How Motivation Improves Performance

Managerial Responses to Motivation

Now that we understand a bit more about what motivation is and the theories behind its origins and development, we can put them to work in a managerial setting. Let’s take a look at some managerial responses to motivation.

Management by Objectives

We talked a bit about management by objectives (MBO) when we discussed goal setting as a part of the work component of motivation. Management by Objective is a response to the goal-setting theory as a motivator.

The goal setting theory has an impressive base of research support, and MBO makes it operational. As a reminder, MBO sets individual goals for employees based on department goals, which are based on company goals. It looks like this:

MBO advocates specific, measurable goals and feedback. There is only implication, though, that goals are perceived as attainable. The approach is most effective when the individual has to stretch to meet the goals set.

MBO can be a participative process. When individuals are consulted in the creation of their own goals, it often results in workers setting a goal that stretch them further. MBO does not require that the individual worker participate, though. The process seems to be about as effective when goals are assigned by a manager to the individual

MBO is a widely used and successful practice for many industries. Failures occur when unrealistic expectations come into play, or cultural incompatibilities thwart the process.

Employee Recognition Programs

Employee recognition programs cover a wide variety of activities, ranging from private “thank yous” to publicized recognition ceremonies. It strengthens the link between performance and outcome on the expectancy framework. Recognition continues to be cited on surveys as one of the most powerful motivators for an employee.

Types of recognition might include:

• A personal thank you to an employee from a manager, verbally or in a note
• A public recognition of an employee, in a company communication or ceremony
• A team thank you via a lunch bought by the manager
• A program where customers recognize great service by front line workers

In an environment where there are layoffs and increased workloads all across the country, recognition programs go a long way toward motivating employees and provide a relatively low-cost way to boost performance.

Employee Involvement Programs

Employee participation and participative management, employee ownership, workplace democracy . . . these are all a part of the catch-all term called “employee involvement programs.” Specifically, employee involvement is a process that uses the entire capacity of employees and is designed to increase employee’s commitment to the organization’s success.

Here are a few types of employee involvement:

• Employee stock ownership plans (ESOPs). A fairly popular employee involvement program, where an ESOP trust is created, and the organization will contribute stock or cash to buy stock for the trust. The stock is then allocated to employees. Research suggests that ESOPs increase satisfaction but their impact on performance remains unclear, as companies offering this option often perform similarly to companies that don’t.
• Participative management. This is a program where subordinates share a significant responsibility for decision making with their managers. As jobs become more complex, managers aren’t always aware of everything that employees do, and studies have found that this process increases the commitment to decisions. Research shows that this approach has a modest influence productivity, motivation, and job satisfaction.
• Representative participation. This is an approach where workers are represented by a small group of employees who participate in organizational decisions. Representative participation is mean to put labor on more equal terms with management and stockholders where company decisions are concerned. The overall influence on working employees seems to be minimal, and the value of it appears to be more symbolic than motivating.

If you look at these employment involvement programs through the Theory X & Theory Y lens, the approach certainly leans more toward the Theory Y approach of people management. These programs can also satisfy an employee’s needs for responsibility, achievement, etc., and thus fit well with the ERG theory as well. They can be part of a good balance of motivational offerings.

Variable Pay Programs

While we’ve already discussed that pay isn’t always a motivator for employees, revamping an organization’s compensation system to incentivize employees can play well into increasing motivation and productivity. Examples of variable pay programs include piece-rate programs, where employees are compensated by the number of units they produce, or profit-sharing plans, where organizations share compensation with employees based on the company’s profitability.

Variable-pay programs increase motivation and productivity, as organizations with these plans are shown to have higher levels of profitability than those who don’t. Variable-pay is most compatible with the expectancy theory predictions that employees should perceive a strong relationship between their performance and the rewards they receive.

These programs help managers address differences in individual needs and allow employees to participate in decisions that affect them. Combining some of these tactics with MBO so that employees understand what’s expected of them, linking performance and rewards through recognition and making sure the system is equitable can help make a manager’s organization productive.