Employee Motivation Theory and Practice

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Employee Motivation: Theory and

practice
The job of a manager in the workplace is to get things done through employees. To do
this the manager should be able to motivate employees. But that's easier said than done!
Motivation practice and theory are difficult subjects, touching on several disciplines.
In spite of enormous research, basic as well as applied, the subject of motivation is not
clearly understood and more often than not poorly practiced. To understand motivation
one must understand human nature itself. And there lies the problem!
Human nature can be very simple, yet very complex too. An understanding and
appreciation of this is a prerequisite to effective employee motivation in the workplace
and therefore effective management and leadership.
These articles on motivation theory and practice concentrate on various theories

regarding human nature in general and motivation in particular. Included are articles on
the practical aspects of motivation in the workplace and the research that has been
undertaken in this field, notably by Douglas McGregor (theory y), Frederick Herzberg
(two factor motivation hygiene theory,) Abraham Maslow (theory z, hierarchy of needs),
Elton Mayo (Hawthorne Experiments) Chris Argyris Rensis Likert and David
McClelland (achievement motivation.)
Why study and apply employee motivation principles?
Quite apart from the benefit and moral value of an altruistic approach to treating
colleagues as human beings and respecting human dignity in all its forms, research and
observations show that well motivated employees are more productive and creative. The
inverse also holds true. The schematic below indicates the potential contribution the
practical application of the principles this paper has on reducing work content in the
organization.
Motivation is the key to performance improvement
There is an old saying you can take a horse to the water but you cannot force it to drink; it
will drink only if it's thirsty - so with people. They will do what they want to do or
otherwise motivated to do. Whether it is to excel on the workshop floor or in the 'ivory
tower' they must be motivated or driven to it, either by themselves or through external
stimulus.
Are they born with the self-motivation or drive? Yes and no. If no, they can be motivated,
for motivation is a skill which can and must be learnt. This is essential for any business to
survive and succeed.
Performance is considered to be a function of ability and motivation, thus:
• Job performance =f(ability)(motivation)
Ability in turn depends on education, experience and training and its improvement is a
slow and long process. On the other hand motivation can be improved quickly. There are
many options and an uninitiated manager may not even know where to start. As a
guideline, there are broadly seven strategies for motivation.
• Positive reinforcement / high expectations

• Effective discipline and punishment
• Treating people fairly
• Satisfying employees needs
• Setting work related goals
• Restructuring jobs
• Base rewards on job performance
These are the basic strategies, though the mix in the final 'recipe' will vary from
workplace situation to situation. Essentially, there is a gap between an individuals actual
state and some desired state and the manager tries to reduce this gap.
Motivation is, in effect, a means to reduce and manipulate this gap. It is inducing others
in a specific way towards goals specifically stated by the motivator. Naturally, these
goals as also the motivation system must conform to the corporate policy of the
organization. The motivational system must be tailored to the situation and to the
organization.
In one of the most elaborate studies on employee motivation, involving 31,000 men and
13,000 women, the Minneapolis Gas Company sought to determine what their potential
employees desire most from a job. This study was carried out during a 20 year period
from 1945 to 1965 and was quite revealing. The ratings for the various factors differed
only slightly between men and women, but both groups considered security as the highest
rated factor. The next three factors were;
• advancement
• type of work
• company - proud to work for
Surprisingly, factors such as pay, benefits and working conditions were given a low
rating by both groups. So after all, and contrary to common belief, money is not the
prime motivator. (Though this should not be regarded as a signal to reward employees
poorly or unfairly.)
Next | The theorists and their theories (1 of 2)
Home / Employee Motivation / Theory and Practice / Theorists 1
Employee motivation, the organizational environment and productivity

Motivation theorists and their theories (1 of 2)
Although the process of management is as old as history, scientific management as we

know it today is basically a twentieth century phenomenon. Also, as in some other fields,
practice has been far ahead of theory.
This is still true in the field of management, contrary to the situation in some of the pure
sciences. For instance, Albert Einstein, formulates a theory, which is later proved by
decades of intensive research and experimentation. Not so in the field of management.
In fact this field has been so devoid of real fundamental work so far, that Herbert A.
Simon is the first management theoretician to win the Nobel Prize for Economics in
1978. His contribution itself gives a clue to the difficulty, bordering on impossibility, of
real fundamental work in this field concerned with people. In order to arrive at a correct
decision, the manager must have all the information necessary relevant to the various
factors and all the time in the world to analyze the same.
This is seldom, if ever, the case. Both the information available and the time at the
managers disposal are limited, but he or she must make a decision. And the decision is,
therefore, not the optimum one but a 'satisficing' one - in effect, a satisfactory
compromise under the real conditions prevailing in the management 'arena'.
Traditional theory 'X'
This can best be ascribed to Sigmund Freud who was no lover of people, and was far
from being optimistic. Theory X assumes that people are lazy; they hate work to the
extent that they avoid it; they have no ambition, take no initiative and avoid taking any
responsibility; all they want is security, and to get them to do any work, they must be
rewarded, coerced, intimidated and punished. This is the so-called 'stick and carrot'
philosophy of management. If this theory were valid, managers will have to constantly
police their staff, whom they cannot trust and who will refuse to cooperate. In such an
oppressive and frustrating atmosphere, both for the manager and the managed, there is no
possibility of any achievement or any creative work. But fortunately, as we know, this is
not the case.
Theory 'Y' - Douglas McGregor
This is in sharp contrast to theory 'X'. McGregor believed that people want to learn and
that work is their natural activity to the extent that they develop self-discipline and self-
development. They see their reward not so much in cash payments as in the freedom to
do difficult and challenging work by themselves. The managers job is to 'dovetail' the
human wish for self-development into the organizations need for maximum productive
efficiency. The basic objectives of both are therefore met and with imagination and
sincerity, the enormous potential can be tapped.
Does it sound too good to be true? It could be construed, by some, that Theory 'Y'
management is soft and slack. This is not true and the proof is in the 'pudding', for it has
already proved its worth in the USA and elsewhere. For best results, the persons must be
carefully selected to form a homogeneous group. A good leader of such a group may
conveniently 'absent' from group meetings so they can discuss the matters freely and help
select and 'groom' a new leader. The leader does no longer hanker after power, lets people
develop freely, and may even (it is hoped) enjoy watching the development and
actualization of people, as if, by themselves. Everyone, and most of all the organization,
gains as a result.
Theory 'Z' - Abraham Maslow
This is a refreshing change from the theory X of Freud, by a fellow psychologist,

Abraham Maslow. Maslow totally rejects the dark and dingy Freudian basement and
takes us out into the fresh, open, sunny and cheerful atmosphere. He is the main founder
of the humanistic school or the third force which holds that all the good qualities are
inherent in people, at least, at birth, although later they are gradually lost.
Maslow's central theme revolves around the meaning and significance of human work
and seems to epitomize Voltaire's observation in Candide, 'work banishes the three great
evils -boredom, vice and poverty'. The great sage Yajnavalkya explains in the
Brihadaranyaka Upanishad that by good works a man becomes holy, by evil works evil.
A mans personality is the sum total of his works and that only his works survive a man at
death. This is perhaps the essence of Maslow's hierarchy of needs theory, as it is more
commonly know.
Maslow's major works include the standard textbook (in collaboration with Mittlemann),
Principles of Abnormal Psychology (1941), a seminal paper, 'A Theory of Human
Motivation' (1943) and the book, Eupsychian Management (pronounced yew-sigh-keyan)
published in 1965. Maslow's theory of human motivation is, in fact, the basis of
McGregor's theory 'Y' briefly described above. The basic human needs, according to
Maslow, are:
• physiological needs (Lowest)

• safety needs;
• love needs;
• esteem needs; and
• self-actualization needs (Highest)
Mans behavior is seen as dominated by his unsatisfied needs and he is a 'perpetually

wanting animal', for when one need is satisfied he aspires for the next higher one. This is,
therefore, seen as an ongoing activity, in which the man is totally absorbed in order to
attain perfection through self-development.
The highest state of self-actualization is characterized by integrity, responsibility,

magnanimity, simplicity and naturalness. Self-actualizers focus on problems external to
themselves. His prescription for human salvation is simple, but not easy: 'Hard work and
total commitment to doing well the job that fate or personal destiny calls you to do, or
any important job that "calls for" doing'.
Maslow has had his share of critics, but he has been able to achieve a refreshing synthesis
of divergent and influential philosophies of:
• Marx - economic and physical needs;

• Freud - physical and love needs;
• Adler - esteem needs;
• Goldstein - self-actualization.
Next | The theorists and their theories (2 of 2
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Motivation theorists and their theories (2 of 2)
Frederick Herzberg - Hygiene / Motivation Theory
This is based on analysis of the interviews of 200 engineers and accountants in the
Pittsburgh area in the USA. According to this theory, people work first and foremost in
their own self-enlightened interest, for they are truly happy and mentally healthy through
work accomplishment. Peoples needs are of two types:
Animal Needs (hygiene factors)
• Supervision
• Interpersonal relations
• Working conditions
• Salary
Human Needs (motivators)
• Recognition
• Work
• Responsibility
• Advancement
Unsatisfactory hygiene factors can act as de-motivators, but if satisfactory, their
motivational effect is limited. The psychology of motivation is quite complex and
Herzberg has exploded several myths about motivators such as:
• shorter working week;

• increasing wages;
• fringe benefits;
• sensitivity / human relations training;
• communication.
As typical examples, saying 'please' to shop-floor workers does not motivate them to
work hard, and telling them about the performance of the company may even antagonize
them more. Herzberg regards these also as hygiene factors, which, if satisfactory, satisfy
animal needs but not human needs.
Chris Argyris
According to Argyris, organization needs to be redesigned for a fuller utilization of the

most precious resource, the workers, in particular their psychological energy. The
pyramidal structure will be relegated to the background, and decisions will be taken by
small groups rather than by a single boss. Satisfaction in work will be more valued than
material rewards. Work should be restructured in order to enable individuals to develop
to the fullest extent. At the same time work will become more meaningful and
challenging through self-motivation.
Rensis Likert
Likert identified four different styles of management:
• exploitative-authoritative;
• benevolent-authoritative;
• consultative;
• participative.
The participative system was found to be the most effective in that it satisfies the whole
range of human needs. Major decisions are taken by groups themselves and this results in
achieving high targets and excellent productivity. There is complete trust within the
group and the sense of participation leads to a high degree of motivation.
Fred Luthans
Luthans advocates the so-called 'contingency approach' on the basis that certain practices
work better than others for certain people and certain jobs. As an example, rigid, clearly
defined jobs, authoritative leadership and tight controls lead in some cases to high
productivity and satisfaction among workers. In some other cases just the opposite seems
to work. It is necessary, therefore, to adapt the leadership style to the particular group of
workers and the specific job in hand.
Victor Vroom
Vroom's 'expectancy theory' is an extension of the 'contingency approach'. The leadership

style should be 'tailored' to the particular situation and to the particular group. In some
cases it appears best for the boss to decide and in others the group arrives at a consensus.
An individual should also be rewarded with what he or she perceives as important rather
than what the manager perceives. For example, one individual may value a salary
increase, whereas another may, instead, value promotion. This theory contributes an
insight into the study of employee motivation by explaining how individual goals
influence individual performance.
We have discussed above only a selection of the motivation theories and thoughts of the
various proponents of the human behavior school of management. Not included here are,
among others, the thoughts of:
• Seebohm Rowntree - labor participation in management;

• Elton Mayo - the Hawthorne Experiments;
• Kurt Lewin - group dynamics; force field theory;
• David McClelland - achievement motivation;
• George Humans - the human group;
• William Whyte - the organization man.
What does it all add up to? Back to 'square one'? Yes, indeed, the overall picture is
certainly confusing. This is not surprising, for the human nature and human mind defy a
clear-cut model, mathematical or otherwise.
In some of the theories and thoughts presented, however, one can see some 'glimpses' of
the person and how, perhaps, he or she could be motivated. This is rewarding in itself.
But, as noted earlier, practice has been ahead of theory in this field, so let us now move to
the practical side of management of human behavior and motivation in the workplace.
Next | Motivation theory into practice
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Application of employee motivation theory to the workplace
Management literature is replete with actual case histories of what does and what does
not motivate people. Presented here is a tentative initial broad selection of the various
practices that have been tried in order to draw lessons for the future.
'Stick' or 'carrot' approach?
The traditional Victorian style of strict discipline and punishment has not only failed to
deliver the goods, but it has also left a mood of discontent amongst the "working class".
Punishment appears to have produced negative rather than positive results and has
increased the hostility between 'them' (the management) and 'us' (the workers). In
contrast to this, the 'carrot' approach, involving approval, praise and recognition of effort
has markedly improved the work atmosphere, leading to more productive work places
and giving workers greater job satisfaction.
Manager's motivation 'toolkit'
The manager's main task is to develop a productive work place, with and through those
he or she is in charge of. The manager should motivate his or her team, both individually
and collectively so that a productive work place is maintained and developed and at the
same time employees derive satisfaction from their jobs.
This may appear somewhat contradictory, but it seems to work. The main tools in the
manager's kitbag for motivating the team are:
• approval, praise and recognition

• trust, respect and high expectations
• loyalty, given that it may be received
• removing organizational barriers that stand in the way of individual and group
performance (smooth business processes, systems, methods and resources - see
outline team building program)
• job enrichment
• good communications
• financial incentives
These are arranged in order of importance and it is interesting to note that cash is way
down the ladder of motivators. Let's look at a couple of examples taken from real life
situations.
The Swedish shipbuilding company, Kockums, turned a 15 million dollar loss into a 100
million dollar profit in the course of ten years due entirely to a changed perception of the
workforce brought about by better motivation. At Western Electric there was a dramatic
improvement in output after the supervisors and managers started taking greater interest
in their employees.
Don't coerce - persuade!
Persuasion is far more powerful than coercion, just as the pen is mightier than the sword.
Managers have a much better chance of success if they use persuasion rather than
coercion. The former builds morale, initiative and motivation, whilst the latter quite
effectively kills such qualities. The three basic components in persuasion are:
• suggest;
• play on the person's sentiments; and
• appeal to logic.
Once convinced, the person is so motivated as to deliver the 'goods'. The manager will
have achieved the goal quietly, gently and with the minimum of effort. It is, in effect, an
effortless achievement.
There has been a considerable amount of research into persuasion / motivation in the field
of advertising and marketing. The research is entirely of the applied type, which can and
has been used to great practical advantage. Some of the findings in this field were first
published in the fifties in a book with the title, The Hidden Persuaders, which became a
bestseller.
More contemporary 'persuaders' used by advertising and marketing people include:
• Faster talk is found to be more effective, since it is remembered better.

• Brain emits fast beta waves when a person is really interested in a particular
presentation. These waves can be detected by an instrument.
• Subliminal approach using short duration presentation, whereby the message is
transmitted below the level of awareness.
Can these findings be used in actual work conditions? AT&T (The American Telephone
and Telegraph Co.,) recognizing the importance of hidden needs, at one time succeeded
in promoting long distance calls by use of the simple phrase: 'Reach out, reach out and
touch someone'. Managers will need to adapt this persuasion / motivation technique to
their own situation.
Next | Motivation theory in to practice 2
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Application of employee motivation theory to the workplace
Job satisfaction - is there a trend?

This is the title of a study carried out by the US Department of Labor among 1500
workers, who were asked to rate the job factors, from a list of 23, which they considered
important starting from the most important factor.
Their findings (Sanzotta (1977)) are contained in the table below.
Job Satisfaction Findings

White-collar workers Blue-collar workers
A. Interesting work A. Good pay
B. Opportunities for development B. Enough help and resources
C. Enough information C. Job security
D. Enough authority D. Enough information
E. Enough help and resources E. Interesting work
F. Friendly, helpful coworkers F. Friendly, helpful co-workers
G. See results of own efforts G.Clearly defined responsibilities
H. Competent supervision H.See results of own work
I. Clearly defined responsibilities I. Enough Authority
J. Good pay J. Competent supervision
It is interesting that out of the 23 job factors listed for the survey, yet with the exception
of two items (white-collar workers' choice (B) and blue-collar workers' choice (C))
groups selected the same top ten factors, although with different rankings. It is significant
that good pay was considered as the most important factor by the blue-collar workers, but
it ranked as the least important for white-collar workers.
Individualize motivation policies
It is well known that individual behavior is intensely personal and unique, yet companies
seek to use the same policies to motivate everyone. This is mainly for convenience and
ease compared to catering for individual oddities (Lindstone (1978)). 'Tailoring' the
policy to the needs of each individual is difficult but is far more effective and can pay
handsome dividends. Fairness, decisiveness, giving praise and constructive criticism can
be more effective than money in the matter of motivation.
Leadership is considered synonymous (Tack (1979)) with motivation, and the best form
of leadership is designated as SAL, situation adaptable leadership. In this style of
leadership, one is never surprised or shocked, leadership must begin with the chief
executive and it is more a matter of adaptation than of imparting knowledge. Ultimately,
it is the leadership quality which leads to the success of a company through team building
and motivating its people.
'The one-minute manager'
A contemporary bestseller (Blanchard & Johnson (1983)) aimed at managers who seek to
make star performers of their subordinates. To start with, the manager sets a goal, e.g.
one page read in one minute, and it is seen to be achieved by 'one minute' of praising or
reprimand as the case may be. But to be effective, these must be given (a) promptly, (b)
in specific terms, and the behavior, rather than the person, should be praised or
reprimanded.
The concept is basic and it makes sense, although the book seeks to 'dramatize' it. 'One
minute' praising is seen to be the motivating force. Everyone is considered a winner,
though some people are disguised as losers, and the manager is extolled not to be fooled
by such appearances.
'Lessons from America's Best-run Companies'
Another bestseller, In Search of Excellence (Peters & Waterman (1982)). Several criteria,
including analysis of annual reports and in-depth interviews, were used to pick 14 'model
excellent companies' out of an initial sample of 62 companies. As expected, most of the
action in high-performing companies revolved around its people, their success being
ascribed to:
• productivity through people;

• extraordinary performance from ordinary employees;
• treating people decently.
Personnel function and in particular leadership were considered the most critical
components. If the leaders in an organization can create and sustain an environment in
which all employees are motivated, the overall performance is bound to be good. The
three essentials for creating such an environment are:
• fairness;
• job security; and
• involvement.
Of all the resources available, the human resource is clearly the most significant, but also
the most difficult to manage. Excellence can only be achieved through excellent
performance of every person, rather than by the high-pitched performance of a few
individuals. And motivation is, undoubtedly, the crux.
Conclusion
There is no simple answer to the question of how to motivate people. Can money
motivate? Yes, but money alone is not enough, though it does help. We have discussed
some of the pertinent theories bearing on human motivation and this is balanced by some
of the practical factors which can lead to excellence. Human resource remains the focal
point and leadership the critical component, and motivation has to be 'tailored' to each
individual. The next section deals with an important mode of motivation, namely
financial aspects of rewarding employees.
Next | Employee rewards
Home / Employee Motivation / Employee Rewards
Introduction
The previous section dealt with motivation theory and practice. There is no doubt that
motivation is the crux for good performance, but there is no clear cut answer to the
question of how to motivate. The previous pages gave a glimpse of the answer through
various theories and practices.
Money is a factor in motivating people and this section concentrates on this.
Employee reward systems are discussed in general and later in specifics in terms of
payment by results. Various schemes for financial motivation are also described.
Money is important!
This is, perhaps, saying the obvious. But it still needs to be said, for a perusal of the
previous section may give the impression to the contrary, at least judging from Maslow's
concept. Refreshing as it is, if the theory was completely valid then, at least in affluent
countries, economic incentives should have lost all their force. This we know is not
correct.
According to Peter Drucker (1974) 'there is not one shred of evidence for the alleged
turning away from material rewards... Antimaterialism is a myth, no matter how much it
is extolled.' In fact, they are taken so much for granted that their denial may act as a de-
motivator. 'Economic incentives are becoming rights rather than rewards.'
There is no doubt that we live in a money-motivated world. Any amount of human

relations cannot compensate for a lack of monetary reward. If the reward is right, good
human relations will give that extra zest to a team, motivating them to give of their best
efforts. Insufficient monetary reward cannot be compensated by good human relations.
Even dedicated footballers do not think of playing for England, they merely pay 'lip
service' to it.; the financial rewards of playing for their clubs far exceed those recieved
from playing from their country .Cricketers and rugby players no longer play for their
own country but opt for the 'highest bidder'. Professional tennis players have refused to
play at Wimbledon, the 'Mecca' of lawn tennis, because the rewards were not attractive.
It is no different in the industrial world. Strikes for better salary and rewards do still
occur. All this despite the claim of psychologists that security is the prime need of a
person, as indicated in the previous section. Has the sense of values changed with time?
But we are not concerned here with the philosophical angle, but with hard facts of life in
a commercial world.
Self-motivation can go only so far and it needs to be constantly reinforced by rewards. In

particular, merit must be measured and rewarded regularly, if it is to be encouraged and
sustained. The 'gold banana' in Foxboro has its origin in just an ordinary banana which
one of the pioneers could muster on the spur of the moment when he discovered
extraordinary performance by one of the employees (see next section.
Next | Rewarding executives
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Employee Motivation, the Organizational Environment and Productivity
Employee rewards
Motivating executives
We discuss this subject separately, since there is an indication from various surveys (see
previous section) that the blue-collar and white-collar workers do not attach the same
importance to financial incentives. This is probably more due to differing value system of
the two, rather than the importance each attaches to the money per se.
Properly used, money can be a motivating factor, but little money may have no effect
(Crystal (1970)). To achieve motivation of executives, therefore:
• reward should be meaningful; and

• reward should vary with performance.
The concept is simple, but its implementation is not easy. However, the job is well worth
trying. To be effective, the reward should be 'tailored' to each individual, but only as part
of the total compensation concept. It is essential (Moore (1968)) to develop an overall
program within which each compensation package must be individualized.
Executive compensation elements
There is also need for constant search of new ideas in this respect. The essentials of an
effective company-wide executive compensation scheme are: sound salary-base structure,
several fundamental compensation devices and considerable flexibility in its application.
The five basic elements (Ellig (1982)) of executive compensation are:
• salary,
• short-term incentives,
• long-term incentives,
• employee benefits and
• perquisites.
Any plan for executives should take into account the following factors:
• Executives perceive others as working less and paid more.

• Appearance of a reward as important a factor as the reward itself.
• Flexibility, but not at the expense of discretion.
• Performance rating should support the pay action.
• Correcting one inequity may lead to yet another.
• A decision once announced is difficult to modify.
• An arithmetic increase in the number of people involved results in a geometric
increase in the time required to reach agreement.
Motivating for high performance can cost a lot of money. Not everyone can be motivated
by money alone, however much. Incentive pay plans should be designed (Ivancevich
(1983)) not only to reward good performance but also to minimize the negative side-
effects, such as conflict and grievance. At times it is difficult to develop a valid, equitable
and acceptable means of performance. Many pay plans fail because of either not being
suited to the particular situation or because of poor implementation. It is essential to
consider the following aspects before designing a pay plan to motivate performance:
• preference of individual employees;

• size of pay rewards for high performance;
• method of motivating individual job performance;
• subjective
We have pointed out earlier that for effective and sustained motivation, the reward must
be prompt and immediate. The example of Foxboro has been quoted. In its early days, the
company's very survival depended on technical innovation. Late one evening (Peters &
Waterman (1982)) a scientist walked into the president's office with a working prototype.
The president was dumbfounded by the elegance of the solution and sought to reward
him immediately and on the spot. Rummaging through the drawers of his desk, all he
could find was a banana and this had to suffice. This was the forerunner of the 'gold
banana' concept, a very apt and fitting reward. Likewise, Thomas Watson Snr. had made
a practice of writing out a check on the spot for any unusual achievement that he
observed.
Executive pay - a caution
However, we must introduce a note of caution. There is a connection (White (1973))

between executive pay and company size, in terms of turnover or number of employees,
but no connection between executive pay and improvement in profitability - the bigger
the company, the higher the pay, but efficiency is not necessarily higher. The higher
salary is probably because of a larger number of levels in big companies. Of course, with
the large number of variables involved, it is difficult to correlate any two isolated factors,
such as executive pay and overall company efficiency.
There should be a direct correlation, but perhaps the yardsticks available for this purpose
are inadequate to establish it. Let us, however, reiterate that individual executives have
different senses of values, of which money is one, and an important one at that. No
reward other than money is so flexible, so measurable or so controllable. But in using
financial motivation, the companies must be clear on what they wish to achieve, then
define what managers are expected to contribute towards the objectives and finally ensure
that financial reward is linked to managerial performance.
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Employee rewards
Performance related pay
Reward can act as the 'catalyst' for improved performance and better productivity. But
reward, as such, is not enough and in any case it is not a substitute for good management.
Rather, it is a part of management. Certain basic criteria are essential for rewards to be
effective. These include:
• Reward should be quick.

• Reward should be significant.
• The goals and rewards must be; known, understandable, and attainable.
• Reward must be distinctly and directly related to performance.
• Reward should be irrevocable.
• Reward should be compatible with job measurement.
If the reward plan is seen to be unfair and unrealistic, for example promotion on the basis
of seniority or favoritism, it may have a definitely negative effect as a motivator. For
rewards to be effective, they have to be generous and significant as noted above, hence
they must be structured to attain a proper balance of motivating people to purpose and at
optimum effort.
Rewards are generally reckoned to improve productivity by somewhere of the order of 20

to 30 per cent. This is nearly twice as much as that attained by goal-setting or job-
redesign. But each incentive or reward system is likely to have value under certain
conditions only. Hence to be effective, the rewards must be 'tailored' and changed to suit
the specific conditions. There is no magic formula for all situations and at all times.
Productivity is usually but erroneously associated only with the workshop floor. But total
productivity which ultimately determines the profitability of the entire organization is the
sum total of the productivity at various levels right up to the CEO.
For if the workers are not given the right materials at the right place and at the right time,
their productivity will suffer due to no fault of theirs. The manager, therefore, plays a
vital role in the productivity of the workers and team.
One can even go as far to say that productivity is the only reason for the existence of the
manager. Individually the manager may be considered nonproductive, in that he or she
does not contribute directly to the production, but is responsible for integrating the work
of his or her team into a total productivity effort, Thus, a manager can increase
productivity indirectly by aiding to produce more, and here too, financial motivation
plays a major role.
Reward systems
The financial rewards are basically of three types:
• profit sharing;
• job evaluation; and
• merit rating.
Profit sharing
Profit sharing could be on a macro basis or on a micro basis. The former relates to the
entire company as a whole and the latter to a particular section or group dealing with a
particular activity and/or product. On a macro level, it would be difficult to identify and
reward outstanding performance. This is possible on a micro level by treating the
particular activity as a cost and profit center by itself. This is easier said than done, since
overheads and other common services have to be charged and this cannot be done
completely objectively. The cost allocation in such cases is somewhat arbitrary and the
profit will therefore not be a true reflection of the performance of that particular group or
activity.
Job evaluation
In case of job evaluation, the various component factors have to be isolated and evaluated
for purposes of inter-job comparison. Each factor is assigned a rating on the basis of a
scale agreed beforehand by the union and the management joint committee. The total
rating for each job then forms the basis of wage structure. However, there must be a base
level, representing, in effect, the 'minimum wage', depending on the nature of work and
the geographical area. In some cases and in some countries these are stipulated by law. A
typical, though somewhat broad, list of job factors is as follows:
• working environment;
• physical characteristics;
• mental characteristics;
• extent of responsibility;
• training and experience.
In case of managers, the factors are:
• responsibility;
• expertise;
• human relations.
Merit rating
Merit rating has been used as an indicator of performance. Each employee is rated,
typically as excellent, good, average or poor, in respect of the following abilities:
• communication;
• human relations, including leadership and motivation;
• intelligence;
• judgment;
• knowledge.
The rating, unfortunately, tends to be carried out purely mechanically and it carries a
heavy bias of the rater who may be too lenient, may not be objective and may also have
favorites or otherwise in the group being rated.
Next | The Glacier Project
Home / Employee Motivation / Employee Rewards / Glacier Project
Employee rewards
The Glacier Project
This relates to a major scientific investigation in a real life situation.
The Glacier Metal Company (UK) was the largest manufacturer of plain bearings in
Europe employing some 4500 persons in six factories.
This was a unique experiment, commercially successful and probably without a parallel.
Task Approach Concept
The project began in 1948 with the assistance of the Tavistock Institute of Human
Relations and it sought to provide novel answers to baffling problems in industrial
organizations. Simply stated, once people get a job, they begin to lose interest in the
work, hate their firm and soon organize themselves in order to pressurize the firm for
higher wages.
The Glacier project used the task approach concept, under which the task is carefully
analyzed and roles clearly defined in order to provide scope for peoples effective
participation in the fulfilment of companies objective. Work is seen to have two
components:
• prescribed; and
• discretionary.
The latter is more difficult of the two. A supervisor, for example, has the discretion in
matters of priorities, allotment of work and development of his or her department. These
elements determine the extent of responsibility and are the basis of the theory of equitable
payment developed by the renowned psychoanalyst, Elliott Jaques.
According to this, wages should be related to the responsibility involved and this in turn
depends on the discretionary elements. Jaques developed a technique for measuring the
time-span for discretion for different types of work and formulated a scale of equitable
earnings for a laborer, machine operator, supervisor and engineer. The Glacier model is
far more comprehensive, but for our present purpose the quantification of wage
differential serves as a motivator for better performance.
Next | Payment by results
Home / Employee Motivation / Employee Rewards / Payment by Results
Employee rewards
Payment by results
One of the earliest and best examples of this is the Rucker and Scanlon plans introduced
in the USA in the depression of the 1930s. Joseph Scanlon was a union officer in the
Penn Steel Mill which, as a result of the depression, was on the brink of extinction.
The aim of the plan was to reduce waste and increase efficiency with consequent increase
of productivity and profits.
The savings and surplus resulting from implementation of the suggestions of the group
are shared. For equitable distribution, a committee has to administer the plan and the
company has to disclose (McBeath (1974)) a considerable amount of financial data and
be also prepared to share profits.
Development of the concept of payment by results
As a result the plan has not always been successful. In a survey (Gruneberg & Oborne
(1982)) of 44 cases, 30 were reported to be successful. Thus success has been achieved in
some companies and in some situations. But the concept is sound. The plan gives the
participants a real sense of participation and self-esteem, and the group cohesion and
motivation are increased in anticipation of the reward. Other methods of payment by
results include:
• time saved;
• piecework;
• daily work measurement;
• productivity index;
• added value.
In each case, the savings or increased production are quantified in monetary terms and
sought to be shared amongst the concerned people. Earlier schemes were based on
individual effort which could be appropriately rewarded.
However, modern technology and production methods are quite often based on a team
approach, hence new schemes for payment by results have to be tried and implemented, if
found effective. In this case individuals do not get rewarded as a result of their own effort
and it is the group performance which counts. This requires a change of attitude of the
workers, as also of the management.
Like the Scanlon plan, the management needs to be prepared to discuss openly with the
workers / unions the real change / improvement in the relevant indices and this requires
disclosure of otherwise confidential financial and production data.
In the long run, such an open attitude will benefit both.
Which scheme is best?
There is no such scheme! Each situation must be studied in depth and a suitable scheme
'tailored' for the specific situation. Also important is the history and culture of the
organisation concerned. Anything radically different and without active participation of
all concerned is bound to fail. It is advisable also not to introduce drastic changes
suddenly. The system must be properly formulated and after full and frank discussion
with the concerned people tried out on a 'mini' scale and refined in the light of the
experience gained.
The main factors involved in selection of a suitable scheme are:
• micro versus macro level;

• problems of implementation; and
• maintenance over a sustained period.
The micro versus macro aspect has been briefly touched on earlier in this section. Both
have their pros and cons and an ideal system may well be a combination of the two. It is
good to reward individual performance since it could act as an instant motivator. On the
other hand certain benefits result only from a group action and therefore must be shared
among the entire group or even across the entire company.
Implementation of any scheme is the most important phase and it should not be rushed
through. Sufficient time should be allowed for discussion and suggestions from the
concerned group. At this stage all problems that may arise during implementation stage
cannot be foreseen, but some of the obvious ones certainly can be anticipated.
Once implemented, both sides should be willing to modify the scheme in the light of the
experience gained. There should be no hesitation to refine the scheme until found
completely satisfactory. It will require full cooperation and complete honesty.
Conclusions
Money is certainly a motivator and a major one at that. Success of companies such as of
Microsoft, IBM and other such tech companies is certainly, at least to some extent, a
result of such motivation. There are, of course, other factors particularly job satisfaction
as shown in the previous section.
Rewarding employees financially does improve levels of employee motivation and thus
improves productivity, which ultimately shows up in the 'bottom line', and part of the
increased profits must be circulated back to the workforce responsible for it.
Some of the schemes for reward systems and payment by results have are briefly
discussed. The novel Glacier project and the Scanlon plan are briefly described. There is
no such thing as the 'best scheme'. It must be formulated and 'tailored' to each specific
case.
Next | Informal group dynamics
\Home / Employee Motivation / Informal Group Dynamics
Introduction
Jeff Lane was at his wits end. As a newly appointed production manager, he had tried
virtually everything to get his work group to come up to production standard. The
equipment was operating properly, and the group had the training and experience to meet
expectations, yet it was not performing well. What was wrong? And what could he do to
correct the situation?
Managers and supervisors frequently face such a dilemma-standards that should be met
but aren't for what seems like no apparent reason. What Jeff Lane and other managers/
supervisors sometimes fail to realize is that within every organization there are often
informal group pressures that influence and regulate individual behavior.
Informal groups formulate an implicit code of ethics or an unspoken set of standards

establishing acceptable behavior In Jeff's department, the informal group may have
established a norm below that set by the organization, subtly exercising control over its
members regarding the amount of output.
Dynamics of informal groups
Informal groups almost always arise if opportunities exist.
Often, these groups serve a counter organizational function, attempting to counteract the
coercive tendencies in an organization. If management prescribes production norms that
the group considers unfair, for instance, the group's recourse is to adopt less demanding
norms and to use its ingenuity to discover ways in which it can sabotage management's
imposed standards.
Informal groups have a powerful influence on the effectiveness of an organization, and

can even subvert its formal goals. But the informal group's role is not limited to
resistance. The impact of the informal group upon the larger formal group depends on the
norms that the informal group sets. So the informal group can make the formal
organization more effective, too.
A norm is an implied agreement among the group's membership regarding how members
in the group should behave. From the perspective of the formal group, norms generally
fall into three categories-positive, negative, and neutral. In other words, norms either
support, obstruct, or have no effect on the aims of the larger organization.
For example, it the informal group in Jeff's shop set a norm supporting high output, that
norm would have been more potent than any attempt by Jeff to coerce compliance with
the standard. The reason is simple, yet profound. The norm is of the group members own
making, and is not one imposed upon them. There is a big motivational difference
between being told what to do and being anxious to do it.
If Jeff had been aware of group dynamics, he might have realized that informal groups
can be either his best friend or his worst enemy. He should have been sensitive to the
informal groups within his area and he should have cultivated their goodwill and
cooperation and made use of the informal group leadership.
That is, he should have wooed the leadership of the informal group and enlisted the
support of its membership to achieve the formal organization's aims. The final effect of
his actions might have been positive or negative, depending upon the agreement or lack
of it between the informal group and himself.
Harnessing the power of informal groups is no easy task. The requirements include:
• an understanding of group dynamics and,

• an ability to bring about changes in informal group norms that positively reinforce
the formal organization's goals.
As a starting point, managers and supervisors should at least be aware of the reasons
behind informal group formation and the properties and characteristics of these groups.
Next | Formation of informal work groups
Home / Employee Motivation / Informal Group Dynamics / Formation
Informal Group Dynamics

Formation of informal work groups
Individuals are employed by an organization to perform specific functions. Although the

whole person joins an organization, attention is usually focused on the partial person, the
part of the individual doing the job. Because people have needs that extend beyond the
work itself, informal groups develop to fill certain emotional, social, and psychological
needs.
The degree to which a group satisfies its members needs determines the limits within
which individual members of the group will allow their behavior to be controlled by the
group.
Sense of belonging
Several major functions are served by informal groups. For example, the group serves as
a means of satisfying the affiliation needs of its members for friendship and support.
People need to belong, to be liked, to feel a part of something. Because the informal
group can withhold this attractive reward, it has a tool of its own to coerce compliance
with its norms.
Identity and self esteem

Groups also provide a means of developing, enhancing, and confirming a person's sense
of identity and self-esteem. Although many organizations attempt to recognize these
higher needs, the nature of some jobs-their technology and environment-precludes this
from happening. The long assembly line or endless rows of desks reinforce a feeling of
depersonalization.
Stress reduction
Another function of groups is to serve as an agent for establishing and testing social
reality. For instance, several individuals may share the feeling that their supervisor is a
slave driver or that their working conditions are inadequate. By developing a consensus
about these feelings, group members are able to reduce the anxiety associated with their
jobs.
All for one, one for all
Finally, the informal group serves as a defense mechanism against forces that group
members could not resist on their own. Joining forces in a small group makes the
members feel stronger, less anxious, and less insecure in the face of a perceived threat.
As long as needs exist that are not served by the formal organization, informal groups
will form to fill the gap. Since the group fills many important needs for its members, it
influences member behavior.
Next | Leadership of informal workgroups
Home / Employee Motivation / Informal Group Dynamics / Leadership

Leadership of informal work groups
Informal groups possess certain characteristics that, if understood, can be used to

advantage. While many of these characteristics are similar to those of formal
organizations, others are unique. One attribute of informal groups is rotational leadership.
The informal leader emerges as the individual possessing qualities that the other members
perceive as critical to the satisfaction of their specific needs at the moment; as the needs
change so does the leader. Only rarely does a single individual possess all of the
leadership characteristics needed to fill the various needs of the group.
Unlike the formally appointed leader who has a defined position from which to influence
others, the informal leader does not possess formal power. If the informal leader fails to
meet the group's expectations, he or she is deposed and replaced by another. The informal
group's judgment of its leaders tends to be quicker and more cold-blooded than that of
most formal groups.
Supervisory strategies
The supervisor can use several strategies to affect the leadership and harness the power of
informal groups. One quick and sure method of changing a group is to cause the leader to
change one or more of his or her characteristics. Another is to replace the leader with
another person.
One common ploy is to systematically rotate out of the group its leaders and its key
members. Considering the rotational nature of leadership, a leader may emerge who has
aims similar to the formal goals of the organization. There are problems with this
approach, however. Besides the practical difficulties of this, this strategy is blunted by the
fact that group norms often persist long after the leader has left the group.
A less Machiavellian approach is for the supervisor to be alert to leaders sympathetic to

the supervisor's objectives and to use them toward the betterment of the formal group's
effectiveness. Still another method is to attempt to 'co-opt' informal leaders by absorbing
them into the leadership or the decision-making structure of the formal group. Co-opting
the informal leader often serves as a means of averting threats to the stability of the
formal organization.
Remember, though, a leader may lose favor with the group because of this association
with management, and group members will most likely select another leader.
Next | Communication in informal workgroups
Home / Employee Motivation / Informal Group Dynamics / Communications

Communications network
The Grapevine
Another characteristic of the informal group is its communications network.
The informal group has communications processes that are smoother and less
cumbersome than those of the formal organization.
Thus its procedures are easily changed to meet the communication needs of the group. In
the informal group, a person who possesses information vital to the group's functioning
or well-being is frequently afforded leadership status by its members.
Also, the centrally located person in the group is in the best position to facilitate the
smooth flow of information among group members.
Knowing about informal group communication the supervisor can provide a strategically
placed individual with information needed by the group. This not only enhances the
stature of this individual perhaps elevating him or her to a leadership position but also
provides an efficient means of distributing information.
Providing relevant information to the group will also help foster harmony between the
supervisor and the informal group.
By winning the cooperation of informal group leaders the supervisor will most likely
experience fewer grievances and better relationships.
Next | Cohesion in informal workgroups
Home / Employee Motivation / Informal Group Dynamics / Cohesiveness

Group cohesiveness
A third characteristic of informal groups is group cohesiveness-the force that holds a

group together. Group cohesiveness varies widely based on numerous factors-including
the;
• size of the group

• dependence of members upon the group
• achievement of goals
• status of the group and
• management demands and pressures.
For example group cohesiveness increases strongly whenever the membership perceives
a threat from the outside. This threat produces the high anxiety that strong group
cohesiveness can help reduce.
If the supervisor presses the group to conform to a new organizational norm that Is
viewed as a threat to the security needs of group members The group will become more
unified in order to withstand the perceived threat. Thus management can limit its own
effectiveness by helping to increase the group's cohesiveness. With the passing of the
threat the group tends to lose its cohesiveness.
Perhaps paradoxically the most dangerous time for group cohesion is when things are
going well. Supervisors can use the factors that affect group cohesiveness to increase
their own effectiveness.
Decision making process involvement
For instance a supervisor can involve the informal group members in the decision-making
process. Input from group members will not only reduce their feeling of alienation but
also improve communication between the supervisor and subordinates thereby reducing
potential conflict.
Where group participation in decision making is not practical the supervisor should
carefully explain the reasons to play down what might be seen as a threat to the group. In
some cases the supervisor may want to increase the groups cohesiveness deliberately
devising situations that put one group into competition with another. If this gambit is
carefully controlled the solidarity that results may bring a higher level of performance.
The danger of this strategy is that the supervisor may be unable to control the reaction of
the group. The ploy could backfire bringing competition and dissension within the group.
Next | Norms of Informal groups
Home / Employee Motivation / Informal Group Dynamics / Norms or Values

Informal group norms or values
Unspoken rules
The final characteristic of informal groups is the establishment of the groups norms
(values). As we discussed earlier, norms keep a group functioning as a system instead of
a collection of individuals.
Norms are of great importance to the informal group in controlling behavior and
measuring the performance of members. Because norm (values) violations threaten a
group's existence, departures from the norm usually carry severe sanctions. The members
must either conform or sever their group affiliation.
The latter action is unlikely, especially if the individual values group membership to
satisfy certain needs.
Two points are important to note about the norms of informal groups.
• First, where both formal and informal norms exist, the informal norms transcend
the formal. At moments when norms conflict with organizational objectives,
organizational effectiveness suffers.
• Second, members of an informal group may be unaware that the norms of the
group influence their behavior. Norms are particularly potent because without
knowing it members would not even think of acting otherwise-norms are that
ingrained into their behavior pattern.
Next | How to change informal group norms
Home / Employee Motivation / Informal Group Dynamics / Changing Norms

Changing group norms
A supervisor should attempt to encourage norms that positively affect the formal
organization's goals, and to alter those that are negative. If this is accomplished, the
informal group/ team will direct its energies toward desired goals.
How can a supervisor bring about a positive change in a group / team's norms?
Once a group / team has developed its norms, they are strictly enforced until changed.
But norms change frequently because the group / team must be responsive to changes in
its environment for self-protection.
When a perceived change occurs in the environment that affects the group / team, it
tightens, eases, or changes its norms.
There are three stages to fostering group / team / team norms that are congenial to the
organization.
First Stage
The first stage involves determining what the group/ team/ norms are, and then getting
group/ team members to recognize their existence and influence.
This can often be accomplished by observing the behavior patterns of the group / team,
interviewing group / team members, or asking the group/ team to identify its own norms.
As noted earlier, people frequently respect and follow norms unconsciously.
A suggested way is to use our Team Building - Informal Group Organizational Norms
Employee Survey (available for purchase by clicking here.) This instrument has ten
predetermined dimensions, these are (together with definitions,) as follows.
• Organizational / Personal Pride. Satisfaction or pleasure taken in attaining

personal or organizational achievements.
• Performance / Excellence. Manner or quality of functioning when striving to
meet or beat standards of performance. This includes setting personal standards
when none are set/ defined.
• Teamwork / Communication. The perception that organizational goals and
objectives are communicated to and shared by members of the group. The
organization has effectively shared its' vision or sense of purpose so that all
employees can articulate and subscribe to.
• Leadership / Supervision. The style of management / supervision in engaging
employees to deliver willingly their best efforts towards organizational goals.
• Profitability / Cost Effectiveness. Awareness of employees of their roles and
actions to the organizations 'bottom line'.
• Colleague / Associate Relations. Personal connections or dealings between or
among individuals and groups.
• Customer / Client Relations. Personal and group attitude towards clients, both
internal (i.e. other departments in the case of service departments) and external
suppliers and customers.
• Innovation / Creativity. To be aware of, appreciate the need for and strive for
new ways of performing a function, process, procedure or the organization's
business model in terms of the need flowing from constant changes in the external
environment, the need to be competitive and the need to retain customer loyalty
and confidence.
• Training / Development. The opportunities within the organization and the
climate set that promote personal growth and development.
• Candor / Openness. The willingness to promote open, honest and direct dialog
by all employees at all levels on issues that affect individuals, groups and the
organization as a whole. This includes the sharing of information, respect for the
diverse backgrounds and experiences of members, the absence of 'competition
over territory' and the agreement of goals and levels of performance/ quality.
Helping define norms is useful because it assists the group / team in clarifying its
thinking and frees members from behavior patterns that they may not really wish to
follow in the first place.
When group / team members actually become aware of negative norms, they commonly
reject them and seek alternative modes of behavior. And the supervisor can't begin to
change negative norms to positive ones until group / team members first become aware of
their existence.
Second Stage
Having identified the team's norms, the next stage is to measure the norms and establish a
norm profile. Using the Team Building - Informal Group Organizational Norms
Employee Survey instrument, each team member is posed a set of questions, related to the
10 dimensions. As shown in the 'Group Norms Profile' graphic, the responses can be
averaged and plotted in order to obtain a norm profile for the group under review.
The difference between where the group / team is versus where the desired norms of the
group should be, denotes the normative "gap." These gaps provide the starting point for
determining where changes should occur.
Third Stage
The final stage is to bring about normative change. A systematic change process consists
of six steps:
• Demonstrate the importance of norms in achieving organizational and group/

team effectiveness.
• Create positive norm goals through cooperative effort.
• Establish normative change priorities.
• Determine a plan of action to bring about change.
• Implement and monitor the change strategy.
• Review the effectiveness of the strategy periodically and modify where necessary.
This process emphasizes the creation of positive norms through cooperative effort that
benefits both the supervisor and the group/ team. Positive group/ team norms -increase
the effectiveness of the supervisor while providing an environment in which group/ team
members can satisfy their own needs.
The process also improves team communications and trust, reducing the anxiety
sometimes created by perceived threats from management.
If the informal group / team's norms are negative, they can negate the interests of an
organization many times the group / team's size. The process of change is a tool by which
a supervisor can deal with the informal group/ team stresses that exist within the
organization and that tend to de-motivate employees.
By fostering positive group norms, a supervisor can harness the power of informal groups
and release the energies of such groups to work together as a team to achieve desired
goals.
Next | How leader perceptions influence performance. The self-fulling prophecy
Home / Employee Motivation / Leader Perceptions
Better Management by Perception

The Self-fulfilling Prophecy or Pygmalion Effect
In 1911 two researchers with the unlikely names of Stumpt and Pfungst began an
investigation of an even more unlikely horse named Clever Hans.
The unlikely thing about Hans was that he could add, subtract, multiply, divide, spell and
solve problems involving musical harmony. Any number of animals had been taught to
perform such tricks before, but they all had to be cued by their trainers.
The really clever thing about Clever Hans was that he could run through his repertoire
even when his owner a German mathematician named Von Osten, was not present. The
horse would answer questions for anyone. Von Osten swore he was mystified by the
whole thing.
In 'Teachers and the Learning Process' (Prentice-Hall, 1971), Robert Strom describes
what Stumpt and Pfungst learned. "Among the first discoveries made was that if the horse
could not see the questioner, Hans was not clever at all. Similarly, if the questioner did
not himself know the answer to the question, Hans could not answer it either... A forward
inclination of the head of the questioner would start Hans tapping, Pfungst observed... as
the experimenter straightened up, Hans would stop tapping he found that even the raising
of his eyebrows was sufficient. Even the dilation of the questioner's nostrils was a cue for
Hans to stop tapping."
In other words, unwittingly, people were giving the horse the correct answers by
communicating their expectations to him via physical signals. Hans was able to pick up
on those signals even subtle ones.
He was clever only when people expected him to be!
A management concept
As it is known and taught today in management and education circles, the notion of the
self-fulfilling prophecy was conceptualized by Robert Merton a professor of sociology at
Columbia University. In a 1957 work called 'Social Theory and Social Structure', Merton
said the phenomenon occurs when "a false definition of the situation evokes a new
behavior which makes the original false conception come true."
In other words, once an expectation is set, even if it isn't accurate, we tend to act in ways
that are consistent with that expectation. Surprisingly often, the result is that the
expectation, as if by magic, comes true.
An ancient myth
Magic certainly was involved in the ancient myth from which the idea of the self-
fulfilling prophecy takes its other common name. As Ovid told the story in the tenth book
of Metamorphoses, the sculptor Pygmalion, a prince of Cyprus, sought to create an ivory
statue of the ideal woman.
The result which he named Galatea, was so beautiful that Pygmalion fell desperately in
love with his own creation. He prayed to the goddess Venus to bring Galatea to life.
Venus granted his prayer and the couple lived happily ever after.
A modern update
That's where the name originated but a better illustration of the "Pygmalion Effect" is
George Bernard Shaw's play Pygmalion, in which Professor Henry Higgins insists that he
can take a Cockney flower girl and, with some vigorous training, pass her off as a
duchess. He succeeds. But a key point lies in a comment by the trainee, Eliza Doolittle, to
Higgins' friend Pickering:
"You see, really and truly, apart from the things anyone can pick up (the dressing and the
proper way of speaking and so on), the difference between a lady and a flower girl is not
how she behaves, but how she's treated. I shall always be a flower girl to Professor
Higgins, because he always treats me as a flower girl, and always will, but I know I can
be a lady to you because you always treat me as a lady, and always will."
The bottom line?
Consciously or not we tip people off as to what our expectations are. We exhibit
thousands of cues, some as subtle as the tilting of heads, the raising of eye brows or the
dilation of nostrils, but most are much more obvious. And people pick up on those cues.
Next | Key principles
Home / Employee Motivation / Leader Perceptions / Key Principles

Key Principles
The concept of the self-fulfilling prophecy can be summarized in these four key
principles:
• We form certain expectations of people or events

• We communicate those expectations with various cues
• People tend to respond to these cues by adjusting their behavior to match them
• The result is that the original expectation becomes true
This creates a circle of self-fulfilling prophecies.
Does it work?
A convincing body of behavioral research says it does.
In 1971 Robert Rosenthal, a professor of social psychology at Harvard, described an

experiment in which he told a group of students that he had developed a strain of super-
intelligent rats that could run mazes quickly. He then passed out perfectly normal rats at
random, telling half of the students that they had the new "maze-bright" rats and the other
half that they got "maze-dull" rats.
The rats believed to be bright improved daily in running the maze they ran faster and
more accurately. The "dull" rats refused to budge from the starting point 29% of the time,
while the "bright" rats refused only 11% of the time.
This experiment illustrates the first of a number of corollaries to our four basic principles.
Next | Corollaries 1 & 2
Home / Employee Motivation / Leader Perceptions / Corollaries 1 & 2

Corollary 1
• Rosenthal concluded that some students unknowingly communicated high

expectations to the supposedly bright rats.
• The other students communicated low expectations to the supposedly dull ones.
But this study went a step further.
According to Rosenthal, "Those who believed they were working with intelligent animals
liked them better and found them more pleasant.
Such students said they felt more relaxed with the animals, they treated them more gently
and were more enthusiastic about the experiment than the students who thought they had
dull rats to work with."
Corollary 2
• Better performance resulting from high expectations leads us to like someone

more
• Lower performance resulting from low expectations leads us to like someone less
Rats not good enough for you?
In another classic experiment, Rosenthal and Lenore Jacobson worked with elementary
school children from 18 classrooms. They randomly chose 20% of the children from each
room and told the teachers they were "intellectual bloomers."
They explained that these children could be expected to show remarkable gains during
the year. The experimental children showed average IQ gains of two points in verbal
ability, seven points in reasoning and four points in over all IQ. The "intellectual
bloomers" really did bloom!
How can this possibly work?
In 'Pygmalion in the Classroom' (Holt, Rinehart and Winston, 1968), Rosenthal replies:
"To summarize our speculations, we may say that by what she said, by how and when she
said it, by her actual facial expressions, postures and perhaps by her touch, the teacher
may have communicated to the children of the experimental group that she expected
improved intellectual performance.
Such communication together with possible changes in teaching techniques may have
helped the child learn by changing his self concept, his expectations of his own behavior,
and his motivation, as well as his cognitive style and skills."
There was no difference in the amount of time the teachers spent with the students.
Evidently there was a difference in the quality of the interactions. The teachers also found
the "bloomers" to be more appealing, more affectionate and better adjusted. Some
students gained in IQ even though they had not been designated as "bloomers," but they
were not regarded to be as appealing, affectionate or well-adjusted.
Apparently, the bloomers had done what was expected of them and the teachers were
comfortable with them. The other students who did well surprised the teachers; they did
the unexpected and the teachers were not as comfortable with them. It may be that they
were thought of as overstepping their bounds or labeled as troublemakers.

Corollary 3
• We tend to be comfortable with people who meet our expectations, whether

they're high or low;
• We tend not to be comfortable with people who don't meet our expectations,
whether they are high or low.
As for our expectations of what will happen or how someone will behave, we form them
in a thousand ways, many preconceived. We all are prejudiced in the literal sense of the
word; we 'prejudge' either positively or negatively.
We like to think we know what's going to happen before it happens, and we don't like to
be proven wrong. We want to feel that we can control things.
The impulse has given rise to religion, which says we can influence the gods with prayer,
magic, which says we can manipulate events with secret powers; and science, which says
we can understand the logic behind events and use it to predict similar events.
Corollary 4
• Forming expectations is natural and unavoidable
The simple truth is that almost all of us behave pretty much according to the way we're
treated.
If you keep telling a teenager, for example, that he's worthless, has no sense of right or
wrong and isn't going to amount to anything, he'll probably respond accordingly.
If you keep telling him (sincerely) that he's important to you that you have every
confidence in his judgment as to what?s right or wrong and that you're sure he's going to
be successful in whatever he decides to do, he'll also tend to respond accordingly.
You transmit those expectations to him and he'll begin to reflect the image you've created
for him.

Corollary 5
• Once formed expectations about ourselves tend to be self-sustaining
Exactly how do we communicate the expectations responsible for the Pygmalion Effect?
The process works in very similar ways with people as it did with Clever Hans.
In 'Educational Sociology: a realistic approach (Holt, Rinehart and Winston, 1980),

Thomas L. Good, Jere E. Brophy list a dozen ways in which teachers and managers may
behave differently toward students and workers.
Corollary 6
• Good managers produce employees who perform well and feel good about
themselves;
• Bad managers produce employees who perform poorly and feel badly about
themselves
Self-fulfilling prophecy in action
One of the critical tools a manager uses to influence employees is the performance
review. Most managers underestimate its importance. Certainly the review is used as a
report card, as a means of calculating the size of raises, as a way to introduce areas
needing improvement and as a permanent record of what someone has accomplished.
Much more importantly, though, reviews influence future performance. They offer a
good example of how self-fulfilling prophecies work, for good or ill.
Take the case of a bright, young, aggressive employee. Let's assume she is abrasive,
disruptive and disrespectful at times. However, she can also be creative, hard-working
and full of enthusiasm. Given proper channeling, she can produce excellent results.
Some managers, required to assign her to a performance category, would call her
"excellent" They're impressed by her strengths. Others, focusing on her weaknesses,
would call her "poor." Still others, weighing the pluses and minuses, would call her
"average." Even with the scant information you have, you can see that any of these
ratings could be justified.
But what these managers are doing probably unknowingly, is helping to determine the
young woman's future performance. If she's rated "excellent," what will happen? She will
tend to be even more abrasive, disruptive and disrespectful. She will also probably be
more creative, enthusiastic and hard-working. She will do more of what she believes her
manager wants.
What if she's rated "poor" She will likely be less abrasive, but she will also be less
creative and enthusiastic. Suppose she's rated "average" Depending on what her manager
says about the rating and why she got it, she may adjust her behavior slightly.
The variable here is the manager's rating. It is based on the manager's values, prejudices
and feelings. Most employees will take the cues and alter their future behavior
accordingly.
Corollary 7
• Performance ratings don't just summarize the past, they help determine future
performance
A manager cannot avoid communicating low expectations because the messages are often
non-verbal and unintentional. As with observers communicating to Clever Hans and
teachers communicating to students, managers nod their heads, prolong or shorten eye
contact, express themselves in a certain tone of voice, etc.
Some managers refuse to admit they communicate negative expectations: "I never said
anything negative to him. I hardly spoke to him at all." (As if that doesn't send a powerful
message.)
The key is not what managers say, but the way they behave.
Corollary 8
• The best managers have confidence in themselves and in their ability to hire,
develop and motivate people; largely because of the self-confidence, they
communicate high expectations to others.
A manager increases or decreases initiative by the frequent or infrequent use of praise,

criticism, feed back information, etc. The manager, therefore, plays a highly significant
role in the success or failure of an employee. The various ways in which teachers
communicate expectations to students can be broken down into four general categories.
The same categories suggest ways by which managers can influence the success of
subordinates.
• Climate
Managers create a warmer social and emotional mood for high-expectation
employees. They smile, more nod their heads approvingly and look into
subordinates eyes more often. They are generally more supportive, friendly,
accepting and encouraging
• Input
More assignments and projects are given to high-expectation employees. In
addition, these assignments are more challenging and afford higher visibility.
• Output
Managers give high-expectation employees more opportunities to speak at
meetings, to offer their opinions or to disagree with the manager?s opinions. They
pay closer attention to their responses, and give them more assistance or
encouragement in generating solutions to problems.
• Feedback
Managers give more positive reinforcement to high expectation employees. They
praise them more for good work and criticize them less for making mistakes.
Consequently, confidence grows.
• Like the teacher with the student and the trainer with the trainee, the manager has
a profound impact on the success or failure of the subordinate.
To quote Livingston once more, "If he is unskilled, he leaves scars on the careers of the
young men (and women), cuts deeply into their self-esteem and distorts their image of
themselves as human beings. But if he is skilful and has high expectations of his
subordinates, their self-confidence will grow, their capabilities will develop and their
productivity will be high More often than he realizes, the manager is Pygmalion."
Next | Self-fulfilling prophecy / pygmalion effect examples

How teachers communicate expectations
• Seating low expectation students far from the teacher and/or seating them in a
group
• Paying less attention to lows in academic situations (smiling less often,
maintaining less eye contact, etc.)
• Calling on lows less often to answer questions or to make public demonstrations
• Waiting less time for lows to answer questions
• Not staying with lows in failure situations (e g. providing fewer clues, asking
fewer follow-up questions)
• Criticizing lows more frequently than highs for incorrect responses
• Praising lows less frequently than highs after successful responses
• Praising lows more frequently than highs for marginal or inadequate responses
• Providing lows with less accurate and less detailed feedback than highs
• Failing to provide lows with feedback about their responses as often as highs
• Demanding less work and effort from lows than from highs
• Interrupting lows more frequently than highs
How managers communicate expectations
• Seating low-expectation employees in low-prestige office areas far from the

manager
• Paying less attention to lows in business situations (smiling less often and
maintaining less eye contact).
• Giving them less information about what's going on in the department.
• Calling on lows less often to work on special projects, state their opinions, or give
presentations
• Waiting less time for lows to state their opinions
• Not staying with lows in failure situations (i.e. providing less help or giving less
advice when subordinates really need it)
• Criticizing lows more frequently than highs for making mistakes
• Praising lows less frequently than highs after successful efforts
• Praising lows more frequently than highs for marginal or inadequate effort
• Providing lows with less accurate and less detailed feedback on job performance
than highs
• Failing to provide lows with feedback about their job performance as often as
highs
• Demanding less work and effort from lows than from highs
• Interrupting lows more frequently than highs
Next | Job design and work organization
Job Design
Open systems approach
The approaches to the design of jobs considered to this point have taken as their focus the
individual job. We have already identified some of the weaknesses of this type of
approach.
At the same time that job redesign techniques were being developed and implemented in
the USA progress was being made, particularly in Europe and Scandinavia, on the
development of the socio-technical systems approach where the focus of attention is at
the level of the working group and the aim is to develop a match between the needs of the
group and the organization in relation to the technology.
Organization as an open system
This approach is based upon the concept of the organization as an open system with the
primary work group as a subsystem of the total organization. Organizations can be
compared to other living systems such as biological cells in that they are engaged in
active transactions with the environment
Raw materials or customers form the input to the organizational system and finished
goods or services form the output. The environment through competition, the influence of
suppliers, and customers and government legislation will all exert pressure on the
organization to comply with certain rules and organize in certain ways. The changing
economic situation, changing values in society, new alternative products or services, and
many other factors demand adaptation within the organization if it is to survive.
Since these factors have an impact on the internal design and functioning of an
organization it is important that the organization be aware of environmental changes
when seeking an optimal design of its social and technical systems.
Guiding Principles
A sociotechnical systems approach to designing organizations is based upon a set of

guiding propositions:
• The design of the organization must fit its goals.

• Employees must be actively involved in designing the structure of the
organization.
• Control of variances in production or service must be undertaken as close to their
source as possible.
• Subsystems must be designed around relatively self-contained and recognizable
units of work.
• Support systems must fit in with the design of the organization.
• The design should allow for a high quality of working life.
• Changes should continue to be made as necessary to meet the changing
environmental pressures.
Motivation Factors
It has been suggested that four categories of job characteristic are significant in terms of
motivation and performance:
• responsible autonomy- the group's acceptance of responsibility for the production

cycle, output rate, quality, and quantity of output;
• adaptability;
• variety;
• participation.
Autonomous behavior includes the self-regulation by the group of work content, critical
self-evaluation of work group performance, self-adjustment to cope with changes, and
participation in goal setting.
Limitations
The socio-technical systems approach is not without its limitations. Whilst many
advantages can result from focusing on the work group rather than the individuals and
their jobs, autonomous group working does not seem to have widespread appeal.
• Certainly the roles of both supervision and specialist advisers are considerably
affected and in some cases eliminated.
• Movement of personnel between work groups with high levels of autonomy may
be difficult, hence removing some of management's flexibility.
• Difficulties are often experienced in implementation in existing work situations.
• A participative design process is not acceptable in many organizations and can be
very time-consuming.
• Alternative ways of organizing work are not always apparent where existing
technology has to be employed.
• Management are often not prepared to take the risk of introducing radically
different approaches to organizing work alongside other changes which already
have a high element of disruption and associated risk.

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http://www.accel-team.com/motivation/index.

Employee Motivation: Theory and

These articles on motivation theory and practice concentrate on various theories

Why study and apply employee motivation principles?

Performance is considered to be a function of ability and motivation, thus:

• Job performance =f(ability)(motivation)

• Positive reinforcement / high expectations

Next | The theorists and their theories (1 of 2)

Home / Employee Motivation / Theory and Practice / Theorists 1

Employee motivation, the organizational environment and productivity

Although the process of management is as old as history, scientific management as we

Traditional theory 'X'

Theory 'Y' - Douglas McGregor

Theory 'Z' - Abraham Maslow

This is a refreshing change from the theory X of Freud, by a fellow psychologist,

• physiological needs (Lowest)

Mans behavior is seen as dominated by his unsatisfied needs and he is a 'perpetually

The highest state of self-actualization is characterized by integrity, responsibility,

• Marx - economic and physical needs;

Next | The theorists and their theories (2 of 2

Home / Employee Motivation / Theory and Practice / Theorists 2

Employee motivation, the organizational environment and productivity

Motivation theorists and their theories (2 of 2)

Frederick Herzberg - Hygiene / Motivation Theory

Animal Needs (hygiene factors)

Human Needs (motivators)

• shorter working week;

According to Argyris, organization needs to be redesigned for a fuller utilization of the

Likert identified four different styles of management:

Vroom's 'expectancy theory' is an extension of the 'contingency approach'. The leadership

• Seebohm Rowntree - labor participation in management;

Next | Motivation theory into practice

Home / Employee Motivation / Theory and Practice / Practice 1

Employee motivation, the organizational environment and productivity

'Stick' or 'carrot' approach?

Manager's motivation 'toolkit'

• approval, praise and recognition

More contemporary 'persuaders' used by advertising and marketing people include:

• Faster talk is found to be more effective, since it is remembered better.

Next | Motivation theory in to practice 2

Home / Employee Motivation / Theory and Practice / Practice 2

Employee motivation, the organizational environment and productivity

Application of employee motivation theory to the workplace

Job satisfaction - is there a trend?

Their findings (Sanzotta (1977)) are contained in the table below.

Job Satisfaction Findings

Individualize motivation policies

'The one-minute manager'

'Lessons from America's Best-run Companies'

• productivity through people;

Home / Employee Motivation / Employee Rewards

Money is a factor in motivating people and this section concentrates on this.

There is no doubt that we live in a money-motivated world. Any amount of human

Self-motivation can go only so far and it needs to be constantly reinforced by rewards. In

Next | Rewarding executives

Home / Employee Motivation / Employee Rewards / Motivating Executives

Employee Motivation, the Organizational Environment and Productivity

• reward should be meaningful; and

Executive compensation elements

The five basic elements (Ellig (1982)) of executive compensation are:

• Executives perceive others as working less and paid more.

• preference of individual employees;

Executive pay - a caution