Businesses with unmotivated employees often face low productivity and high turnover rates. Multiple theories help explain how workers are motivated and provide suggestions for how to increase motivation in the workplace. Understanding which theory best fits your employees may help improve your small business by increasing employee retention rates and improving worker productivity.


Theory X and Theory Y

In the 1960s, Douglas McGregor proposed two theories related to employee motivation and management. His theories divided employees into two categories. Theory X employees avoid work and dislike responsibility. In order to motivate them, employers need to enforce rules and implement punishments. Theory Y employees enjoy putting forth effort at work when they have control in the workplace. Employers must develop opportunities for employees to take on responsibility and show creativity as a way of motivating Theory Y employees. A third theory, Theory Z, was developed by Dr. William Ouchi. It encourages group work and social interaction to motivate employees in the workplace.


Hierarchy of Needs

Maslow’s Hierarchy of Needs contains five levels that often shape motivation styles in an organization. To motivate employees, an organization must move up the pyramid of needs to ensure all of an employee’s needs are met. The bottom of the pyramid contains physiological needs such as food, sleep and shelter. Safety makes up the second level and belonging the third. The top two levels of the pyramid include esteem and self-actualization. Successful organizations focus on the top two levels of the pyramid by providing employees with the necessary recognition and developing opportunities for employees to feel they are doing valuable work and reaching their potential with the company.


Hawthorne Effect

Through a series of experiments in the late 1920s, Elton Mayo developed the Hawthorne Effect. This effect theorizes that employees are more productive when they know their work is being measured and studied. In addition to this conclusion, Mayo realized that employees were more productive when provided with feedback related to the studies and allowed to provide input into the work process. Workers need recognition for a job well done and reassurance that their opinion matters in the workplace to be motivated to perform.


Equity Theory

John Stacey Adams’ Equity Theory argues that employees are motivated when they perceive their treatment in the workplace to be fair and unmotivated when treatment is perceived to be unfair. In an organization, this involves providing employees with recognition for the work they are doing and giving all employees the chance to advance or earn bonuses and other awards. Managers who play favorites or single out employees for recognition may face a largely unmotivated group of employees.


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