~chapter 2 lit review.docx

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Chapter 2: Literature Review

2.0 Introduction

Today more and more competitive trade world means a highly motivated labour force is essential

for any establishment seeking good results (Robert Heller and Tim Hindle, 1998). We can saythat the presence of motivation is equivalent to the achievement of better results and higher level

of job satisfaction. On the other hand absence of motivation in the workplace can lead to

frustration, conflicts, poor performance and also poor interpersonal relations. All these can lead

to a fall in productivity and hence in the profit of the organisation.

The link between motivation and performance would seem to be an obvious one (Andrew

sergeant, 1990). In most instances, employee performance is determined by three factors,

namely, motivation, ability and the work environment. Motivation as we have seen is the desire

or willingness to do a job. Ability is the capacity of an individual to do the job. As for the work

environment, it is the availability of the resources needed to perform the job, for examples, raw

materials and equipment. As a result, employees performance is a function of ability, the work

environment and also motivation. The function is illustrated below

Job perf ormance = f (motivation) (abil ity) (work envir onment)

In fact, if an worker lacks the required ability to do his work, the organisation can provide

appropriate training to the employee. For example, if the company introduced department called

Information technology and its employees dont have the required skills, training can be

provided to the employees. On the other hand, if there are problems in the work environment, the

organisation can take action by changing the work environment in order to increase performance,

for example it can buy modernised tools. However, if motivation is the problem, then the task of

the organisation becomes more complex.

According to the survey carried out by Pricewaterhouse Coopers in the Czech Republic on

human resource management in 2004, it was found out that the top ten companies were those

whose main priorities were employee motivation and satisfaction. A member of this survey

called Milan Bartak states that employee motivation and satisfaction are important factor for

company performance and competitiveness.


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2.1 Motivation

Motivation can be defined as forces within an individual that make them to behave in such a way

to achieve specific needs. Considering motivation at work within an organization, a well-

motivated workforce lead to an efficient and goal oriented workplace. Pertaining to different

management theories, motivation comprises of three elements namely needs, drives and

incentives. When people aim at these elements, they will be willing to work towards

organizational goals. However it should be noted that high level of efforts do not always lead to

favorable job performance. Management should see that effort is being directed appropriately

.Due to our technological and rapidly changing environment motivated employees are needed.

Management therefore needs to analyses what motivates employees. For example some

researches have conducted that money motivates employees.

2.2 Intrinsic motivation and extrinsic motivation

The principle of motivation can be subdivided as intrinsic and extrinsic. Intrinsic mean inner

interest. Some people may want challenging task. They focus on their work rather on outcome.

Such characteristic is usually self-generated. They want to develop their skills and abilities andthus accept challenges for advancement. Extrinsic motivation refers to the external factors. This

is when management provides rewards such as increased pay and promotion. This can have

immediate effect but may not last long.

2.3 Content theories of motivation

The basic assumption underlying these theories is that all individuals have similar needs. The

global aspect of the theories is defined to explain factors which motivate people at work by

identifying their needs and goals. Those major theories are:

Herzberg's two factor theory Maslow's hierarchy of needs


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Alderfer's motivation theory McClelland's Learn need Theory Douglas Mcgregor's motivational theory x theory y

2.3.1 Herzberg's two factor theory

To be able to better understand this theory we will have a look firstly to pictorial representation

of this model

Figure 2.1:Herzberg's two factor theory model

Through the analysis of the study of motivation, job attitude, job satisfaction, and dissatisfaction

are major components of this mechanism. It I based on the assumption that an employee has

basic needs in relation to work and that work attitude will determine success or failure. Herzberg

states that work motivation is determined primarily by two distinct set of factors, as shown in


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figure 2.1. The first set relates to the nature of the job and is called satisfier or motivators. The

others part call hygiene factor, takes into consideration the environment or the context.

This theory has been criticized by Graham and Messner (1998) on three facts that is;

The conclusion of this theory have not been supported by empirically All workers have been assumed to be alike It is not considered as a theory of motivation but instead as a theory of job satisfaction

The credibility of Herzberg theory has been largely supported by the study carried out by

Bassett-jones and Lloyd (2005).

2.3.2 Maslow's hierarchy of needs

The main assumption of this theory is basic need, need to be satisfied extremely either by pay or

tenure are classified as lower need any place at the bottom of the hierarchy and higher needs

which are satisfied internally are placed at the top of the hierarchy (Robbins 2003). Figure 2.2

shows a pictorial representation of the theory

Figure 2.2:Abraham Maslow hierarchy of needs pyramid (Motivational model)


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Needs have been the major attraction since evolution of mankind toward materialism, they are

mainly characterised into specific segment as per Maslow

2.3.2.1 Physiological needs

These are important needs for sustaining the human life such as food, water, warmth, shelter and

so on. Maslow believed that until these needs are satisfied, no other motivation factors can work

(Shah and Shah, 2000)

2.3.2.2 Security or Safety needs

Safety and Security needs include:

Own security Monetary security Well-being Security Safety insurance against accidents or illness

2.3.2.3 Love and belonging

Once physiological and safety needs are satisfied, the third level comprises feelings of

belongingness. It is especially strong in the juvenile stage of life. This stage includes

Friendship Intimacy Family

As per Maslow, its vital for individuals to feel at ease and be accepted in the society.

2.3.2.4 Esteem Needs

After satisfaction of the first three needs, esteem needs turn into more and more important. These

embrace the need for things that reveal on self-esteem, accomplishment, social recognition, and

personal worth


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2.3.2.5 Self-actualization needs

The uppermost level of the hierarchy of needs is self-actualizing individuals are self-conscious,

apprehensive with own growth, less or no concerned with the ideas and attitude of others, and are

only concerned about their potential.

2.3.3 Alderfer's motivation theory

Alderfer theory speaks about existence, relatedness and growth needs. The study is a derivation

of Maslows hierarchy of needs and it attempts to group human needs that are relevant to

organization as show below

Figure2.3:Alderfer's erg model of motivation

2.3.3.1 Resemblances to Maslow's Hierarchy

Researches had shown that the central levels of Maslow's hierarchy have some similarity;


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Alderfer talked about reducing the levels down to three. The ERG needs can be found in

Maslow's theory as follows:

I. Level 1Existence in other words physiological and safety needsII. Level 2 - Relatedness namely social and external esteem needs

III. Level 3Growth that is self-actualization and internal esteem needsAlderfer, C. (1972), Similar to Maslow's model, ERG theory is hierarchical. Although this theory

follows the same pattern as Maslow's, it has one major difference that is the behavior of

individuals might be motivated by more than one need at a time.

2.3.4 McClelland's Learn need Theory

This theory put forward that human beings acquire certain needs through societys culture values

during childhood (Rollinson et al. 1998). As shown in figure 2.4 McClelland categories its model

into three sub groupings

Figure 2.4: Distribution of Need Behaviors, Typical behaviors associated with motivational

type. (Adapted from Swenson, 2000)


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The goal setting theory

2.5.1 Vrooms valence, Instrumentality and Expectancy Theory

Vroom (1964) is usually attributed to be the pioneer of expectancy theory for the place of work

based on three key variables; valence, instrumentality and expectancy.

Valence is the scope to which a person desires a specific outcome. It can be optimistic orundesirable depending on the strength of the individuals preference.

Instrumentality is the alleged strength of the linking between outcomes which are theinstant results of behavior and second level outcomes which are the behavior flow from

the first level outcomes (Rollinson et al, 1998).

Expectancy is the connection between a selected course of action and its anticipatedoutcome. Its value ranges from 0 to 1; 0 meaning that an outcome will result from

an action and 1 meaning that an action will result with certainty in the outcome

(Mullins, 2012)

According to Vroom, as shown in figure 2.5 below, when expectancy, instrumentality and

valence are combined together, a driving force is created which motivates an individual to work

harder to achieve a level of performance and obtain a reward in the end. This driving force is

known as the motivation and is calculated as:

M= E x V x I; where M is the motivation, E is the expectancy, V is the valence and I is the

instrumentality.


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Figure2.5: Vroom's Expectancy Theory (1964) Model

This theory suggests that individuals are aware and lucid when they make selections about their

behavior and are motivated to work harder and beyond when they have satisfied their personal

goals and are rewarded for the extra effort that they have put on in the work (Robbins, 2004). It

has been characterized as a Universal Theory by Huddleston and Good (1999) as it does not

specify the types of rewards that motivate workers.

2.5.2 The Porter and Lawler Extension of expectancy Theory

The porter and Lawler model (1968) is just an extension lead of the expectancy theory. Yet, they

claim that an worker will be more happy to work if performance is a reasonable results.

Furthermore, they also claim that high job performance can result to rewards and job satisfaction.

Rewards can be intrinsic, for example salary and extrinsic, such as self-esteem. Figure 2.6

demonstrates Porter and Lawler model of motivation.


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Figure2.6:Lyman W. Porter and Edward E. Lawler developed version of motivation

2.5.3 The goal setting theory

This is one of the most active and broadly used theories at work. The goal setting theory is a

technique of motivating employees by creating performance objectives. It assumes that setting

goals motivate employees to work harder in order to achieve those goals. For Instance, if the goal

of the company is to raise productivity or to decrease expenses, workers will try their best to

achieve goals. Besides, employees will give the best in order to show their praiseworthiness, so

that the organisation keeps them. Nevertheless, businesses must set goal line which is attainable

by the employees. This theory uses the framework of SMART as shown in figure 2.7 below

Figure2.7: Ed Muzios SMART goal-setting model (Muzio, Setting SMART Goals.)

2.6 The human relations approach (1930-1960)


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The human relations school did not agree with the old-style school that individuals could be

viewed as machines. In fact, one of the founders of the human relations approach is Elton Mayo

with his Hawthorne experiments (1924-1932) carried out at the Western Electric Plant in

Chicago. This ideology put emphasis on social relationships at the work. It assumes that workers

want to feel worthwhile and essential and that they want to be recognised as individuals.

According to this method, workers need to be members of groups. With the development of this

school of thought, many motivational approaches emerged. First it was the task of the manager

to make each employee feel important and useful. Secondly, managers must be kept up-to-date

and their views or ideas must be show up. Thirdly, managers must allow workers to exercise

some self-direction and control on day to day activities. In this school of thought, the needs for

belongingness and to feel valuable are more significant than money in motivating employees.

Figure1.8 below will help us to better understand the human relation model of motivation

Figure 2.8

Fulfilment

Recognition

Satisfaction of

Social needs

Job Satisfaction

PERFORMANCE


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2.7 Human Resource approach (1960-onwards)

It conveys the concepts that human being are motivated by numerous interconnected aspects. It

assumes that individuals want and is able to contribute to the institutes effectiveness. Besides,

staffs also want to be more original and in authority. Staffs are regarded as being able to do more

than what their current jobs request. So, work is not essentially unpleasant and staffs are capable

of making lucid decision concerning their job.

Consequently, the manager should maximised human resources and must also embolden the

individuals participation in decision making. Additionally, the establishment must also generate

an environment in which all workers can contribute. Growing will bring about more efficiency in

the job and job satisfaction will be the benefit. Even though the chronological views of

motivation have evolved it is inaccuracy to rely on the thing that a later stage one approach can

replaced an earlier one.

2.8 Salary Administrative

Salary Administrative refers to equitable salary relationships with progressively greater

disclosure of salaries; it means getting these relationships internally and externally right for all to

see. Nowadays, there are few American and European Organisations which have not developed

some systematic approach to administer the salaries of their staff. In Mauritius also apart from

the Public sector there are big companies like Ireland Blyth and Rogers and co. who have set up

or are in process of setting up the systematic salary administration. Haphazard salaries bearing

little relationship to competitive rates for different jobs and to internal relationship and merit no

longer exist. It is ensured by the Salary Administrative, salaries are no longer determined on the

basis of personalised and arbitrary decisions regard to an overall structure.

It is proposed to talk of Salary administration instead of wage and salary administration for

the sake of brevity. Wage is traditionally associated with the reward of manual workers and

salary with that of white-collar workers. However, now there is an increasing overlap in the level

of remuneration of these two categories for which the distinction is no longer clear cut. The


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problem that arises here in regards of wage or salary administration is that they are nearly the

same.

2.8.1 Aims of salary policy

Salary Administration must be conducted within a given policy similar to various other

management practices. However, in the design of a salary policy, care should be taken to ensure

that the aims do not conflict with the one of the overall policy of the organisation.

The aims of the salary Policy should help to:

1. Attract staff of the right calibre.2. Reward staff in accordance with the value of their contribution.3. Encourage staff to make full use of their abilities and develop their potential; and to strive

to achieve the objectives of their jobs and the organisation.

4. Prevent loss of morale thought dissatisfaction with levels of pay.5. Encourage staff to stay in the Organisation.

2.8.2 Environmental factors

Salary administration cannot be seen in legislation. There are many forces that set the limits of a

salary policy. Management requires to keep any pressures which are frequently in conflict on top

of a game and to ensure that the end results satisfy all the varied individuals, for instance, from

labourer to the permanent secretary in the Public Service.

The following questions are therefore central to salary administration:

1. The ability to pay.2. The market values3. The income gap (highest and lowest income)4. The motivational factors.

2.8.3 Salary: Motivator or Dissatisfies


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Salary administration is concerned with compensation for services rendered. Organisations offer

compensation as a mix of extrinsic and intrinsic rewards. Extrinsic rewards are controlled by the

organisations for example salaries, pensions, promotions, etc. Intrinsic rewards are the one which

an employee gives to himself like the satisfaction that comes from the feeling of having

something accomplished something worthwhile.

Motivation theory which seems to have taken clear shape from the work and publication of

Frederick Herzberg recognises the predominance of intrinsic rewards. The opportunity to do

satisfying and to take credit for their achievements motivates people.

Salary is not primarily a motivator but also has the potential demotivate. Therefore, salary must

be right and salary administration must ensure thats it is so.

2.8.4 The roots of dissatisfaction

Money seems to represent social respectability to some people; it may mean recognition for

achievement to others, to still others it stands for worldliness and materialism. Thus, while salary

has been placed in general perspective, the user of it is individual.

Salary therefore can demotivate and dissatisfy for two main reasons:

1. If the individual feels that financial is not related to his performance and achievement.(Recognition)

2. If the individual considers that there is inequity between the salary attached to his job andsalaries of other jobs in the organisation.(Equity)

2.8.4.1 Recognition

If financial recognition is to be related to performance, it is important that the performance

should be capable of measurement that eventually the measures used should be as clear as


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possible. Then, increase in productivity could be claim for increase in pay. However, in the

public service the nature of work is such that measurement of productivity is almost impossible.

In such a circumstance, a pay performance relativity for the public Service be of no value.

2.8.4.2 Equity

Almost as shown above, the worker wants more from his job than just money, yet the question of

relative pay is highly important to him. However, rather than the exact amount of money they are

paid, the workers are more concerned about the relationship between their pay and that of fellow

workers.

2.9 Motivation in public sector

The objectives of the public sector are to produce goods and services at minimum cost. The

scope of governmental activities is extensive. However, the exact responsibilities of a central and

local government will vary from country to country. Public sectors employees are perceived as

different from those of the private sector. They are apparently motivated by the concern for the

community and desire to serve the public interest. Public service motivation can be characterised

as reliance on intrinsic rewards over extrinsic rewards. (Crewson 1997). For example civil

servants after an accomplished project have a sense of accomplishment and a sensation of pride.

On the other side extrinsic can be in the sense of pay rise, job security or promotion. These

different motivating factors can be;

2.9.1 Human resource development

HRD is one of the top most important departments in any organisation. Its aim is to develop the

employees for the advancement of the individual, for the organisation and even for the society.

Human resource development can be sub divide in three main areas that is

Education, it emphases on the works that the employee may possibly embrace in thefuture.


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Training is a process by which individuals obtain competences to achieve organizationalgoals.

Development is the evolution of a personscapability and potential over the delivery oflearning and educational programme.

HRD, leads to positive returns such as workers feel empowered, and this will improve employees

involvement and commitment toward the organisation.

2.9.2 Job Satisfaction

Job satisfaction is ones attitude towards ones job. In other words it is the difference between

the amount of reward workers received and the amount they should receive. As per research,

monetary compensation is one of the most important factors for job satisfaction. Taylor and vest

(1992) found that pay level affect job satisfaction, they also states that those public employees

matched their salary with those of non-governmental sector employees, and this had lower the

level of job satisfaction in the public sector.

2.9.3 Reward and incentive

Reward or incentive is given to those who demonstrate outstanding performance, good

attendance and membership to the organisation. How rewards or incentives are distributed and

their relative amount has significant influence on motivation. Even though, it is know that

employee form the public sector are less motivated compared to those form the private sector.

2.9.4 Reward strategy

Reward management is about how individuals are rewarded in according to the values they

attribute to an organisation (Armstrong & Murlis, 1994). Reward is both financial and non-

financial. It encompasses the ideas, strategies, policies, plans and processes used by


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organisations. It is utmost to study a reward strategy as it outlines the aims of the organisation on

how its reward policies and processes should be developed to achieve organizational goals.

Effective reward strategies are:

Based on company values and beliefs; Derived from the organisation strategy but also endorses it; Driven by organisational needs and 'fits' the business strategy; Aligns organisational and individual competencies; Integrated with other personnel and development strategies.

Reward strategy should be developed and combined to the overall human resource strategy of the

organisation. The strategy should cater the employee relations environment and for trade union

the processes for negotiating pay. The figure below shows a relationship between different

element that are found in a reward system


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the public employees have been found to attached less importance to sttus and prestige than

private employees (Rainey 1982; Wittmer 1991; Jurkiesicz, Massey and Bround 1998)

2.9.6 Service to society and public interest

Employees in the public sector will lay more emphasis on the services to the society, the public

interest and the importance of work. They place more importance on social recognition and

public interest and less importance on efficiency. The survey of Crewson (1997) finds that public

employees have the feeling of accomplishment and being helpful to the society as more

important.

~chapter 2 lit review.docx

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