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PLAN Introduction I. The Concept of Motivation 1. What Motivates People ? 2. The Motivational Process in Organizations II. The Expectancy Theory of Motivation 1. Valence of Rewards 2. Performance-Reward Instrumentality 3. Effort-Performance Expectancy III. Developing Motivational Principles 1. Matching Rewards to Employee Needs 2. Matching Rewards to Performance 3. Matching Jobs to Employees Conclusion Literature INTRODOCTION People join and work in organizations to satisfy their needs. They are attracted to organizations that have the means of satisfying their needs. These means are called incentives of rewards; organizations use them to induce people to contribute their efforts toward achieving organizational goals. The continued existence of an organisation depends on its

ability to attract and motivate people to achieve these personal and organizational goals. I. THE CONCEPT OF MOTIVATION Motivation is defined as goal-directed behavior. It concerns the level of effort one exerts in pursuing a goal. Managers are concerned with this concept because it is closely related to employee satisfaction and job performance. If managers are asked to list the problems they face, the problem of motivating employees is likely to be near the top. Employee motivation is a major concern of managers as well as scholars because motivation is closely related to the success of an individual, an organisation, and society. Through motivational efforts, people achieve their personal, or organizational, and societal goals. In an age of high labour costs and limited

natural resources, the effective utilization of human resources is a key to solving many organizational and economic problems. Yet motivating employees is becoming increasingly complex and difficult. As people become better educated and economically more independent, the traditional means of motivation þ formal authority and financial incentives become less effective. In addition, the ever increasing contraints placed on organizations further erode the power of manager to motivate employees. Within these contraints, however, managers still have the responsibility of motivating their employees toward the attaintment of organizational goals. To meet this responsibility, they should understand how and why people are motivated to work in organizations and be equipped with a set

of principles that can be applied to employee motivation. What Motivates People? Why are some amployees better motiveted than others? Employee motivation is difficult to understand because it involves a variety of individual and organizational factors. The individual factors include needs, goals, attitudes, and abilities; the organizational factors include pay, job security, co-workers, supervision, praise and the job itself. A number of theories have been developped to explain employee motivation in organizations. These theories can be divided into two main categories: (1) content and (2) process. Content theories include the needs theory and the reinfircement theory. The needs theory indicates that human behavior is energised by internal stimuli þ needs; the reinforcement

theory explains how behavior can be controlled by its consequences þ reward and punishment. While content theories are primarily concerned with the internal and external causes of behavior (needs and incentives), process theories attempt to explain the process by which people make motivational choices. The process theories are the perceptual theory, the expectancy theory, the equidity theory and the discrepancy theory. The Motivational Process in Organizations The motivational process in organizations can be described by a model that is composed of three parts: motivational inputs, motivational decisions and motivational outcomes. The first part of the model identifies a set of motivational determinants. These key variables can be described as: 1. Employee needs. People