Boundless Business

Motivation Theories and Applications

Theories of Motivation

Maslow's Hierarchy of Needs

Maslow's hierarchy of needs are a series of physiological and emotional requirements for human contentment, arranged in order of necessity.

Learning Objectives

Explain Maslow's hierarchy of needs

Key Takeaways

Key Points

  • Maslow's hierarchy of needs is often portrayed in the shape of a pyramid, with the greatest and most fundamental levels of needs at the bottom, and the need for self-actualization at the top.
  • The order of needs as categorized by Maslow are physiological; safety; love and belonging; esteem; and self-actualization.
  • Maslow acknowledged that many different levels of motivation are likely to be present in a human all at once. His focus in discussing the hierarchy was to identify the basic types of motivation and the order that they generally progress as lower needs are reasonably well met.

Key Terms

  • esteem: to regard someone with respect.
  • security: The condition of not being threatened, especially physically, psychologically, emotionally, or financially.
  • potential: currently unrealized ability.

The most fundamental and basic needs are what Maslow called "deficiency needs" or "d-needs":

  • Esteem
  • Friendship and love
  • Security
  • Physical needs

If these "deficiency needs" are not met, the body gives no physical indication but the individual feels anxious and tense. Maslow's theory suggests that the most basic level of needs must be met before the individual will focus on higher level needs.


Maslow's Hierarchy of Needs: Maslow's hierarchy captures the varying degree of needs by which humans are motivated. According to the psychological perspective, decision makers are motivated by these needs and decisions are influenced accordingly.

The human mind is so complex that separate motivations from different levels of Maslow's pyramid usually occur at the same time. Maslow referred to these levels and their satisfaction in terms such as "relative," "general," and "primarily." His focus in establishing the hierarchy of needs was to identify the basic types of motivations and the order in which that they generally progress as lower needs are reasonably well met.

Physiological Needs

Physiological needs are generally obvious because they are requiremed for survival. If requirements are not met, the body cannot continue to function. People lacking food, love, esteem, or safety would consider food to be their greatest need. Air, water, food, clothing, and shelter are the basic physiological needs.

Safety Needs

Once physical needs are satisfied, individual safety takes precedence. Safety and Security needs include:

  • Personal security
  • Financial security
  • Health and well-being
  • Safety net against accidents/illness and their adverse impacts
  • Love and belonging

Interpersonal Needs

After physiological and safety needs are fulfilled, the third layer of human needs are interpersonal. This involves feelings of belongingness. Deficiencies in interpersonal needs, due to neglect, shunning, ostracism, etc., can impact an individual's ability to form and maintain emotionally significant relationships in general, such as:

  • Friendship
  • Intimacy
  • Family

Humans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, religious groups, professional organizations, gangs, family, or mentors. Humans need to love and be loved (sexually and non-sexually) by others. Without these connections, many people become susceptible to loneliness, social anxiety, and clinical depression. This need for belonging can sometimes overcome physiological and security needs. For example, an anorexic may ignore the need to eat and the security of health for a feeling of control and belonging.


Esteem represents the normal human desire to be accepted and valued by others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or an inferiority complex. Many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame, respect, and glory externally, but must first accept themselves internally. Psychological imbalances, such as depression, can prevent one from obtaining self-esteem on both levels.

Maslow noted two versions of esteem needs: a "lower" version and a "higher" version. The "lower" version of esteem is the need for respect from others. This may include a need for status, recognition, fame, prestige, and attention. The "higher" version manifests itself as the need for self-respect. For example, the person may have a need for strength, competence, mastery, self-confidence, independence, and freedom. This "higher" version takes precedence over the "lower" version because it relies on an inner competence established through experience. Deprivation of these needs may lead to an inferiority complex, weakness, and helplessness.

Maslow also states that even though these are examples of how the quest for knowledge is separate from basic needs, he warns that these "two hierarchies are interrelated rather than sharply separated. " This means that this level of need, as well as the next and highest level, are not strict, separate levels but closely related to others, and this is possibly the reason that these two levels of need are left out of most textbooks.


"What a man can be, he must be. " This quotation forms the basis of the perceived need for self-actualization. This level of need refers to what a person's full potential is and the realization of that potential. Maslow describes this level as the desire to accomplish everything that one can, to become the most that one can be. Individuals may perceive or focus on this need very specifically. For example, one individual may have the strong desire to become an ideal parent. In another, the desire may be expressed athletically. For others, it may be expressed in paintings, pictures, or inventions. As previously mentioned, Maslow believed that to understand this level of need, the person must not only achieve the previous needs, but master them.

Herzberg's Two-Factor Theory

The Two-factor theory indicates that one set of factors at work cause job satisfaction, while another set of factors cause dissatisfaction.

Learning Objectives

Explain Herzberg's two factor theory

Key Takeaways

Key Points

  • Factor 1: Motivators such as challenging work and recognition give positive satisfaction created by the job's intrinsic conditions. Factor 2: Hygiene factors such as status, job security and salary do not themselves create positive satisfaction, but their absence can cause dissatisfaction.
  • Individuals look for the gratification of higher-level psychological needs associated with achievement, recognition, responsibility, and advancement, rather than the satisfaction of lower-order needs such as minimum salary levels or safe and pleasant working conditions.
  • If management wants to increase satisfaction on the job, it should be concerned with the nature of the work itself. On the other hand, if management wishes to reduce dissatisfaction, then it must focus on improving the job environment.

Key Terms

  • productivity: Productivity is a measure of the efficiency of production and is defined as total output per one unit of a total input.
  • Need Hierarchy: Abraham Maslow's theory created in 1943 that postulates that needs can be categorized into the following 5 categories which are the basis for human motivations: Physiological, Safety, Belongingness and Love, Esteem, and Self-Actualization
  • motivate: To provide someone with an incentive to do something; to encourage.

The Two-factor theory (also known as Herzberg's motivation -hygiene theory and Dual-Factor Theory) states that certain factors in the workplace cause job satisfaction, while a separate set of factors cause dissatisfaction. It was developed by Frederick Herzberg, a psychologist, who theorized that job satisfaction and job dissatisfaction act independently of each other.

Fundamentals of the Theory

Attitudes and their connection with industrial mental health are related to Maslow's theory of motivation. According to Herzberg, individuals are not content with the satisfaction of lower-order needs at work such as minimum salary levels or safe and pleasant working conditions. Rather, individuals look for the gratification of higher-level psychological needs having to do with achievement, recognition, responsibility, advancement, and the nature of the work itself. This appears to parallel Maslow's theory of a need hierarchy.


Maslow's hierarchy: Maslow's hierarchy captures the varying degree of needs by which humans are motivated. According to the psychological perspective, decision makers are motivated by these needs and decisions are influenced accordingly.

However, Herzberg added a new dimension to this theory by proposing a two-factor model of motivation, based on the notion that the presence of one set of job characteristics or incentives leads to worker satisfaction at work, while another and separate set of job characteristics leads to dissatisfaction at work. Thus, satisfaction and dissatisfaction are not on a continuum with one increasing as the other diminishes, but are independent phenomena.

This theory suggests that to improve job attitudes and productivity, administrators must recognize and attend to both sets of characteristics and not assume that an increase in satisfaction leads to decrease in unpleasurable dissatisfaction.

Herzberg found that the job characteristics related to what an individual does (the nature of the work he performs) apparently have the capacity to gratify such needs as achievement, competency, status, personal worth, and self-realization, thus making him happy and satisfied. However, the absence of such gratifying job characteristics does not appear to lead to unhappiness and dissatisfaction. Instead, dissatisfaction results from unfavorable assessments of such job-related factors as company policies, supervision, technical problems, salary, interpersonal relations on the job, and working conditions.

Thus, if management wishes to increase satisfaction on the job, it should be concerned with the nature of the work itself—the opportunities it presents for gaining status, assuming responsibility, and for achieving self-realization. If, on the other hand, management wishes to reduce dissatisfaction, then it must focus on the job environment—policies, procedures, supervision, and working conditions. If management is equally concerned with both satisfaction and dissatisfaction, then managers must give attention to both sets of job factors.

Theory Development

The two-factor theory was developed from data collected by Herzberg from interviews with 203 American accountants and engineers in Pittsburgh, chosen because of their professions' growing importance in the business world. The subjects were asked to relate times when they felt exceptionally good or bad about their present job or any previous job, and to provide reasons, and a description of the sequence of events giving rise to that positive or negative feeling.

The two-factor theory distinguishes between:

  • Motivators (e.g. challenging work, recognition, responsibility) that give positive satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth.
  • Hygiene factors (e.g. status, job security, salary, fringe benefits, work conditions) that do not give positive satisfaction, though dissatisfaction results from their absence. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices, or wages/salary.

Essentially, motivation factors are needed to motivate an employee to higher performance. Hygiene factors are needed to ensure an employee is not dissatisfied. Herzberg also further classified our actions and how and why we do them. For example, if you perform a work related action because you have to, then that is classed as movement, but if you perform a work related action because you want to, then that is classed as motivation.

Implications of Herzberg's Theory

Herzberg's theory attempts to uncover psychological needs of employees and enhance employee satisfaction. In order to apply this theory, employers are encouraged to design jobs that enhance and motivate employees beyond simply meeting a daily or weekly quota. This theory highlights the importance of rewards systems and monitoring when and how employees are rewarded. Herzberg's theory implies that simple recognition is often enough to motivate employees and increase job satisfaction.

Herzberg argues that both motivation and hygiene are equally important, but that good hygiene will only lead to average performance, preventing dissatisfaction, but not, by itself, create a positive attitude or motivation to work. To motivate the employee, management must enrich the content of the actual work they ask them to do.

MacGregor's Theory X and Theory Y

Theory X and Theory Y describe two contrasting models of workforce motivation applied by managers in human resource management, organizational behavior, organizational communication, and organizational development.

Learning Objectives

Differentiate between the motivators in Theory X and the motivators in Theory Y

Key Takeaways

Key Points

  • Theory X and Theory Y, put forward by Douglas McGregor, describe two contrasting models of workforce motivation and management.
  • Theory X is a much more traditional management style, predicated on the assumption that external rewards, punishments, and supervision are effective ways to manage employees.
  • Theory Y focuses on the internal mechanisms of motivation (relative to the employee), assuming that employees have a natural drive to contribute, take ownership of their work, and pursue organizational objectives on their own.
  • While Theory Y may seem optimal, it does have some drawbacks. Through empowering everyone towards autonomy, it can be easy to lose organizational alignment. Strong organizational objectives and processes are necessary in order for it to work.
  • There is some balance to be achieved between these two perspectives, though Theory Y motivators tend to be the preferably approach to building strong collaborative cultures.

Among the many theories of motivation is Douglas McGregor's concept of Theory X and Theory Y. His initial work focused on demonstrating two contrasting motivators in the workplace: external motivators such as supervision, rewards, penalties, and rules (X) versus internal motivators such as passion, job satisfaction, accountability, and feelings of self-worth (Y).

The true value in creating this contrast is understanding the situations where X or Y may work better, and recognizing that motivation is both internally and externally complex. To draw something of a parallel here, Maslow's hierarchy has some loose alignment with McGregor's theories, wherein the lower levels of the hierarchy are more along 'X' lines while the higher levels have more of a 'Y' feel to them.

Theory X

The core assumption here is that, in a given workplace environment, employees won't have the intrinsic motivations required to accomplish objectives. Instead, a system should be in place where external motivators create desired behavioral outcomes. This is considered more of a firm managerial approach, where management will set objectives, supervise execution, and provide corresponding returns.

This can be implemented in two ways. Employees can be externally motivated by the existence of supervision or punishment or externally motivated by the absence of supervision or punishment.

In the first scenario, supervision is tight, and rewards are positive for strong performance and negative for bad performance. In this method, authoritarian management pushes employees toward desired outcomes. Workplaces like this focus on shaping their employees into what they want them to be. The latter scenario represents a softer approach that reduces animosity and anxiety.

Theory Y

Theory Y is a bit more complex, as  the manager is not entirely in control (and thus, feels less like a management style). However, properly understanding Theory Y concepts can help managers manage and hire better.

Theory Y assumes that employees enjoy a challenge, and strive to add value for the sake of self-worth and a desire to contribute to a community. The focal point here is on building strong, friendly relationships between management and employees, and removing most (if not all) authority from the arrangement. In such a situation, there is no push and no push back, simply unclouded business objectives.

This, in theory, sounds ideal. However, managers and employees who work in this framework do eventually encounter some challenges. Through a hands off management approach, it can be easy to lose alignment, as different individuals go in slightly different tactical directions. It can also result in enabling less motivated employees to take advantage of a relaxed work environment. There are various ways to address these concerns, though, such as building organizational processes to create alignment and through hiring carefully.

This image demonstrates where the true source of motivation is derived in each theory. Under Theory X, management uses control to direct behavior. Under Theory Y, behavior is dictated by employees through communication with management and an understanding of the agreed upon broader strategy and objectives.

Theory X and Theory Y: This image demonstrates where the true source of motivation is derived in each theory. Under Theory X, management uses control to direct behavior. Under Theory Y, behavior is dictated by the employees themselves through communication with management and an understanding of the agreed upon broader strategy and objectives.

Using Both

No model is perfect, and every circumstance requires some individual thought. Most often, experienced managers will find the need to use both at some point, though Theory Y usually leads to preferable outcomes and company culture. Some employees require different sources of motivations depending on where they are in their own personal development, not to mention some tasks seems to work out better when externally driven, while others work better when internally driven. Having comfort with both concepts is the ideal tool set for a motivational manager.

Ouchi's Theory Z

Ouchi's theory focuses on increasing employee loyalty to the company by providing a job for life and focusing on the employee's well-being.

Learning Objectives

Explain how the Ouchi Theory promotes a strong work force

Key Takeaways

Key Points

  • Theory Z is a name applied to three distinctly different psychological theories, one of which was was developed by Dr. William Ouchi.
  • According to Ouchi, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.
  • William Ouchi takes Japanese business techniques and adapts them to the American corporate environment.
  • One of the most important pieces of this theory is that management must have a high degree of confidence in its workers in order for this type of participative management to work.

Key Terms

  • morale: The capacity of people to maintain belief in an institution or a goal, or even in oneself and others.
  • turnover: In a human resources context, turnover or staff turnover or labor turnover is the rate at which an employer gains and loses employees.


Theory Z is a name applied to three distinct psychological theories. One was developed by Abraham H. Maslow in his paper Theory Z and the other is Dr. William Ouchi's so-called "Japanese Management" style popularized during the Asian economic boom of the 1980s. The third was developed by W. J. Reddin in Managerial Effectiveness.

For Ouchi, Theory Z focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. According to Ouchi, Theory Z management tends to promote:

  • Stable employment
  • High productivity
  • High employee morale and satisfaction

History of Ouchi's Theory

Professor Ouchi spent years researching Japanese companies and examining American companies using the Theory Z management styles.


Toyota: A Product of Japanese Productivity: Professor Ouchi spent years researching Japanese companies using the Theory Z management styes.

By the 1980s, Japan was known for the highest productivity anywhere in the world, while America's productivity had fallen drastically. The word "Wa" in Japanese can be applied to Theory Z because they both deal with promoting partnerships and group work.

The word "Wa" means a perfect circle or harmony, which influences Japanese society to always come to a solution via teamwork. Promoting Theory Z and the Japanese word "Wa" is how the Japanese economy became so powerful. Because the Japanese show a high level enthusiasm to work, some of the researchers also claim that the "Z" in the Theory Z stands for "Zeal. "

Ouchi's Conclusions

Ouchi wrote a book called Theory Z: How American Business Can Meet the Japanese Challenge (1981). In this book, Ouchi shows how American corporations can meet the Japanese challenges with a highly effective management style that promises to transform business in the 1980s.

The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people. "This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, long-range staff development, and consensus decision-making" (Ouchi, 1981). Ouchi claims that the results show:

  • Lower turnover
  • Increased job commitment
  • Dramatically higher productivity

William Ouchi doesn't say that the Japanese culture for business is necessarily the best strategy for the American companies. Instead, he takes Japanese business techniques and adapts them to the American corporate environment.

Much like McGregor's theories, Ouchi's Theory Z makes certain assumptions about workers. Some of the assumptions about workers under this theory include:

  • Workers tend to want to build happy and intimate working relationships with those that they work for and with, as well as the people that work for them.
  • Workers have a high need to be supported by the company, and highly value a working environment in which such things as family, cultures and traditions, and social institutions are regarded as equally important as the work itself. These types of workers have a very well developed sense of order, discipline, a moral obligation to work hard, and a sense of cohesion with their fellow workers.
  • Workers can be trusted to do their jobs to their utmost ability, so long as management can be trusted to support them and look out for their well-being (Massie & Douglas, 1992).

One of the most important pieces of this theory is that management must have a high degree of confidence in its workers in order for this type of participative management to work. This theory assumes that workers will be participating in the decisions of the company to a great degree.

Ouchi explains that the employees must be very knowledgeable about the various issues of the company, as well as possess the competence to make those decisions. He also points out, however, that management sometimes has a tendency to underestimate the ability of the workers to effectively contribute to the decision-making process (Bittel, 1989). For this reason, Theory Z stresses the need for the workers to become generalists, rather than specialists, and to increase their knowledge of the company and its processes through job rotations and constant training.

Promotions tend to be slower in this type of setting, as workers are given a much longer opportunity to receive training and more time to learn the ins and outs of the company's operations.

The desire, under this theory, is to develop a work force, which has more loyalty toward staying with the company for an entire career. It is expected that once employees do rise to a position of high level management, they will know a great deal more about the company and how it operates, and will be able to use Theory Z management theories effectively on the newer employees.

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