Mitarbeiterentwicklung

How to measure motivation?

Reinhard Fellner Vienna, 16^th June 2001

We all know in the meantime that motivation is the most important success factor. This is underlined by the formula of Mullins which show the connection between Motivation and Performance:

Performance = Ability x Motivation.

Out of the importance of motivation, the question comes up how we can measure motivation.  I think we can’t measure in the way physicians are doing. But in an organization we see clear signs for demotivation:

•  Increased sick leave

•  High increasing turnover

• Negative development seen in an “Employee satisfaction survey”

This indirect, but still measurable signs of demotivation. Without recognizing this demotivation level will increase continuously. Therefore managers should start to find out objective reasons for this demotivation.

To support that investigations there are some different theories which can be used and which look to the different drivers of motivation:

Drivers of Motivation

As described by Mullins (1993) we know three drivers for motivation:

• Needs

• Values

• Goals

1         Analysis of Needs

Based on Maslow’s hierarchy of needs we have to find out the motivation level.  If people are working in a very low level, they are influenced mainly by existential fear due to the fact their salary is too low to cover their living costs. Therefore they need to earn additional payment through either overtime and/or bonus agreements. In such a case managers often oversee that bonus payments are no motivator, in contrary demotivation will be driven trough existential fear.

Conclusion: A high level according to Maslow’s hierarchy of needs is a basis for any action in connection with motivation

2         Analysis of Values

Investigating motivation in terms of “Value” can be done trough two different theories. 

• In the Equity Theory Model (J.S. Adams) a person evaluates his/her own efforts and outcome vs. the effort and outcome of others and

• In the Expectancy Theory Model (Vroom Victor) a person evaluates his/her outcomes against his/her own effort.

2.1      Analysis using Equity Theory

The Equity Theory Model can be applied to compare two organizations, companies, business units, etc. which are doing similar activities.

An example for an inequity between two sales organizations with the following subjective outcome:

• With more effort they receive less money

• With more daily work they achieve less revenue

• With better PI`s (Performance Indicators) they get less bonus payment

In such an investigation demotivation could be in both organizations because their impression is only subjective.

Conclusion: Managers please don’t oversee that competing within a company is not always a motivation factor. Bad managed competing groups could be demotivated both!

2.2      Analysis using Expectancy Theory

Expectancy Theory can be applied wherever people exercise effort and expect a reward for it.  It focuses on

1. the link between effort & performance (expectancy)
2. the link between performance & outcome (instrumentality) and
3. the value that the outcome has for the person (valence).

In personal discussions managers have to find out the main mistakes in all three areas:

Mistakes in the area of Expectancy:

• The amount of energy/effort that can be expended could be limited.

•  Employee could spend a lot of energy/effort for a tasks that do not lead to increased performance in terms of revenue, service level and cost management.

Mistakes in the area of Instrumentality:

•  Instrumentality could be very low because the revenue targets that are linked to bonus are set so high that they are almost unachievable

Mistakes in the area of Valence:

•  Valence could be low because the only offered outcome is the bonus-money. As the basic salary is low the bonus, even if it is won can only cover needs that are very low on Maslow’s pyramid.

Conclusion: Managers should try to ensure that efforts of the people should lead direct to highest outcome.  Try to understand the valence of a certain outcome. Sometimes promotion or recognition has more value for the employees than bonus payment.

3         Analyses of Goals

Very often wrong Goal setting, in most cases in connection with PRP is the reason for demotivation. Therefore I try to question the goal setting itself using the Goal Setting Theory Figure 4 (Mullins, 1993) but also performance related payment (PRP) per se.

3.1      Goal setting theory

Goal Setting Theory analysing a typical sales organization

Goal setting theory mentions three ways of motivation through goal setting:

Setting challenging, but realistic goals:

Setting clearly understood goals:

Supply complete, timely and accurate feedback:

3.2      Performance Related Payment (PRP)

In connection with PRP (performance related payment) you find the idea to use this system as a:

• Steering instrument

• Motivation factor

• Control instrument

As published by Kohn, 1993 and very clear formulated from Reinhard K. Sprenger[1] in Mythos Motivation, 1993 we see that

• PRP is not a motivator, especially in our case where the variable income is seen as a part of necessary income (Maslow Theory – pyramid of needs)

•  Rewards are a covert form of punishment

Rewards disrupt teamwork (because PRP is necessary for their family, they make everything to achieve at least a small variable income)

•  PRP discourages risk taking

To further underline the meaningless of PRP, Jeffrey Pfeffer [2] published “The Six Dangerous Myths about compensation. In point 5 and 6 he states:

• People want to have fun. Companies that ignore this fact pay the price in a lack of loyalty and commitment

•  Individual incentive pay undermines performance of both the individual and the organization

Conclusion: Managers don’t hesitate to involve your employees in goal setting. Don’t overestimate bonus systems.

As motivation is essential for achieving high performance in all areas, e.g. sales, service, etc. above mentioned theories should support managers to analyse their organization and to take the right decisions.