Business Decision Making

Managers of all types of organizations, including small firms, need to motivate their employees to remain competitive. Since employees may find different factors to be motivating, it is crucial that managers take the time to determine what drives each individual. In the majority of cases, positive factors that appeal to an individual's internal needs tends to be more effective than using negative reinforcement, criticism and feedback only when performance falls short of expectations.
Types of Theories
Motivational theories typically fall into two categories. Content theories explain individual needs, while process theories explain the thought processes behind an individual's behavior. According to content theories, needs drive humans to act in certain ways and adopt specific work behaviors. Process theories explain a person's behavioral decision process.
Maslow's Hierarchy of Needs
Abraham Harold Maslow's Hierarchy of Needs theory states that motivation stems from various sets of needs, including physiological, safety, social, esteem and self-actualization. According to some interpretations of the theory, an individual will not seek to satisfy higher-level needs until he fulfills his lower-level needs. Higher-level needs are esteem and self-actualization, while lower level needs are physiological, safety and social. If a manager wants to appeal to self-actualization needs, he may offer to develop an employee's potential and reward him with a promotion if he meets performance requirements. Some employers structure entry-level positions in this manner to motivate new employees to remain loyal to the company and perform above expectations. An example would be a "management trainee" position.
Herzberg's Two-Factor Theory
Frederick Irving Herzberg developed a motivational theory for the workplace that consists of two separate categories. The first contains a list of hygiene factors that might create high levels of dissatisfaction if they are lacking or negative....