motivation
Alderfer (1972) classifies needs into three categories into hierarchical order. They are:
The existence category
Ø Provides our basic material existence requirements.
Ø They include Maslow’s physiological and safety needs.
Ø The desire we have for maintaining important interpersonal relationships.
Ø These social and status desires require interaction with others.
Ø They align with Maslow’s social need and the external component.
Ø An intrinsic desire for personal development.
Ø These include the intrinsic component from Maslow’s esteem category, and the characteristics included under self-actualization.
This theory is very similar to Maslow’s theory. Existence need corresponds with Maslow’s physiological and safety needs, Relatedness need corresponds with Maslow’s social needs and Growth need corresponds with Maslow’s esteem and self-actualization needs.
The relationship between Maslow’s theory and Herzberg’s theory is shown below.
A comparison of Maslow, Alderfer and Hertzberg
GROWTH Self - Actualisation External Esteem Need
RELATEDNESS - Internal Esteem needs Social needs
EXISTENCE - Safety needs Physiological needs
ERG theory is similar to Maslow's Hierarchy of needs; Alderfer did differ from Maslow in two important ways. According to Alderfer hierarchy is not included and a need may be satisfied, that may continue to dominate. More than one level of need can cause motivation at the same time and if need remain unsatisfied at some high level, the individual will regress to lower level, and begin to move to lower needs again.
Hertzberg's hygiene factors represent Maslow's physiological, security and belongingness needs and Alderfer's existence and relatedness needs. Maslow's esteem and self-actualization needs are similar to Hertzberg's motivators and Alderfer's growth factor.
Alderfer’s ERG theory differs from Maslow’s in the following arguments:
1 More than one need may be operative at the same time.
2 If, the gratification of a higher-level need is stifled, the desire to satisfy a lower-level need increases.
3 ERG theory does not assume that there exists a rigid hierarchy. A person can be working on growth even though existence or relatedness needs are unsatisfied, or all three need categories could be operating at the same time.
ERG theory also contains a frustration-regression dimension. Maslow argued that an individual would stay at a certain need level until that need was satisfied. ERG argues that multiple needs can be operating as motivators at the same time. ERG theory notes that when a higher-order need level is frustrated, the individual’s desire to increase a lower-level need takes place (Robbins, 2003).
McClelland’s Theory of Needs
McClelland’s (1961) theory focuses on three needs: achievement, power, and affiliation. They are defined as follow:
i) Need for achievement (nAch) – Individuals high in. nAch derive satisfaction from reaching goals. The feeling of successful task accomplishment is important to the high achiever. High achievers prefer immediate feedback on their performance and they generally undertake tasks of moderate difficulty rather than those that are either very easy or very difficult. They also prefer to work independently so that successful task performance (or failure) can be related to their own efforts rather than the efforts of someone else.
ii) Need for power (nPow): The individual exhibiting this need as the dominant one derives satisfaction from his or her ability to control
others. Actual achievement of desired goals is of secondary importance to the high nPow individual; instead the means by which goals are achieved (the exercise of power) are of primary importance. Individuals with a high nPow derive satisfaction from being in positions of influence and control. Organizations that foster the power motive tend to attract individuals with a high need for 'power’ (for example military organization).
iii) Need for affiliation (nAff): Individuals exhibiting this need as a dominant motive derive satisfaction from social and interpersonal activities. There is a need to form strong interpersonal ties and to "get close" to people psychologically. If asked to choose between working at a task with those who are technically competent and those who are their friends, high nAfft individuals will chose their friends.
Based on this theory, the following assumptions can be made (Robbins, 2003):
Ø Individuals with a high need to achieve prefer job situations with personal responsibility, feedback, and an intermediate degree of risk. When these characteristics are prevalent, high achievers will be strongly motivated.
Ø A high need to achieve does not necessarily lead to being a good manager, especially in large organizations. People with a high achievement need are interested in how well they do personally and not in influencing others to do well.
Ø The needs for affiliation and power tend to be closely related to managerial success. The best managers are high in their need for power and low in their need for affiliation.
Cognitive Evaluation Theory
This theory proposes (Deci & Ryan, 1985) that when extrinsic rewards are used by organizations as payoffs for superior performance, the intrinsic rewards, which are derived from individuals doing what they like, are reduced. The popular explanation is that the individual experiences a loss of control over his or her own behavior so that the previous intrinsic motivation diminishes. Furthermore, the elimination of extrinsic rewards can produce a shift – from an external to an internal explanation – in an individual’s perception of causation of why he or she works on a task (Robbins, 2003).
Therefore, pay or other extrinsic rewards should be made contingent on an individual’s performance.
This theory may have limited applicability to work organizations, because most low-level jobs are not inherently satisfying enough to foster high intrinsic interest, and many managerial and professional positions offer intrinsic rewards
Locke and Latham (1990) proposed that challenging goals produce a higher level of output than do the generalized goals. More difficult the goal, the higher the level of performance will be. People will do better when they get feedback on how well they are progressing toward their goals. A goal serves as a motivator, because, it causes people to compare their present capacity to perform with that required to succeed at the goal.
There are four contingencies in goal-setting theory:
Ø Goal commitment: Goal-setting theory presupposes that an individual is committed to the goal.
Ø Adequate self-efficacy: Self-efficacy refers to an individual’s belief that he or she is capable of performing a task. The higher your self-efficacy, the more 1confidence you have in your ability to succeed in a task.
Ø Task characteristics: Individual goal setting does not work equally well on all tasks. Goals seem to have a more substantial effect on performance when tasks are simple, well-learned, and independent.
Ø National culture: Goal-setting theory is culture bound and it is well adapted to North American cultures.
Reinforcement theory (Komaki et. al., 1991) argues that reinforcement conditions human behavior. According to this theory, behavior is a function of its consequences. Behavior is environmentally caused. It can be modified (reinforced) by providing (controlling) consequences. Reinforced behavior tends to be repeated.
According to this theory (Adams, 1965), employees make comparisons of their job inputs and outcomes relative to those of others. If, an individual perceives the input-outcome ratio to be equal to that of the relevant others with whom he/she compares him/herself, a state of equity is said to exist. He/she perceives the situation as fair. If the ratio appears to be unequal, the individual experience inequity.
There are four referent comparisons that an employee can use:
Ø Self-inside: An employee’s experiences in a different position inside his or her current organization
Ø Self-outside: An employee’s experiences in a situation or position outside his or her current organization
Ø Other-inside: Another individual or group of individuals inside the employee’s organization
Ø Other-outside: Another individual or group of individuals outside the employee’s organization
There are certain issues which are crucial regarding Equity theory. They are as follows:
1 Employees with short tenure in their current organizations tend to have little information about others.
2 Employees with long tenure rely more heavily on co-workers for comparison.
3 Upper-level employees will make more other-outside comparisons.
When employees perceive an inequity, they can be predicted to make one of six choices:
Ø Change their inputs.
Ø Change their outcomes.
Ø Distort perceptions of self.
Ø Distort perceptions of others.
Ø Choose a different referent.
Ø Leave the field.
People’s perceptions of fairness in organizations, consisting of perceptions of how decisions are made regarding the distribution of outcomes and the perceived fairness of those outcomes themselves.
1. Distributive Justice : The perceived fairness of the way rewards are distributed among people.
2. Procedural Justice : Perceptions of the fairness of the procedures used to determine outcomes.
3. Interactional Justice : The perceived fairness of the interpersonal treatment used to determine organizational outcomes.
Certain tips, which may be important in this regard, are as follows:
1. Avoid overpayment.
2. Give people a voice in decisions affecting them.
3. Explain outcomes thoroughly using a socially sensitive manner.
Expectancy theory is one of the most widely accepted explanations of motivation. Victor Vroom’s (1964) expectancy theory has its critics but most of the research is supportive. Motivation is based on people’s beliefs, goals and linkage between effort and performance, performance and reward, and reward and individual goal satisfaction. Expectancy theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.
Determinants of motivation according to this theory are as follows:
Expectancy: The belief that one’s efforts will positively influence one’s performance.
Instrumentality: An individual’s beliefs regarding the likelihood of being rewarded in accord with his or her own level of performance.
Valence: The value a person places on the rewards he or she expects to receive from an organization.
Other Determinants: Skills and abilities, role perceptions, opportunities to perform, etc.
Three key relationships in Expectancy theory are:
Ø Effort-performance relationship: the probability perceived by the individual that exerting a given amount of effort will lead to performance
Ø Performance-reward relationship: the degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome
Ø Rewards-personal goals relationship: the degree to which organizational rewards satisfy an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual.
A popular way of thinking about employee performance is as a function of the interaction of ability and motivation; that is,
Performance = f (Ability x Motivation x Opportunity).
If either of motivation or ability is inadequate, performance will be negatively affected. Furthermore, when an employee performs, he/she needs opportunity to be allowed to perform and prove his/her worth.