Motivation in Action



A. From Theory to Practice: The Role of Money

The most commonly used reward in organizations is money. As one author notes, “Money is probably the most emotionally meaningful object in contemporary life: only food and sex are its close competitors as common carriers of such strong and diverse feelings, significance, and strivings.” 2 A recent survey of Canadian employees found that overall, 46 percent believe they are underpaid. More employees in Quebec think they are underpaid (54 percent) than those in Ontario (38 percent). The survey’s results are similar to a poll conducted in the United States, in which 45 percent felt they were underpaid.

The motivation theories we have presented only give us vague ideas of how money relates to individual motivation. For instance, Theory X suggests that individuals need to be extrinsically motivated. Money is certainly one such extrinsic motivator. According to Maslow’s hierarchy of needs, individuals’ basic needs must be met, including food, shelter, and safety. Generally, money can be used to satisfy those needs. Herzberg’s motivation–hygiene theory, on the other hand, suggests that money (and other extrinsic motivators) are necessary but not sufficient conditions for individuals to be motivated. Process theories are relatively silent about the role of money specifically, indicating more how rewards motivate, without specifying particular types of rewards. Expectancy theory does note that individuals need to value the reward, or it will not be very motivational.

B. Creating Effective Reward Systems

What to Pay: Establishing a Pay Structure

There are many ways to pay employees. The process of initially setting pay levels entails balancing internal equity —the worth of the job to the organization (usually established through a technical process called job evaluation )—and external equity —the external competitiveness of an organization’s pay relative to pay elsewhere in its industry (usually established through pay surveys). Obviously, the best pay system pays the job what it is worth (internal equity) while also paying competitively relative to the labour market.

Some organizations prefer to pay above the market, while some may lag the market because they cannot afford to pay market rates, or they are willing to bear the costs of paying below market (namely, higher turnover as people are lured to better-paying jobs). Some companies who have realized impressive gains in income and profit margins have done so partially by holding down employee wages, such as Walmart.

How to Pay: Rewarding Individuals through Variable-Pay Programs

A number of organizations are moving away from paying people based solely on credentials or length of service. Piece-rate wages, merit-based pay, bonuses, gainsharing, profit-sharing plans, stock options, and employee stock ownership plans are all forms of a variable-pay program , which bases a portion of an employee’s pay on some individual, group, and/or organizational measure of performance. Earnings therefore fluctuate up and down with the measure of performance, 15 as Jason Easton, director of Strategy and Business Transformation at Toronto-based GM Canada, explains: “In any given year the variable pay can actually be zero, below the target or above the target, depending on how the company has performed.” 16 When GM Canada gave performance-based bonuses to its salaried employees, it generated discontent among union employees who had no such provision in their collective agreemen.

Flexible Benefits: Developing a Benefits Package

Alain Boudreau and Yasmin Murphy have very different needs in terms of employee benefits. Alain is married and has three young children and a wife who is at home full time. Yasmin, too, is married, but her husband has a high-paying job with the federal government, and they have no children. Alain is concerned about having a good dental plan and enough life insurance to support his family in case it’s needed. In contrast, Yasmin’s husband already has her dental needs covered on his plan, and life insurance is a low priority for both Yasmin and her husband. Yasmin is more interested in extra vacation time and long-term financial benefits such as a tax-deferred savings plan.

A standardized benefits package for all employees at an organization would be  unlikely to satisfactorily meet the needs of both Alain and Yasmin. Some organizations, therefore, cover both sets of needs by offering flexible benefits. Consistent with expectancy theory’s thesis that organizational rewards should be linked to each individual employee’s personal goals, flexible benefits individualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs. They replace the traditional “one-benefit-plan-fits-all” programs designed for a male with a wife and two children at home that dominated organizations for more than 50 years. 51 The average organization provides fringe benefits worth approximately 40 percent of an employee’s salary. Flexible benefits can be uniquely tailored to accommodate differences in employee needs based on age, marital status, spouse’s benefit status, number and age of dependants, and the like.

Intrinsic Rewards: Employee Recognition Programs

Laura makes only $10.00 per hour working at her fast-food job, and the job is not very challenging or interesting. Yet Laura talks enthusiastically about the job, her boss, and the company that employs her. “What I like is the fact that Guy [her supervisor] appreciates the effort I make. He compliments me regularly in front of the other people on my shift, and I’ve been chosen Employee of the Month twice in the past six months. Did you see my picture on that plaque on the wall?”

Organizations are increasingly recognizing what Laura knows: Important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensation systems. In this section, we deal with ways in which managers can reward and motivate employee performance. Expectancy theory tells us that a key component of motivation is the link between performance and rewards (that is, having your behaviour recognized). Employee recognition programs range from a spontaneous and private “thank you” on up to widely publicized formal programs in which specific types of behaviour are encouraged and the procedures for attaining recognition are clearly identified. 55 Some research suggests financial incentives may be more motivating in the short term, but in the long run it’s nonfinancial incentives that are motivating.

Beware the Signals That Are Sent by Rewards

Perhaps more often than we would like, organizations engage in what has been called “the folly of rewarding A, while hoping for B” 63 ; in other words, managers may hope employees will engage in one type of behaviour, but they reward another. Expectancy theory suggests that individuals will generally perform in ways that raise the probability of receiving the rewards offered. Exhibit 5-2 provides examples of common management reward follies. By signalling what gets rewarded, organizations implicitly determine whether employees engage in organizational citizenship behaviour, as Focus on Research shows.

Can We Eliminate Rewards?

Abolish Incentive

Pay Pay employees generously and fairly so they don’t feel exploited. They will be more able to focus on the goals of the organization, rather than have their paycheque as their main goal.

Re-evaluate Evaluation

Instead of making performance appraisals look and feel like a punitive effort—who gets raises, who gets promoted, who is told they are performing poorly—structure the performance evaluation system more like a two-way conversation to trade ideas and questions. The discussion of performance should not be tied to compensation. “Providing feedback that employees can use to do a better job ought never to be confused or combined with controlling them by offering.

Create the Conditions for Authentic Motivation

A noted economist summarized the evidence about pay for productivity as follows: “Changing the way workers are treated may boost productivity more than changing the way they are paid .”  There is some consensus about what the conditions for authentic motivation might be: helping employees rather than putting them under surveillance; listening to employee concerns and thinking about problems from their viewpoint; and providing plenty of feedback so they know what they have done right and what they need to improve.

Encourage Collaboration

People are more likely to perform better in well-functioninggroups where they can get feedback and learn from one another. Therefore, it’s important to provide the necessary supports to create well-functioning teams.

Enhance Content

People are generally the most motivated when their jobs give them an opportunity to learn new skills, provide variety in the tasks that are performed, and enable them to demonstrate competence. Some of this can be fostered by carefully matching people to their jobs, and by giving them the opportunity to try new jobs. It’s also possible to increase the meaningfulness of many jobs, as we discuss later in this chapter.

Provide Choice

 “We are most likely to become enthusiastic about what we are doing—and do it well—when we are free to make decisions about the way we carry out a task.” 74 Extrinsic rewards (and punishments) remove choice, because they focus us on rewards, rather than on tasks or goals. Research suggests that burnout, dissatisfaction, absenteeism, stress, and coronary heart disease are related to situations where individuals

did not have enough control over their work situations. 75 By choice we do not mean lack of management, but rather, involving people in the decisions that are to be made. A number of studies indicate that participative management, when it includes full participation by everyone, is successful.

C. Motivating by Job Redesign

The Job Characteristics Model

Developed by OB researchers J. Richard Hackman from Harvard University and Greg Oldham from the University of Illinois, the job characteristics model (JCM) says we can describe any job in terms of five core job dimensions.

Skill variety . The degree to which the job requires a variety of different activities so the employee can use specialized skills and talents.

Task identity . The degree to which the job requires completion of a whole and identifiable piece of work.

Task significance . The degree to which the job has an impact on the lives or work of other people.

Autonomy . The degree to which the job provides the employee freedom, independence, and discretion in scheduling work each day and determining the procedures for carrying it out.

Feedback . The degree to which carrying out work activities generates direct and clear information about the employee’s performance.

Job Redesign in the Canadian Context: The Role of Unions

Labour unions have been largely resistant to participating in discussions with management over job redesign issues. Redesigns often result in loss of jobs, and labour unions try to prevent job loss. 88 Union head offices, however, can sometimes be at odds with their membership over the acceptance of job redesign. Some members value the opportunity for skill development and more interesting work.

How Can Jobs Be Redesigned?

Job Rotation

If employees suffer from overroutinization, one alternative is job rotation , or the periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level (also called cross-training ).

Job Enrichment

Job enrichment expands jobs by increasing the degree to which the employee controls the planning, execution, and evaluation of the work. An enriched job allows the employee to do a complete activity, increases the employee’s freedom and independence, increases responsibility, and provides feedback so individuals can assess and correct their own performance.

Relational Job Design

While redesigning jobs on the basis of job characteristics theory is likely to make work more intrinsically motivating to people, more contemporary research is focusing on how to make jobs more pro-socially motivating to people. In other words, how can managers design work so employees are motivated to promote the well-being of the organization’s beneficiaries? Beneficiaries of organizations might include customers, clients, patients, and users of products or services. This view of job design shifts the spotlight from the employee to those whose lives are affected by the job that the employee performs.

Alternative Work Arrangements

Beyond redesigning work itself and including employees in decisions, another approach to motivation is to alter work arrangements with flextime, job sharing, or telecommuting. Doing so might address one of Kohn’s ideas for increasing motivation that we discussed above: creating better work environments for people. These arrangements are likely to be especially important for a diverse workforce of dualearner couples, single parents, and employees caring for a sick or aging relative.


Flextime is short for “flexible work time.” Employees must work a specific number of hours a week, but they are free to vary the hours of work within certain limits. As shown in Exhibit 5-5 , each day consists of a common core, usually six hours, with a flexibility band surrounding it. The core may be 9 a.m. to 3 p.m., with the office actually opening at 6 a.m. and closing at 6 p.m. All employees are required to be at their jobs during the common core period, but they may accumulate their other two hours before and/or after the core time. Some flextime programs allow extra hours to be accumulated and turned into a free day off each month.

Job Sharing

Job sharing allows two or more people to split a 40-hour-a-week job. One might perform the job from 8:00 a.m. to noon and the other from 1:00 p.m. to 5:00 p.m., or the two could work full but alternate days. While it’s popular in Europe, it’s not a common arrangement in Canada. About 14 percent of Canadian employers offer this arrangement. 114 The reasons it’s not more widely adopted are likely the difficulty of finding compatible partners to share a job and the historically negative perceptions of individuals not completely committed to their jobs and employers.


Telecommuting (sometimes called teleworking ) might be close to the ideal job for many people. No commuting, flexible hours, freedom to dress as you please, and few or no interruptions from colleagues.

The Social and Physical Context of Work

The JCM shows that most employees are more motivated and satisfied when their intrinsic work tasks are engaging. However, having the most interesting workplace characteristics in the world may not always lead to satisfaction if you feel isolated from your co-workers, and having good social relationships can make even the most boring and onerous tasks more fulfilling. Research demonstrates that social aspects and work context are as important as other job design features. 134 Policies such as job rotation, employee empowerment, and employee participation have positive effects on productivity, at least partially because they encourage more communication and a positive social environment.

Employee Involvement

Participative Management

The distinct characteristic common to all participative management programs is joint decision making, in which subordinates share a significant degree of decisionmaking power with their immediate superiors. Participative management has, at times, been promoted as the solution for poor morale and low productivity. For participative management to be effective, followers must have trust and confidence in their leaders. Leaders should refrain from coercive techniques and instead stress the organizational consequences of decision making to their followers.

Representative Participation

Almost every country in western Europe requires companies to practise representative participation , called “the most widely legislated form of employee involvement around the world.” 140 Its goal is to redistribute power within an organization, putting labour on a more equal footing with the interests of management and stockholders by letting employees be represented by a small group of employees who actually participate.


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