Managerial Accounting 9.11.20
Employee motivation and motivational theories
Why motivates staff?
o Improve staff satisfaction
o Increase turnover and profit
o To enhance customer service
o Achieve organisational objectives
Motivation
o A major objective of management control systems (MCSs) is to align
employee and organisational interests – maximises value of company
o Employee motivation has a major impact on firm performance
o Performance = f (Motivation x Ability)
o Ability = f (Aptitude x (Training +experience))
o Understanding what motivates employees to act in the organisation’s best interest is a
core to organisational success
o Theories of motivation will link to management control
Motivational theories
o Behavioural scientists focused on empirically tested models and suggested:
- Instinct theories (James, Freud) viewed behaviour as resulting from instinct
- Models based on drive or reinforcement
- Scientific management movement (Taylor) – Paternalistic
- Social scientists considered the role of social influences on behaviour (1930s)
- New models of work motivation emerged – content theories (50s)
Content theories
o Identifies the specific factors associated with motivation
1) Maslow’s hierarchy of needs – Content theory
o Identifies a hierarchy of needs starting from basic values to higher needs (self-
actualisation)
o Once a level is satisfied, the next is likely to motivate employees
o If a need is already satisfied, it will no longer motivate
o Advantages:
, Managerial Accounting 9.11.20
- Simple framework
- Intuitively appealing
o Disadvantages:
- Positioning specific incentives within this framework is difficult
- Lower level needs dominate until satisfied
2) Herzberg two factor theory - Content theory
o Hygiene factors (working conditions, money)
- Can have a negative impact on performance if they are not up to standard
- They do not have a positive impact and must be present
o Motivating factors (recognition)
o Advantages of theory:
- Cost effective
- Straightforward and easy to implement
o The classification of money under hygiene factor is open to dispute, however
3) McGregor (1960s) - Content theory
o Theory X: Humans are…
- Lazy
- Must be controlled
- Avoid responsibility
o Theory Y:
- Working is natural
- Can lead and control themselves
Employee motivation and motivational theories
Why motivates staff?
o Improve staff satisfaction
o Increase turnover and profit
o To enhance customer service
o Achieve organisational objectives
Motivation
o A major objective of management control systems (MCSs) is to align
employee and organisational interests – maximises value of company
o Employee motivation has a major impact on firm performance
o Performance = f (Motivation x Ability)
o Ability = f (Aptitude x (Training +experience))
o Understanding what motivates employees to act in the organisation’s best interest is a
core to organisational success
o Theories of motivation will link to management control
Motivational theories
o Behavioural scientists focused on empirically tested models and suggested:
- Instinct theories (James, Freud) viewed behaviour as resulting from instinct
- Models based on drive or reinforcement
- Scientific management movement (Taylor) – Paternalistic
- Social scientists considered the role of social influences on behaviour (1930s)
- New models of work motivation emerged – content theories (50s)
Content theories
o Identifies the specific factors associated with motivation
1) Maslow’s hierarchy of needs – Content theory
o Identifies a hierarchy of needs starting from basic values to higher needs (self-
actualisation)
o Once a level is satisfied, the next is likely to motivate employees
o If a need is already satisfied, it will no longer motivate
o Advantages:
, Managerial Accounting 9.11.20
- Simple framework
- Intuitively appealing
o Disadvantages:
- Positioning specific incentives within this framework is difficult
- Lower level needs dominate until satisfied
2) Herzberg two factor theory - Content theory
o Hygiene factors (working conditions, money)
- Can have a negative impact on performance if they are not up to standard
- They do not have a positive impact and must be present
o Motivating factors (recognition)
o Advantages of theory:
- Cost effective
- Straightforward and easy to implement
o The classification of money under hygiene factor is open to dispute, however
3) McGregor (1960s) - Content theory
o Theory X: Humans are…
- Lazy
- Must be controlled
- Avoid responsibility
o Theory Y:
- Working is natural
- Can lead and control themselves
