# Study Notes: DP IB Business Management HL 2.4 - Motivation & Demotivation ## The Importance of Employee Motivation Motivation is the **inner desire or willingness** that drives individuals to take action and achieve specific goals. It can be: - **Intrinsic**: Originating from within (e.g., values, beliefs, personal satisfaction). - **Extrinsic**: Driven by external factors (e.g., rewards, punishments). ### Impacts of Motivation on Business Success 1. **Productivity**: - Motivated employees are more engaged, efficient, and proactive. - Higher productivity leads to increased output, quality, and profits. 2. **Reliability**: - Motivated workers are dependable, punctual, and committed. - Fewer absences and higher trust between employees and management. 3. **Turnover Rates**: - Motivated employees are less likely to leave, reducing recruitment and training costs. --- ## Motivational Theories ### Taylor's Scientific Management Developed by **Frederick Winslow Taylor**, this theory focuses on maximizing efficiency by breaking down tasks into simpler components. #### Key Principles: 1. **Study and Analyze Work Processes**: - Break tasks into smaller steps to identify the most efficient methods. 2. **Standardize Work Processes**: - Create detailed procedures and instructions for consistency. 3. **Select and Train Workers**: - Choose employees based on skills and abilities. - Provide technical training and instill proper attitudes. 4. **Provide Incentives**: - Use rewards like bonuses or piece-rate pay to motivate workers. #### Advantages: - Increased efficiency and reduced costs. - Standardized procedures minimize errors. - Specialization improves productivity. #### Disadvantages: - Overemphasis on efficiency can reduce creativity and satisfaction. - Limited applicability for roles requiring creativity or interpersonal skills. - Risk of exploitation (e.g., sweatshop labor). Over-focusing on efficiency can lead to worker disengagement and dissatisfaction. --- ### Maslow's Hierarchy of Needs Maslow's theory outlines **five tiers of human needs** that must be met for individuals to reach their full potential. #### Application in Business: 1. **Physiological Needs**: - Provide necessities like a comfortable work environment, clean water, and rest breaks. 2. **Safety Needs**: - Ensure job security, fair pay, benefits, and safe working conditions. 3. **Love and Belonging Needs**: - Foster teamwork and a sense of community. 4. **Esteem Needs**: - Recognize achievements and create a positive work culture. 5. **Self-Actualization Needs**: - Offer opportunities for employees to pursue passions and personal growth. #### Advantages: - Higher employee satisfaction and motivation. - Improved performance and lower turnover rates. #### Disadvantages: - Tailoring approaches to individual needs can be costly and time-consuming. - Not all employees prioritize the same needs. Use Maslow's hierarchy to identify unmet needs and align incentives accordingly. --- ### Herzberg's Motivation-Hygiene Theory Herzberg identifies **two factors** affecting motivation: 1. **Hygiene Factors**: - Prevent dissatisfaction but do not directly motivate (e.g., fair pay, safe working conditions). 2. **Motivators**: - Drive satisfaction and motivation (e.g., recognition, responsibility). #### How Businesses Apply Herzberg's Theory: - **Decrease Dissatisfaction**: - Pay fair wages, provide excellent working conditions, and ensure job security. - **Increase Satisfaction**: - Build a recognition culture, offer growth opportunities, and provide challenging work. #### Advantages: - Clear distinction between factors that prevent dissatisfaction and those that motivate. - Helps businesses focus on both foundational needs and higher-level motivators. Google provides gourmet restaurants and dog care to address hygiene factors, while offering challenging projects to motivate employees. --- ### Other Motivational Theories #### McClelland’s Acquired Needs Theory Focuses on **three acquired needs**: 1. **Achievement (nAch)**: - Desire to excel and achieve challenging tasks. - Motivated by feedback and problem-solving. 2. **Affiliation (nAff)**: - Desire for positive relationships and harmony. - Motivated by collaboration and social interaction. 3. **Power (nPow)**: - Desire to influence and control. - Includes personal power (control over others) and institutional power (shaping systems). #### Deci and Ryan’s Self-Determination Theory Identifies **three psychological needs**: 1. **Autonomy**: Control over decisions. 2. **Competence**: Feeling capable and effective. 3. **Relatedness**: Connection and belonging. #### Adams's Equity Theory Explains how employees perceive fairness in their inputs (effort) and outputs (rewards). #### Vroom's Expectancy Theory Motivation depends on: 1. **Expectancy**: Belief that effort leads to performance. 2. **Instrumentality**: Belief that performance leads to outcomes. 3. **Valence**: Value of the outcomes. --- ## Labour Turnover ### Definition: Labour turnover measures the **percentage of employees leaving a business** during a specific period. #### Formula: $$\text{Labour Turnover} = \frac{\text{Number of Staff Leaving}}{\text{Total Number of Staff}} \times 100$$ #### Consequences: - **Problems**: Increased recruitment costs, lower productivity. - **Opportunities**: New ideas and perspectives. Worked Example: Calculate labour turnover for a company with 432 employees, 54 of whom left: $$\text{Labour Turnover} = \frac{54}{432} \times 100 = 12.5\%$$ --- ## Types of Employee Appraisal ### Formative Appraisal - **Ongoing feedback** to improve performance. - Focuses on development rather than high-stakes decisions. ### Summative Appraisal - Conducted **yearly** or at the end of a project. - Used for decisions on pay, promotion, or continued employment. ### 360-Degree Feedback - Feedback from multiple stakeholders (e.g., managers, colleagues, customers). - Provides a comprehensive view of performance. ### Self-Appraisal - Employees evaluate their own performance, strengths, and areas for improvement. --- ## Methods of Recruitment ### Internal Recruitment - Promoting or redeploying existing staff. - **Advantages**: Familiarity with business culture, cheaper, quicker. - **Disadvantages**: Limited pool of candidates, potential resentment. ### External Recruitment - Hiring from outside the organization. - **Advantages**: Fresh ideas and skills. - **Disadvantages**: Higher costs, time-consuming. Use a combination of internal and external recruitment to balance familiarity and innovation. --- ## Key Takeaways - Motivation theories help businesses understand and improve employee engagement. - Labour turnover and retention rates are critical metrics for HR management. - Appraisal methods should align with organizational goals and employee development. - Recruitment strategies must balance cost, efficiency, and the need for fresh perspectives. Motivation is highly personal; businesses must tailor their approaches to individual needs and preferences.