Chapter Two- Literature Review
2.1 Introduction
At one time, employees were considered just another input into the production of goods and services. What perhaps changed this way of thinking about employees was the research, referred to as the Hawthorne studies, conducted by Elton Mayo from 1924 to 1932 (Dickson, 1973).This study found out that employees are not motivated solely by money but also their behaviour is linked to their attitudes (Dickson, 1973).The Hawthorne studies begun the human relations approach to management, whereby the needs and motivation of employees become the primary focus of managers (Bedein, 1993). Understanding employee motivation and its relationship with corporate culture and gender is the focus of this research.

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This chapter is divided into seven sections; section 2.1 introduces the main subjects of this dissertation and is followed by section 2.2 which discusses employee motivation in small medium companies. The next section which is section 2.3 looks at motivation and the various theories developed by researchers, then section 2.4 considers the role of the manager when it comes to employee motivation. The last two sections; section 2.5 examines corporate culture with section 2.6 on gender and how it is perceived. Finally a summary of the whole chapter is presented in section 2.7.
This section will review the most relevant studies on employee motivation and in small medium companies.
2.2 Employee Motivation in Small Medium Companies
Organizational scientists and practitioners have long been interested in employee motivation and commitment. This interest derives from the belief and evidence that there are benefits to having a motivated and committed workforce.
The Hawthorne Studies
A major revision of ‘needs’ theory came from the work undertaken in the United State of America in the 1920’s and 1930’s of the Hawthorne Works of the Western Electric Company. This gave rise to a new school of management thinking, which suggested that employees have social needs which are as important as economic needs; these studies concluded that social relationships were significant in the satisfaction of the human need for social contact. The major contribution of this work in understanding employee motivation at work has been to focus attention on the design of jobs and tasks in an effort to make them attractive (Mullins, 2007).
Employee motivation could be seen as the internal strength that drives employee performance. This strength enables employees to carry out their duties as expected of them having a particular aim in mind. And in most cases, where this strength is lacking, employees sometimes perform poorly. However, certain factors like job features, individual variation and organisational practices may influence employee motivation to work. It depends on good system that reward effectively, because it is critical as a motivated employee will achieve a great deal (Clark, 2009).
According to McConnell (2002) companies have to consider the following steps in order to keep their employees in the organisation:
 The employee’s perception of the work environment directly relates to the job performance.
 What employees think of their jobs and their employer when the environment is positive
 Improvement of the environment generally improves employee performance.
McMackin (2006) states that large corporations have more money, name recognition and benefits to attract the best employees in comparison with small medium companies. Regardless of the positive aspects of larger corporations, many employees leave in order to work for small businesses, since they are able to have faster career advancement.
According to Gaebler Ventures (2006) research show ten different motivational factors that are important for increasing motivation both for managers as well as employees; they include promotion potential, interesting work, personal loyalty, tactful discipline, appreciation for work done, good working conditions, help with personal problems, high wages, feeling of being in on things and job security.
Gerson (2003) on the other hand states that employees in small organisations may leave for better salaries and benefits. The decision to leave can be affected by feelings of unappreciation, work condition, cultural conflicts, lack of convenience, lack of advancement and lack of support. According to Moses (2005) the basis for employee motivation is divided into two categories; anticipation of reward for work well done, and fear of discipline for mistakes or works done poorly. Motivation techniques at most companies falls into one of these two categories.
The ideal for a small-business owner is to motivate employees in a positive way, since employees develop loyalty and personal commitment when they are encouraged to perform well in order to advance and receive recognition and financial benefits. The most negative aspect of this method is the fact that the less hard working employees will be fired or downgraded. The method also lacks teamwork, includes employee backbiting and has no long-term motivation.
Wiley (1997) states that the relationship between people and work have fascinated scientists for many years, both psychologists and behavioural scientist, but in both field concepts such as need, motive, goal, incentive and attitude occur more frequently rather than concepts of aptitude, ability and skill. Scientist investigates how personal, task and environmental characteristics influence behaviour and job performance concerning motivation.
Motivation does not remain the same over the years, it changes due to personal, social and other factors and it also affects the behaviour of a person rather than end performance. In order to create an environment that fosters employee motivation it is important to explore the attitudes that employees have towards factors that motivate them. When a company know what motivates its employees they are better prepared to stimulate them to perform well. In order to know what motivates employees’, organisations must have regular communication and ask employees what sparks and sustains their desire to work (Herzberg, 2003).
Most managers assume that their employees have the same motivational drivers as them, but managers must abandon this assumption and focus on the recognition of individual drivers. Findings from a forty year survey demonstrate that employees are motivated by receiving feedback and recognition and those individuals at different levels of the organisation might have different motivational values (Wiley, 1997). Managers have to understand what motivate their employees in order to receive high performance at the organisation.
2.3 Motivation
Motivation is the formation of incentives, and working atmosphere which allow individuals to carry out their duties to the top of their capability in pursuit of organisational success. It is commonly viewed as the magic drives that allow managers to get employees to realize their targets. Since the dawn of the twentieth century, there has been a shift at least in theory. Since the early 1900’s several theories have been advanced which have offered insight into the concept of motivation (Strickler, 2006).
The hierarch of needs espoused by Abraham Maslow sheds lights on individual behaviour pattern. Other significant studies have been carried out by Frederick Herzberg, who considered job fulfilment, Douglas McGregor’s X and Y theory, which suggest management styles that motivate and de-motivate employees’ etc. Underpinning Herzberg’s theory was his attempt to bring more humanity and caring into the workplace.
His theory was to explain how to manage people properly, and to motivate them for the good of all people at work. Many contemporary authors have come up with several definitions for the concept of motivation. Motivation has been defined as the emotional progression that gives behaviour reason and course (Kreitner, 1995), the inner drives to fulfil unsatisfied need (Higgins, 1994), and the determination to realize (Bedeian, 1993). In dissertation, motivation is defined as the central energy that derive individual to accomplish personal and organisational goals (Mullins, 2007).
Motivation can have an impact on the productivity of any company or organisation. Organisations and companies relies heavily on the efficiency of it production personnel to ensure that goods are produced in numbers that meet up customer’s order. If these workforce not have the motivation to create and perform to the best of their ability and meet the demand of customers, then an organisation may face a problem which may lead to serious consequences.
2.3.1 Internal and External Motivation
Motivation according to Kehr (2004) can be either internal or external, it can be viewed as push or pull determinants. Implicit motives are factors intrinsic to the activity and explicit motives arise from factors extrinsic to the activity. Intrinsic motivation is the key motivation component of employee empowerment and individuals are responsible for achieving their own career success. It is based on positively valued experiences that a person receives directly from their work tasks such as meaningfulness, competence, choice and progress. Bymes (2006) explain that external motivators depend on outside factors to push the individual to complete a task. Kehr (2004) adds that explicit motives are influenced by social demands and normative pressures.
Extrinsic rewards are based on reward and punishments controlled by the organisation. Like Bymes (2006) individuals with external motivators are motivated by salary or wage packets. Internal on the other hand is associated with employees who want to be employed in a particular position by a firm whose organisational values and work requirements are closely linked with the individual’s personal values and skills.
Implicit and explicit motives relate to different aspects of the person, but both are important determinants of behaviour. According to Basset-Jones & Lloyd (2005) motivators associated with intrinsic drivers outweigh motives linked to financial and inducement and observing others benefiting from recognition and extrinsic rewards. Like Locke &Latham (2004) internal factors that drive motivation and external factors that act as inducements to action is the concept of motivation. Motivation can affect three aspects of work; direction, intensity and duration. People’s skill, abilities and how and to what extent they utilise them are affected by motivation.
According to Katz (2005) intrinsic factors are the main reason for a person’s true commitment and motivation. Extrinsic factors like salary and working conditions are also important, but do not give the commitment and excitement that the employee needs. How a person views the assignment and how tasks, information, rewards and decision-making processes are organised are strongly linked to the personal activities.
People become more motivated when they identify themselves within a group and contribute to performance as a group (Van Knippenberg, 2000).This relies on the work performed by Locke and the goal setting theory he developed. This goal is team performance and the individual feeling part of the group. The focus of Locke was on the goal but in order to reach the goal one must associate oneself with the group and task. Glen (2006) contend that the most important factor to rely on is feedback since it can help an employee improve his or her performance ; communication is also vital in the world today and can be beneficial to both the manager and employee .
2.3.2 Motivation Theories
The traditional form of motivation stated that people could be driven by fear and therefore managers had to be tough. This approach made the employees do the bare minimum and only work while their manager was watching. Research on motivation and it impact on individuals and employees has been undertaken from the mid-twentieth century. Prominent among such researchers include; Maslow1954, Herzberg 1959, Adams 1962, Vroom 1964, Alderfer 1972, Locke 1981 and others.
There is intense competition as a result of technological advancement, demographic changes, globalisation, which puts more pressure on organisations to deliver products and services with continuous improvement. The theories on motivation identify individual needs, their expectation and reaction to both internal as well as to the external environment. The various motivation theories are discussed below.
Maslow’s Hierarchy of Needs
A ground-breaking theory on the subject of motivation and needs of the human being was advanced by Abraham Maslow in 1954.He stated that there are some fundamental needs for the human being that can be arranged in a hierarchic way. He argued that individual’s and for the purpose of this study, employees are motivated to satisfy a number of diverse needs. According to Maslow until the most vital needs are fulfilled, other needs have little effect on the employee’s behaviour. Once a need is satisfied, and therefore less essential, other needs emerge and become motivators of their behaviour (Porter et al, 2003).
At the base of the hierarchy is the physiological needs; food, clothes etc.These are considered primary needs as employees concentrate on satisfying these needs before the others. Physiological needs according to Maslow are undeniably the most pressing of all needs. Once this need is fulfilled, the next level surfaces with the employee becoming anxious with the need for safety and security both at home and at the workplace.
Likewise, once the safety need too is satisfied, the employee strives for a sense of membership or an affiliation and a feeling of approval by others. Once the employee finds his/her place in a group or team, the need and longing to be held in esteem, recognised and respect crops up. Maslow asserts that with all these needs satisfied, employees are then motivated by the desire to ‘self-actualise’ and accomplish whatever they identify as their utmost potential. (Ramlall, 2004)
Herzberg’s Two-Factor theory
According to Herzberg an individual’s relation and attitude towards work can determine success or failure. While Maslow looked at individual needs, Herzberg tried to find out how employees felt about their work and what really motivates them. In 1959 he created his two-factor theory by looking at the causes of job satisfaction and dissatisfaction in an effort to fully know what motivate people. He divided the needs into two categories; hygiene factors which relate to the needs that involve the framework of the task they performed and if these needs are not fulfilled there will be dissatisfaction on the part of employees. In essence if you want to motivate employees, concern should be given to the work itself (Ramlall, 2004).
Herzberg’s hygiene factors can be linked to Maslow’s hierarchy of needs and primarily the vital needs at the base of the hierarchy. The hygiene needs accommodate the need that arises from the physiological, safety and social or belongingness needs that do not make the employees satisfied in their job, but simply avoid dissatisfaction if fulfilled. In contrast motivator factors are those that allow for psychological growth and progress on the job. They are very much connected to the idea of self-actualisation regarding a challenge, to savour the satisfaction of achievement, and to be acknowledged as having done something meaningful (Basset- Jones and Lloyd, 2005).
Herzberg further stated that certain characteristics are related to job satisfaction and others to job dissatisfaction. Intrinsic factors, such as achievement, advancement, recognition, responsibility are related to job satisfaction. Job dissatisfaction is a result of extrinsic factors; company policies, supervision, working condition etc. He assert that a job do not get satisfying by removing dissatisfying factors and therefore dissatisfaction is not the reverse of fulfilment. In order to understand the employee’s motivation to work the attitudes of the particular employee has to be known (Herzberg, 2003).
To Bassett-Jones & Lloyd (2005) Herzberg was interested in the extremes where workers either felt good about work or bad, and this led to the development of extrinsic and intrinsic factors. The extrinsic factors are called hygiene or maintenance factors and are linked to job dissatisfaction. Intrinsic factors on the other hand lead to job satisfaction. The factors were labelled motivators to growth because they were associated with high level of job satisfaction. The two factors are of equal importance when explaining what motivates an employee.
They explain Herzberg’s suggestion of motivation as similar to ‘internal self-charging battery’. For employees to become motivated the energy has to come from within. Herzberg however argues that motivation is founded on development needs; and originate from satisfaction born out of a sense of achievement, recognition for achievement, responsibility and personal growth. A review of Maslow’s and Herzberg’s theory lead to further research and theories the first of which was developed in 1962 by Stacy Adams.
Equity Theory
This theory developed by Stacey Adams in 1962 suggests that since there is no absolute standard for fairness, and employees want to be treated fairly, they are likely to assess fairness by making comparison with others in similar situations. If they find out that they are not treated similarly they may lower their output, their quality of work or even leave the organisation for another where they are likely to be treated better. In essence it is not the real reward that motivate, but the perception of the reward in comparisons with others (Boxall and Purcell, 2007. While a simple theory, this theory according to Latham cannot cover every incident as some employees are far more receptive to perceptions of unfairness than others. It is therefore very important for managers to be conscious of what their employees perceive to be fair and just and also know that this will differ from one employee to the other (Latham, 2007).
Vroom’s Expectancy Theory
Whereas Maslow and Herzberg looked at the connection between needs and the ensuing effort expanded to fulfil them, Vroom concentrated on effort, performance and outcomes. The fundamental concepts key to expectancy theory is that the anticipation of what will happen influences the employee’s choice of behaviour that is, expectations and valence.
Vroom interpreted motivation as a process in which employees choose from a set of alternatives based upon the likely levels of expectation, and called the individual’s perception of this instrumentality. Valence in his theory is the assessment of actual outcome of one’s performance and together with instrumentality is very central in the expectancy theory (Ramlall, 2004; Mullins 2007).
From this theory’s viewpoint, an employee assigns a worth to an expectation, considers how much effort will be required, and works out the likelihood of success. If the perceived reward is sufficient for the effort required, the employee may make the effort. Expectancy in this theory is the prospect that they can carry out their duty in a way that leads to an optimistic result. For the employee the amount of effort he/she is eager to put in any performance of task is influenced by the expectation of the outcome of the effort (Mullins, 2007). If the employee works hard then he/she can expect a good work result hence a higher reward.
High instrumentality for the employee comes from the notion that if he/she shows off good work result there will be adequate reward. Low instrumentality would then be that the employee feels that the result of the reward will not be independent on the particular work result.
Writing in People Management Magazine, Lees (2008) believes that Vroom’s theory give an insight into the research of employee motivation by shedding more lights on how individual goals sway individual performance. Vroom’s expectancy theory has been criticised for attempting to envisage a choice or effort. However because no obvious pattern of the meaning of effort exist, the variable cannot be measured effectively. According to Latham (2007), the employee is assumed to deliberately weigh up the satisfaction or pain that he/she expects to attain or avoid and then a selection is made. The theory says nothing about intuitive motivation, something that Locke considered when he expanded Vroom’s theory.
Alderfer’s ERG Theory
Unlike Maslow’s theory that refers to an individual who acts increasingly for his/her need satisfaction first, with the simplest one up to the most complex ones, Clayton Alderfer’s theory (1972) which extended Maslow’s theory asserts that this course of action is not essentially progressive. According to him, there are three significant categories of human needs:
Existence (E) needs which ensures the sustainability and human endurance; food, Salary, shelter etc
Relational needs (R) that is socialising need that refers to the relationship between an individual and the social setting and is satisfied by interpersonal relations. Fulfilling these needs depends on the association with others.
Growth (G) needs which consists of a person’s self respect through personal feature as well as the concept of self-actualisation present in Maslow’s hierarchy of needs.Alderfer believed that as you begin satisfying superior needs, they become powerful like the power you get, the more you want (Mullins 2007) .
Although not fully tested, Ramlall (2004) and Strickler (2006) contend that the ERG theory seems to describe the dynamics of individual needs in an organisation rationally well and can help managers when it comes to motivating employees. To them it provides a less rigid account of employees needs than Maslow’s hierarchy. By and large, it comes closest to explaining why employees have certain needs at diverse times.
Goal Setting Theory
Edwin Locke extended Vroom’s theory by developing his goal setting theory which takes into consideration the conscious motives that exist when organisations set goals to be met. According to Robbins (2003) Locke’s goal setting theory states that specific and difficult goals lead to higher performance with the help of feedback. In addition to feedback, goal commitment, and adequate self -efficacy, task characteristics and national culture have been found to influence the goal – performance relationship.
Motivation comes from the goal an individual set up based on human needs, personal values, personality traits etc which are shaped through socialization and experience. The behaviour used to accomplish the goal depends on whether the goal is difficult or specific. The amount of effort an individual puts in reflects the level of satisfaction experienced which can lead to other actions (Porter et al, 2003). In order to reach the goals some conditions has to be present; such as feedback, goal commitment, ability etc.
According to him, a goal is required in order to create motivation within the employees to perform better than before. He indicates that financial rewards can improve the sustainability of a person’s dedication as well as behaviour. .Goal setting and management by objectives programs have grown in the past two decades and motivation has been organised in three categories; personality based view, cognitive decision and self regulation perspectives.
The basic idea of Locke’s goal setting theory is that employees’ goals are related to their motivation since their goals direct their thoughts and action. The cognitive decision predicts an individual’s choices or decisions and finally the personality-based perspective emphasize personal characteristics as they affect goal choice and striving (Locke and Latham, 2004). The personality-based category does not predict motivation, but it can provide understanding of what motivates individuals.
The above theories are part of the broad field of human motivation study and they all have implications for individual’s different workplace behaviour. They can also be applied to a variety of management practices aimed at motivating employees. However these researches were carried out in Western Europe and in America decades ago. Can the findings of this research be applied in Ghana which is in a different setting? Will similar research in Ghana yield the same result? T o better understand employee motivation, it is important to know the role of managers who are facilitators of employee motivation.
2.4 Motivating Employees: The Role of the Manager
Leadership literature states that motivation is influenced by the nature of the relationship between the leader and employees. Managers according Bymes (2006) needs to hire the right person that is most suitable for a certain job, value its employees and support them in making contributions to the organisations and always try to create a motivated workforce. Motivated employees do not only create a good working environment, they also make noteworthy contributions to the organisations. Good managers make their employees fell like business partners and use empowerment in order to make the workplace and the surrounding environment into a place where employees feel good as well as creating a work wherefrom employees feel good inside (Bassett-Jones &Lloyd,2005).
Motivation therefore is about cultivating your human capital. The human challenges lies not in the work itself, but in you, the person who creates and manage the work environment. As indicated by Garg & Rastogi (2006) in today’s competitive environment feedback is essential for organizations to give and receive from employees and the more knowledge the employee learn, the more he or she will be motivated to perform and meet the global challenges of the market place.
By involving the employee at work and providing challenging tasks it might increase the intrinsic motivation which transforms potential into creative ideas and this will factor fair and constructive judgement of ideas and sharing of informations.Leaders have an important part in the organisation because they act as the force that motivates the performance of the employees (Katz,2005). Leaders are there to motivate people to follow the designed work and by doing so enhance performance. Even though employees look to diverse organisational elements to suit different drivers of needs, they look forward to their managers to do their best to attend to their needs and concerns.
Organisations has to recognize the resources, both human and technological that are available within the organisation and conduct training programs that will contribute to the productivity and the levels of motivation at individual or group levels. Motivating employees begins that to do their best, employees must be in an atmosphere where their emotional drive to bond and be understood are met. The drive to bond is best achieved by a custom that encourages teamwork and frankness (Nohira et al, 2008). Motivating employees is vital if employers are to achieve maximum performance and productivity.
Contemporary theories on motivation centres more specifically on the relation of beliefs, values, goals with action. Motivation in contrast functions as an engine for inner human growth by providing attractive and demanding task. Motivation theories developed in the western world with their orientation on self-satisfaction and instrumentalism have mainly emphasized on rewarding those individuals who succeed. These theories did not take into consideration the terrain in Africa and also individuals who are highly motivated but incapable of accomplishing. This has produced in some part of Africa and also in Ghana situations where managers are not able to answer the needs of every employee.
Studies indicate that employees in the western world draw their motivation from self satisfaction but the same cannot be said of their counterparts in Africa and most especially in Ghana. What do they derive their motivation from? Does the company’s corporate culture have any bearing on how they are motivated? Is there a relationship between the company’s corporate culture and motivation? The next section will look at motivation and corporate culture.
2.5 Motivation and Corporate culture
Corporate culture draws its roots from various sources. This include national and regional cultures, (Hofstede, 1991) the vision and management style (Schein, 1985) and the nature of the business and the environment it operates in and the organisational field where it operates (Gordon, 1991). For this study the relevant cultural roots comes from Ghana. Individuals, especially qualified ones, have more choices with regards to potential jobs offers.
How companies motivate place a vital role in attracting employee and competing well today’s competitive market. To create a culture that fosters individual motivation is not easy because it takes time to figure out the factors that motivate each employee. It is even more important nowadays as more individuals draw their interest from other things beside money. To understand the importance of corporate culture in this dissertation it is important to first define what culture is.
Schein (2004) defines culture as ‘consisting of rules, procedures and processes that govern how things are done, as well as the philosophy that guides the attitudes of senior management towards staff and customers’. Referring in his work to the people of a nation Hofstede also defines culture as ‘the collective programming of the mind which distinguishes one group or category of people from another’. Thus it endorses the issue that corporate culture is a unique aspect of an organisation, even though it is difficult to manage.
According to Schein an organisation’s culture develops to help cope with its environment. He characterizes culture as consisting of three levels:
 Artefacts which are the most observable level of culture yet are hard to understand.
 Espoused Values; which underlie and to a large extent determine behaviour, but they are not directly observable as behaviours. There may be a variation involving known and functioning values.
 Basic assumptions and Values: the essence of culture is characterized by the fundamental assumptions and ideals, which are not easy to differentiate since they are present at mainly unconscious point. Nevertheless they offer the input to appreciate why things turn out the way they do.
2.5.1 National culture
National culture milieu influences the outlook of an organisation’s stakeholders. Hofstede proved this with work on IMB employees in 43 countries and how attitude to work and behaviour of employees towards authority differ from one location to the other. In his study he identified five dimensions of culture and demonstrated that there are national and regional cultural groupings that affect the behaviour and activities of organisations.
The first dimension is power distance and refers to the degree to which people accept inequality amongst institutions and organisations. The second dimension, uncertainty avoidance measures the degree to which people are willing to accept change and work in uncertain circumstances. Therefore the higher the degree of uncertainty avoidance the more structured people likes things to be (Steers et al, 1993). Individualism which is the third dimension refers to the degree to which people see themselves as being part of a group or as individuals.
His fourth culture dimension, masculinity versus femininity refers to the conventional values place