Organizational Behavior

Meeting the demands of production is a very important part of personnel management. At its very core is the knowledge of how to motivate the workers in any firm. There are several theories that describe employee motivation and the impact that they have on the productivity of the employee. Two theories explain the motivation of employees; the theory of equity, which plays a function of how fair he/she considers it to be in comparison with other employees, and the theory of expectancy; which looks at motivation from the point of view of the goals of the employee, how they can be met by his current place of employment.

Case study

Diaco Pharmaceuticals is a pharmaceutical manufacturing and research company, based in Bondi beach in Sydney, Australia. They have a staff of about 250 people and, they are known as a company with a green philosophy, moreover, this philosophy is evident in their actions. They are not a big company, but they have developed very high reputation even among their competitors. Their employees are well-motivated and well cared for, also the company encourages innovativeness, hard work and teamwork. They encourage participation of their employee’s in environmental work, provide medical insurance, a day care center, and pay a portion of tuition cost for employees who are studying, they offer the chance to work for a reputable firm and earn a good living. It is not difficult to understand why they get many applications for the job. The behavior of this establishment and certain theories will be analyzed and explained.

Expectancy theory of motivation

Vrooms Expectancy Theory (Vroom, 1964) is based upon three variables or beliefs that he calls Valence, Expectancy and Instrumentality (Lacpa) furthermore, “…Expectancy theory proposes that work motivation is dependent upon the perceived association between performance and outcomes and that individuals modify their behavior based on their calculation of anticipated outcomes…"(Chen & Fang, 2008). Motivation is the force that energizes, directs and sustains behavior (Schmidt). Motivation is individual and non-transferable by this, goals and aims of the individual are exclusive to him, because they are made up of the experiences that he has, and the goals that he/she has set. It follows that, what motivates one person or is considered as the goal, could have little or no significance to another person and this relative importance of rewards is known as valence (Alderfer, 1972). Consequently, it is very difficult to find a common denominator of motivation for every member of staff, but, by and large, there are certain rewards that are common to all, although not equally so. Instrumentality refers to the opinion held by the worker that the goals that they have for themselves are attainable and are the direct consequence of their actions or performance (Lunenburg, 2011).

In the Diaco case, the company has shown a very innovative approach to employee motivation as they have employed a multi-pronged approach a “different strokes for different folk’s”.This policy shows that the company has taken the time to anticipate the needs of their employees. Take the day care center for instance: parents or a mother, for instance, can potentially be distracted from maximum productivity by the concern of the welfare of her infant, whose hospital costs have been covered by the insurance provided by the company. By doing this, the company gave the reward first, and then, place the employee in debt to them, but it should emphasized that it does not have the negative connotation, because when the employee is relaxed and there is no distraction, most likely that she will be focused to perform in the best way for the company which takes care of her needs. This approach creates an invaluable resource – loyalty.

The company’s green policy, which includes a six month fully paid leave for employees to work on environmental issues, is rather ingenious. Human beings are rather complicated creatures to find the common language especially when it comes to the decision making process. The expectancy theory of motivation is the one that explains behavioral choice and takes into consideration the number of factors that influence on people’s decisions (Porter & Lawler, 1968).

Take for instance, an employee who is passionate about the environment and has two job offers from two companies: one company offers a huge salary and relatively speaking no free time, and the other company, in this case Diaco, offers a decent pay, but allows and actually encourages this person to pursue his or her interests. The Diaco company in this example not only offers this person a good job, it offers a him the intangible opportunity to add value to his life by making him feel good about working for a green company and having the chance to actually go out to support the environmental cause after his heart.

Theory of Equity

The theory of equity was developed by Adams in 1963 (Adams, 1963) and explained motivation, as not necessarily a function of rewards, goals or expectations, but rather as a product of the perceived fairness of the said reward by the person to whom it is given. In order to appreciate this concept we need to understand the difference between intrinsic and extrinsic motivation as well as the concept of referents. An intrinsically motivated person performs a task because it is something that brings pleasure, and the best reward for such person is the possibility to do it. An extrinsically motivated person does a task or job for reasons outside himself; fame, money, status, approval etc. (Deci, 1972). Referents, refers to the various indices against which an employee measures his rewards. They could be internal in the same work place, or external in an entirely different workplace, but with people doing similar jobs. As a result the value of the rewards is not in itself, but is important how the worker sees them comparatively. This places management in a position where they are evaluated by their staff and should they fail at this, run the risk of demotivating the very people working for them. A way around this could have personnel department, which covertly study the staff and evaluate on a personal level every member. Departmental appraisals could also minimize the problems associated with this theory. It bears mentioning, that a worker could be intrinsically motivated, this means that the person’s reward is actually in doing the assigned task consequently, when paid to do a job he actually enjoys doing, he  can not help feeling over paid and could possibly lose his motivation for the job. A study done by Edward Deci (Deci, 1972) illustrated this point beautifully. On the other hand, a person who is well paid can observe the attitude of the co-worker, who in his opinion does not work as hard as he does, and earn the same amount of money, and in this case he feels under paid and as a result is less productive. This is a classic case of external motivation; where the motivation to do a job does not come necessarily from enjoying the job, but from the rewards that come after the job has been completed. The dilemma here, lies is in management’s capacity to understand and evaluate the desires of their staff, motivate and, consequently, reward them appropriately.

Diaco pharmaceuticals does a wonderful job in this respect, they have instituted a system that provides a broad range of rewards that range from medical insurance, an ambient work environment, picking people off equivalent academic level, ensuring that their staff can pursue things they are passionate about, providing for young parents among their staff and situating their offices close to the beach in a notoriously hot climate. It is quite ingenious, different people are motivated by different things ,have near equal opportunity to get the rewards as worth the efforts they are putting into the success of the company. People, who contribute to environmental causes with pleasure, find the satisfaction of working in a green company and being able to do other things six weeks in a year in that regard, people whose moral compasses make them averse to working for notorious firms can be proud of working for Diaco. Comparatively speaking, the company does not pay top-dollar to its staff but they are not far off either and they regularly make those staff that are not particularly productive or team players redundant. In this way they have been able to apply the principles of equity to staff motivation, limiting to some extent any issues with staff who are performing below average.

The Diaco company has painstakingly applied several methods to reach the employees’ motivation; I would dare suggest they organize at the end of the year specisl bonus for members of staff that are deserving of it the recipients of which should be voted for by the co-staff. It is a reward that can be aspired to, as well as something that can reward those members of staff for whom recognition is paramount.

Each of these theories of motivation there are advantages and disadvantages. Every single reward is valued differently by various people for their own reasons. The expectancy theory is premised on the assumptions that people associate the place of work accordingly to their goals.  The behavior of the individual behavior stems from conscious choices, so a person will join organization for their own reasons (satisfaction, financial rewards, challenge, personal problems and even a change of scenery). Herein is the problem: people by nature are secretive about their goals so, it is very difficult to know exactly what exactly each individual wants. We all want mostly the same things, but in different degree’s.

No single motivation theory completely accounts for the vagaries of human nature and cannot compensate or adjust the interest that is inherent to human character. A combined application of the various motivational theories will stand for any company in good stead, because people will only go as far as they believe they need to and can actually go.