McClelland’s Theory of Needs
After David McClelland theory an individual is having mainly three needs: need for achievement, need for power, and need for affiliation. These needs can be explained as follows:
- Need for achievement – desire to overcome resistance, to achieve goals under predetermined rules, to achieve success;
- Need for power – desire to make others behave in such a way they would not behave if not you;
- Need for affiliation – desire of friendly and close relationships.
Goal-Setting Theory
In late 1960s Edwin Locke determined that the best motivator is to work towards attaining specific goals. Exactly determined goals tell a person what is he/she required to do and what effort he/she needs to achieve that goal.
According to the goal-setting theory specific and difficult goals which are supported by feed-back give productively and effectively done work.
Self-Efficacy Theory
Self-efficacy theory is directed to the individual’s belief that he/she is capable to fulfill a task of some level of difficulty. A person with higher self-efficacy is more self-convinced. The person convinced in his/her abilities and capabilities does not “give up” easily and keeps on working to the finishing of the task.
Equity Theory
According to the equity theory individuals compare the efforts they give and results they get to the efforts and results of others. As a result of this comparison an organization can get three possible states of its employee: undervaluing, equity, overvaluing. Any inequity causes relevant reaction and activity from the individual. The result of the inequity is a demotivated employee.
Expectancy Theory
Victor Vroom expectancy theory – the behavior of the individual depends on what he/she expects as a result of this behavior and how attractive the expected result (this expectance) is for him/her. This dependence is well seen graphically:
Respectively the focus is on the three relationships:
- Effort – goal. The expectance of the individual that some level of the effort will give some goal;
- Goal – reward. In accordance to the achieved goal he/she gets feed-back (reward);
- Reward- personal goals. The reward given by the organization and the individual’s personal goals or wants are intercepted.
Above discussed theories are focused generally on nonmaterial motivators, material motivators (such as salary, wage, bonuses, and etc.) are also very important. To say briefly, money is a very effective and simple (but short-term) source of motivation.
Situation Analyses
As already mentioned, to determine motivation level and motivators used in the banking sector a questioner based on the above discussed theory was prepared.
The questioner was determined for the employees of the banks operating in Georgia, but because of the ongoing crisis management of almost all banks refrained from conducting such type of survey.
To generate a general overview on this subject other methods became necessary to be used. These were: interviews with the HR department employees and direct observation on bank employees during the working process.
Based on interviews we found that almost every bank operating on Georgian market uses nearly the same motivational methods and approaches. The motivators in the banks are presented generally by the material motivators, such as: salary, wages, premium, bonuses, salary increase and etc. Some kinds of nonmaterial motivators – oral or written thank are also used sometimes. But nonmaterial motivators are not paid big attention and they are not perceived important.
The crisis, that arose in Georgia as a result of different reasons, had a negative influence as directly on operating business associations (and besides of course banks) so naturally on motivational systems too.
The negative influence on motivation and motivators was once again enforced by the fact that banks were generally depending on material motivators. To save financial results the new financial and calendar year almost all banks annulled such kind of motivators (bonuses, premiums, salary increase), and some banks had to take more fierce steps – stop paying salary (or to give some employees not paid vacation) or just fire them (staff reduction).
Taking into consideration the fact that the banks have almost no motivation system (as mentioned above there are no more material motivators and nonmaterial motivators lost their weigh – and just did not exist), it would be logical to get a high level of demotivation and dissatisfaction among banking sector employees. But the reality turned to be entirely contrary: bank employees are quite motivated and do their job effectively and with high quality.
This paradoxical result can be explained as follows: simultaneously with annulling the material motivators, there appeared new “motivator” – fear of losing a job. The majority of bank employees work better as they used to not to appear in a list of staff reduction.
To my mind, such kind of “motivator” cannot be useful for a company and entails serious dangers, more specifically in such situation there may be formed a not healthy competition among employees and there is a threat that an employee thinking about possible firing can be harmful for a bank. In some case he/she can put under danger material and intellectual property of the bank. The extremely negative result may be a crime, such as: he/she may transmit intellectual property, valuable information to competitor companies, may damage or stole company property.
The high level of the possibility of raising these dangers is linked to the motivation system functioning before the crisis. As the banks have not been using nonmaterial motivators, after reduction of material motivators, there was left practically no source to motivate employees.
During informal conversation employees explained that they would be glad to move other company and the only reason of staying in the same company was sharp reduction on job market.
Situation Analyses and Theoretical Framework
To find relationship between the above mentioned theories and the present situation is somehow difficult. In other words the banks do not use these motivational tools. The main motivation system was based on material motivators, more specifically – money.
To improve motivation level, employee effectiveness and satisfaction and respectively the whole company effectiveness and quality, it would be useful if the companies (banks) at least partially use the well-known and probated motivation methods.
To better understand these theories and to tailor it to the Georgian reality and the present situation it would be wise to discuss them separately.
McClelland’s Theory of Needs
Persons striven by need for achievement does the job better than it was done before them. Their reward is the job itself and the pleasure got by doing the job. Such types of individuals are self-motivated. Individuals with high desire of achievement prefer situations were they have responsibility (are empowered), feedback on the work done and the average level of risk.
The need for power is performed by the desire of having influence over other, controlling other. Individuals with high need of power get pleasure by being in charge of something, prefer status-oriented positions and are more concerned by prestige and influence over others, then effective and quality work.
Individuals with the need for affiliation avoid conflict and competitive situations. They focus on relationships and not on achievements.
Goal-Setting Theory
As a result of researches it was determined that more difficult goals require more effective working then more easily attained goals. But to get such effect an individual must share and accept this goal.
So it would be useful if management of an organization takes into consideration the theory and to improve employee motivation level generate such kind of tasks for them that would be difficult but attainable.
The feedback on the work performed is also important factor for motivation. It allows the individual to compare what should be done to what is really done, analyze the difference and take into consideration the faults.
It should be mentioned that some individuals have so called self-generated feedback; this means he/she analyzes the work done by him/her himself/herself. Such types of individuals are more productive, effective and motivated.
As many other traits, this trait (self-critic, “self-feedback”) can also be developed and improved by the individual.
Self-Efficacy Theory
This theory is in close relationship with the goal-setting theory. Giving difficultly achieved goals increases self-efficacy, as when the manager gives the employee a difficult task, the employee feels the confidence and support from the manager, what increases self-estimation.
Albert Bandura, the author of the theory, suggests that there are four ways to increase self-efficacy:
-
Enactive mastery – after Bandura the most important issue it increase self-efficacy is the professional side of mastering. Every successfully attained goal increases self-convenience of the person;
-
Vicarious modeling – a person becomes more self-convinced when sees other is capable to do the task;
-
Verbal persuasion – an individual’s self-convenience increases when another person persuades him/her that he/she has necessary skills and abilities to achieve the success;
-
Arousal – arousal and sometimes irritation works as energizer. But in some cases (when the effective work requires calm approach) this may cause reverse effects.
Equity Theory
According to the equity theory when feeling inequity an individual may have one of five reactions:
- change effort (e.g.: do not work as well as working before);
- distort perception of self;
- distort perception of others;
- change the object of comparison;
- quit the job.
Of course none of the above mentioned gives desired results fort the company.
Also it should be mentioned that the cause of the feeling of inequity is not only salary/wage, but other nonmaterial stimulus are important too.
What is meant under equity and justice? As a result of researches the meaning of this term for the employees was determined. Generally the perception of the equity goes to the organizational justice, which requires the unity of the following components:
-
Distributive justice – equal division of stimulus between employees;
-
Procedural justice – fairness of the result determination process;
-
Interactional justice – the degree of respective approach.
All the three aspects of justice are to be taken into consideration when interacting with employees. Managers should publicly discuss and share the information about why some employee is given some stimulus (reward), should take objective decision of rewarding an employee. For this a respective motivational system is needed, which takes into consideration public systems of employee appraisal.
Expectancy Theory
The activity of the individual is determined by a logical sequence, which can be perceived with three connections: effort – results; results - rewards; rewards – personal goals.
The main idea of expectancy theory is exactly in determining and understanding these connections. Based on an individual’s personal goals, an organization (management) should generate a desirable reward for the employee, which will be in connection with the results and the corresponding effort.
Of course every individual is driven by different personal goal and desire, but yet it should be at least partially recognized.
Recommendations
Despite the approaches of the methods and theories discussed are quite different, they have the same goal – to motivate an individual and respectively to increase his/her effectiveness and quality. Each of them taken separately cannot give such an effect as their complexity.
These methods fill up each others and generate the effect of synergy; accordingly they should be implemented coordinated.
The starting point of implementation for every company would be to take an individualistic approach to each employee.
Personal goals of an employee should be determined, what he desires, by what he is driven, what he wants to achieve. There are several ways to determine this: direct observation on an employee during the working process, surveying employees using the relevant questioners.
After determining personal goals rewards, stimulus motivating the employee may be defined. According to McClelland’s theory of needs three types of motivators can an individual have at the workplace: achievement, power, and affiliation. These needs can be presented in an individual equally, or can be presented with big differences (e.g.: high level of need for achievement and almost zero level of need for power). Besides these motivators other motivators should also be taken into consideration if presented for an individual. An employee should be given the reward, stimulus motivating for him/her. Herewith it is necessary to distribute rewards equally (depending on performance) and the performance should be estimated objectively and fairly.
As a result to follow this sequence will give desired effort, effect and quality from the employee.
Feedback on the work performed and the experience gained by successfully achieving a goal (enactive mastery) will increase the employee self-efficacy. And also successful performance and effort given by one employee will generate a precedence of imitation by another employee (vicarious modeling).
The effort may also be increased by giving difficultly achieved goals (which themselves will increase employee self-efficacy) and sometimes by irritation. Again these become a part of the sequence.
Objective, fair and respective approach to every employee is also important (to avoid demotivation).
Implementation of these recommendations is not easy. Of course it is not an ideal model of motivation system of an organization, but using its modified model (tailored to the specific company) will sharply increase motivation level among employees and respectively will increase company effectiveness, work quality and accordingly financial gain.
It should be mentioned that this model is mainly focused on nonmaterial motivators which will not be a cost for an organization and which can be implemented any time despite the scarcity of financial or other resources.
Conclusion
The present motivation level and methods used in banking sector for employees are not so enviable. The ongoing social-economical crisis can be considered as a reason of this situation, but it should be mentioned that the crisis just played the part of catalyst. The real reason is quite different. Demotivated employee is a result of incorrectly implemented motivation system. If going deeper, the incorrect motivation system is a result of incorrect HR policy and management, and the latter is caused by incorrectly planned strategy. Actually the problem has begun earlier – when these companies (banks) entered Georgian market. Accordingly, correction of the sole problem – low level of motivation, just making changes in this field will be quite difficult and nearly impossible. Checking strategy and main objectives should be made frequently during existence of a company and this issue is more actual during the crisis period.
In my opinion, if the present approach is kept unchanged the situation will deteriorate which will directly expose financial and not only financial loss generated by demotivated employees (which also seriously acts on company image). Of course the loss in the banking sector is considerable for the present, but this result is more, and even entirely is connected to the financial problem. It should be mentioned that the importance of motivation and demotivation connecting this issue is not considered yet.
Finally, we can conclude that the way out the present situation is to check and change company strategy and the whole business, also to find out the mistakes which are apparently seen and “lay on the surface” and the most important is to correct or radically change them.
Not taking into consideration all the issues and the present environment will procrastinate the way out of the crisis and the improvement of the situation for the banking sector.
Also, we can conclude that not taking these steps will lead the companies to the position where they will be quite weakened (and may even go bankrupt) or will have to take action hastily which will be ineffective, low quality and will require huge spending. The reason for this may become as lasting the crisis period so the improvement of the overall situation and increasing competition.
Despite the present situation there are fairly serous resources which are a guarantee of positively arranging the problems.
A List of the Applied Literature
Text-books
-
Organizational Behavior” 12th edition, Pearsons/Prentice Hall – Robbins and Judge
Internet
