Open Review of Management, Banking and Finance

«They say things are happening at the border, but nobody knows which border» (Mark Strand)

How motivation brings to healthy organizations: methods and incentives to increase satisfaction, efficiency and productivity

by Angela Domenica Frusciante, Mohammed Elshendy and Nunzio Casalino

Abstract: Motivation is a process consistent of several factors that make employees continually interested and committed in their job: it is done by stimulating their unique characteristics and their own needs/energies. Dealing with a managerial context, this article provides a wide discussion about the different keys that encourage motivation and empowerment; business well-being happens by adopting the appropriate strategies aimed at achieving satisfaction and productivity. There is a focus on intrinsic/extrinsic motivation and on how it is related to effectiveness, efficiency, productivity and performances. So monetary incentives are not always the right stimulus when the purposes are corporate healthy behaviors and high results. Furthermore, S.M.A.R.T. goals setting is explained: its implementation requires management-based theories and reinforcement procedures. In addition, leadership styles play an important role in this framework. The ones here discussed are participative, supportive and directive. The articles ends with a discussion on authors’ findings and thoughts.

Summary: 1. Introduction. – 2. Role of motivation and organizational theories. – 3. The pyramid of needs and work dimensions. – 4. Goal settings and reinforcements. – 5. Leadership and motivation management. – 6. Research findings. – 7. Conclusions.

1.  This article focuses on the useful factors for effectively motivating workers in their workplaces. A motivated worker generates value for the company. A good manager, therefore, is interested not only into the employees’ physical health but also into the mental health, because this last is able to bring the highest results. The social changes of the 70s introduced an important new concept: health is not a factor to be taken into account when it is missing, but it is useful to implement policies in order to have a good climate in the organizations; this leads to study the psychosocial aspects of work [1]. It was increasingly evident the influence on health of both biological and psychological factors (as well as the importance of their combination and interaction). In the 90s the situation improved with the creation of the Occupational Health Psychology (OHP), an interdisciplinary topic aimed at optimizing the quality of the working life and safety. In this perspective, healthy work environments are characterized by high productivity, good employee satisfaction, good security, lower absenteeism, few turnover and no violence. The OHP intervened on three basic dimensions: the working environment, the individual and the relation work/family. Raymond, Wood and Patrick (1990) [2] presented an assessment tool of organizational health-based indicators built considering two criteria: the time characteristic of the indicators (current, retrospective, and forecasting) and the availability/fluency of collecting data. A second study [3] aimed to a long-term view: a healthy organization is evaluated not only through the ability of working effectively but also through the ability to grow and develop. Consequently, the organizational health can be considered as the overall scenario and it is linked with studies on corporate culture and stress. The indicators of organizational “malaise” (symptoms) were spotted: this including the decrease in profits, the decrease in productivity, the absenteeism, the stress level of employees/organization and the overall well-being [4][5]. Avallone believes that the concept of organizational health is uncertain, generic and does not allow to identify the conditions by which an organization is in a good state and is able to keep it in time with motivation and productivity [6].

2.  A lot of researchers addressed the aspect of motivation at work analyzing the factors that take place from job satisfaction and job dissatisfaction. The motivation at work can be defined as the inner drive that leads individuals to apply with energy and enthusiasm. It is a kind of internal strength [7] that stimulates, regulates and supports the major actions (taken by the subject involved) and can be described in a cyclic way: the individual searches for the tools in order to satisfy his/her own need, perceived as an inner tension; when it is satisfied, the subject checks for new and additional needs. Motivation is inside the individual and cannot be induced from the outside. Through external interventions it is possible to urge or, at most, to fuel it.

immagine_1Figure 1: The life cycle of needs

The motivational system can be understood as the set of perceived needs and the links between them and the behavior. In order to define which are the elements that govern the motivation, several theories were formulated. For example Herzberg, in his studies, asked to the examined subjects to list what events in their professional life had caused satisfaction and what events had caused dissatisfaction [8][9]. The analysis of the results showed that the factors mostly contributing to generate satisfaction were related to the content of the work, while the factors of dissatisfaction were embedded in the working environment and remuneration. He took its cue from these analyses to develop a theory based on the distinction between two major classes of factors. On one hand there are those related to the external conditions of working such as the physical environment, social environment, remuneration (the ones that Herzberg calls the “hygienic factors”). On the other hand, there are the factors that affect the internal content of the work, and therefore the ability to provide a psychological growth for the worker (the ones that Herzberg calls the “motivational factor”). Herzberg thesis is that hygienic factors cannot provide an effective satisfaction. The improvement of hygienic or environmental factors (i.e. more wages or more comfort) can only lead to a lower dissatisfaction. Therefore, with particular regard to the link between man and work, Herzberg said that people can be classified according to two different basic attitudes: there are “researchers of motivation” and there are “researchers of hygiene”. The people in the first group are not only interested in economic well-being, safety, comfort of the physical environment or the pleasantness of the co-workers. Their aim is reaching a high level of satisfaction at work that will give them the joy of a psychological growth. Researchers of hygiene, instead, are captured only by the external aspects of working such as remuneration, environment, etc. Herzberg also said that only the researchers of motivation can experience a real job satisfaction. So researchers of hygiene, although may declare themselves satisfied, are actually “not-dissatisfied”. According to Frederick Taylor (Monistic Theory) the motivation of the employee must be stimulated through systems designed to maximize productivity: the solutions he proposed concerned the introduction of piecework, the profit sharing and the participation in the savings. These systems are called monistic and the aim is to ensure that each employee uses, at work, all his/her energy in order to maintain and increase productivity [10]. By increasing productivity, the employee can increase his/her salary, his/her self-esteem and his/her status. Motivation procured by money however is questionable. In order to increase motivation, in an enterprise context, it could be useful to introduce [11]:

  • empowerment;
  • job enrichment & enlargement;
  • job sculpting.

The term empowerment has had in recent years a significant resonance: it has Anglo-Saxon origin and a set of multifaceted meanings. Empowerment means “increased power”. On an individual level, it is the ability of people to feel responsible/protagonists of their own tasks and to expand themselves; on an organizational level, it is the opportunity for the company to be more effective in operations and innovative challenges. In both cases, however, the assumption in that everyone has the resources that may be developed. Job enrichment, instead, is the approach by which the characteristics of the work are modified in order to make employees work with more autonomy and responsibility. This process is called vertical job loading and it introduces new and more enriched activities that do not belong to the daily routine. The horizontal job loading, instead, introduces an enlargement of the job, incorporating activities belonging to the same organizational level (in this way, however, the change is only quantitative and will lead to a greater load of routine activities). Some of the basic job dimension are [12]:

  • variety of tasks;
  • clear identification of tasks;
  • significance of tasks;
  • autonomy;
  • presence of feedback.

Job sculpting is “the art of retaining your best people” [13]. It consists in making workers exactly do the tasks they really want and on which they perform better, satisfying so their deepest desires.

3.  The Theory of Needs argues that the behavior of a person, even at work, tends to the satisfaction of needs arranged in a clear hierarchy, which he has shown in a pyramid. Starting from the bottom, the following categories are registered:

  • physiological needs, linked to immediate survival (breathe, drink, eat, relax, move);
  • security needs, physical and emotional, related to long-term survival (freedom from danger, threats and deprivation caused by physical damage, economic hardship, illness);
  • need for love and belonging (emotional relationships, acceptance by peers, recognition as a member of the group);
  • need for esteem and self-esteem (recognition by others and self-respect);
  • need for self-realization.

The individuals’ behavior is designed to satisfy the needs in the lower level, whose satisfaction leads to make them motivated and brings out the needs in the superior levels. This theory was very important in the management context during the last century, but it has some problematic sides: each individual, in fact, differs from the others and warns and meets the needs in different ways. For example, while some people are able to rest only a few hours’ sleep, others need many more hours; while some people want to eat when hungry, others tend to satisfy higher needs. Salvemini has defined a different scale of needs that an individual can experience in the work contexts. The rank is:

  • consumption needs;
  • security needs;
  • needs of sociability;
  • esteem needs;
  • power needs;
  • needs of realization.

According to this author the satisfaction of a need, defined as the lack of a desired object, can be functional or dysfunctional to the satisfaction of other needs (i.e. the fulfillment of the desire for power can be functional to the needs for self-realization). According to Vroom (1964) [14], instead, motivation is related to two factors: the value, which is referred to the importance that one person gives to the achievement of a goal, and the expectation, which is represented by the probability recognized in order to achieve it. Motivation is so expressed in this formula:

Motivation = Valence X Expectancy

The value can be positive (when you want something) or negative (when you don’t want something), while the expectation can only have positive value in fact, if the person doesn’t recognize any chance of achieving the goal, the expectation is equal to 0. This theory was further developed and was enriched with an additional factor: the value of the reward, which refers to the reward of achieving the objective. The formula becomes the following:

Motivation = Valence X Expectancy X Value

According to this principle, the motivation of staff can be defined as a function of the work done, the objectives achieved and the behavior (i.e. if the behavior is considered positive, such as high performances at work, it should be subjected to a premium). The level of needs’ satisfaction generates the organizational structure and the corporate climate/culture. The organizational behavior, that affect the individual performances, is the result of the interaction of four dimensions:

  • extrinsic dimension (A);
  • intrinsic dimension (B);
  • dimension of sociality (C);
  • dimension of solidarity (D).

A) Extrinsic motivation follows when an employee engages in an activity for purposes that are extrinsic to the activity itself, such as, for example, receiving praise, recognition, good grades or avoiding unpleasant situations, as a punishment or a fool.

B) Intrinsic motivation, in contrast, occurs when a worker engages in an activity because he finds it challenging and rewarding, feeling more and more competent. Intrinsic motivation is based on curiosity, which is activated when an individual meets environmental characteristics as strange, surprising and new; in this situation the person tends to explore the surroundings in order to search new information and solutions.

C) The dimension of sociality refers to the degree of friendship between the members of a community. There are many benefits: creativity is rewarded, work environment is pleasant, trust and mutual respect are produced. Pay attention to avoid the groupthink phenomenon, where consensus takes the place of the constructive debate and criticism.

D) The dimension of solidarity finally regards the actual interests / goals of the people. Solidarity determines a significant focus on the objectives, produces intolerance for unsatisfactory performances and allows you to respond quickly to threats. As disadvantages: the level of cooperation depends only by mutual interest and, if the roles are strictly defined, disagreements could arise inside the group.

Goffee and Jones’ (1999) matrix [15] explains the relations between the last two dimensions.

immagine_2Figure 2: Goffee & Jones’ Matrix

The box related to the “fragmented” concerns with the workers who interact with low sociability and little solidarity: goals are not perceived and interpersonal relationships are not present (sometimes it could happen that employees work remotely and they do not know each other). People in the “networked” box upgrade friendly relationships but are not so interested into sharing common objectives and tasks. The third box (“mercenary”), instead, has a strong focus towards the goals: typically these communities have short live and are highly motivated in the achievement of specific goals (i.e. Soldiers, Project Work Teams; even if the work experience is finished, during the time, the period spent together is remembered nostalgically and with pleasure). The ideal organization is the organization of citizens (“communal”) [16] where the degree of sociability and the degree of solidarity are both high: the persons are strongly motivated into achieving their professional tasks, sharing suggestions, observing deadlines, partaking into meetings and, in the same solution, into establishing social relationships rather hardly (sometimes co-workers become good friends and they also meet each other after work for informal drinks).

4.  Goals are defined as the desired future conditions that the organization intends to achieve. Therefore, considering that these conditions are focused on company’s purpose, the way they are being achieved is very important. Goal setting is a crucial dimension for labor relationships and it has been studied in fields such as Psychology and Economics [17]. According to the management and organizational literature, in order to motivate workers, one of the leader key-tasks is to promote clear purposes and ambitious goals for the whole team. A recent Fortune report talked about “Why CEO’s fail” and estimated that projects execution failed in 70 percent of organizations, due to [18]:

  • managers’ disability to create a balance between strategic and operational tasks;
  • unclear goal setting strategies.

Meanwhile, in Psychology literature, it is well recognized that goal setting is an effective way of achieving behavioral change in people. For instance, many psychologists argue that wage-irrelevant performance goals enhance employees’ motivation and work performance [19]. Goals should be relevant (according to the person involved), challenging but realistic, achievable, specific and measurable [20]. According to this topic, in the last years one question arose: “How should goals be specified or written”? Locke and Latham carried out a case study explaining that employees are motivated when clear goals and periodic feedback (these last ones regarding performances) are provided. Their conclusion was that specific and precise goals have the highest motivational effect rather than vague and easy ones. Later, they developed five fundamental principles in order to create effective goal setting: the S.M.A.R.T. goal system [21]. S.M.A.R.T. goal setting drives towards efficacy. Instead of vague targets, SMART goal setting creates prosecutable path towards certain objectives, precise milestones and reliable results. Every goal, from the easiest to the most difficult one, can be made S.M.A.R.T. [22]. The acronym S.M.A.R.T. means:

  • Specific – what is being pursued is exactly defined;
  • Measurable – the achieved results are measured using recognized indices;
  • Attainable – the goals are realistic to be achieved;
  • Result – the goals are result-oriented;
  • Timely – the milestones are exactly fixed in the timeline.

Reinforcement theory for motivation was proposed by Skinner and his colleagues. This theory said that the individual behavior follows the “law of effects”. For example, individuals tend to repeat the actions that reproduce positive consequences and eliminate those ones that drive toward negative effects. Thus, according to Skinner (1953) [23], the organization must design its environment in order to encourage workers toward positive consequences. This theory is useful to control and analyze the different mechanisms concerning the individual behavior. The reinforcement is the submission of a certain kind of temporally limited stimulus which produces a response [24]. A reinforcing stimulus is defined by its power and by its ability to produce the desired changes. Some stimuli are able to produce changes, better than others are, and, consequently, they are classified as reinforcing or no reinforcing. Reinforcement is fine when the positive behavior increases or maintains its frequency. In the organizational context, the employee desires the reinforced signal if he/she associates the outcomes to the behavior; in these cases the effect is stronger, more resistant and difficult to eliminate. In reinforcement learning, the procedure of selecting the best action is based on evaluating the results achieved during the observations (it could be useful to conduct many tests in order to individuate the best reinforced signals to use). The leader will choose the action, which maximizes the desired results [25]. Leaders use the following methods aimed at enhancing employees’ behavior:

Positive Reinforcement – It implies giving a positive response when the worker shows the right and required behavior (i.e. immediately praising an employee for coming early at work). This will increase the probability by which the behavior occurs again. Rewarding, for example, is positive but not in all contexts. Only if the employees’ behavior improves, rewarding can said to be a efficacious. The greater reinforcement happens when the intention of giving a reward is spontaneous.

Negative Reinforcement – It implies dealing with an employee by using action aimed at removing negative/undesirable consequences. Both positive and negative reinforcement can be used for increasing desirable/required behavior. Negative reinforcement is often used if positive reinforcement have not been effective in increasing the target skill/behavior [26].

Punishment – It implies removing positive consequences in order to decrease the probability by which an undesirable behavior befalls. In other words, punishment means applying undesirable consequence aimed at forbidding undesirable behavior (i.e. suspending an employee for breaking the organizational rules). In such contexts, considering the gained results, punishment can be equalized to positive reinforcement.

Extinction – It happens when reinforcements are absent. So extinction aims at lowering the probability of occurred-undesired behavior by removing all kinds of rewarding (i.e. if a worker no longer receives praise and admiration for his/her good work, he/she may feel unappreciated for his/her contribution). Extinction may unintentionally reduce desirable behavior.

5.  Several studies have shown that leadership styles and motivation are strictly related: the most motivated followers have the most motivated leaders and vice versa [27]. According to this trail, the most important factors that an organization should use in order to preserve its effectiveness and its productivity are joined to the different leadership styles. Researchers have defined numerous and different leadership styles. The “style of a person” is created through the combination of his/her beliefs, values and preferences, organizational cultures and norms (encouraging one style and, even, discouraging others). As concerns Leadership Theories, there are three main key variables that affect the leadership styles: the leader’s characteristics, the follower’s characteristics and the environment’s characteristics.

Figure 3. Key leadership components

Participative leadership style. It makes workers have high influence about their work decisions. This type of leadership leads to participative conditions where subordinates share a significant degree of decision-making power with their superiors. For example, if the workforce is smart, well-staffed and skillful, subordinates would prefer participative managers rather than directive ones. Instead of suppressing disagreement, aimed at appeasing the superior anger or ideas’ divergence (as done in the recent past), the new generation of workers would definitely prefer to have a precise role in decision making. Supportive leadership style. It establishes a psychological support towards subordinates and this facilitate goal achievement, mutual trust and respect, helpfulness and friendliness. A channel leader with a supportive leadership style considers other channel partners’ needs, looks after other partners’ well-being, creates a pleasant atmosphere for interaction, encourages other units’ accomplishments, looks out for their welfare, establishes mutual trust and builds a harmonious climate. Directive leadership style. It characterizes the leader that provides specific guidelines in order to drive his/her own subordinate work activities; this is managed by organizing and defining the task environment, assigning the necessary functions to be done, specifying rules and procedures to be followed (while accomplishing tasks), clarifying expectations, scheduling work, establishing communication networks and evaluating work group performance. Buble, Juras & Matic (2014) [27] said that motivation depends also on the following characteristics:

Demographic characteristics. They are relevant in order to configure managers’ motivation and leadership styles. The most famous ones are those five: gender, age, academic degree, total work experience and work experience in the specific company.

Communication. It is commonly defined as the process of transferring information from one person to another. Interpersonal communication is not only the involvement grade of an individual in a group, but also the individual’s self-realization level. Therefore, the communication development in the company significantly affects business performances and demonstrates the leadership style.

Interaction. It is the process of mutual and reciprocal influence regarding two or more people’s behavior. Interaction has crucial importance for the management and it mainly bursts through the leader and his/her co-workers. It could be helpful to study the different kinds of interactions between the manager and his/her subordinates.

Decision-making. It is defined as the process of identifying the problems and the opportunities to resolve them [28]. It includes efforts before and after the decision is made. Who the decision makers are and how intensely the subordinates are involved in the decision-making process has a significant impact on the solutions’ realization. Therefore, it is very important to examine how this process takes place in the particular companies.

Controlling. It is aimed at monitoring employees’ activities, determining the way the company uses towards the goals established; if needed, it supports corrective decision-making [28]. The management task is to ensure that employees are focused on achieving the goals fixed. In the context of graduated organizational changes [29], empowerment and trust are developed following new trends (the workers are less self-governed equalized to the previous classifications).

Therefore, the riddle is: “Which combination of leadership styles, motivation and followers’ satisfaction results optimal for the organizational effectiveness?”.

6.  Multiple researches have shown the great influence of leadership on motivation. For example Mehta and other (2003) [30], studied the workers’ performances subjected to multiple kind of motivation created by different leadership styles. The research showed that participative, supportive and directive leadership styles return all high levels of performance. Wright and Pandey (2010) [31], Bass and Riggio (2006) [32] and Storseth (2004) [33] found that the people-oriented leadership style is a key predictor for work motivation. Many other researchers have also confirmed these results leading to the thesis that the relation between leadership styles and employees’ motivation is strong. So, as a result, the following model shows five principles in order to increase business productivity:

1)  optimize human resources. A reorganization of human resources makes people do the activities they really “fit”. Knowing the potential of each member in the company and entrusting the right responsibilities will enhance efficiency [34];

2)  spur interpersonal relationships between employees. Quarrels and negative situations significantly harm the productivity. Suggesting corporate learning [35], creating a serene atmosphere and organizing events after-work (such as dinners or lunches) will help collaboration and tolerance among colleagues;

3)   stimulate motivation encouraging members to do the best actions and to improve their position within the company (i.e. offering financial incentives or reward, such as travel, dinners, certificates, esteem, etc.);

4)    improve the employees’ welfare providing adequate break (i.e. coffee break to recharge the forces and make no mistakes) and allowing more flexibility (i.e. part-time or working from home, after a period of illness);

5)    define priorities and delegation drawing up a list of things to do. It could be useful I) to delete – from time to time – the activities carried out, II) to get no distraction from colleagues and III) to delegate less pressing and important tasks.

7.   A successful organization can reach its success by motivating employees. However, it can be difficult; there are no magic formulas or programs helpful to do this. Motivation is a personal dimension. While one employee may appreciate time off, another may enjoy new challenges. The basic rule is to discover what the workers want making it become reality or encouraging them to earn it. This is a success key for a department or a company [36]. Moreover, extrinsic factors are more significant compared to intrinsic ones. So high salary, job security, etc., are more frequently required by employees and have the bigger impact on their motivational behaviors [37] but factors such as getting recognition for a job well done are more precious than the previous. Both categories of motivation enhancers, considered in different mixes, are always present in all type of leadership styles. The researches’ results have confirmed that the relation is stronger between intrinsic motivation and leadership style rather between this last and extrinsic motivation. In conclusion, influencing managers’ leadership style to motivational factors is very important [38] to avoid the drift towards the authoritarian leadership which is very dangerous. General principles to adopt and to support employees in their work are: know effectively the staff, give useful feedback, encourage people in achieving the goals, educate about the “business well-being”, keep them informed and involved with the GAOS (in Italian: Grande Audace Obiettivo Sfidante) and adopt rewards (such as verbal recognition, professional development or money). Without motivation, nothing really gets started, as what you pay is what you get.

References

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Authors

Angela Domenica Frusciante has achieved a master degree in Enterprise Engineering and she is a Researcher and PhD candidate in Business Engineering – DII at University of Tor Vergata, Rome. She is involved in research activities on management, social sciences and economy, business intelligence, finance, big data, social network and social media analysis (e-mail: angeladomenica.frusciante@uniroma2.it).

Mohammed Elshendy has achieved a master degree in Mechanical Engineering and he is a Researcher and PhD candidate in Business Engineering – DII at University of Tor Vergata, Rome. His research activities are focused on economics of corporations, leadership, social network analysis and social media (e-mail: elshendy@dii.uniroma2.it).

Nunzio Casalino is Associate Professor of Business Organization and Human Resource Management as well as Director of Master in Human Resources and Organization at Guglielmo Marconi University – Department of Economic and Business. He obtained the Ph.D. in Business Information Systems Management at LUISS Guido Carli University, Rome, Italy. His research interest areas are business organization and human resource management, SMEs opportunities and issues, entrepreneurship development, small business growing, innovation, enterprise resource planning. He is involved in several research activities in collaboration with national and international public and private partners on business practices, providing up-to-date contents to entrepreneurs, companies, manufacturers, organizational aspects and operative business processes through innovative managerial approaches (e-mail: n.casalino@unimarconi.it).

The manuscript is the result of joint observations of the three authors. They contributed equally to this work.

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