Chapter 5: Theories of Motivation

Learning Objectives

After reading this chapter, you should be able to do the following:

  1. Understand the role of motivation in determining employee performance.
  2. Classify the basic needs of employees.
  3. Describe how fairness perceptions are determined and consequences of these perceptions.
  4. Understand the importance of rewards and punishments.
  5. Apply motivation theories to analyze performance problems.

What inspires employees to provide excellent service, market a company’s products effectively, or achieve the goals set for them? Answering this question is of utmost importance if we are to understand and manage the work behavior of our peers, subordinates, and even supervisors. Put a different way, if someone is not performing well, what could be the reason?

Job performance is viewed as a function of three factors and is expressed with the equation below (Mitchell, 1982; Porter & Lawler, 1968).According to this equation, motivation, ability, and environment are the major influences over employee performance.

Figure 5.1

Performance = Motivation X Ability X Environment

Performance is a function of the interaction between an individual’s motivation, ability, and environment.

Motivation is one of the forces that lead to performance. Motivation is defined as the desire to achieve a goal or a certain performance level, leading to goal-directed behavior. When we refer to someone as being motivated, we mean that the person is trying hard to accomplish a certain task. Motivation is clearly important if someone is to perform well; however, it is not sufficient. Ability—or having the skills and knowledge required to perform the job—is also important and is sometimes the key determinant of effectiveness. Finally, environmental factors such as having the resources, information, and support one needs to perform well are critical to determine performance. At different times, one of these three factors may be the key to high performance. For example, for an employee sweeping the floor, motivation may be the most important factor that determines performance. In contrast, even the most motivated individual would not be able to successfully design a house without the necessary talent involved in building quality homes. Being motivated is not the same as being a high performer and is not the sole reason why people perform well, but it is nevertheless a key influence over our performance level.

So what motivates people? Why do some employees try to reach their targets and pursue excellence while others merely show up at work and count the hours? As with many questions involving human beings, the answer is anything but simple. Instead, there are several theories explaining the concept of motivation. We will discuss motivation theories under two categories: need-based theories and process theories.


Mitchell, T. R. (1982). Motivation: New directions for theory, research, and practice. Academy of Management Review, 7, 80–88.

Porter, L. W., & Lawler, E. E. (1968). Managerial attitudes and performance. Homewood, IL: Dorsey Press.

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