In a VUCA world, the business is constantly challenged with a question: where to find resources to increase efficiency?
While most of the resource usage has already been well optimized, occasionally technological breakthroughs help businesses improve processes and get better business results. Nevertheless, one thing never changes: we always come back to our most valuable resource – our employees. Top Management looks to HR, hoping they might find a magic recipe for more efficient human resource management. It’s like we are supposed to come up with some “potion” that works perfectly for everyone. However, those kinds of potions are not easy to brew.
That’s the point where many quite complicated questions pop-up and this is where I tend to ask myself: Can HR find a magic recipe to motivate the multigenerational cohorts of employees for better performance thus bringing better results? Has everything already been created? Are the motivational factors the same as they were hundreds of years ago? Should we be more aware of tools already in place, but use them better?
Before trying to answer these questions, we should probably take a step back and look at the theoretical side of the issue. So, let us go through the basic motivational theories of the last century and see if they are still valid for our current multigenerational workforce.
What is employee motivation?
As we all know, employees as human resources are one of the key success factors of a company and its main competitive advantage. But, do we get the best out of this valuable resource? There are various factors that influence employee performance: the political and economic situation in the country, legislative restrictions, technological progress, and environmental factors. So, finding the best ways to enhance performance is not easy both for HR managers and company management.
Employee performance is often determined as a combination of abilities and motivation. Therefore, as theorists say, one of the primary tasks of a manager is motivating employees to perform to the best of their ability. Motivation has been described as “one of the most pivotal concerns of modern organizational research”.
The bad news is – we can’t see motivation or measure it directly. Indeed, HR often faces managers who consider money as the key motivational factor to boost performance, but it was never as simple as that. Therefore, we have to rely on the existing theories to find our way to the most efficient motivators, always having in mind specific conditions within which the company operates.
Let us see what the gurus of motivation think of that.
Brief dive into motivational theories
Maslow’s Theory of motives and needs, probably the best known, defines five levels of employees’ needs, from bottom to top: physiological needs, safety, social needs, ego, and self-actualizing. Upper could be motivating for employees only if the lower ones are satisfied. Most managers can confirm that this theory works and it is especially visible for the needs on top of the pyramid.
To examine how employees perform when they can compare themselves to their peers, we can address Adam’s Equity and justice theory. The research revealed that underpaid employees have shown a decrease in performance (reduce their impact). Observing inequity causes a sort of dissonance or tension that induces an employee to engage in certain behaviors to relieve that tension (e.g. raise or lower work efforts to re-establish equity, leave the situation that is causing the inequity).
The Expectancy theory by Vroom suggests that motivation is a multiplicative function of three variables: expectancy, instrumentality, and valence. It is based on the belief that employee effort will lead to performance and performance will lead to rewards – negative or positive. The higher reward – the stronger motivational effect on an employee.
Interesting and kind of more complex Motivation-hygiene theory by Herzberg categorizes motivation into two factors: motivators – as the intrinsic factor and hygiene – as the extrinsic factor. Intrinsic factors, such as achievements and recognition, give the employee job satisfaction, while extrinsic factors, such as compensation and job security, give job dissatisfaction. In other words, if managers want to motivate employees and have them interested in their jobs, they should not use money (of course, with provided basic pay at an appropriate level).
Promoting the culture of payment and focusing employees’ attention on job security escalate expectations, which, in turn, constantly increases HR costs without bringing the desirable result of employees’ long-term motivation. Most importantly, despite the frequent conviction that motivation is tightly connected with payment, studies have shown that managers can increase employees’ intrinsic motivation and long-term job satisfaction by providing psychological growth opportunities.
Following this, we could agree that money is not the key motivator. Deci and his Cognitive evaluation theory also support this. On the contrary to common opinion – money can demotivate. The theory defines two motivational subsystems – intrinsic and extrinsic. Intrinsically motivated individuals attribute the cause of their behavior to internal needs and perform behaviors for intrinsic reward and satisfaction.
Locker’s Goal-setting theory suggests that setting specific challenging goals for employees leads to better performance. Goal setting works especially well with feedback, which allows individuals to track their progress relative to the goal.
Personally, I like Pinder’s explanation of motivation, who defines it as the set of internal and external forces that initiate work-related behavior and determine its form, direction, intensity, and duration. Work-related behavior is affected by both environmental forces (e.g., organizational structure, reward systems, the nature of the work being performed) and forces intrinsic to the person (e.g., individual needs and motives).
All these traditional theories emphasize specific elements that empower workforce motivation. As we could notice, none of these theories support the idea of money being a primary performance motivator (as long as it satisfies the basic level needs in Maslow’s pyramid).
To sum up, the main tools for managers to motivate their employees are supporting fairness and justice among employees, designing work to stimulate performance, reinforcing positive employee behavior, providing psychological growth opportunities, setting clear goals and giving feedback.
HR is constantly working on incorporating and combining these numerous theories in everyday practice by creating ranges of instruments and practices to motivate employees. However, this becomes more and more challenging each year, as the work environment has high levels of volatility, uncertainty, complexity and ambiguity (VUCA environment).
Globalization and cultural differences
As an example of additional complexity, we can discuss current motivational challenges considering globalization and cultural differences within teams.
The globalization of business often brings different cultures within one company. Managers have to find ways to motivate their subordinates even when they work all over the world. The rapid development of technology does help but is not enough. We need to consider this when educating our leaders and, of course, when introducing incentives for employees.
Since the 90s, with the increased globalization of businesses, there have been more and more studies on cross-cultural specifics of motivation drivers.
Some countries, such as the USA, are more individualistic in goal achievement; whereas Chinese employees are more motivated by team goals. Different studies have shown various cultural differences: for instance, Chinese students reported stronger motives and attitudes towards achievement than the Japanese, whereas Japanese students reported a stronger work ethic. Personal initiative in Eastern Germany was estimated to be lower than in Western Germany; Sri Lankans scored less in terms of work ethics as a need for mastery than Australians; Dutch and French executives were more skeptical about long-term incentives in comparison to their US colleagues and reported less correlation between the company results and their performance. U.S. salespersons were more dependent on extrinsic motivation instruments like pay increases, job security, and development than the Korean and Japanese participants.
Deci’s cognitive evaluation theory is hence more useful in Asian cultures than in the U.S., where the expectancy theory was proved to be more applicable.
All these differences in beliefs, values, and pay practices reflect the cultural differences between uncertainty avoidance and individualism.
As usual, there is always something more. In addition to the factors discussed above, with increased retirement age and workforce scarcity, we now have five generations working at the same time. The question is what approaches can we take to motivate them? Should these approaches be different?
In Mannheim’s Sociology of generations, people are grouped into cohorts based on experiencing the same significant social and historical events within a given period. Generations develop their values and attitudes based on the events that took place during their youth. Many researchers advocate close attention to the multi-generational workforce and their stereotypical behaviors. Professional literature often recommends adjusting motivation schemes to different values and perceptions of different generations.
However, as we have seen, it would be hard to find a simple solution in known motivational theories, since they do not provide any differentiation by generations.
Going deeper into characteristics of generations that are the current workforce, we should pay attention to different personal values, approaches to psychological contract, desirable communication styles, and different ways they see the world. If not treated properly, all these differences can create conflict in the organization. We need to understand them to get the best outcome of the available workforce and to bring success within an organization.
Therefore, it is important to understand what are the motives of each cohort to use their competencies and abilities for strengthening commitment and work engagement. The goal is to create a positive outcome both for the organization and employees.
“Veterans” (the generation born before 1946, before “baby boomers”) represent a very small percentage of the current workforce. They are influenced by World War II. They are patriotic, loyal, conservative, value stability, and commitment. Seeking long-term job security, they are loyal to the organizations and their leaders.
“Baby boomers” (born between 1946 and 1964) were influenced by the post-war period and the cold war. According to Gursoy, although they work hard and believe their work defines them, they mostly pursue personal recognition or development rather than the company’s development. They could be described as optimistic workaholics, who value health and well-being and are value-oriented. Boomers have a technological disadvantage compared to younger generations. That may cause tension and, associated with high ambition, may lead to burnout.
“Generation X” (born between 1965 and 1979) makes the second biggest generation in the workforce. As the first generation to enter the workforce after corporate downsizing, they grew up as latchkey kids with both parents working or divorced. “Xers” grew up at the beginning of the so-called “Information age”, amid social, economic and political upheavals.
They are skeptical, independent and entrepreneurial. They seek constant feedback and autonomy but also expect organizations to give them opportunities for skill development. This generation lacks employer loyalty and likely will use every opportunity to challenge the hierarchical decision-making structure. If they are not satisfied with the job, they easily change it. They are also appreciated for thinking globally.
Generation Y – “Millennials” – are the children of Baby Boomers (born between 1980 and 2000). They are the first generation born into a technology-based world. Growing up, they were bombarded with various information through all types of media, have experienced job loss in their families and have lived through September 11. According to Dawn, they grew up with a focus on family and had relatively scheduled and structured lives, so they are now looking for challenges and learning opportunities. Industry experts suggest that Generation Y employees value work-life balance and put significant importance in finding meaning at work, as well as in their personal lives.
According to Bersin by Deloitte, two-thirds of Millennials cite their organization’s “purpose” as the reason they choose it as the employer. A survey by Lewis and Wescott shows that the most important job satisfaction factor for Generation Y is “having things well explained”.
The youngest generation slowly starting to join the workforce is “Generation Z”. They prefer face-to-face communication, expect transparency and clear directions. They demand flexible schedules. They are motivated by meaningful work and responsibility. Another way to engage them is through experiential rewards and badges earned in gaming, as well as through potential for personal growth.
All in all, the workforce is changing drastically. Long-term relationships seem to be passé. In Tulgan’s study employees tended to favor short-term rewards, wanted immediate pay increases rather than waiting, and sought incentives that contributed toward better morale, higher productivity levels and retention of employees. The average duration of employment has decreased in recent years as well. To ensure long-term organizational success, managers have to be true leaders, mindful of the various performance motives for different categories of employees and looking for the right approach to the various needs of different generations.
Using the information on generations and diverse theories of motivation, companies conduct surveys and get constant feedback, to find out the particularities of their employees’ motivation and needs. Based on those surveys, strategies are set to carry the business forward.
While creating the motivators for desirable performance in our organizations, we have to take into account not only the generational but the cultural differences too.
Having taken a step back to study the theory, we saw that most of the motivational theories concentrate on particular motivators that do not change through generations. Safe to say, lucky for us!
Therefore, it is very important to monitor our personnel motivation, to regularly track the changes and adapt our current practices to the changing VUCA-influenced business surroundings. The most important part is to educate our employees and especially our leaders on how to manage the cultural and generation diversity, thus creating a culture of fun, collaboration, and creativity that is not always an easy task.
When taken to its logical extreme, applying generational tags to employees is extremely dangerous. Thinking of the motivation of employees, we have to take into consideration a lot of factors, along with cultural and generational differences. Therefore, it is a great challenge for organizational leaders to support the multicultural environment that manages multi-generational differences.
How do we do it then? Easy! – We learn the theory, ask the employees and then switch on our creativity to generate both into an innovative solution.