Strategy Circles

Strategy has been a well studied subject area under the Business Management discipline and there are various models researched and proposed by scholars on this topic. This article presents another strategy model that businesses may use, especially on how they layout their business from the viewpoint on how they want to target their customers.

Figure below illustrates the proposed model.

Bathiyas_Strategy_Circles
Bathiya’s Strategy Circles

Generalization

Generalization is the strategy in which you consider your entire customer base as one. Your business is not focussed on catering the needs of a particular customer or a particular customer segment within your customer base. Your focus is to provide an experience/engagement to all customers that is generalized. This should not be confused with providing a consistent experience/engagement to all customers.

Randomization

In this strategy, you understand and appreciate that there are different customer segments within your customer base. You also know the possible experience/engagement criteria that would suit these customer segments. However, you lack the means of identifying which customer is exactly belonging to which segment. Thus, you randomly (or controlled randomly) select an experience/engagement that you think may appeal to a given customer. Yes, it may work if the customer is actually belonging to the anticipated segment, but there is also the possibility that a customer is getting the not so optimized experience/engagement that he/she expected.

Differentiation

One step ahead of the randomization strategy, now you know to which customer segment a given customer is belonging to. Thus, you can selectively provide the more appropriate experience/engagement that is generalized to that segment of customers.

Personalization

Personalization requires that you build up a persona for each customer (i.e. long term customers), carefully analyzing the customer’s behaviors on your previous engagements with that customer over a longer period of time. Overtime, this persona profile of the customer will get more & more refined which will let you customize your experience/engagement to that customer into more granular levels.

Individualization

Individualization involves a more real time or short term oriented analysis of what your customer is looking for and catering that exact need. The difference between personalization and individualization is, personalization is more long term oriented (for example the customer prefers Nike Sports Shoes), where as individualization seeks to cater the customer’s immediate need (for example the customer is trying to purchase a Gift for his sister’s birthday). Thus, individualization tends to be momentary.

Mixing strategies

There is no hard and fast rule that a given business will (or should) always only use one of these strategies. There can be occasions where businesses will adapt different strategies at different stages of a customer’s or business’s life cycle. For example, for brand new customers, the business will start off with a generalization or randomization strategy, and as the business learns some details about that particular customer may move to a differentiation strategy. In the long run, the business may adapt a personalization strategy to long standing customers, while also catering the momentary needs of the customer via an individualization strategy.

 

Advertisements
Strategy Circles

Modern Employee Selection Processes

Most organizations today, employ a series of consistent steps to process and select applicants for jobs. Figure 1 illustrates a flow chart of such a basic process of selection.

Figure 1: Basic Selection PROCESS

Basic_Interview

Source: Mathis & Jackson, 2010

“Company size, job characteristics, the number of people needed, the use of electronic technology, and other factors cause variations on the basic process” (Mathis & Jackson, 2010). Traditionally, most organizations relied on the classic trio of steps for selecting candidates, namely, application forms, interviews and references (Armstrong, 2012). However, it is argued that, this classic trio should be complemented by incorporating selection tests and assessment centres (Armstrong, 2012). In addition, research has also highlighted the applicability of techniques such as self-assessment, group selection and work sampling for enhancing the selection process to suit the unique requirements of modern organizations (Torrington, Hall, & Taylor, 2005).

Application Forms

Traditionally, the application form was used as a personal details form, which was intended to act as the nucleus of the personal record of an individual when he/she began work. Today, many organizations have adopted the application form to act as a useful preliminary to employment interviews and decisions, either to present more information that was relevant to such deliberations, or to arrange such information in a standard way (Torrington, Hall, & Taylor, 2005). Preparing the application form to be used as an information source to assist the selection process can be a challenging task to the HR department, yet, a properly prepared application form can serve a modern organization in many different aspects (Mathis & Jackson, 2010; Torrington, Hall, & Taylor, 2005),

  1. It is a record of the applicant’s desire to obtain a position.
  2. It organizes all applicants details according to a single standard which expedite sorting of applications and shortlisting of candidates.
  3. It provides the interviewer with a profile of the applicant that can be used during the interview.
  4. It is a basic employee record for applicants who are hired.
  5. It can be used for research on the effectiveness of the selection process.

While there is still a heavy use of CVs for managerial and professional posts in private sector, many organizations, especially in the public sector, is increasingly adopting the application form as a productive alternative to CVs. Some private sector organizations also adopt a hybrid approach in which the application form is used to shortlist the candidates while the CV is used to assist the interviewers along the selection process. Figure 2 illustrates a sample application form.

Figure 2: Sample Application Form

Application_Form

Source: Mathis & Jackson, 2010

Interviews

Arguably the most well-known and the most common step in many selection processes, is the interview. Although “interview” is such a general term in employee selection, it is interesting to note that there are many different variants of interviews. Interviews can be broadly categorized in to structured interviews and unstructured interviews (Armstrong, 2012).

“A structured interview is one based on a defined framework” (Armstrong, 2012). All candidates who have applied for the same job position framed by a given framework are asked the same set of questions and the framework may define a rating system for the candidates by assigning a score to the answer of each question. Structured interviews can be categorized in to different forms (Mathis & Jackson, 2010) and some organizations come up with hybrids of two or more of these forms to suit their own unique selection requirements.

  • Biographical Interview: This form of structured interviews focus on a sequential assessment of the candidate’s past experiences in order to provide a sketch of what the candidate has done up to now in his career.
  • Behavioural Interview: In this form, candidates are asked to describe how they have performed a certain task or handled a problem in the past. This can provide useful information for the interviewer to predict how the candidate would take decisions and act if he/she were to be selected for the job position. A study (Krajewski, Goffin, McCarthy, Rothstein, & Johnston, 2006) has shown that, behavioural interviews are better at identifying achievement at work than situational interviews, since they focus on what applicants have actually done in real situations opposed to what they think they might do in hypothetical situations.
  • Competency Interview: In competency interviews, the interviewer is provided a competency profile, which includes a list of competencies necessary to do that particular job. These competency profiles are useful to interviewers in that, the interviewer can structure his/her questions to the candidate more focused towards the competencies listed in the competency profile. However, it has been argued that the interviewer must be trained in spotting strong answers for the competencies in the candidates (Gurchiek, 2008).
  • Situational Interview: Opposed to behavioural interviews, situational interviews assess what the candidate would consider to be the best option, not necessarily what he/she did in a similar situation. In fact, the candidate may not have experienced the same or a similar situation before in his/her career. A variant of this form is known as case study interview, where the candidate is asked how he/she would diagnose and correct a challenge that the organization is currently facing (Mathis & Jackson, 2010).

“An unstructured interview occurs when the interviewer improvises by asking questions that are not predetermined” (Mathis & Jackson, 2010). The general focus behind an unstructured interview is to get an overall picture of the candidate as an individual (Armstrong, 2012).

A variant that lie in-between structured and unstructured interviews is referred to as semi-structured interviews (Mathis & Jackson, 2010). In these semi-structured interviews, a guided conversation is gradually built up between the interviewer and the candidate. The interviewer raises some broad questions to the candidate and new questions arise as a result of the discussion. Some organizations today, especially in the ICT industry, tend to conduct such a semi-structured interview in the form of a telephone interview before calling in the candidate for the structured interview.

Modern organizations, depending on the job requirement, may also exercise another form of interviews known as stress interviews which can be either structured or unstructured (Mathis & Jackson, 2010). In a stress interview, the interviewer assumes an extremely aggressive and insulting posture. However, the rationale behind such an interview is that the particular job position the candidate has applied to involves high degrees of job stress. A good example for such a job position is the customer care and call centre operators.

referrals

In most selection processes, and typically in organizations still following a more traditional process of selecting candidates, contacting referees the candidate has provided is the last step in deciding whether or not the candidate should be offered the employment. “The main purpose of a reference is to obtain in confidence factual information about a prospective employee” (Armstrong, 2012). However, some researchers argue against the use of references as a criterion for selecting candidates on the basis that, no candidate will knowingly pick a reference who would speak poorly of them (Lublin, 2009).

In contrary, some modern organizations make it mandatory for a candidate to provide at least one reference from his/her previous employment, possibly a manager to whom the candidate was reporting to. However, as highlighted in multiple texts (Armstrong, 2012; Mathis & Jackson, 2010) the questions asked from such a referee should be within strict ethical boundaries.

Selection Tests

Selection tests provide an organization a more practical and reliable tool to assess a candidate in various aspects such as levels of abilities, intelligence, personality, aptitudes and attainments (Armstrong, 2012). However, as research has shown, selection tests must be evaluated extensively and test items should be linked to a thorough job analysis, before being utilized as a selection tool (Mathis & Jackson, 2010).

Many different tests that can be used in various selection criteria have been proposed, for example, intelligence tests, ability tests, personality tests, aptitude tests (Armstrong, 2012), honesty/integrity tests (Mathis & Jackson, 2010), trainability tests and attainment tests (Torrington, Hall, & Taylor, 2005).

Assessment Centres

“Assessment centres assemble a group of candidates and use a range of assessment techniques over a concentrated period (one or two days) with the aim of providing a more comprehensive and balanced view of the suitability of individual members of the group” (Armstrong, 2012). Figure 3 illustrates an example of an assessment centre.

Figure 3: An example assessment centre

Assessment_Center

Source: Torrington, Hall, & Taylor, 2005

A main disadvantage of assessment centres is that, assessment centres require a lengthy design process to select the appropriate activities so that every competency of the candidates will be measured via more than one task. However, research has also proven that assessment centres are one of the most effective ways of selecting candidates (Torrington, Hall, & Taylor, 2005).

Other Forms of Selection Criteria

Self-assessment (Torrington, Hall, & Taylor, 2005) is a technique where the typical selection process is reversed. In this technique, the candidate him/herself evaluates whether he/she is fit to do the job. This can be in the form of a video showing how the actual job looks like, an informal discussion with the current job holders, a self-selection questionnaire on the company website or further information sent with the application form. However, a survey result has shown that only a minority of the modern organizations actually implement this form of selection (Editors of Chartered Institute of Personnel and Development, 2003).

Group selection is arguably the earliest form of assessment centres which has its roots dating back to the Second World War (Torrington, Hall, & Taylor, 2005). There are three main group selection techniques, namely, leaderless groups, command or executive exercises and group problem solving (Plumbley, 1985). Although considered as an older selection technique, modified variants of group selection can still be a cost effective alternative to assessment centres.

Work sampling is the selection technique where a potential candidate for a permanent job will be assessed in a temporary post or a training period within the same organization (Torrington, Hall, & Taylor, 2005). A typical example for work sampling from the modern ICT industry is the internship programs offered by software companies. A close variant of work sampling is the sample work portfolio in which the candidate is expected to present a portfolio of his/her former work at the interview. This technique of selection is common in jobs such as photographers, artists or even UI engineers in the ICT industry.

References

Armstrong, M. (2012). Armstrong’s Handbook of Human Resource Management Practice, 12e, London: Kogan Page.

Chartered Institute of Personnel and Development. (2003). Recruitment and Retention Survey Report 2003. Retrieved from http://www.cipd.co.uk/NR/rdonlyres/B779ADD8-E9EA-4849-BA4E-BAC6E70F24F9/0/recruitretnsurvey.

Gurchiek, K. (2008, January 28). Behavioural Interviewing Popular, but Training in Use Urged. Retrieved from http://www.shrm.org/publications/hrnews/pages/behavioralinterviewingpopular.aspx.

Lublin, J. (2009, April 7). Bulletproofing Your References in the Hunt for a New Job. Retrieved from http://online.wsj.com/news/articles/SB123904785521794145.

Mathis, R. L. & Jackson, J. H. (2010). Human Resource Management, 13e, Mason: South-Western Cengage Learning.

Plumbley, P. R. (1985). Recruitment and Selection, 4e. London: Institute of Personnel Management.

Torrington, D., Hall, L., & Taylor, S. (2005). Human Resource Management, 6e, Essex: Pearson Education Limited.

Krajewski, H. T., Goffin, R. D., McCarthy, J. M., Rothstein, M. G., & Johnston, N. (2006). Comparing the Validity of Structured Interviews for Managerial-Level Employees: Should We Look to the Past or Focus on the Future? Journal of Occupational & Organizational Psychology, 79, 411 – 432.

Modern Employee Selection Processes

A Retrospective Analysis of Employee Motivation Studies

“Does half a century of human motivation research enough to make managements truly understand what ticks their employees..?”

“What motivates people to work in the first place?  Is it money and material gains?  Or is it the need for interpersonal interactions?  Is it the need to feel needed, or a need to feel powerful?  Or is it an interaction of all of these factors and more?” (“Motivation to work”, 2013). Motivation is an intrinsic drive that influences one’s behavior. However, as emphasized in the above extract, one’s motivation towards work is affected by both intrinsic and extrinsic factors. Over the years, many psychologists and researchers have developed several models that highlight how these intrinsic and extrinsic factors influence one’s motivation. Broadly, these theories of motivation can be divided into two categories; Content theories and Process theories.

Content Theories of MOTIVATION

“Content theories deal with what motivates people and it is concerned with individual needs and goals” (Zan, n.d.). In this category, the work by Abraham Maslow, Clayton P. Alderfer, Frederick Herzberg and David McClelland are considered the most significant.

Abraham Maslow’s Hierarchy of Needs is probably the most well-known content theory of motivation to date. In his article A Theory of Human Motivation published in Psychological Review magazine of July 1943, Maslow argued that human needs can be represented in a pyramid as in figure 1.

Figure 1: Maslow’s Hierarchy of Needs

Maslow

Source: Wikipedia, 2013b

According to Maslow, an individual’s motivation is driven by the existence of unsatisfied needs, and these needs are stacked upon one another as in the shape of a pyramid. The basic lower-level needs such as physiological and safety must be satisfied before an individual pursues higher-level needs such as the need for esteem and self-actualization. When a need is mostly satisfied, it no longer acts as a motivator and the next higher need takes its place. Thus, in identifying what motivates each employee, it is important that the management clearly understands and differentiates which needs each employee considers most important and least satisfied. Although the hierarchy of needs theory was subsequently questioned and criticized, it is still best-known due to:

  • representing a foundation from which contemporary theories have grown
  • being regularly used by practicing managers in explaining employee motivation.

ERG Theory of motivation introduced in 1969 by Clayton P. Alderfer in his article An Empirical Test of a New Theory of Human Need, redefined Maslow’s needs hierarchy in better synchronization with empirical research findings. Alderfer argued that, there is no particular order in which an individual pursue needs, thus no real hierarchy of needs as proposed by Maslow. He re-categorized Maslow’s hierarchy of needs into three broader classes of needs as illustrated in figure 2. He also emphasized that an individual may pursue needs of more than one class in parallel. This explains why a management focusing exclusively on one need at a time, will not effectively motivate employees to do their job (Redmond, 2013a).

Figure 2: Comparison of Hierarchy of Needs and ERG Theory

ERG

Source: Eduster, 2012

In 1959 a psychologist Frederick Herzberg, in his book The Motivation to Work proposed, Two Factor Theory or motivation-hygiene theory. The theory was based on the data gathered in an interview of 203 accountants and engineers in Pittsburgh. The respondents were asked to describe a work situation where they felt exceptionally good or bad about their job, and to describe the factors which led to that positive or negative feeling.

The analysis of the responses confirmed that some factors contribute to job satisfaction, which Herzberg referred to as motivators while others were found to be a source of dissatisfaction when absent. The later was called hygiene factors which in essence are the basic maintenance factors that are necessary to avoid dissatisfaction, but, that by themselves do not provide any satisfaction. Figure 3 illustrates how these two factors affect an employee’s satisfaction and motivation towards work.

Figure 3: Two Factor Theory of MOTIVATION

Two_Factor

Source: 12manage – The Executive Fast Track, 2013

Herzberg’s two factor theory provides the answer to one of the prevailing questions that most managers’ face, “why a satisfied employee tends to work in the same organization but this satisfaction does not always result in better performance?” (Zan, n.d.).

In his book The Achieving Society published in 1961, David McClelland introduced a new theory of motivation, the Acquired Needs Theory. McClelland proposed three types of motivational needs, on which he argued that one’s style of being motivated and motivating others relied. Figure 4 illustrates these three types of needs proposed by McClelland.

Figure 4: Acquired Needs Theory of Motivation

McClelland

Source: Redmond, 2013a

McClelland argued that most individuals possess some level of all three needs but some display a strong bias towards a particular need that will in turn influence the individual’s motivation towards work and managing others (Redmond, 2013a). He also argued that the need group to which an individual falls may change as they grow, and those who do not naturally possess specific needs can acquire them through training and experience (Mendenhall, Punnett, and Ricks, 1995). From a management’s perspective, “McClelland’s Need Theory suggests that understanding these needs and accurately placing the right people in the right positions should yield greater levels of motivation which, in turn, should increase productivity and reduce turnover” (Redmond, 2013a).

Process Theories of Motivation

“Process Theories deal with the process of motivation and is concerned with how motivation occurs” (Zan, n.d.). From the many theories of motivation that attempt to describe how motivation occurs, the work by John Stacey Adams, Victor H. Vroom, Edwin A. Locke and Albert Bandura are considered significant contributions in the field of organizational behavior.

Equity Theory was the first to evaluate how an individual gets satisfied and in turn motivated by going beyond the individual’s self. Introduced in 1963 by John Stacey Adams, a workplace and behavioural psychologist, equity theory explained how an individual evaluates equity in the form of a comparison which commonly manifests as a sense of what is fair. As explained in the following extract, equity theory provides the answer to another prevailing question that most managements face, namely, ‘why pay and conditions alone do not determine motivation?’

Equity, and thereby the motivational situation we might seek to assess using the model, is not dependent on the extent to which a person believes reward exceeds effort, nor even necessarily on the belief that reward exceeds effort at all. Rather, Equity, and the sense of fairness which commonly underpins motivation, is dependent on the comparison a person makes between his or her reward/investment ratio with the ratio enjoyed (or suffered) by others considered to be in a similar situation (Businessballs.com, 2013).

Adams argued that, an employee perceiving a state of equity in this comparison will consider his/her situation as fair and just. An employee perceiving an inequity, either under-rewarded which creates anger or over-rewarded which creates guilt, will be motivated to do something to correct it. Adams also highlighted four referent others whom an individual will take into account in his/her comparison; self-inside, self-outside, other-inside and other-outside (Robbins, Judge, & Vohra, 2012).

Later researchers have further improved Adams’s equity theory beyond its initial scope. Rather than defining fairness merely on the basis of amount and allocation of rewards among individuals, which is commonly referred to as distributive justice, today’s equity theory attempts to describe Organizational Justice of which distributive justice is only one of three contributing components. Figure 5 illustrates the three components contributing to organizational justice.

Figure 5: Organizational Justice

Org_Justice

Source: Robbins, Judge, & Vohra, 2012

Expectancy Theory of motivation proposed by Victor H. Vroom in 1964 is one of the most widely accepted explanations of motivation today. The theory “does not attempt to explain what motivates individuals, but rather how they make decisions to achieve the end they value” (Scholl, 2002). In essence it explains ‘why individuals choose one behavioural option over others’. According to Vroom, an employee will be motivated:

  • to exert a high level of effort when they believe that it will lead to a good performance appraisal (effort-performance relationship)
  • that a good appraisal will lead to organizational rewards (performance-reward relationship)
  • and that the rewards will satisfy the employee’s personal goals (rewards-personal goals relationship) (Robbins, Judge, & Vohra, 2012).

Expectancy theory provides a powerful tool to managers in understanding ‘how individuals make decisions regarding various behavioural alternatives’. It argues that, when deciding among behavioural options, individuals select the option with the greatest Motivational Force (MF) (Scholl, 2002). Figure 6 illustrates how the three components of expectancy theory, Expectancy, Instrumentality, and Valance contribute to this MF.

Figure 6: Motivational Force

MF

Source: Scholl, 2002

First introduced in 1968 by Edwin A. Locke in his article Toward a Theory of Task Motivation and Incentives, Goal Setting Theory is probably one of the most researched theories of motivation to date with over thirty years of research by Locke himself (Wikipedia, 2013a; Redmond, 2013b). Some researchers have even argued that goal setting is the underlying explanation for all major theories of work motivation (Lunenburg, 2011). Locke emphasized that, specific difficult goals, when accepted, together with specific constructive feedback, results in higher motivation towards work, in turn performance (Robbins, Judge, & Vohra, 2012; Redmond, 2013b).

According to goal setting theory, four conditions must be met to make goals effective in invoking motivation (Redmond, 2013b).

  1. Goal Acceptance/Goal Commitment – A goal should be accepted by the individual and he/she should put forth a degree of determination towards achieving the accepted goal.
  2. Goal Specificity – A goal must be specific and measurable, thus, should answer the “who”, “what”, “when”, “where”, “why”, and “how” of the expectations of the goal.
  3. Goal Difficulty – A goal should be set high enough to encourage high performance but low enough to be attainable.
  4. Feedback – Specific constructive feedback should be made available to make the individual aware of his/her progression or regression towards achieving the goal. It will also let the individuals know that their work is being evaluated and that their contributions are being recognized.

Goal setting theory is widely used by today’s managers to clarify expectations, improve performance, and develop employees into stronger workers while the most popular application of the goal setting theory being the Management By Objectives (MBO) (Robbins, Judge, & Vohra, 2012; Redmond, 2013b).

Albert Bandura first introduced his ideas about Self-Efficacy Theory in his article Self-efficacy: Toward a Unifying Theory of Behavioural Change published in Psychological Review magazine of 1977. “Perceived self-efficacy refers to beliefs in one’s capabilities to organize and execute the courses of action required to manage prospective situations. Efficacy beliefs influence how people think, feel, motivate themselves, and act.” (Bandura, 1995).

As illustrated in figure 7, four sources of information help individuals to judge and improve their self-efficacy.

Figure 7: Sources of Information for Self-Efficacy

Self_Efficacy

Source: Bandura, 1977

Managers can benefit by facilitating these four sources of information to improve employee’s effort, persistence, goal setting, and performance on specific tasks (Redmond, 2013c). Additionally, some researchers have shown how self-efficacy theory in conjunction with Locke’s goal setting theory can be used to boost motivation, in turn performance (Robbins, Judge, & Vohra, 2012; Redmond, 2013c).

IN Summary…

Type Theory Strengths Weaknesses Applications
Content Theories of Motivation

 

 

 

 

 

 

Maslow’s Hierarchy of Needs Clear categorization of needs. The sequence of hierarchy of needs is questionable. Identify priority needs of the employees.
Logical and easy to understand. People may try to fulfil several requirements simultaneously and there can be possible overlaps. Helps the managers to understand the behaviour of their employees.
Provides summary of human needs, which can be used in marketing. Too much of culture-bound: Different cultures and the assumptions are lacked. Individual going through the stages in reaching the highest level of capability.
Increases the efficiency, productivity and profitability of the organization. Ignorance of motivating factors like expectations, experience and perception. Provides the right financial and non-financial motivation to their employees.
Alderfer’s ERG Theory Recognizes that people are different and they do have multiple needs. Sociocultural elements are not identified .The theory is difficult to test with the current tools and research methods. Acts as a recipe to motivate people based on their motivation factors.
Provides a workable solution to addressing the dynamics of human needs at workplace. Consumes more time in understanding the employees’ need and changes that negatively affect motivation and performance. Helps to construct a communication strategy by leaders to address the needs for relatedness and growth with less resistance of the work force.
More flexible and discusses the reality of how a person’s needs change in reaction to changes. Doesn’t provide a motivational value for each motivator.
Herzberg’s Two Factor Theory Clear categorization of the two factors. There can be border factors. It is very digital kind of a criterion. Ambiguities are ignored. To identify the hygiene factors and make sure they are satisfied first and then the motivation factors.
Provides awareness that job design is related to employee satisfaction and motivation. Not be appropriate to all groups of employees or individuals within a group. Used by managers to mitigate the demotivating effect by providing open communication.
Satisfaction of our higher needs leads work motivation. Hourly employees may not be particularly interested in job enlargement and enrichment, and may be more motivated by increased pay.
Standardised scales of satisfaction while ignoring various job factors.  
McClelland’s Acquired Needs Theory Addresses an individual’s development related to motivation. Socio-cultural factors/contextual factors are not considered. Better decisions on which type of employees to put in to various positions.
More useful with more empirical evidence to support the theory. Lack of predictive power as it relates to entrepreneurship. Identifying different motivation factors since people are motivated differently.
Helps to identify the need for achievement with positive organizational behaviours and performance. Rewarding with praise and financial incentives to managers who have high need for achievement.
Enables to react proactively for the employees behaviours.   Building a strong sense of team spirit among subordinates, of pride in working as part of a team.
Process Theories of Motivation Adams’s Equity Theory Highlights the performance based rewarding system. Purely looks at output vs. input. Socio-cultural factors are ignored. Can be used as the basis to create a good reward system.
Motivating people by comparing with people who gets rewarded and trying to perform well. People compares with others and complain on the rewards since rewards are not solely based on performance. Fair return for what they contribute to their jobs, a concept referred to as the “equity norm”.
Helps to predict employees’ basic behaviours. Overpayment does not give more productivity. Piece rate payments reflecting input/outcome ratios.
Maintains and increases productivity.   Keeping procedural and distribution justice at high levels help the managers to motivate people.
Vroom’s Expectancy Theory Highlights the key influencers and the link among them. Focusing on extrinsic factors, thus, is complex. To design a performance based reward systems.
Helps to achieve maximum satisfaction and minimum dissatisfaction based on self-interest individual. Lack of transparency and incompleteness of information. Clear link to the organizational culture. Preferred to apply in results driven cultures.
Since people consider an expected outcome for many actions, this theory has practical relevance. Assumes all necessities are in place, which is not the case. Employees need to have ability, resources and opportunity to perform well.
Locke’s Goal Setting Theory Highlights the importance of stretch goals. Narrowly looking only at the goals ignoring the contextual factors. Set specific and individual goals and include employees in goal setting (MBO).
One of the most popular theories and highly researched and practitioner support. Exerting too much focus on one goal may make it difficult to achieve the others. Meetings with employees regularly regarding performance and progress on developmental objectives.
Ability to inspire individuals and is a critical key to self-management. Does not explain how setting goals is linked to performance. Design the reward systems with desirable results.
Leads to better performance by increasing motivation and efforts. When employees focus so intently on their goals, they will ignore other aspects of their job. Ensure that the goals are focused on areas that are important to current and future goals.
Bandura’s Self-Efficacy Theory Encourages employees to set higher and difficult goals. Complexity and overly individualistic. To identify high flyers and encourage to do more.
Brings the individual’s positive perception in approaching challenging tasks. Ambiguity and lack of definition in self-efficacy and not adequately evaluated. Using verbal persuasion to show praise for a job well done and giving positive feedback.
Leads to innovation and creativity through new ideas. Impossible to exclude outcome considerations from efficacy expectations. Setting up small basic goals at the beginning and based on the success go for more difficult goals.
Increases one’s persistence and focus on a given task beyond previous levels. High self-efficacy beliefs do not always guarantee positive outcome expectations. Improving learning by improving the self-efficacy.

References

12manage – The Executive Fast Track. (2013). Two Factor Theory (Herzberg). Retrieved from http://www.12manage.com/methods_herzberg_two_factor_theory.html.References

Bandura, A. (1977). Self-efficacy: Toward a unifying theory of behavioural change. Psychological Review, 84(2), 191-215.

Bandura, A. (1995). Self-Efficacy in Changing Societies, New York: Cambridge University Press.

Businessballs.com. (2013). Adams’ equity theory. Retrieved from http://www.businessballs.com/adamsequitytheory.htm.

Eduster. (2012, December). Motivation Theories. Retrieved from http://eduster.blogspot.com/2012/12/motivation-theories.html.

Lunenburg, F. C. (2011). Goal-Setting Theory of Motivation. International Journal of Management, Business and Administration, 15(1), 1.

Mendenhall, M. E., Punnett, B. J., & Ricks, D. (1995). Global Management, Cambridge: Blackwell.

Motivation to work. (2013). Retrieved from http://community.ocr.org.uk/core/community/public/download_file?rid=202.

Nohria, N., Groysberg, B., & Lee, L. E., (2008). Employee Motivation: A Powerful New Model, Harvard Business Review, July.

Redmond, B. F. (2013, February 3). Needs Theories Overview. Retrieved from https://wikispaces.psu.edu/display/PSYCH484/2.+Need+Theories.

Redmond, B. F. (2013, February 17). Goal Setting Theory. Retrieved from https://wikispaces.psu.edu/display/PSYCH484/6.+Goal+Setting+Theory.

Redmond, B. F. (2013, February 25). Self-Efficacy and Social Cognitive Theories. Retrieved from https://wikispaces.psu.edu/display/PSYCH484/7.+Self-Efficacy+and+Social+Cognitive+Theories.

Robbins, S. P., Judge, T. A., & Vohra, N. (2012). Organizational Behavior, 14e, New Delhi: Pearson Education, Inc.

Scholl, R. W. (2002). Motivation: Expectancy Theory. Retrieved from http://www.uri.edu/research/lrc/scholl/webnotes/Motivation_Expectancy.htm.

Wikipedia. (2013, May 13). Goal setting. Retrieved from http://en.wikipedia.org/wiki/Goal_setting.

Wikipedia. (2013, May 20). Maslow’s hierarchy of needs. Retrieved from http://en.wikipedia.org/wiki/Maslow’s_hierarchy_of_needs.

Zan, O. (n.d.). A Brief Introduction to Motivation Theory. Retrieved from http://ozgurzan.com/management/management-theories/theories-about-motivation/.

A Retrospective Analysis of Employee Motivation Studies