Expectancy theory, two-factor theory, hierarchy of needs, and equity theory

Management Theory and Application

An Analysis and Application of Four Employee Motivation Theories to the Whinslo Case Study

Motivating employees is one of the most essential tasks for any manager, and can be a difficult one to approach. At the Whinslo Ltd. company as presented in the case study, Lesley Watt has felt a definite lack of motivation, and a large part of the fault rests with her boss, Mr. Foreman. Despite making numerous suggestions on improving productivity, Lesley feels she has been completely unappreciated. Many of her ideas were not implemented without any explanation, and even though the ones that were implemented were successful, Lesley was not thanked or in any way acknowledged for her contributions. Instead, when she received her first annual merit-based pay raise, she found that she had only received the average raise for her job while another lower-performing colleague got more. An examination of a few management theories can help to address this issue.

Equity theory is one of the most basic and yet most profound theories regarding employee motivation. First put forward by John Stacey Adams, equity theory put simply states that all employees seek to receive compensation equal to what they put into the company/project -- in other words, that employees strive for equity (Adams & Berkowitz 1976). Adams also notes other factors that prevent even the conscious carrying out of a system-based entirely on equity with concepts such as the "equality norm." This is the tendency for allocators of reward to distribute rewards equally regardless of the individual inputs of each constituent member of a team, generally in order to promote harmony and efficieny within the team (Adams & Berkowitz 1976). In general, though, equity theory predicts that workers will put less in when they feel they aren't being adequately compensated.

Studies have shown that the applicability of equity theory can change drastically from country to country and culture to culture, however, and even from industry to industry (Yum & Canary 2009; Wildes 2008). This leads one to question the applicability of equity theory in general, as personal differences also likely have an effect on one's work ethic and sense of equity (Yum & Canary 2009). Wide variations in expectation of compensation exist within single cultures, as well, and this further muddies and mitigates the effects predicted y equity theory (Wildes 2008). Though sound in theoretical principal and still useful in many situations, equity theory is not always an accurate predictor of behavior or a good source for potential solutions to observed problems. The manipulation of expectation and perception is often easier to achieve than a change in compensation, and this makes equity theory complex in application.

Expectancy theory is very similar to equity theory in that it generally predicts that employee motivation occurs based on the perception of reward, but there are several key differences as well. Rewards are only part of the expectations necessary to motivate an employee to work; other requirements are that here is a clear expectation of the employee to do the work, and (rather obviously) that employees have the ability and the opportunity to perform the tasks as well (Johnson 2009). This can be further refined and simplified by saying that an employee will perform a certain task only insofar as they feel they are capable of completing it and will receive rewards commensurate to the amount of work required (Green 1999).

Like equity theory, expectancy theory predicts that work will not be completed, or completed as efficiently and with the quality an employee is capable of, if the employee is not motivated by an adequate reward (Johnson 2009; Green 1999). Expectancy theory places a large part of the motivation on the pre-work conditions as well, however. That is, before beginning a task the employee must believe themselves capable of completing the task, and feel as though they have an adequate opportunity to do so (Johnson 2009). Without these factors being in place, the reward becomes entirely inconsequential as the work or task will not be completed in the first place, or so expectancy theory predicts (Green 1999). With this, expectancy theory acts as a refinement on equity theory, and appears far more practically applicable. It still leaves many other factors of workplace motivation untouched, however, most notably the complex interrelationships between a given employee and the other employees, as well as the overall structure and dynamic of the given organization in its entirety.

Another long-enduring theory at work in the management field is Abraham Maslow's hierarchy of needs, which was developed and applied to human beings in general as a psychological explanation of personality but also brings much to bear on the issue of motivation (Cullen & Gottel 2002; Koontz & Weihrich 2006). Maslow identified five basic classes of needs that every humn being strove to fulfill, starting with the most basic and moving up. First are physiological needs -- eating, breathing, etc., followed by the need for safety and security, which includes knowing where one's next meal is coming from, shelter, and other simple needs. These are followed by the need for acceptance/affiliation, the need for esteem and recognition, and finally the need for self-actualization -- being all that you can be (Koontz & Weinhrich 2006). Each of these is essential to achieving and maintaining happiness.

Maslow's theory is another one that sounds very good and can be applied anecdotally to almost any situation, but that empirical research has consistently failed to back up his ideas (Wahba & Bridwell 1974). The research that originated many of Maslow's theories and claims has also been decried as heavily sexist, thereby tainting the theories of dominance inherent to Malsow's theories, especially (Cullen & Gottel 2002). Even those skeptical of Malsow's hierarchy of needs theory, however, have noted that the self-actualization predictions and behaviors have been empirically verified (Wahba & Bridwell 1974; Cullen & Gottel 2002). As at least the first three and often four classes of needs are generally met in most work environments anyway, the validity of Maslow's self-actualization theories keeps them practically useful.

Frederick Herzberg's two-factor theory of employee motivation is one of the more complex, but possibly one of the more accurate due to its splits approach. Rather the seeing job satisfaction and job dissatisfaction as occupying opposite ends of the same continuum, Herzberg's research suggested that there were two separate sets of factors motivating each (Furnham 2005). It has also been noted that for certain individuals and in certain industries there is more influence exerted by the so-called hygiene factors -- the extrinsic, physical aspects of a job such as salary, work environment, management accessibility and attitude, etc. -- whose lack or absence creates dissatisfaction are more prominent, and in others the motivators are more powerful (Maidani 1991). Even more interesting are the specific factors and where they fall in this schema.

Salary and extrinsic benefits are often considered the primary pr even the sole motivators, especially by the rather simplistic application of equity theory often used. Herzberg's research shows, however, that these benefits can only prevent dissatisfaction, and do not often provide motivation to perform better (Furnham 2005; Maidani 1991). Once dissatisfaction has been prevented, no increase in salary will actually increase motivation, but instead the more intrinsic motivating factors of achievement, recognition, and enjoyment of the work itself must be used in order to spur productivity and employee motivation (Furnham 2005). The two-factor theory was based on extensive surveys of employees, and more accurately predicts levels of both satisfaction and dissatisfaction than some of the other motivational theories described above (Furnham 2005; Maidani 1999). Equity and expectancy theory especially seem inadequate in light of Herzberg's claims, as his theory provides explanations for some of the inconsistencies in the application of these theories (Maidani 1999).

This is borne out by an application of these theories to the problem at hand. Equity theory can initially be seen at work in Lesley Watt's case -- she is at first excited by her job, and eagerly makes suggestions, but when her ideas aren't rewarded she loses heart. When another employee gets a larger raise than she for doing substandard work, she loses interest in her job. Equity theory predicts all of this; as Lesley does not perceive an equitable reward for the work she performs, she ceases performing work in the same amount and quality, lowering her output to match her perceived reward. But this is actually a misrepresentation of the case -- Lesley was willing to perform excellent work for the first year at a certain rate of compensation, and her salary did not become an issue until her relative compensation was known. Furthermore, the lack of response ot her suggestions would not have led to inferior performance of her standard duties according to equity theory.

Expectancy theory has similar deficiencies., though it does come closer to explaining Lesley's situation. The issue of the rewards is almost precisely the same; Lesley did not expect a reward for doing her work to the best of her abilities, so she ceased doing so. However, her initial suggestions of improvement -- especially after a lack of positive response the first few times -- are not predicted by expectancy theory. It was obvious that she was not expected to make such suggestions, nor was she especially given an opportunity to do so, and both of these circumstances are considered necessary in expectancy theory. Furthermore, Lesley would have known that she was expected to perform her day-to-day tasks, and she was of course capable of doing so and afforded the opportunity, and she was rewarded for this. Again, while expectancy theory predicts her lack of motivation to achieve more, it fails to predict her dissatisfaction.

Maslow's hierarchy of needs comes somewhat closer to finding a true explanation for Lesley's behavior. The physiological and safety needs -- the two first levels of need in Maslow's hierarchy -- are certainly met by Lesley's employment. Her need for acceptance generally is, too, in that she obviously gets along well enough with most of her colleagues for them to have confided average pay rates and other sensitive information to her. But when it comes to esteem, the lack of recognition for her ideas and the boss's seeming respect for an inferior employee would have left her completely unfulfilled. According to Malsow's theory, the needs of one level in the hierarchy won't even be sought until the lower levels are satisfied; the lack of esteem would prevent Lesley from even seeking self-actualization. This would lead to her dissatisfaction and ultimately to her decision to seek new employment that would better fill her needs.