Motivation Theories

Motivation Theories

erberg 2 factor theory

Effective employee motivation can increase employees' productivity and loyalty; failing to put these theories into place can lead to increased employee turnover.

Expectancy Theory

The expectancy theory puts forth the premise that employees will put forth an amount of work and commitment equal to what they expect to receive in return. Commission compensation structures leverage this theory by allowing employees to earn as much money as they desire, completely based on their job performance.

Making sure that employees always expect future pay raises and potential job promotions can keep them working hard to achieve personal goals. If employees expect little compensation and no growth opportunities in return for their work, they may put forth only minimal effort until they eventually look to a new employer for new opportunities.

Hierarchy of Needs

Abraham Maslow's hierarchy of needs theory places employees' needs into five progressive categories, beginning with basic physical needs and progressing up to needs for personal growth and career development. Maslow claims that employers must meet each level of employees' needs for employees to truly commit themselves to workplace goals.

Failing to meet employees needs at any level in the hierarchy can create a lack of fulfillment in employees' professional lives, causing them to eventually try to fulfill these needs on their own, possibly by finding a new employer who provides better opportunities.

Problem #3 Turnover

Our goal is to reduce the turnover rate every quarter by using equity theory of motivation and expectancy theory. Our turnover rate are always higher than most companies and so for year 2 we tried to implement these theories into actions. We increases wage throughout every quarter but the last quarter which is why our turnover rate skyrocket over the industry averages during the last quarter. Last quarter we ran out of money so we couldn’t increase raise to keep up with the industry average. Not only that but we aren’t even be able to hired new employee which gave us a shortage of employee. With the shortage on hand we ended up paying for overtime costs. This prove how equity theory of motivation work through wages. We didn’t give anyone much raise to motivate them to work harder.” External equity refers to how a job’s pay rate in one company compares to the job’s pay rate in other company” from chapter 10 in the textbook. With no raise the employee is discourage and feel that they could get better pay if work elsewhere. That is why our turnover is so high as many of them decided to leave to find new job. For quarter 6 our turnover rate is great due to our programs, benefits, training, and wages increases. With all of that come in place, many of our employees decided to stay with the company since we are better than the current market average. We also use expectancy theory to prove our points and hoping that it will reduce our turnover rate. Making sure that employees always expect future pay raises and potential job promotions can keep them working hard to achieve personal goals. Program such as performance appraisal allow the employee to feel satisfy about their job which reduce turnover. We always buy performance appraisal programs to ensure that our employees are being recognize for their effort. Overall both theories work as long that we have enough budget to buy all of the factors listed in our chart. Decrease in benefit, program, wage increase, trainings will have a negative effect on turnover. In the future it is crucial to have a well balance budget planning before spending most of the money all at once.