HR911 Psychological Theories - Essay Plan

What contribution can psychological theories make to our understanding of motivation and reward in the workplace? Consider these theories in relation to variable pay and incentives. Draw on theory, evidence, and examples of reward management in practice.


  • Significance of psychological theories in HRM
  • List prevalent theories (Maslow's, two-factor)
  • Not empirically proven (individuality)

Maslow's (1970)

Definition and theory

Physiological, safety, social/love, esteem, and self-actualisation. [1]

  • Distinct hierarchy (rigid but broad and inclusive due to individuality)

Workplace implications

“In one exercise, we got groups of eight housekeepers at a table and asked an abstract question: if someone from Mars came down and saw what you were doing as a housekeeper in a hotel, what name would they call you? They came up with “The Serenity Sisters,” “The Clutter Busters,” and “The Peace of Mind Police.” There was a sense that people were doing more than just cleaning a room. They were creating a space for a traveler who was far away from home to feel safe and protected.” [2]

  • Encourage engagement in higher levels of the pyramid
  • Inspiration from knowing the importance of the job with respect to the company
  • Human connection - appeal to society
  • Quality of life benefits for lower levels of pyramid
  • Extrinsic rewards

Steers and Porter (1991)[3]'s organisational version of Maslow's hierarchy


Definition and theory[5][6]


House & Wigdor (1967)[7] criticised Herzberg's Motivation-Hygiene Theory on
several grounds:

  • Limitations of the methodology used - Critical Incident Technique.
  • The faulty research base.
  • That the Theory was not consistent with previous research evidence of satisfaction and motivation.

Workplace implications

Herzberg suggests that in order to motivate people, management should focus on either
factors related to the work itself or the direct outcomes derived from it[8], such as:

  • Personal growth opportunities.
  • Achievement responsibility.
  • Promotional opportunities and recognition

Hawthorne effect and Attribution theory

Not enough relevance

Definition and theory

The experimenters concluded that it was not the changes in physical conditions that were affecting the workers' productivity. Rather, it was the fact that someone was actually concerned about their workplace, and the opportunities this gave them to discuss changes before they took place. [9]

Workplace implications

Expectancy Theory (Vroom)

Definition and theory

View of behaviour as subjectively rational and as directed toward the attainment
of desired outcomes and away from aversive outcomes[10]

  • Focuses on outcomes rather than needs. [11]

Expectancy Theory states that people will perform their jobs if they[12][13]

  • Believe that they have the ability to perform the job
  • Will be rewarded for doing the job (expectancy)
  • Will receive the reward they require (valence)

Motivation is a combination of these three key factors:

  • Expectancy: effort will lead to reaching performance goals, affected by self-confidence.
  • Instrumentality: reaching the performance goal grants a reward.
  • Valence: subjective perceived value of the reward.

Workplace implications

In order to enhance the performance-outcome tie, managers should use systems that tie rewards very closely to performance. Managers also need to ensure that the rewards provided are deserved and wanted by the recipients.[14]

Edward Lawler claims that the simplicity of expectancy theory is deceptive because it assumes that if an employer makes a reward, such as a financial bonus or promotion, enticing enough, employees will increase their productivity to obtain the reward. However, this only works if the employees believe the reward is beneficial to their immediate needs. For example, a $2 increase in salary may not be desirable to an employee if the increase pushes her into a tax bracket in which she believes her net pay is actually reduced, which is actually impossible in the United States with marginal tax brackets. Similarly, a promotion that provides higher status but requires longer hours may be a deterrent to an employee who values evening and weekend time with their children.[15]

Other fields of management research (e.g., leadership, decision making, negotiations, groups and teams, and organization design) continue to develop conceptually, substantive theoretical developments focusing on work motivation have not kept pace.[16]

Goal Setting Theory

Definition and theory

Workers' commitment to performance goals that they set is the key determinant of motivation.[17][18][19][20][21][22]

Individuals are motivated and perform better when:

  • Goals are challenging (focuses attention, energiser)
  • Goals are specific (provides direction, purpose)
  • They are involved in the process of setting the goal (commitment and persistence)
    Feedback and results of the attempt is available (adapt strategies, improve and measure progress)

Workplace implications

  • Widely used SMART goal planning
  • Management by objectives - place certain rewards at certain performance goals

In the study "The effects of reward type on employee goal setting, goal commitment, and performance" it was found that not all individuals are motivated by cash rewards.[23]

Reward system implications

Reward systems where payments are made based on employee performance. (ACCA, 2013)

Variable pay results in good pay satisfaction only among workers at the top of the earnings distribution.[24] For the rest of the workers, a partly variable pay results in better satisfaction than either a completely fixed or completely variable pay scheme.[25][26][27][28]


  1. Maslow, A.H., Frager, R. and Fadiman, J., 1970. Motivation and personality (Vol. 2, pp. 1887-1904). New York: Harper & Row. ↩︎

  2. ↩︎

  3. STEERS, R. M., & PORTER, L. W. (1991). Motivation and work behavior. New York, McGraw-Hill. ↩︎

  4. Mullins, L. J. (2005). Management and organisational behaviour (7th ed.). Harlow: Prentice Hall/Financial Times. ↩︎ ↩︎

  5. Management and organizational behavior (Mullins, 2005) ↩︎

  6. Herzberg, F. (1968). One more time: How do you motivate employees. Boston: Harvard Business Review. ↩︎

  7. House, R. J., & Wigdor, L. A. (1967). Herzberg’s dual‐factor theory of job satisfaction and motivation: A review of the evidence and a criticism. Personnel Psychology, 20(4), 369–390. ↩︎

  8. Robbins, S. P., & Judge, T. A. (2013). Organizational behavior (15th ed.). Prentice Hall ↩︎

  9. ↩︎

  10. Vroom, V. (1964). Work and motivation. New York ; London: Wiley ↩︎

  11. Sinclaire, J. K. (2011). Student satisfaction with online learning: Lessons from organizational behavior. Research in Higher Education Journal, 11, 1–19. ↩︎

  12. Sullivan, E. J., & Garland, G. (2010). Practical leadership and management in nursing. Harlow : Pearson . ↩︎

  13. Fox, K. A. (1997). An investigation of factors affecting job satisfaction and career motivation of on‐air radio personalities. Journal of Radio Studies, 4(1), 30–44. ↩︎

  14. Montana, Patrick J; Charnov, Bruce H, Management - 4th edition; (2008) - Barron's Educational Series, Inc. ISBN 978-0-7641-3931-4 ↩︎

  15. Lawler, E.E., III. (1971). Pay and organizational effectiveness: a psychological view. New York: McGrawHill. ↩︎

  16. Steers, R. M., Mowday, R. T., & Shapiro, D. L. (2004). Introduction to special topic forum The future of work motivation theory. Academy of Management Review, 29(3), 379-987. Retrieved from syllabus/steers et al future of wk mot ac mgt rev 2004.pdf ↩︎

  17. Locke, E. A. (1968). Towards a theory of task motivation and incentives. Organizational Behavior and Human Performance, 3, 157-189. ↩︎

  18. Locke, E. A., & Latham, G. P. (1984). Why does goal setting work? In E. A. Locke & G. P. Latham (Eds.), Goal Setting: A Motivational Technique that Works! (pp. 20-40). Englewood Cliffs, NJ: Prentice-Hall, Inc. ↩︎

  19. Locke, E. A., & Latham, G. P. (1984). Goal setting and stress. In E. A. Locke & G. P. Latham (Eds.), Goal Setting: A Motivational Technique that Works! (pp. 90-106). Englewood Cliffs, NJ: Prentice-Hall, Inc. ↩︎

  20. Locke, E. A., & Latham, G. P. (1984). The benefits of goal setting. In E. A. Locke & G. P. Latham (Eds.), Goal Setting: A Motivational Technique that Works! (pp. 10-19). Englewood Cliffs, NJ: Prentice-Hall, Inc. ↩︎

  21. Locke, E. A. & Latham, G. P. ( 2002). Building a practically useful theory of goal setting and task motivation. A 35 year odyssey. American Psychologist, 57(9), 705-717. ↩︎

  22. Latham, G. P. & Locke, E. A. (2007). New developments in and directions for goal-setting research. European Psychologist, 12(4), 290-300. ↩︎

  23. Vance, T. W. (2013). The effects of reward type on employee goal setting, goal commitment, and performance. The Accounting Review (0001-4826), 88 (5), p. 1805. ↩︎

  24. McCausland, W. D., Pouliakas, K. & Theodossiou, I. (2005). Some are punished and
    some are rewarded: A study of the impact of performance pay on job satisfaction,
    International Journal of Manpower, 26(7/8), p. 636-659. ↩︎

  25. Cloutier, J., Morin, D. & Renaud, S. (2013). How does variable pay relate to pay
    satisfaction among Canadian workers?, International Journal of Manpower, 34(5), p.
    465-485. ↩︎

  26. P Cerasoli, Christopher & Nicklin, Jessica & T Ford, Michael. (2014). Intrinsic Motivation and Extrinsic Incentives Jointly Predict Performance: A 40-Year Meta-Analysis. Psychological bulletin. 140. . 10.1037/a0035661. ↩︎

  27. P. Cerasoli, Christopher & Nicklin, Jessica & Nassrelgrgawi, Alexander. (2016). Performance, incentives, and needs for autonomy, competence, and relatedness: a meta-analysis. Motivation and Emotion. . 10.1007/s11031-016-9578-2. ↩︎

  28. Kuvaas, B. (2006). Performance appraisal satisfaction and employee outcomes: mediating and moderating roles of work motivation. The International Journal of Human Resource Management, 17(3), pp.504-522. ↩︎