MOTIVATION THEORIES

Motivation Theories

Motivation Theories

Individual Motivation Theory

One aspect usually neglected in economic literature is role of individual motivation; while, in psychology, motivation is the concept that has been discussed extensively. According to Spector (2003) previous teamwork motivation theories are most typically concerned with reasons, rather than ability, that some people perform their jobs better than others. Steers and Black list stages evolution of management thought concerning employee motivation has passed through. They are traditional model, human relations approach and, more recently, human resources model. In particular, “this newer approach also assumes that different employees want different rewards from their jobs, that many employees sincerely want to contribute, and that employees by and large have capacity to exercise the great deal of self-direction and self-control at work ” (Steers and Black, 1994, p. 139).

To this extent case of Kyocera Corporation is striking. As it concerns reward system, Kyocera's founder Kazuo Inamori, in the booklet describing his philosophy, writes “We don't think in terms of individual rewards. We don't buy individuals ' loyalty with monetary incentives or titles. Rather, we believe that individuals who are endowed with superior capabilities should contribute their capabilities for good of entire group. ” (for the discussion of Kyocera's organizational culture reader may refer to By linsky (1990)). This example is contrasted by pay incentives used at Lincoln Electric, where most employees are paid on the piece-rate system (Lincoln Electric Company has been described in several case studies by business schools, see for instance Fast and Berg (1975)). Several comparisons between incentive programs have been presented in literature. Among others, Weiss (1987) provides an empirical comparison between individual wage incentives and group incentives examining effects in terms of motivation and quit rates.

Following joint production approach, we consider the modular model of hierarchical organization. Specifically, we concentrate mainly on pyramidal structures. This particular structure is widespread and, consequently, both economic (see Beckmann, 1988, for the formal analysis) and simulative literature (for instance, see Glance and Huberman, 1994) find interest (for an analysis of different approaches to pyramidal structures see Merlone, submitted for publication). In our model, organization consists of two heterogeneous agents interacting in the supervised work group with the Cobb-Douglas production function. In literature, distinction between team and previous teamwork group is hazy; nevertheless we will follow Spector (2003). As the consequence, we will refer to the supervised work group as, in our case, we consider interchangeable subordinates.

We refer in particular to situations like those described in Smith (1977) where employees expend their discretionary effort (for the discussion about antecedents of discretionary effort and its consequences on performance reader may refer to (Bailey et al., 2001) and (Sutton, 2007)). In this sense, two different cost functions can be interpreted in terms of motivation; while piecewise constant cost function may be appropriate when subordinates have high self-efficacy and are highly motivated, other cost function seems to be more appropriate for individuals who are mainly interested in monetary incentives. It is well known (Zhou, 2002) that, with regard to principal-agent theory, ...