Employees are essential to any growing business. For entrepreneurs to start scaling their businesses and expanding their operations, they must have a reliable team that they can trust to perform to the best of their abilities. 

However, there are instances where employees unpredictably and unknowingly lose their motivation to work. When this happens, employees may experience mood shifts, negative attitudes, as well as a loss of productivity, creativity, and initiative. Aside from that, they can also exhibit frequent or increased absenteeism, tardiness, and poor social engagement.

While employee motivation can be a matter of personal struggles or issues, environmental and cultural factors in the workplace may affect an employee’s motivation to work. To give you a better idea, here is a comprehensive guide and overview of the importance of employee motivation in business.


Importance of Employee Motivation

Source: Pexels

Before we dive deeper into the topic of motivation, let us first define what employee motivation is in the context of business and the workplace. Renowned job site Indeed defines employee motivation as the driver that “brings commitment and enthusiasm in the workplace”. It encourages employees to work effectively and efficiently which boosts the overall productivity of a business or organization.

Indeed also explains that employee motivation helps maximize the utilization of human resources as it decreases the gap between an employee’s ability (skill) and willingness (motivation) to work. Therefore, motivated employees tend to love what they do and are typically the most productive. 

Because of this, high employee motivation results in higher productivity and efficiency which reduces a business’s operating costs. In addition to this, motivated and satisfied employees can also become sources of creativity and innovation. They are also more likely to take further steps in developing and sharpening their skills to provide better work performance. 


Types of Motivation

Now that we have a better understanding of the role of employee motivation in the workplace, let’s take a look at the concept of motivation from a psychological perspective. Researchers generally categorize employee motivation into two distinct types – intrinsic and extrinsic.

Intrinsic motivation refers to motivation that comes from a personal or individual level. It is the type that motivates a person with the thought of being rewarded internally or for personal gratification. 

On the other hand, extrinsic motivation is the type that is rooted in external factors. Extrinsic motivators are further classified into two which are compensation and punishment. 

Compensation typically involves rewards such as salary, bonuses, prizes, awards, and praise that becomes a source of joy and pride. On the contrary, punishments involve motivational drivers that bring blame, judgment, shame, or even fines. 

Both types of motivation can effectively push an individual to perform at their best, ultimately increasing their work efficiency and productivity.


Theories On Employee Motivation

It is easy to say that factors such as rewards or punishments can push people to do the best they can. However, there are much deeper theories that can help explain why people behave the way that they do when it comes to motivation. To give you a better idea, here are some popular theories and concepts on employee motivation that better illustrate this human behavior.


Maslow’s Hierarchy of Needs

One of the most popular psychological concepts when it comes to human motivation is the pyramid that shows an individual’s hierarchy of needs. According to Maslow, people are wired to work to meet their needs – starting from the most fundamental such as food and clothing, up to the personal level which involves self-actualization and personal growth.

The pyramid developed by Maslow demonstrates five levels that categorize human needs. Let’s see how these hierarchy levels translate in the context of the workplace.


  • Level 1 (Physical Needs)

This includes the basics needed to live and survive such as food, clothing, and shelter. Employees are motivated to work and earn a salary to meet these needs.


  • Level 2 (Security) 

This level focuses on the desire to feel safe and secure in one’s space. Employees strive to achieve job security and also want to work in a considered safe environment.


  • Level 3 (Social)

This category extends from the intrinsic or internal level and transcends to the need to belong. Employees strive as they want to be recognized by other people as valuable members of the organization.


  • Level 4 (Ego) 

More than the feeling that they belong, people also tend to desire higher recognition and elevated status. Employees are motivated to perform to the best of their ability to boost their ego in times of success.


  • Level 5 (Self-actualization)

Once the basic needs and status are met, people tend to turn back to intrinsic motivators and focus on self-development. At this stage, employees care less about rewards, recognition, or praise. Instead, they are motivated by personal goals and beliefs such as growth, creativity, and innovation. 


McClelland’s Three Needs Theory

In contrast to Maslow’s Hierarchy of Needs, another psychologist by the name of McClelland proposes the Three Needs Theory to explain human motivation. Unlike Maslow’s proposal of innate human needs, McClelland suggests that people are driven by needs shaped over time and through life experiences.

The Needs Theory lists three types of motivational needs that drive people regardless of their demography, culture, or economic status. This includes:


  • Need for Achievement

This type of motivator drives people to put effort into achieving their goals in life. People with a high need for achievement consider the ability to accomplish their objective as a better reward than prizes or praise. Employees with this kind of need work well in result-oriented or output-based tasks and are more likely to come up with creative and innovative solutions.


  • Need for Power

The need for power refers to people’s tendency to want to hold a certain degree of control or authority over others. They want to be in a position to make decisions and implement changes to align with their personal desires. This particular need focuses on ego, self-esteem, and influence and is best suited for leadership roles to either control or guide others.


  • Need for Affiliation

The Need for Affiliation type of motivation revolves around an individual’s desire to be surrounded and accepted by others. People with this type of need strive to establish long-lasting and quality relationships. They love to work in teams and on collaborative projects and tend to follow rules to avoid risks of rejection. 


Herzberg’s Two-Factor Theory

Herzberg’s two-factor motivation theory argues that employee motivation is influenced by two mutually exclusive sets of factors present in the workplace. Herzberg’s theory focuses on the factors that ensure job satisfaction as well as elements in the work environment that cultivate employee dissatisfaction.

Herzberg argues that the lack of job satisfaction does not directly lead to dissatisfaction. Instead, it is evidence of the absence of satisfaction due to the work environment and culture. 

Also referred to as the motivation-hygiene theory, Herzberg developed a list of motivation factors that aid in ensuring job satisfaction. He also added a list of hygiene factors that the presence or lack of can influence employee motivation. 

Motivation factors can either have positive or negative effects on a team member’s job satisfaction. Employees’ experiences and other situational factors influence their motivation to continue working. Herzberg lists the motivation factors as:


  • Career or personal advancement 
  • The nature of the job itself
  • Possibility of growth
  • Opportunity for responsibility
  • Recognition
  • Achievement


On the other hand, hygiene factors are environmental and cultural factors in the workplace that are meant to decrease job dissatisfaction. The lack of these hygiene factors can increase a team member’s dissatisfaction while the presence of it can also alleviate feelings of displeasure, discomfort, and discontent. The Two-Facto Theory lists the hygiene factors as:


  • Salary and monetary compensation
  • Interpersonal relations
  • Company policies and regulations
  • Leadership and supervision
  • Working conditions



For business owners and good leaders, there is a lot to gain in knowing the different concepts and theories that explain motivation. With this knowledge and understanding, you can take steps towards creating a positive and healthy work environment and make employees feel acknowledged, happy, and satisfied in their jobs.

Maintaining a team full of motivated employees can keep your business running at a high level of efficiency and productivity. Also, you won’t have to worry about problems such as tardiness or day-to-day inefficiency. Instead, you can trust and rely on your employees to do their assigned tasks properly and to the best of their ability. 


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