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Chapter 13 – Motivating Employees
The importance of motivation
Motivation: a person’s internal drive to act.
Direct turnover (replacing an employee) costs include the time it takes to hire the
replacement and costs related to onboarding them (i.e. training.)
Indirect turnover costs result in a loss of productivity.
“Soft” costs include: loss of intellectual capital, decreased morale, increased employee
stress and a negative reputation.
Intrinsic reward: the good feeling you have when you have done a job well.
Extrinsic reward: something given to you by someone else as recognition for good work;
extrinsic rewards include pay increases, praise, and promotions.
Frederick Taylor: the father of scientific management
Taylor’s goal was to increase worker productivity to benefit both the firm and the worker.
Believed the way to improce productivity was to scientifically study the most efficient ways
to do things, determine the one “best way” to perform each task and then teach people
Scientific management: studying workers to find the most efficient ways of doing things
and then teaching people those techniques.
3 basic elements to Taylor’s approach: time, methods and rules of work. Most important
tools were observation and the stopwatch.
Time motion studies: studies, begun by Frederick Taylor, of which tasks must be
performed to complete a job and the time needed to do each task.
Principle of motion economy: theory developed by Frank and Lillian Gilbreth that every
job can be broken down into a series of elementary motions.
Elton Mayo and the Hawthorne studies
Mayo tested lighting and the association with productivity but making it lighter or dimmer
led to the same result.
Then tested temperature change – but making it hotter or colder also led to the same result
Upon interviewing the workers, Mayo concluded:
Workers thought of themselves as a social group – informal atmosphere, could talk
to each other, felt special and worked hard to stay in the group. This motivated
Workers were involved in the planning of experiments. Felt their ideas were
respected and that they were involved in managerial decision making. This
Despite the physical conditions, workers enjoyed the atmosphere of their special
room and the additional pay they got from more productivity. Job satisfaction
Hawthorne effect: the tendency for people to behave differently when they know they are
Mayo’s findings led to the assumption that pay was not the only motivator for employees,
in fact, money was found to be a relatively ineffective motivator.
Motivation and Maslow’s hierarchy of needs
Abraham Maslow believed that motivation arises from need.
Maslow’s hierarchy of needs: theory of motivation that places different types of human
needs in order of importance, from basic physiological needs to safety, social and esteem
needs to self-actualization needs.
1. Physiological needs: basic survival needs (food, water and shelter)
2. Safety needs: need to feel secure at work and home
3. Social needs: need to feel loved, accepted and part of the group
4. Esteem needs: need for recognition and acknowledgement from others, as well as
self-respect and a sense of status or importance
5. Self-actualization needs: the need to develop to one’s fullest potential
When one need is satisfied, another higher level need emerges and motivates the person to
do something to satisfy it.
Firms must establish a work environment that includes goals such as social contribution,
honesty, reliability, service, quality, dependability and unity.
Herzberg’s motivating factors
Frederick Herzberg asked workers to rank various job-related factors in order of
importance relative to motivation. The question was: what creates enthusiasm for workers
and makes them work to full potential?
1. Sense of achievement
2. Earned recognition
3. Interest in the work itself
4. Opportunity for growth
5. Opportunity for advancement
6. Importance of responsibility