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Motivation Theories

(1) Goal-setting theory and equity theory The goal-setting theory is based on the observation that employees perform at a much higher level when given tasks that challenge their limits. On the contrary, if given mundane work or rountine activities, their level of motivation would fall and their productivity will decline way below what they are truly capable of. The implication of this theory is that, when teaching the employees how to adapt to the new business logic, emphasis must be placed on how much more they can accomplish with the new system. By showing them their productivity at work can improve beyond their traditional limits, the employees would feel that they are being challenged by the new business model. In the long term, their sense of accomplishment would rekindle and their motivation regained.

The equity theory is based on employee’s inner belief that their amount of contribution should commensurate with the rewards they deserve. If the rewards they receive is much less than their innermost expectation, they would negatively influence their motivation. When designing any reward program, therefore, the management team should request the employees explicitly state what would be fair rewards for them. Negotiation would be necessary to attain a sound

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and reasonable reward system.

(2) Herzberg’s two-factor theory The current loss of motivation among employees in Phyllis and Barnes can be explained by the “hygiene factors”, which are elements in the work environment that could degrade motivation. In our case, the existing chaotic business logic in the ordering system and the rapid changes in work requirements are regarded as the major hygiene factors. When deciding how to motivate employees, the management team can consider several typical “motivation factors”, which are elements that could boost employees’ motivation such as salary raise, bonus and other financial rewards, a new promotional scheme, increased medical benefits, etc.

Recommendations and Implementation Plan After comparing the pros and cons of four different approaches, conducting the organizational development (OD) program is our key recommendation in this case analysis. Our reason is based on a belief that the most comprehensive and systematic solution is most effective at resolving organizational issues. Here we elaborate what techniques would be used to implement such an OD program. Participants should reach a consensus regarding a common problem that the company faces.


The drop in sales in Phyllis and Barnes was found to be caused by an outdated business workflow. By following the above recommendations, the Department of Operations can gather a set of comprehensive inputs from the employees and build an ordering system that would be welcomed by all the users. In the long run, the company will also benefit enormously from a restructuring of the organizational culture.

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