Last Updated 28 Jan 2021

Financial trouble

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This theory was developed by J. Stacey Adams and states that employee are motivated by their perception regarding the reward system used by the employer. As such, the theory suggests that employees see a reward scheme as either fair or unfair depending on the level of input that each individual puts into the job. As such, the theory suggests that employees tend to compare inputs and outputs between different employees against the rewards that each gets. The rewards are thus classified as equitable, inequitable or more than equitable.

Both inequitable and more than equitable rewards demoralize workers except for the recipient of the more than equitable reward, while equitable rewards are received with a normal reaction. This however does not only apply to employees but customers too. A Perfect review on this theory is Virgin Atlantic Airway’s intervention to competition. When the airline realized that it was fast loosing its clients due to financial trouble rumours, the airline reiterated with introducing offers like free massages to clients and free Limo rides to the airport.

This in turn created positive inequity, which saw the clients using Virgin Atlantic airways again (Chowdhury, Faisol. 2008). Reinforcement Theory This theory was developed by B. F Skinner and suggests that employees are more motivated by external factors more than internal factors such as employer’s attitude, feelings or cognitive behaviour. As such, the theory suggests that the only way to motivate the workforce is for the management to enforce positive or negative modifications on the external environment.

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Positive reinforcements include rewards, while negative reinforcements include taking away the aversive stimuli. The reasoning behind the latter is that employees will want to avoid the consequences of the negative reinforcement hence encouraging them to put more efforts into their jobs. Successful evidence of this theory is more common in a classroom set up whereby, students respond really well to both stimuli (Skinner, 1969) Theory Z This theory was developed by William Ouchi and borrowed heavily from McGregor’s Y theory and elements from Japanese form of management. Read also W illiam Ouchi's Theory Z

This theory sought to provide America with a more effective management approach with the view of increasing productivity (Vasu ; Stewart, 1998). This theory states that there is much value in long-term employment, Individual employee responsibility, effective promotion systems, consensual decision-making, slow evaluation in the workplace and reasonably specialized career paths. Among the prominent American Corporation, which has tried out the Z theory in practise is Chrysler. Goal Setting Theory

This theory was developed by Edwin Locke and states that the management of a company would achieve much more by giving the employees specific tasks and clear objectives instead of issuing the employees with vague tasks. The theory further states that the managers should set the performance goals higher in order to motivate the employees to put in more efforts towards achieving those goals. The theory is based on the self-efficacy dream that is based on the belief that an employee is capable of a hard disk.

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