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Project Team Rewards

Literature Review

Table 6: Motivation Theories II

The following sections investigate the modest reward proponents’ view and analyse by

what factors the reward answers are influenced.

Developed by McGregor in 1957. There are two kinds of humans:

dislikes work inherently and has to be forced to work.

actively seeks responsibility if the work conditions are right. The theory implies

that rewards are only appropriate for type X employees.

Beardwell et al. (2004)

Developed by Albert Bandura. Persons with high self-efficacy will believe that they

are able to achieve a goal and a linked reward. In this case, their motivation will be

Armstrong & Murlis

Equity Theories

Different theories exist that are concerned with employee's perception of fairness.

If employees feel treated fairly, their motivation is high. Their perception of

fairness develops from comparisons with other employees and past situations

and depends on employees' individuality. In addition, reactions to perceived

unfairness depend on individuality. Adams developed in 1965 the concept of

distributive and procedural justice. Procedural justice describes if employees

believe that the procedures for distributing rewards are fair. Distributive justice

describes if the distribution actually is fair.

Armstrong (2002)

Beardwell et al. (2004)

Motivation is the product of three factors. 1. Valance describes the value to

achieve a goal (e.g. value of the reward). 2. Instrumentality describes the belief

that one's performance will be rewarded. 3. Expectancy describes the belief that

one's action will result in the desired outcome. In addition, the individual's ability

and role perception are important. This theory highly supports the use of rewards.

The higher the reward, the higher the value (Valance), the higher the motivation (if

the other two factors are high as well).

Armstrong (2002)

Porter & Lawler in

Armstrong (2002)

Guest in Armstrong

The theory basically states that people try to avoid unpleasant consequences

(punishment / negative reinforcement) and seek pleasant consequences (rewards

/ positive consequences). Hence, incentives and disincentives are proper tools to

motivate employees.

Armstrong & Murlis

Developed by Latham and Locke. Depending on the source either in 1968

(according to Wright 2004), in 1979 (according to Armstrong 2002) or 1984

(according to Beardwell et al. 2004). The theory states that setting goals

increases performance. The goals have to be SMART (Specific, Measurable,

Achievable, Relevant, Timely) and the more difficult a goal the higher the

performance (as long as the goal is achievable).

Armstrong (2002)

Beardwell et al. (2004)

Several Theories exist. The most popular is by Locke 1976. People value certain

things and try to get these things. The basic principle is similar to need theories

but directly explains people's desire for money. Although people do not have a

direct need for money, they value money. Money satisfies people's needs in the

same way (person A can buy as much food as person B can buy for the same

amount of money) but people value this satisfaction different.

Table 6: Motivation Theories II

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