Thesis Synopsis

University of Tartu

A Study on Impact of Motivation on Employee Performances in Service Sector

Introduction
This study provides an understanding about the most important area in Human Resource Management (HRM) field. The study aims employees work motivation on performance in the service sector by taking psychological framework of goal setting theory into consideration. Also this study provides a framework which suggests that goal setting theory plays important roles for understanding the employee to independent contribution on assignments, tasks and service to employee work motivation and performance. The study is divided into two parts which consists of first literature review and research study in the second part. The literature review is later divided into Four Chapters. First chapter deals with the introduction, Objectives of the study and Research Methodology. Second chapter deals with Definitions, which provides details about different terminologies which are important for the research. Third Chapter concentrates on the Literature review, which provides an in-depth study of Motivation, and its theories. Chapter Four deal the Goal Setting Theory and its implications in the service sectors. In the Second Part of the study, provides an in-depth view about the research and its implications. The research is to be conducted within the service sector to find out work motivation which is based on the goal setting theory and its impact on employee performance in service sector. Moreover, this segment also provides the implications and suggestions of the study.

By Samir Halder

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Thesis Synopsis

University of Tartu

Objective of the Study

Today, one of the greatest challenges that the organization is undergoing is particularly for the HR function, is to create and maintain motivated workforce which helps to increase the performance. In the world of globalization, employees are not only motivated by the help of extrinsic rewards but also intrinsic rewards play an important role in increasing employees performances. Hence, the following are the objectives of the study: i) ii) To identify the importance of Goal Setting Theory in motivation for employee performance within service sector. To identify the extrinsic and intrinsic motivators for motivating workforces in service sector.

Research Methodology

The aim of the study is to find out the importance of Goal Setting Theory in the service sector. This research is designed to evaluate the effectiveness of work motivation by the help of goal setting theory within service sector with the help of gathering data through questionnaires, interviews and observations. Later based on the gathered data and findings, this study will provide suggestions for improvement in work motivation which will help the professionals for improving their performances.

By Samir Halder

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Thesis Synopsis

University of Tartu

Definitions

Motivation Motivation can be defined as the activities that direct human behavior and how this behavior is sustain to achieve a particular goal. It can also be defined as a set of processes that arose, direct and maintain human behavior toward attaining the goals (Peter Ebong Ajang, 2005). However, Jones (1995) argues that Motivation is concerned with how behavior gets started, is energized, is sustained, is directed, and is stopped and what kind of subjective reaction is present in the organization while all this is going on.(Gibson, Ivancevick, Donnelly, Organizations: process, structure, behavior, Page 214)

Employee Satisfaction Employee satisfaction refers to the positive or negative aspect of employees attitude toward the jobs. (Ivancevick, Page 448)

Organizational Goals Organizations goals are those ends for which the organization seeks to accompanies by its operational and existence. According to Amitai Etzioni, Organization goals are desired states of affairs or preferred results that organizations attempts to realize and achieve (Ryszard Barnat, 2011).

Performance Performance can be understood as the act of performing or doing something differently. Also performance can be understood as the difference in behavior of one group of people in a particular manner as compared to other groups of people.

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Thesis Synopsis

University of Tartu

Efficiency Efficiency can be understood as the ratio of the input and the output of any system. It can be used to analysis the waste of the resources within a process. It also helps to analysis the ability of the organization to produce maximum output by minimum input.

Literature Review

Motivation

Greenberg and Baron (2000, page 190), motivation can be divided into three parts, where the first part consists of the arousal which deals in energy behind the individual actions. The second part consists of the alternative choice that an individual make and post behavior. And the last part consists of how long the person has to maintain the behavior to persist at attempting to meet their goals. Buford, Bedeian & Linder (1995), Higgins (1994), and Kreitner (1995) all cited in Linder (1998, page 3) states motivation as, the psychological process that gives behavior purpose and direction, a predisposition to behave in a purposive manner to achieve specific unmet needs, an unsatisfied need and the will to achieve, respectively. On the other hand, Young (2000, page 1) had suggest that motivation can be defined in a variety of different ways, depending on the person you ask. Most of the time if you ask to any person about motivation, commonly responds like its what derives us or its what make us do the things we do. Therefore motivation is the force within an individual that account for the level, direction and persistence of effort expended at work. (Peter, 2011) Antomini (1999, page 29) defines motivation as, the amount of effort that people are willing to put in their work depend s on the degree to which they feel their motivational needs will be satisfied. According to Halepota (2005, page 16) motivation is a person active participation and commitment to achieve the prescribed results. However, Halepota further proposed that the concept of the motivation is wide.

By Samir Halder

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Thesis Synopsis

University of Tartu

Motivation process is guided by individuals perception of ideal self and ideal self. Every individual has a self-identity which consists of abilities, belief, feelings, strength etc. However, ideal self identifies the desire of an individual which is difference from their actual self. Moreover the difference between ideal self and actual self can be regarded as needs (Rollinson, 2008). Theorists of work motivation distinguish between intrinsic and extrinsic and social motivators. However, a separation has to be created to explain the different types of motivators. It is been defined that intrinsic motivators is more of psychological in nature. Intrinsic motivators are concerns to the individual and originates from the nature of the job that one performs i.e. job satisfaction, personal development, acknowledgement from employers/supervisors at work. On the other hands, extrinsic motivators are beyond individuals control and they are tangible in nature i.e. pay increase, bonuses and other rewards. Social motivators originate when an individual interact with people, mostly formed while achieving common purpose as a group or team. Social motivators are mostly psychological in nature (Bratton, 2007).

Intrinsic Motivators Ideal Self

Extrinsic Motivators Need and Expectation at work Social motivators

Behavior

Actual Self

Motivation Process
(Adapted from Rollinson, 2008: 197)

Influencing the behavior of employees can be possible if we understand the process of motivation and what motivates them. There is no universally acceptable theory of motivation

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within the workplace due to complexity in nature; however, there are some popular motivation theories which aim in motivating the employees in workplace.

Contribution in Theory of Motivation

Theory of motivation can be tracked by the ideas of Taylor (1911) who had contributed and came up with the principles of Scientific Management, which has the objective to provide greater control to the management over the labor process by exchanging work/job for rewards. According to Traylor management plays superior to employees and argues that management should play an important role as a brain of the organization. Also he further suggested that to achieve more, the employee needs to work more by most productive and efficient way as possible. Traylor believed that if management transforms ideas into practice, work would be more simple and satisfying for the employees. He was mostly interested in the areas of planning and performances. Also he believed that it is the best practice by which employee should take into consideration for accomplish the task in most efficient as possible. He further suggested that instruction and other feedback are to be provided to the employee to improve the process of work. On the other hand, the ideas of Traylor are challenged by criticism on workplace where there are heavy pressures on employees. A series of experiments at Hawthorne plant in 1930s, named Hawthorne Experiments had proved the importance of people in the organization, which leads to the creation of Human Relations approach. This experiment suggests that the employees surrounding environment and their relation with each other is one of the important factor that increase the performance at work. Hawthorne experiments focused on four key areas: lighting, employees perception about the supervisors, layout of the rooms and social relations at work. The summary of the experiments was peoples satisfaction at work mostly depends on the social relations with other (friends, love etc.) and also social relations played more important role than surrounding environment conditions (furniture, layout etc.) at work (Mayo, 1933). However, Mayos contribution on Hawthorne experiments leads to interest in human behavior.

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Thesis Synopsis

University of Tartu

Theories of Motivation

Motivation is one of the main concerns of the HRM department in organizations. The theories of motivation aim to motivate the workforce of the organization. The theories of motivation can be further grouped into two categories: Content theories of Motivation and Process theories of Motivation.

Content Theories of Motivation

Content Theories of Motivation aims on individuals goals, specific needs and explore the situations where these impact the behavior. The following are Content Theories: Maslows Hierarchy of Needs, Alderfers ECG (Existence, Relatedness and Growth) Theory, Herzbergs two factors theory, McGregors Theory X and Theory Y

Maslows Hierarchy of Needs According to Maslow people are motivated by built in intrinsic motivators that are arranged in hierarchical order. The basic or first level is psychological needs i.e. food, water, shelter etc. After the first level is satisfied, the second level consists of safety needs i.e. security, order etc. Maslow argues that the first two basic levels of intrinsic motivators can be satisfied by increasing incomes. The next level consists of the social needs i.e. friends, sense of belonging etc. It states that employees will be better motivated if they form friendship or groups at workplace. The next level consists of esteem needs where the ego has to be satisfied by recognition, self-respect etc. The next or the top level is self-actualization needs, where the employees are in there full potential (Maslow, 1943). Maslow also states that one level must be satisfied before the need for the next level emerges.

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Maslows Hierarchy of Need

Self-actualization needs Esteem needs Social needs

Safety needs Psychological needs

Maslows Theory of motivation has been criticized for being broad and vague. Critics argues that its impossible to predict human behavior as a result motivators cannot be categorized, also, the theory mostly applies to social and psychological behavior rather than organizational behavior. Moreover, recently in researches it had been proved that there is no evidence that proved that human needs can be categorized into five levels in hierarchal order, however they can be categorized into two needs: deficiency and growth needs (Wahba and Bridwell, 1976). Apart from critics, Maslows theory remains influential and relevant for management studies and behavior of employees, as this theory is the root of many management practices i.e. Business Process Reengineering (BEP), self-managing teams, total quality management (TQM) etc. (Buchanan and Huczynski, 2004)

Alderfers ECG Theory Maslows theory of motivation has been criticized; as a result, Alderfer (1969) had argued that Maslows theory of motivation can be modified to overcome the critics and can be classified into three needs: Existence, Relatedness and Growth or ECG Theory. Where, Existence needs considers Maslows psychological and safety needs, Relatedness needs consists of Maslows social and esteem needs and Growth needs consists of Maslows self-actualization needs.
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Thesis Synopsis

University of Tartu

However, Alderfer believes that it is not necessary to satisfy one level of needs before there is an emergence for the other need. Also he suggested that different needs can emerge simultaneously as the complex nature of the individual. As a result, he doesnt believe in the nature of hierarchy of needs according to importance as compared to Maslows Theory of need. One importance of hypothesis in ERG theory is the frustration regression hypothesis, where, Alderfer suggest the increase of importance of other individual need can cause by the failure to satisfy a particular level of need. It is been a mystery that Alderfers ECG Theory is applicable to the workplace or organizations or individual as this theory is not tested empirically beyond its own efforts.

Herzbergs Two Factors Theory Herzberg (1966) based on his own idea and study conducted on many accountants and engineers, where he asked them about the factors that felt them good or bad at workplace, proposed two factors: Hygiene and motivator factors for motivation. Hygiene factors are extrinsic and they determine the environment of the workplace. When these factors (condition of the workplace, status, job security etc.) emerge on a continuum, they lead to determine whether the employees are satisfied or they are dissatisfied at the workplace (McLean et al. 1996). Hygienic factors doesnt provide job satisfaction, rather they only produce good working conditions. On the other hand, motivational factors are intrinsic and thus they are different from individual to individual (e.g. recognition, development, acknowledgement etc.) which are associated with work. Absence of these factors at work results unsatisfactory and when they are present then it results satisfactory, however, if these factors are absent, employees are not necessarily dissatisfied but they are no satisfaction (Rollinson, 2008). Absent of hygienic factors caused dissatisfaction and when motivational factors are present it provides satisfaction. However, absent of motivational factors and present of hygienic factors caused neither satisfaction nor dissatisfaction but simply no satisfaction. Herzbergs motivation theory had also been criticized as being confusing. One set of criticism is that the Herzberg motivation theory is not applied to unskilled/manual labor where work is repetitive and dull and apart from engineers or accountants who take an active role in research, these employees are not much interested in content of job. The other set of criticism is the outcome of the experiment influenced by the good or bad events.

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McGregors Theory X and Theory Y McGregor was motivated by Maslows need theory to generate his ideas on motivating of employees by two set assumptions (Theory X and Theory Y) suggests that the managers way of managing depends on their opinion about the people. His aim of study highlighted the managements stereotypical views rather providing empirical evidences. According to McGregor, Theory X represents set of assumptions of the employees who are motivated to satisfy only basic needs but not interested to contribute to organizational needs. It also suggests that employees only work for money and they prefer little work and are unreliable. McGregor argues that when certain situation occur when the staff has to change the behavior to fit the needs, can be achieved through rewards, punishments and control. On the other hand, McGregor also claims that Theory Y represents set of assumptions of employees who are motivated for growth and contributing to organizational goals. This set of assumptions stated that its the managements responsibility to provide employee development and growth by providing healthy work environment by offering training and development, redesigning work design and job tasks etc.

Process Theory of Motivation

Goals are one of the important criteria in Process Theory of Motivation. However, this theories concentrate on the choices that person makes to achieve their goals. Further these theories can be sub divided into three theories: Expectancy Theory, Equity Theory and Goal setting Theory.

Expectancy Theory Vroom (1964) and Porter and Lawler (1968) had contributed to Expectancy Theories where Vroom had made a set of assumptions and claimed that the forces of motivation can be calculated if the values are known Expectancy it perceive that there is a connection between performance and effort e.g. if an employee work hare, he will be promoted.

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University of Tartu

Instrumentality it perceive that if there is a performance related outcome, it will result in value related outcome e.g. if an employee will increase the quality of work, he will receive bonus. Valance expected worth of outcome e.g. if an employee is acknowledged by the management, it will satisfy his self-actualization needs.

Literature provides various calculations and formulas for the calculating of the forces of motivation if these values are known, however, these theories in practical consumes a lot of time and its not possible for the management for calculating the numbers. Today its irrelevant for HRM to practice these theories; however, its useful to know the formulas that shape the forces of motivation. On the other hand, Porter and Lawler had added and took it in bit further where they had introduced value of reward with the equations. They also argued that performance is shaped by the persons perception of their role at workplace and their personality and performances is not the result of forces of motivation. Porter and Lawler also proposed that value of reward is the value of a person, places on the outcome of a performance and every person will value the outcome differently and they are mostly influenced by previous work experiences. Hence, forces of motivation alone cannot determine performance but also other values are to be considered.

Equity Theory Adam (1965) had proposed equity theory, where he assumes that individuals perception of how fairly they are treated when compared to other will determine their motivation e.g. if a person want to find hoe fairly he is getting paid, he will compare his salary with his other colleagues. Adam argues that person can only be satisfied at workplace only if they believe that others are sharing the same conditions. However, employees performances is often evaluated and compared with other. Adam also suggested that the employees place values for input and output. If they think that input (e.g. time, effort etc.) exceed output (e.g. salary, other benefits etc.) they will by dissatisfied and will be motivated to change the situation by raise in pay or working less. Despite of the simplicity in nature of the equity theory, it is also tested and proved that it is very useful for the organization to understand the employees satisfactions and dissatisfactions. This theory is also very useful for HR practitioners in the areas of designing job and reward system, as to avoid dissatisfaction and conflicts among the employees.

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Goal Setting Theory Locke (1968) assumes that employees goals are determined by their behavior and decisions at work. He further argues that if employees will achieve their goals they will be satisfied and the more difficult these goals are to achieve, will result more satisfaction when they achieve them. Also, high performance can be achieved if the outcomes of the goals are clear and explicates i.e. an individual will perform better if the outcome of the task is clearly explained and known to the individual. On the other hand, in addition its argues that effective feedback will lead to higher performances among employees. Also, goals are to set with employees, that it should follow top down approach. Studies showed that the greater the employee involvement in goal setting, the more productive the performance is. Employees can be motivated by allowing employees to participate in goal setting and it result sense of involvement in the task to employees.

Its obvious that there is no universal accepted theory to motivate employees also no single motivation theory can contribute to the behavior of the employees at work. Its always helpful to consider more than one motivation theories in workplace to motivate employees as every individual are different from one another and they will be motivated differently. However, this study is considered only with Goal Setting Theory apart from other theories. Also, this study will concentrate only to find out the importance/need of goal setting theory within the service sector.

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References
Rollinson, D(2008) Organization Behavior and Analysis: An Integrated Approach. Ed. 4. Harlow: Pearson Education Ltd. Adams, JS (1965) Inequality in social exchange. In L. Berkowitz, ed. Advances in Experimental Social Psychology. New York: Academic Press. Alderfer, C.P. (1969) An empirical test of a new theory of human needs. Organizational Behavior and Human Performance, pp- 140-175. Bratton, J. (2007) Work and Organization Behavior. Basingstoke: Palgrave McMillan. Bunchanan, D. and Huczynski, A. (2004) Organizational Behavior: An Introduction Text. Ed.- 5. Harlow Prentice Hall. Herzberg, F. (1966) Work and Nature of Man. Cleveland. OH, USA: World Locke, E.A. (1968) Toward a theory of task motivation and incentives. Organizational Behavior and Human Performance, pp- 155-190. Maslow, A.H. (1943) A theory of Motivation. Psychological Review, pp- 95-370 Mayo, E. (1933) The Human Problems of Industrial Civilization. New York: Macmillan. Taylor, F.W. (1911) Scientific Management. New York: Wiley. Vroom, V.H. (1964) Work and Motivation. New York: John Wiley. Antomioni, D. (1999), What motivates middle managers? Industrial Management, Nov,- Dec, Vol. 41, No 6, pp. 27-30 Peter Ebong Ajang, 2005, Assessing the role of work motivation on employee performance. Ryszard Barnat, 2011, Organizations Goals: Assessed Online on Dec 2011 at http://www.introduction-to-management.24xls.com/en104 Helepota, H.A. (2005) Motivational Theories and their application in construction, Cost Engineering, Vol. 47, No. 3 pp. 14-35. Greenberg J &Baron A.R (2003) Behavior in Organizations, Prentice Hall, Vol. 8, Pages. 188-215 Stephen P. Robbins, Timothy A. Judge, Seema Sanghi 2009; Organization Behaviors. 13th Ed. : 678-730.

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