A Review of Employee Motivation as Applied to a Multigenerational Workplace

A Review of Employee Motivation as Applied to Multigenerational Workplaces

Executive Summary

In today's competitive environment, managers are striving to motivate their employees to perform at high levels. Numerous studies have shown a direct link between employee motivation and high employee productivity but many companies still do not recognize the link between workforce motivation and business performance (Qenani-Petrela, Schlosser, & Pompa, 2007). As motivation is critical to organizational success, understanding the various types of individual motivation is important for effective use of resources. Managers must find ways of motivating employees by developing programs or practices aimed at satisfying emerging or unmet needs.

This is the first time in American history that four distinct generations have been in the workforce at the same time. The four generations in the workforce today are the veterans, Baby Boomers, Generation X and, Generation Y. Generation affiliation can influence what an individual wants on the job as well as satisfaction with what they are getting. Because employers have finite resources with which to compete for talent, they must understand the generations, what matters most to them and what they can do to motivate different generations of workers.

Generational differences are not the sole determiners of work motivation. Regardless of generational affiliation employees tend to share the same concerns as they move through various life stages. Employers must recognize this and not assume that the generational needs of the past will be the same in the future.

Introduction

This is the first time in American history that four distinct generations have been in the workforce at the same time. Because employers have finite resources with which to compete for talent, they must understand the generations, what matters most to them and what they can do to motivate different generations of workers. In today's highly competitive labor market there is extensive evidence that organizations are facing retention challenges. A study done in 1998 reported that 60% of companies report difficulties retaining their employees (Ramlall, 2004). Given the large investment in employee retention efforts it is important to identify and analyze employee reasons for leaving and to establish a relationship between employee motivation and retention. Even when unemployment is high, organizations are concerned about retaining their best employees.

There is significant economic impact to an organization losing any of its critical employees, especially taking into account the knowledge that is lost. Fitz-enz (1997) stated that the average company loses $100K with every professional employee who leaves the organization. If direct and indirect costs are combined, the total cost of employee turnover is between one and two years of pay and benefits.

Managers must find ways of motivating employees by developing programs or practices aimed at satisfying emerging or unmet needs. As motivation is critical to organizational success, understanding the various types of individual motivation is important for effective use of resources. Numerous studies have shown a direct link between employee motivation and high employee productivity but many companies still do not recognize the link between workforce motivation and business performance (Qenani-Petrela, Schlosser, & Pompa, 2007).

Managers have the responsibility to create a proper climate in which employees can develop to their fullest potential. Failure to provide such a climate could increase employee frustration and the result is poorer performance, lower job satisfaction, increased withdrawal from the organization and higher turnover.

Motivation Theory

Motivation is a set of forces that causes people to engage in one behavior over another (Qenani-Petrela, Schlosser, & Pompa, 2007). Motivation is defined by Robbins (1998) as the "willingness to exert effort toward organizational goals, conditioned by the efforts and ability to satisfy some individual need". An unsatisfied need creates tension that stimulates drives within the individual. Motivated employees are in a state of tension and to relieve this tension they exert effort. The greater the tension experienced, the higher the effort level to relieve it. Need theories attempt to pinpoint internal factors that energize behavior. The challenge for companies is to identify and create tension that drives employees to satisfy their needs as well as the goals and objectives of the company.

The most widely publicized model is based on the work of Abraham Maslow. According to Maslow, only unsatisfied needs are prime sources of motivation. The level of motivation will depend on the extent and duration of one's unfulfilled need. Maslow also suggested that there are five major needs that account for most of our behavior. They begin with the very basic needs of food and shelter and move up to more mature needs such as belonging, ego-status and ultimately self-actualization. People first seek to satisfy lower needs and once fulfilled, begin seeking to satisfy higher level needs according to Maslow (Montana & Petit, 2008).

McClelland (1961) described in his publication The Achieving Society the theory of needs focusing on three needs: achievement, power and affiliation. Because effective managers must positively influence others, McClelland proposes that top managers should have a high need for power coupled with a low need for affiliation.

Equity theory recognizes that individuals are not only concerned with the absolute amount of rewards they receive for their efforts, but also the relationship of this amount to what others receives (Giancola, 2008). When people perceive an imbalance in their outcome-input ratio relative to others a tension is created. The challenge for organizations is to develop reward systems that are perceived to be fair and equitable and distributing the reward in accordance with employee beliefs about their own value to the organization.

"Expectancy theory holds that people are motivated to behave in ways that produce desired combinations of expected outcomes" (Kreitner & Kinicki, 1998). Essentially, the expectancy theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual (Robbins S. , 1998).

The job design approach is based on the idea that the task itself is the key to employee motivation.