Employee Motivational Programs

The text book defines Vroom’s expectancy theory as “a theory of motivation that suggests employees are more likely to be motivated when they perceive their efforts will result in successful performance and ultimately, desired rewards and outcomes.” It offers the following definition for the equity theory, “a theory of motivation that examines how a person might respond to perceived discrepancies between his input/outcome ratio and that of a reference person.” So what are the issues and implications that need to be addressed when considering motivational programs in the work place that are drawn from these theories? I perceive them to be as follows:

1. What is the task or job that needs to be accomplished?

2. What is the expected or intended result of the task?

3. What is to be gained by the employee(s)?

4. What is to be gained by the employer?

5. Is the program identical or different for all levels?

6. Is the reward identical or different for all levels?

Let’s suppose that company ABC is losing market share and sales as a direct result of costs related to processes in product manufacturing as well as business and manufacturing support functions. Management has taken steps to eliminate some costs but is now turning to employees to help lower costs, increase productivity and profit, and improve morale. It will implement an incentive program based on performance and reward employees with money in the form of bonuses. The performance will not be judged on an individual basis but on how well the company as a whole has performed. The goal is to reduce costs by X% and increase profit by Y% each quarter and a Z% average for the year. If quarterly goals are met, management has decided to reward hourly wage earners on a quarterly basis. Salaried positions are tied to the year end results. Management has also set a range that results fall into so that every effort is rewarded by percentage of earnings. i.e., no gains = no bonus, 1% below target = 1% of earnings, target met = 2% of earnings, and above target met = 3% of earnings. The program was abandoned after one year.

Using the expectancy theory management was able to establish first level outcomes of improvement in productivity and lowering of costs by encouraging employees to become more proficient and efficient and the job they were tasked with, which then led to the second level outcome of the performance bonus. Since outcomes were based on company performance, management hoped that this would encourage employees to help each other complete individual tasks and work as a team to achieve the desired outcomes including boosting morale. This would satisfy questions one, two, three, and four from above.

The equity theory was applied by management differently depending on the status of type of employment, hourly or salary. The program was seen by management to be equal for all