5 Motivational Theories in Business

5 Motivational Theories in Business

Aug 18, 2021Editorial Team

Are you a business owner or manager looking for ways to motivate your employees in order to increase the productivity of the business? In that case, you are in the right place, as this post will give you valuable insight into the world’s five most popular motivational theories in business.

So, without further ado, let us dive right in to find out what these theories are.

1. Hierarchy of Needs by Maslow

In 1943, a psychologist named Abraham Maslow proposed the theory “Hierarchy of Needs” in one of his papers called “A Theory of Human Motivation.” The crux of this theory is that to motivate your employees and boost business productivity, you must meet all of their basic needs.

This theory defines five levels of the human hierarchy of needs.

  • Physiological – the needs that a person must have to survive, such as food, shelter, and water, etc.
  • Safety – these include health, wellbeing, personal and financial security
  • Belonging/Love – a human’s need for relationships, friendships, and family
  • Esteem – the need to feel respected by others and feel confident.
  • Self Actualization – personal desire to achieve what your employees possibly can and reach their true potential

 Applying Hierarchy of Needs in Your Business?

In order to increase the productivity of your business using this motivation theory, you must ensure to support your employees in all aspects of their lives. Perhaps you can offer them time to focus their attention on the families by offering flexible working hours.

Additionally, you can make sure that you are paying them fair wages to help them stay financially stable. This will give your employees a mental piece that will eventually translate into a boost in their productivity.

2. Two-Factor Theory by Hertzberg

This motivational theory in business is also known as a “dual-factor theory” or “motivation-hygiene theory.” Thanks to Frederick Hertzberg, who was a psychologist to develop this theory back in the 1950s. He came up with this theory by analyzing how 200 engineers and accountants responded when asked about their negative and positive feeling about work.

Hence Hertzberg found two factors influencing the employees' satisfaction and motivation, and these are.

  • Hygiene Factors – the absence of these factors may lead to a lack of motivation and dissatisfaction amongst your employees. Examples include company policies, salary, relationship with co-workers and managers, and salary.
  • Motivator Factor – these factors lead to the satisfaction of employees and motivate them to work harder. These include an enjoyable working environment, recognition for hard work, and career progression.

Applying Two-Factor Theory in Your Business?

This theory indicates that a happy workplace translates into a productive workplace. Therefore, you must improve both hygiene and motivator factors. To increase productivity, you must motivate your employees by making them feel appreciated.

Give them plenty of feedback and ensure that they understand how they can grow with the business. Treat them right by offering all possible adequate working conditions accompanied with fair pay.

3. Expectancy Theory

The Expectancy Theory states that employees will choose to behave depending on the result they expect to achieve from their behavior. In simpler terms, your workers will do certain things based on what outcome they expect to come from their actions. For instance, your employees would want to work longer hours and expect a pay rise.

This theory also stipulates that your employees’ perception of rewards will also decide their behavior. So, the better rewards you offer, the more motivated your employees will be. Three elements make up Expectancy Theory, and these are.

  • Expectancy – your employees’ belief that their efforts will result in achieving their desired goal, i.e., pay rise, benefits, overtime, etc.
  • Instrumentality – the belief of your employees that they will receive a reward if they meet certain performance expectations.
  • Valence – the value of the reward itself.

This means your employees will work harder and feel motivated if they know that they will receive a reward for performing above and beyond their set targets. This motivation will result in the overall productivity of your business.

Applying the Expectancy Theory in Your Business?

The key for your business is to set achievable targets for the employees and offering them rewards that they want. However, the rewards do not have to be pay raises, bonuses, and benefits only. You can even offer praises, opportunities to progress or promotion, or an “employee of the month” kind of reward, etc.

4. Three-Dimensional Theory of Attribution

This theory explains that people try to determine their behavior in terms of why they do what they do it. The “Three-Dimensional Theory of Attribution” states that the reasons your employees attribute to their behavior will influence how they behave in the company in the future.

Bernard Weiner, who proposed this theory, defined three main characteristics of this theory that may affect your employees’ future motivation. These are as follows

  • Stability – stable attributions to be a successful achiever such as completing their job tasks. This can lead to your employees expecting something positive from you, including feedback, praise, pay rise, etc. This will further boost their motivation to brace for future success and to receive more rewards. The harder your employees work, the better your productivity.
  • Locus of Control - did a certain event occur due to internal or external factors. For example, if the employee did not do well due to their own fault, they will lose all motivation. However, if the employees know that they failed because of a factor not under their control, such as equipment malfunction, COVID-19 lockdown, etc., they will not feel as down as they would in the former situation.
  • Controllability – how controllable is or was the situation? If your employee believes they could have done better, this may adversely affect their motivation. However, if external factors caused the failure, they will try to do it again and better in the future.

Applying Three-Dimension Theory of Attribution in Your Business

To apply this theory, you must make sure to provide specific feedback to your employees. Let them know what they can do to improve and that you know all about their hard work. This will help them attribute their failure to uncontrollable factors (if applicable) and that they can succeed if they did right using different strategies.

You can also praise your employees for even the slightest improvement in their performance, irrespective of whether the outcome was less than expected. This will motivate your employees to try even harder and give their best to achieve desirable results.

5. The Hawthorne Effect

It was Henry A. Landsberger who came up with the Hawthorne Effect in 1950. He noticed the tendency of some employees to work harder and performing better when observed by researchers. This motivational theory in business was a result of social experiments based on the influence of physical conditions on employee’s productivity.

The researchers used to change a number of physical working conditions during the experiment, including working hours, breaks, and lighting. The final findings of the experiment, which became the basis of the Hawthorne Effect, were that workers tend to become motivated and work harder when you pay attention to them, instead of changing any physical conditions.

Applying the Hawthorne Effect in Your Business?

If you are a business owner or manager thinking about motivation your employees to increase productivity, start observing them. This will motivate them to work harder and be more productive to come across as the best performer amongst the rest.

You can also try to give them regular feedback to let them know that you are aware of their performance and how they are doing. Showing your workers that you care while improving the working conditions will make them work harder for your business which will boost your overall productivity.


Whether you are a small business or a large corporation, any of these five motivational theories in business can help you motivate your workforce and increase productivity. However, just like each company is different, each employee is different. Therefore, you must come up with rewards and motivational factors suitable for your employees.

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