Herzberg Two Factor Theory Essay

1) According to Herzberg’s two factor theory, there exists ‘hygiene factors’, extrinsic factors of a workplace that lead to either dissatisfaction or non-dissatisfaction, but not motivation. As well, there are motivation factors, intrinsically rewarding factors of a workplace that “[emphasize] factors associated with the work itself or with outcomes directly derived from it”. In raising the salary of his employees, Dan hoped that the extrinsic reward of a pay increase would lead to intrinsically beneficial opportunities for personal growth for his employees. The opportunities for personal growth should in turn further motivate employees in their job. When Dan chose to raise the salaries of his employees, he was “influenced by research showing

that this annual income could make an enormous difference in someone’s emotional well-being by easing nagging financial stress.” Therefore, Dan increased the value of the hygiene factor, ‘pay’, in order to make his employees less dissatisfied. In hoping that the pay raise will enable further opportunities for personal growth among employees, Dan intended for his employees to be satisfied and further motivated.

2) According to equity theory, there exists a ratio between how much input employees put into their work, such as effort and experience, in relationship to the outcome of such input, such as salary levels and raises. Employees actively compare this ratio with each other, and when one employee sees they are being under rewarded, they may respond in a variety of negative ways, which may cause tension and negative reactions in the workplace. When Gravity Payments enforced the raise, many employees exhibited negative responses to the perceived inequitable decision. One popular response was for employees to adjust their perceptions of others, and to view others as less rewarding of a new salary equal to their own. Grant Moran for example states “Now the people who were just clocking in and out were making the same as me.” Grant adjudged his input to outcome ratio to be inequitable, and thus adjusted his perception of some of the other employees as people who are doing the bare minimum amount of work and are unfairly receiving the same pay as him. Other employees changed their perception of themselves and questioned their self-worth to the company, like Stephanie Brooks who questioned “Am I doing my job well enough to deserve this?” Ultimately, the raise caused employees who saw the action as inequitable to quit as did two of Dan’s most valued and longest serving employees who thought it was unfair to double the pay of staff who have not been working at the company as long as they did.

3) The letters and responses saying “you just made my job harder” that Dan was receiving from some of his customers is because these customers’ own employees will be less motivated to do work because their extrinsic reward, their salary, will be less than Gravity Payments’ .

This can be explained using expectancy theory which states that “individuals act depending on whether their effort will lead to good performance, whether good performance will be followed by a given outcome, and whether the outcome is attractive to them.” The key relationship in expectancy theory that would explain customer’s frustration with Dan is the Performance-Reward Relationship, or Instrumentality, which is links the effort an individual will put into their work to an extrinsic reward. A customer and manager like Brian Canlis or Steve Duffield sees that Dan is offering a substantially high extrinsic reward, one that they cannot replicate. For instance, Steve states “We can’t afford to do that…employees are the biggest expense, and they need to manage those costs to survive.” Because these managers cannot match the expenses, the coefficient ‘I’ for instrumentality in the formula motivational force equates expectancy, instrumentality, and valence would become much lower, especially when comparing their organizational rewards to that of the employees of Gravity. This lower coefficient according to expectancy theory would demotivate employees in other firms, making managers’ jobs

harder.

4) Organizational justice is “when employees perceive their organizations as just… [and] believe rewards and the way they are distributed are fair.” Having organizational justice in a given company not only means that a person describes how much they get paid as being fair, but also how they got paid as being fair. Because organizational justice is multi-dimensional, it encompasses distributive justice – if the rewards are fair –, procedural justice – how fair the rewards process is –, and interactional justice – if a person was treated with respect. In Gravity Payments there was issues with the distributive and interactional justice from the raise, resulting in poor overall organizational justice. A good example of this is what happened with Maisey McMaster. She initially viewed the raise as unfair, displaying the lack of distributive justice the pay raise caused. Then she tried speaking with Dan about the raise to express her concerns, however Maisey claims that “[Dan] treated me as if I was being selfish and only thinking about myself.” The lack of respect Maisey was shown when trying to discuss the raise with her boss exemplifies the poor interactional justice issues in her office, contributing to the overall substandard organizational justice at Gravity.