Business Report


What is the main aim of the business report? Explain.


The main aim of the business report is to describe the theories based on motivation. The report provides the theories on work motivation and also distinguishes between the content and process theories of work motivations. The repot analyzes various components such as McClelland’s work and theories of work motivation. It also discusses the goal setting and its role in work motivation on the review and agrees process. Further the author in the report discusses the equity theory and expectancy theory. Examples are used to explain the theories on work motivation.  Work motivation is the behavior or the value that the individuals possess either within the workplace or outside the workplace to work hard. It is a process to analyze the employees to work hard and achieve the goals set by the organization. The basic theory of motivation states the factors that affect the motivation of employees and specifies the factors that motivate an individual. The factors to motivate the workers depend on the managers of the organization.  McClelland’s theory is the motivation theory on achievement. Various authors have presented various theories on motivation such as Maslow’s needs hierarchy and Alderfer’s ERG theory. Motivation process is the scientific study of the results that considers motivation as the main factor or aspect. Process theories are different from that of content theories. 


Motivation theories are of two types. One is the content theory that studies motivation and the factors that motivates the person to work hard. It also focuses on the factors within a person such as sustainability, stop behavior and energy. McClelland’s work motivation is an example of content theory that is helpful in discussing the work motivation. Process theories of motivation are another category that is different from the content theory of motivation. There are four process theories in work motivation that are predominant such as Reinforcement, expectancy, equity and goal setting (Kanfer et al. 2012). Work motivation is a process or an approach to motivate and energize people at organizations to work hard. Work motivation has many barriers and there are many strategies that the managers can use to overcome the barriers and keep the employees motivated at work. A motivated worker helps the organization attain success by developing a successful performance to the organization. There are many ways that the managers can use to motivate the workers. The employees that are performing well at workplace should be recognized and awarded so that they stay motivated and work hard. This also influences the other people at workplace to work hard as it creates a scene of competition (Pinder 2014).  

A worker is motivated by various factors that include task identity when the worker exactly knows the accomplishment of the employees. Motivated employees are productive and happy and yield a better result that is beneficial for the organization. Motivating the workers can be a challenging task as employees have different skills and behaviors that greatly influences attitude of the people. There are number of theories that have been developed by various authors that the organizations and managers can use to motivate the workers. The report analyzes the various theories of work motivation presented by various authors such as equity theory, expectancy theory, goals setting and McClelland’s work motivation theories (Dwivedula et al. 2015).  

McClelland’s work and theories of work motivation

McClelland’s theory of motivation is based on the Need theory that was developed in the year 1940 by Abraham Maslow. David McClelland published his theory on work motivation in the year 1961 in his handbook that was known as The Achieving Society. McClelland’s theory of motivation is also sometimes known as Learned Needs Theory because the motivators that he has identified are highly skilful and learned. The main motivators that all the human beings posses identified by McClelland are: a need for attainment, a need for relationship and a need for authority (Gagné 2014). Different people have different characteristics depending on the dominant motivator that each individual posses. The dominant motivator depends largely on the culture and life experiences of individuals. Irrespective of the age, gender and culture each individual posses a motivating driver that motivates the individual to work hard. His theory is also known as acquired need theory that states that individuals need are accomplished over time. The basic focus is on the three needs of an individual that includes power, affiliation and achievement (Stoeber et al. 2013).  

McClelland’s Need theory is applicable in real work situation as well. This motivation theory helps in characterizing the behavior of the people at workplace (Haslam et al. 2014). Different people have different motivation needs that are characterized as follows:


People who work hard have a need for high achievement known as (nAch). These people should be given challenging projects with the achievable goals. The achievers at workplace avoid both high risk and low risk situation. They prefer working in a mediocre environment. Achievers avoid low risk situation because it is easily attainable so it won’t be accounted as achievement. They also avoid high risk situation because the outcome of the project is more of a chance rather than their own effort. It is essential to provide constant feedback to these achievers so that they can evaluate the performance and try working hard the next time. Achievers that inculcate the need of achievement prefer to work hard or with the other achievers. This gives them a sense competition to work better (Miner 2015). 


High affiliation needs in employees make them perform better at the corporative environment. The people for the need for affiliation prefer to work in harmony with people. These are the ones that are not generally accepted by society. These people are the ones that believe in obeying the rules and regulation set by the organization. The main aims of the people with affiliation needs believe in providing a quality service to its clients and satisfy the customers. They also prefer working with the group of people that helps in increasing the personal interaction. They avoid risk and uncertainty (Levina and Vaast 2015). 


High power needs for motivation seeks to work with the employees in order to manage the other peoples need. The power of employees is of two types that are personal and institutional. Personal powers are undesirable that includes directing others at work for management of the people at workplace. Institutional power is also known as social power that includes managing the work of other employees to achieve the goals of the organization to maximize the efforts. The power need wants to control and influence its team mates and others to further motivate the workers. The power needs are the ones that like to win arguments and also enjoy competition (Barrick et al. 2013). 

The McClelland’s theory helps the managers identify the dominant motivators of the employee to utilize them for the benefit of the organization. The theory can also be used to provide feedback, set goals and motivate and reward the team members of the organization. McClelland theory uses Thematic Apperception Test (TAT) to measure the needs of the individuals at the workplace to influence it for motivation. David McClelland is a psychologist that proposes motivational model to explain the managerial context (Royle and Hall 2012). 

Implication or the effect on management 

McClelland theory on work motivation is applicable in the real scenario as well. The research shows that eight six percent of the people are either dominant in one of the motivators needs, two or all the three needs. The theory found out that if people with high achievement need are given the challenging project they work better. The theory suggests that people in high position at workplace is need of power while those in lower positions are in need of affiliation. The theory also suggests that people at top level are happier with the need of affiliation but are not successful (Donovan et al. 2013). 

Goal Setting and its role in work motivation: the ‘Review & Agree ‘Process

Goal setting is the most widely motivation theory used in organization psychology and industrial institutes. The co founder of the theory is Dr. Edward Locke and it was developed in the year 1960. The theory shows the relationship between goal setting and the performance of employees. Goal setting is an action plan designed to motivate and guide a person or group towards a goal set by the firm. Ambitious and effective goals setting leads to higher and better performance provided that the person has the ability to attain and retain the goals (Peters, R.S., 2015 (Peters 2015). The theory suggests that there is positive linear relationship between the goal setting difficulty and the task performance. Every firm has some goals and objectives set by the managers. It is the responsibility of the employees to stay motivated, work hard and try to achieve the goal and objectives of the organization. Goals setting are the function of self regulatory mechanism (Heckhausen 2012).

The four mechanisms through which the individual performance is affected by goal setting are:

Goals should focus on the attention relevant activities of the firm. 

Goals are considered as energizers. Higher goals motivate workers to work harder. 

Goals affect persistence.

Goals also help the employee cope up with the situation that they face (Csikszentmihalyi and Wong 2014). 

The goal setting motivation theory of Locke is the most widely and accepted management theories. It is mostly beneficial for the small business organizations. If goals are set by the managers then the employees get a path in which they have to follow to achieve the objective. This helps in motivating the employees. The main key components of the goal setting theory are clearness, confront, promise, criticism and difficulty (Pervin 2015). Also the goals that the company set must be challenging in nature so that the workers stay motivated to work. It is also essential for the employees to get sufficient time and resources to fulfill the challenging goals set by the firm. It is not always essential to involve employee participation in goal setting as it may hamper the firm’s objective. The certain eventualities of goal setting are self efficiency and goal commitment (Pieterse et al. 2013).  

The advantages of the goal setting theory are that it helps the employees earn incentive to work hard and stay motivated. It also leads to better performance through increasing and improved feedback. The limitation to the theories is that it lacks evidence that goal setting also in improving the job satisfaction. It also stimulates an increase in risk stimulator because the goals that the firms set are challenging which increases the risk. It also is sometimes in conflict with the managerial goals. If the employees lack skills and knowledge that is required to accomplish the goals it will have opposite effect. It might then result in reducing the performance (Kiresuk et al. 2014).

There are various categories and approaches to set the goals by the managers for the organization. The most common criteria are the SMART object for the goals setting. It helps in personal development. The example of goal setting is that in a particular year the goals of the firm can be to reduce the cost and concentrate in maximizing the goals. In another year it may aim at concentrating in sale to increase it. When the firms set goals of maximizing profit the employees will stay motivated to produce better quality products at effective rates that are cost effective (Schunk and Zimmerman 2012).    

Equity Theory using examples

Equity theory on motivation was published in the year 1963 by John Stacey Adams. It is much like many of the other prevalent theories of motivation that was presented by Maslow Hierarchy of Needs theory. The idea stated by Adam Stacey is the fairness and equity is two components that keep the individual at workplace motivated to work better. Equity theory is based on the principle of fairness. If there is fairness at workplace individuals stay motivated. But if they find that there is any form of inequality at workplace then the individuals will adjust the output according to the input that they get. Higher the equity higher is the motivation of the individuals. Individuals are likely to be de motivated in an unfair environment. Motivation and fairness are directly related (Peters 2015). Adam stated that individuals stay motivated by comparing the equity between the inputs and output. Give and take issues are stated as inputs and outputs or personal efforts and rewards. It determines it is not only the pay condition that motivates the workers. The individual compares the equity based on the inputs and outputs with its referent groups. The individual said to be treated with fairness if the ratio of the individual outcomes and input is equivalent to people that are around that person (Lazaroiu 2015). 

Formula expressing equity theory is:

Outcomes of person A       outcomes of person B

Inputs of person A                     inputs of person B

Job satisfaction is determined by the ratio of an individuals input to outcome at work place that states the perception of equality. Examples of inputs considered in equity theory are Time, effort, loyalty, flexibility and skills while the outcomes include job security, salary, expenses and responsibility (Greenberg and Cohen 2014).  

Propositions of Equity Theory:

The first proposition is that individuals try to maximize their outcomes that include praise, responsibility and salary. 

The second proposition is that the individuals can maximize the collective rewards by proportionately distributing the resources among the members of the organization. 

The third proposition is that groups that treat others equally will be rewarded while those who treat others inequitably will be punished. 

The fourth proposition says that individuals are likely to stay distressed if they are involved in an in equitable relationship. According to the equity the person who gets more and the person who gets less are distressed and dissatisfied. The person getting more is in a guilt and shame while the person getting less is angry and humiliated. 

The fifth proposition says that individuals try to restore to equity if they are involved in an inequitable relationship to eliminate distress (Al-Zawahreh and Al-Madi 2012). 

Assumptions of the Equity Theory 

The three primary equity theories that are applied to most of the businesses are as follows:

The first assumption is that employees always expect a fair return if they contribute fairly to their job. This is known as equity norm. 

The second assumption is that of social comparison where the return is based on classifying and comparing the inputs and outcomes with its team mates. 

The third assumption is that people try to restore to equity by either leaving the organization or altering the inputs and outcomes if they find themselves stuck in an inequitable situation (Kaur et al. 2014). 

Implication of equity theory for managers: 

Individuals measures inputs and outcomes in totality. 

Different people have different perception for equity and fairness. They assign different values to inputs and outcomes. 

Employees adjust according to the purchasing power and the conditions of the local market and adapt accordingly.  

Large differences in the pay scales and compensation de motivate workers although individuals are ready to accept differences in pay scale but for small amount.  

The managers should be efficient in managing the perceptions of the workers as the perceptions that they hold regarding the inputs and outcomes may be wrong that may be damaging for the organization.  

An overcompensated employees may increase the efforts but the values that the person possess will also be adjusted that in long run will decrease the effort (Lazaroiu 2015).  


The main criticism of the theory is that the model presented by Adam is very simple and there are many other demographical and psychological factors that affect the perceptions of the individual. Critics also say that the theory cannot be applied in the real world business as it has been tested for the laboratory settings only (Kanfer et al. 2012).

Example of Equity theory:

Out of various theories of motivation the management can apply equity theory of motivation in its workplace. The examples of Equity theory is that people may feel de motivated if they coworkers get higher compensation in spite of possessing the same knowledge and qualification. Working mother does not expect for higher pay scale or compensation but they will be motivated when they get flexible working hours. Many businesses have adopted theory of equity in management to understand the relationship between employee’s motivation and the perception of the employers or the managers of equitable and inequitable treatment. Equity theory greatly depends on evaluating the performance of the other at workplace a concept known as social comparison. Four major examples of equity theory are Adams equity theory, Maslow’s need hierarchy theory, Vroom’s theory, and Skinners theory. Equity theory compares a balance between the reward and costs.  

Expectancy Theory using examples

Expectancy theory was developed by Victor Vroom in 1964 and it is known to be the most effective motivation theory. Expectancy theory is based on the expectation of the people. If an individual expect that the effort put by them will lead to higher performance and better reward then they will be stay motivated to work hard. Effort and motivation will depend on the result that is likely to come after the effort. The three components of the expectancy theory are reward, expectancy and performance of the employees at organization. The level of the effort of the individual depends on the effort that will result a better performance. Vroom’s expectancy theory shows the relationship between performance, expectation and outcome that is separated from each other by efforts. Vroom’s theory says that the individual’s performance is based on various factors such as skills, knowledge, personality, experience and ability. The three components of the theory are interrelated that includes performance, expectation and outcome or effort (Estes and Polnick 2012). 

The theory is based on the assumption that if a person will work hard then it will definitely show a better result. A person’s performance and efforts are affected by various variables and situations that include availability of the resources such as raw materials, and time. It is also affected by situation such as having the right skills and knowledge to complete the task. A person will also be able to perform better if proper support from the legal head is provided to the person concerned. A person will be motivated to work hard if there is positive relationship between rewards and effort. For example if a person is ready to work for five hours extra in a week then he expects that effort to be rewarded. If a person dies not get any praise or reward for the effort then the individual will be disappointed and de motivated. The rewards that the employees get should also be valuable in nature and this totally depends on the characteristics of an individual employee (Renko et al. 2012). 

Expectancy theories are more useful to the managers than the employees as they are the ones that can imply certain strategies to motivate the workers at workplace. The main aim of the expectancy theory is to explain the relationship between employee satisfaction and rewards, performance and reward and effort and performance. High expectation leads to higher motivation as their expectation for valuable reward increases. It is essential for managers to stay motivated to implement proper strategies for its employees. 

The three other key components of expectancy theories are expectancy, instrumentality and valence. Expectancy shows the relationship between effort and performance. Instrumentality is the relationship between performance and outcome; valence is the relationship between outcome and reward (Renko et al. 2012).  

The theory has some criticisms also. The critics say that the theory is simplistic in nature. It is also deceptive sometimes because the employees may not always be ready to work hard if the reward paid to them pushes them in further dilemma (Baumann and Bonner 2016).

Example of expectancy theory:   

Expectancy theory is explained using the example or the case of Bob Buttkiss. Bob is an employee of the store that provides service for home improvement. Bob is an employee who reaches the office first and also gives in extra effort by working overtime. He is also ready to take ion extra projects and always ready helps its co workers. The teammates of Bob think that Bob is crazy to work so hard for little pay. But Bob is motivated to work hard because he expects that effort that he provides will not be in vain and it will be rewarded some day or the other. This is the expectancy theory as published by Vroom (Taylor 2014). 


Motivation theory is to motivate the workers in an organization to work better to achieve and accomplish the goals and targets of the organization. Process theory specifies how can the behaviors that a person posses can be energized, stopped, sustained or directed. Various authors have presented various work motivation theories. The most common used theory in management is Goal setting theory and Vroom’s expectancy theory on work motivation. The main principle of all the theories is to show the factors that affect the motivation of employees at workplace.


Al-Zawahreh, A. and Al-Madi, F., 2012. The utility of equity theory in enhancing organizational effectiveness. European journal of economics, finance and administrative sciences, 46, pp.158-170.

Barrick, M.R., Mount, M.K. and Li, N., 2013. The theory of purposeful work behavior: The role of personality, higher-order goals, and job characteristics.Academy of Management Review, 38(1), pp.132-153.

Baumann, M.R. and Bonner, B.L., 2016. An Expectancy Theory Approach to Group Coordination: Expertise, Task Features, and Member Behavior.Journal of Behavioral Decision Making.

Csikszentmihalyi, M. and Wong, M.M.H., 2014. Motivation and academic achievement: The effects of personality traits and the quality of experience. In Applications of Flow in Human Development and Education (pp. 437-465). Springer Netherlands.

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Kiresuk, T.J., Smith, A. and Cardillo, J.E., 2014. Goal attainment scaling: Applications, theory, and measurement. Psychology Press.

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