Question

There are numerous theories that link higher performance with higher pay, as well as other theories that indicate higher performance is not necessarily a function of higher pay.

1. In your opinion, what theory of motivation could most effectively influence workplace performance? Describe the theory and explain your rationale for selecting this theory.
2. How can this theory be applied to make a compensation program more effective?

Answer 1

Herzberg’s two-factor motivation theory effectively influences performance in the workplace. The two-factor theory adopts the approach of asking the employees about the factors that satisfy and dissatisfy them in their jobs. Herzberg classified job dissatisfaction factors as hygiene factors and included supervision, company policies, salary, working conditions, security and safety in job (work environment-related). Herzberg classified job satisfaction factors as motivators including recognition, achievement, advancement, increased responsibilities, interesting work, growth opportunities and advancement (intrinsic to the job). The limitation of the two-factor theory is that employees attributed motivators (causes of satisfaction) to themselves and blamed hygiene factors on work environment or situation

The rationale for selecting the two-factor theory is that it is research-oriented and universally accepted. The two-factor theory aims to reduce the hygiene factors by improving the work environment and at the same time enhance the motivators to increase the job performance of employees considerably

The two-factor theory can be applied to increase the effectiveness of a compensation program as it factors out both hygiene factors and motivators to increase the job performance and pay the employees on a competitive basis. The two-factor theory is helpful in identifying the top talent of the company and allows the management to update the compensation plan accordingly and make informed decisions on pay policies. The pay strategy developed based on the two-factor theory is transparent and is highly useful in discussions pertaining to bonuses and salaries. The two-factor theory is also helpful to the manager in developing the reward programs to the employees to retain them in the organization as loyal employees