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This chapter is from the book

Three Factors

We assert that there are three primary sets of goals of people at work: equity, achievement, and camaraderie. We call this our Three Factor Theory of Human Motivation in the Workplace and we maintain that:

  1. These three sets of goals characterize what the overwhelming majority of workers want.

  2. For the overwhelming majority of workers, no other goals are nearly as important as these.

  3. To our knowledge, these goals have not changed over time and they cut across cultures, at least the cultures of the economically developed sectors of societies (the only sectors we studied).

  4. Understanding these sets of goals, and establishing organization policies and practices that are in tune with them, is the key to high workforce morale and firm performance. There is no conflict between the goals of most workers and the needs of their organizations.

NOTE

Keep in mind that our focus is on the goals of people at work. There is more to life than work, and our theory is not meant to cover all human motivation.

What is the evidence on which our assertions about human motivation are based? For one, we have been in the business of observing and querying employees for more than four decades. After all this time and the literally tens of thousands of employees with whom we have had direct contact and the millions we surveyed by questionnaire, we see certain themes repeating themselves time and again. They repeat themselves no matter what the occupation—from assembly-line workers to research scientists—no matter what the region of the world (North America or Europe), and no matter what the sex, race, or age. The specifics vary, of course, but everywhere we worked, people want to be proud of the work they do. They want to be paid a fair wage for their efforts and have job stability. Their co-workers—their cooperation and congeniality—are important to them. There is no escaping these fundamental needs of people at work and the enthusiasm they experience and express when the needs are satisfied (and the frustration when they are not).

Having trained as behavioral scientists, we are also aware that these impressions—no matter how impressive and convincing to us—must be buttressed by evidence gathered through systematic research. The evidence we have is derived from numerous analyses of survey data:

  • Statistical analyses of the answers to the multiple-choice questions in our questionnaires invariably show that the questions that correlate most highly with employee morale and performance are those that measure the three factors (equity, achievement, and camaraderie).

  • When we directly ask employees what they want from their jobs and their companies, they mention several goals, and the bulk of their answers fall into the three factors.

  • When we ask employees, in focus groups and in the "write-in" questions at the end of the questionnaire, what they like and dislike most about working for their company, a careful analysis reveals that their likes and dislikes almost always reflect the three factors.

  • In our research on employee turnover, we learn that the major reasons people stay with or leave an organization—other than personal reasons, such as a spouse getting a job in a different geographical area—almost always reflect the three factors.

To summarize, the evidence—both impressionistic and systematic—is overwhelming. We review a portion of this evidence later in this chapter. But first, here is our description of the three factors and the degree of satisfaction of employees with them in their work lives.

Equity. To be treated justly in relation to the basic conditions of employment.

Certain basic conditions are expected simply by virtue of the employment relationship. They are unrelated to position in the company or to performance. They are defined by generally accepted ethical and community standards and, while the basic goals do not change over time, a number of the standards that define what is acceptable do change. The basic conditions are as follows:

  • Physiological, such as having a safe working environment, a workload that does not damage physical or emotional health, and reasonably comfortable physical working conditions.

  • Economic, such as having a reasonable degree of job security, satisfactory compensation, and satisfactory fringe benefits.

  • Psychological, such as being treated respectfully, having reasonable accommodation made for personal and family needs, having credible and consistent management, and being able to get a fair hearing for complaints.

Are those things surprising? Of course not. What is surprising is how little we hear of them in many modern theories of management. But, enlisting the willing cooperation of a workforce in achieving the aims of an enterprise is impossible unless people have a sense of elemental fairness in the way they are treated.

We use the term "reasonable" frequently in our definitions because employees do not expect a level of perfection unrelated to the realities of our world. For example, the desire for job security does not mean that employees expect a lifetime-employment guarantee. They are not naïve; they understand that such a guarantee is virtually impossible in a capitalist economy. But, they are angry when they (or their co-workers) are laid off without the company having a pressing need to let them go (when, for example, it is already highly profitable or when it has not exhausted other more obvious ways to reduce costs). Their anger is magnified by insensitive handling of layoffs, such as when layoffs are done without adequate notice or financial and job-placement assistance.

In other words, employees become angry when, in their view, elementary considerations of fairness are completely submerged by the company's pursuit of its short-term business interests, such as the anticipated immediate impact of an announced layoff on a company's stock price.

Similarly, consider compensation. Most people know that becoming tremendously rich is more fantasy than reality. So, the common assumption that "employees will never be happy with their pay" is fallacious. Our norm on our satisfaction-with-pay survey question is 46 percent favorable and 23 percent unfavorable. (The rest are neutral about their pay.) Although pay satisfaction is among the lower-rated aspects of work, it is hardly very negative. Furthermore, those are the averages across many organizations, and the range of responses is large: the most positive company response is 69 percent favorable and the least positive is 16 percent.

Contrary to "common sense," people can view their pay as fair. Our research shows that perceived fair compensation is a function of a number of variables, including perceptions of what other organizations pay for similar work, the relationship of pay to employee contribution, and the company's profitability. Chapter 4, "Compensation," elaborates on these variables. The underlying attitude that these results reflect is simply whether the organization tries to be fair with its salary policies or whether it tries to squeeze every last nickel from its employees. And "fair" does not mean wildly generous. Everything else being equal, we find employees pleased with "competitive" pay and very pleased with compensation that is even a few percentage points above other companies' pay.

Similar observations can be made about other elements of the equity factor, such as benefits. But there are elements where the ultimate is expected, such as the following:

  • Safety. Where loss of life or limb is at stake, perfection has become the goal, and understandably so.

  • Respect. People want to be treated like responsible adults, but many workers—primarily in factories but also in many white-collar settings—are, as they see it, treated like children or criminals, subjected to strict monitoring of their work and other behavior to coerce performance and conformity to the "rules." The response to this kind of treatment is that anger builds up in workers over time, and this has always been a major element in the more severe industrial relations conflicts we have studied. Even when the reaction is not explosive, this mode of management is self-defeating for the company. It is based on false assumptions about the great majority of workers (e.g., that they are irresponsible) and becomes a self-fulfilling prophecy: management that expects the worst from people gets it.

  • Management credibility. A basic need of human beings from childhood through adulthood is to be able to trust the word of those whose actions have significant impact on them. A major source of discontent among many workers is information about important matters that is incomplete, unclear, contradictory, or simply absent. When workers assume that the company is deliberately withholding information, the void is filled with paranoid thoughts about what is really going on. This is a sure way to poison the relationship between management and its workforce.

How do workers feel about the degree to which their equity needs are being met? Our research indicates that the highest degree of average satisfaction concerns how people feel about safety at work, while the lowest relates to the failure of the organization to effectively deal with favoritism. There is a large difference in response from the highest to the lowest; in this case, from 79 percent favorable for safety to 43 percent favorable for favoritism. This demonstrates that employees make sharp differentiations among the various aspects of their work.

See Table 1-1 for a sample of the normative data relating to equity. We show in that table the average percentage satisfied across all our surveys for each question and its range: the lowest score we have ever obtained on the question (the "minimum") and the highest (the "maximum").

Table 1-1 1994–2003 Norms and Ranges for a Sample of Equity Questions

 

Range

Question

Norm

Min

Max

Safety

79%

33%

94%

Treated with respect and dignity

67%

32%

91%

Supervisor's human-relations competence

66%

35%

82%

Benefits package

65%

12%

97%

Physical working conditions

62%

24%

94%

Job security

60%

6%

90%

Amount of work expected

58%

17%

77%

Company interest in employee well being

52%

5%

98%

Company communication on important matters

52%

10%

80%

Sr. management's actions consistent with words

51%

37%

70%

Pay

46%

16%

69%

Favoritism (lack of)

43%

21%

70%


The overall ranking of items is similar within most of the individual organizations that we survey. When we discover an exception to the pattern, it is cause for particular attention. Take safety, for example. In general, safety is highly rated in our surveys, but there are a few organizations, especially in heavy manufacturing, where it is one of the lower-rated items. But, there are exceptions to that, too. As an example, see Chapter 6's discussion of Paul O'Neill (the former Secretary of the Treasury) and his work on safety when he was chairman of Alcoa. These "exceptions to the exceptions" are particularly noteworthy and illuminating because from them we learn that in management practice, little is foreordained. Much can be done if there is a will to do it.

Although this pattern tends to hold up across organizations (with exceptions, as noted), the levels of satisfaction—within the same broad pattern—vary widely. Thus, for example, employees in companies A and B can rate safety among the highest and pay among the lowest of all the equity items, but company A employees can be much higher than those in company B on both of these (and on just about every other equity item).

The great variations among organizations can be seen in the ranges in Table 1-1, and they are extremely important. First, they lend the lie to the commonly held assumption that people, no matter where they work, are similar to each other in their disgruntlement with their employment conditions. What management does is critical and the differences among organizations in management behavior—and therefore employee response—can be huge. Second, the variability allows us to answer the "So what?" question about employee attitudes: does satisfaction matter for business success? In Chapter 2, "Employee Enthusiasm and Business Success," we show how business performance varies markedly among organizations with different degrees of employee satisfaction.6

Achievement. To take pride in one's accomplishments by doing things that matter and doing them well; to receive recognition for one's accomplishments; to take pride in the organization's accomplishments.

A sense of basic equity in the employment relationship serves as the foundation on which high employee morale can be built: the powerful need to feel proud of one's accomplishments and the accomplishments of the organization is then freed to drive behavior toward high performance. Pride comes both from the employees' own perceptions of accomplishment and from the recognition received from others.

That is why the often-asked question, "How do you motivate employees?" is foolish. Most people enter a new organization and job with enthusiasm, eager to work, to contribute, to feel proud of their work and their organizations. Perversely, many managers then appear to do their best to demotivate employees!

You may reject that argument if you believe that people (other than a few saints, overachievers, or neurotic workaholics) are basically greedy and lazy when it comes to work. The reverse is true: most people are reasonable in what they expect in terms of treatment and are eager to perform in a way that makes them feel good about their performance. When we observe the opposite in an employee, it is either an atypical case (see the following discussion on individual differences) or, most commonly, because management has damaged that employee's motivation.

Our statistical analysis shows that a sense of achievement has six primary sources:

  • Challenge of the work itself. The extent to which the job uses an employee's intelligence, abilities, and skills.

  • Acquiring of new skills.

  • Ability to perform. Having the training, direction, resources, authority, information, and cooperation needed to perform well.

  • Perceived importance of the employee's job. The importance to the organization, to the customer, and to society.

  • Recognition received for performance. Both non-financial (such as a simple "thank you" from the boss or a customer) and financial (compensation and advancement that are based on performance).

  • Working for a company of which the employee can be proud. Because of its purpose, its products (their quality and their impact on customers and society), its business success, its business ethics (treatment of customers, employees, investors, and community), and the quality of its leadership.

As with the equity items, the surveys reveal a mixed picture regarding achievement. A sample of the normative data relating to achievement is shown in Table 1-2. We ask many questions about this area, and these are discussed in relevant chapters. But, for now, we note that among the most positive ratings are those focused on two opposite organization poles: the macro and the micro. Employees, on the average, are most favorable toward the overall characteristics of the organization (such as the quality of the organization's products and services, its profitability, and its ethics) and, at the other pole, toward the immediate work environment (such as the job, co-workers, and the technical ability of the immediate supervisor). The least positive ratings tend to be about efficiency at a "middle" level (such as bureaucracy, consistency of direction from management, and, as will be seen later, cooperation across units) and also about reward. There are some apparent contradictions, such as the view of many employees that the amount of work expected of them hurts quality and yet the very positive feeling about the quality of the products and services the organization delivers to its customers. These matters are all discussed in detail in the book. Where we have comparisons with other surveys, the results are similar to ours (see Appendix D).

Table 1-2 1994–2003 Norms and Ranges for a Sample of Achievement Questions

 

Range

Question

Norm

Min

Max

Clear idea of results expected

84%

7%

95%

High-quality products/services for customers

80%

16%

100%

Supervisor's technical competence

78%

38%

91%

The work itself

76%

52%

95%

Pride in organization

74%

48%

96%

Company profitability

72%

13%

97%

Corporate citizenship

67%

11%

100%

Tools and equipment to do job

64%

23%

94%

Information to do job

62%

29%

88%

Training

57%

9%

83%

Company overall is effectively managed

57%

24%

92%

Employees treated as important

57%

40%

73%

Feedback on performance

53%

21%

79%

Recognition for good job

51%

16%

86%

Decisions without undue delay

49%

30%

85%

Participative environment

44%

21%

81%

Not a lot of wasted time and effort

44%

24%

71%

Don't receive conflicting instruction from management

43%

25%

65%

Solve problems rather than blame

41%

16%

69%

Merit salary results from performance

40%

5%

91%

Bureaucracy (lack of)

39%

12%

72%

Balance of praise vs. criticism

38%

11%

71%


Camaraderie. To have warm, interesting, and cooperative relations with others in the workplace.

Human beings are social animals: positive interaction with others is not only gratifying, but essential for mental health. We often neglect the extent to which an organization functions not only as a business entity, but also as a community that satisfies social and emotional needs of its members.

We offer respondents an opportunity to write comments on the survey. One typical question asks, "What do you like most about working here?" One of the most frequent and consistent responses to this question involves the people with whom they work. That is because co-workers are important and because, by and large, people get along well with each other within their work units. We receive considerably fewer positive comments about relationships with other units in the organization; those comments are often in response to what employees like least. For example, note the following:

  • From an employee in a real estate company (what employee likes "most"): "My team is full of intelligent people who are friendly and constantly want to do better and help each other. We work beautifully together."

  • From an employee in a factory (likes "most"): "The people I work with." Simply this phrase, or variations of it (such as "the great people I work with"), appears repeatedly in almost every survey in response to the question about what respondents like most.

  • From an employee in a hospital (likes "least"): "Cooperation and communication between physicians and nurses needs to be much better. Nurses truly know the patients. We are at the bedside dealing with families and the patient. Many times, we are ignored. It's like we're the physicians' servants and we should jump when they say so."

  • From an employee in an information-technology group in a bank (likes "least"): "What gets me most upset is the way the departments we have to service are absolutely clueless about how busy we are and short handed we are. We can't do everything just when they want it. They don't care and when they complain to our V.P., he doesn't support us."

The quality of interaction in organizations is obviously greatly affected not just by friendliness and mutuality of interests, but also by co-workers' competence and cooperation. In that environment, a friendly slacker is an oxymoron: being unhelpful to co-workers is, by definition, unfriendly. This is another example of the way employees' needs—in this case, for positive interpersonal relationships in the work setting—are congruent with the organization's needs for high performance.

The camaraderie concept is somewhat less complex than equity and achievement, and we came to an explicit realization of its importance somewhat later in our work. Therefore, in our surveys, fewer questions have asked about camaraderie and these are shown in Table 1-3. However, we can state that the most favorably rated aspect of camaraderie is simply the relationship between co-workers, followed by teamwork within the workers' unit, teamwork across departments in a given location, and finally, teamwork and cooperation across the entire company.

Table 1-3 1994–2003 Norms and Ranges for a Sample of Camaraderie Questions

Question

Norm

Min

Max

Relationship with co-workers

83%

37%

97%

Teamwork within work unit

73%

51%

93%

Teamwork across departments in location

51%

23%

89%

Teamwork across company as a whole

49%

5%

88%


As previously mentioned, teamwork is not just a camaraderie issue. It also has a major effect on achievement. And we said that attitudes toward teamwork are more positive at the micro level—within units—than at what we have termed the middle level—across units. The differences between companies, however, are large, which shows that familiarity and proximity do not always breed contentment or distance antagonism. For example, although the norm for teamwork within the unit is 73 percent, the range varies from 51 to 93 percent. Also, the norm for teamwork across units is 51 percent, but the range varies from 23 to 89 percent!

Chapter 10 discusses camaraderie, its impact on performance, and ways of enhancing it. That chapter also discusses the way camaraderie can sometimes work against organization goals. For example, solidarity in a workgroup might develop in opposition to a management whose practices are considered unjust by employees. Management becomes the "enemy camp" and, in those situations, equity issues must be dealt with first.

That summarizes the key sets of goals of the overwhelming majority of employees. Other than extreme cases where our theory does not apply (which will soon be discussed), we assert that a manager does not need to know much more about human motivation at work. That is quite an assertion, but we challenge anyone to suggest other motivators that are as powerful, relevant in the workplace, and widespread. We further claim that a genuinely high-morale, enthusiastic, and highly productive workforce is impossible if those needs go unsatisfied.

The three goals we propose are distinct needs that, unfortunately, cannot be substituted for each other. For example, enriching the content of a job does not increase satisfaction with pay or cause an employee to minimize the importance of his pay dissatisfaction. Discontent with pay can be ameliorated only by more pay! Similarly, unhappiness with a boring job can be solved only by restructuring the job or transferring the employee to work that is more interesting. Paying the employee more won't solve the issue. Each goal—and most every subgoal—must be dealt with individually. There are no panaceas.

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