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12 Psychology Concepts for Improving Employee Motivation

Office Space Bobs

Intro: Motivation in the workplace is an important factor for entrepreneurs. And I often explore the many fascinating psychology research studies that have led us to a deep understanding of employee motivation. The following post is a thorough list of the best psychology concepts for motivating your workforce.

A Road Not Taken…
There was a time in my life when I was studying to become an Industrial-Organizational Psychologist. Basically I thought that listening to, and attempting to vanquish, the workplace-based depression of a Fortune 500 company’s middle managers would be an interesting career. Looking at my current life, I am extremely glad I didn’t venture down that path!

My formal training in psychology, on the other hand, has taught me a ton of valuable concepts that I now use daily. These ideas translate well for almost any situation in the business and marketing world.

A couple of days ago I was speaking to a few budding entrepreneurs and the topic of motivation came up. While speaking with them, I realized how I forgot the actual psychology terms for the theories even though I think about the concepts almost on a daily basis. So I dug out my notes and gave myself a refresher course. The following concepts are some of the more important theories in motivational psychology in terms of workplace behavior:

Intrinsic Motivation

What drives us to do bold things? Those who have a desire to effectively perform behaviors for their own sake are said to have intrinsic motivation. If you are reading this article it’s probably because you are generally interested in learning about psychology. Thus, you have intrinsic motivation towards understanding human nature. Same rule applies in the workplace. Those workers who love being at work and will do anything it takes for the company to flourish are most of the time intrinsically motivated. Put in other words, they have a passion to succeed.

Extrinsic Motivation

Commissions, sales incentives and social praise are well-known motivators. The psychological concept is extrinsic motivation. These rewards can be extremely powerful when looking to motivate your staff to go above and beyond their current comfort zone of productivity.

Overjustification Effect

The catch-22 of extrinsic motivation. The overjustification effect occurs when someone naturally has a passion (intrinsic motivation) to see something through, but is offered a reward for its completion. Thus rendering them less effective. For instance, if an employee loves writing on your corporate blog but you decide to financially compensate them for each post. There is a chance they will find the writing less enjoyable. Since they have to be bribed into writing, then the task must not be worth doing for its own sake.

Positive Reinforcement

Strengthening or diminishing certain employee behaviors is extremely important when developing a highly effective team. This can be achieved with a basic understanding of operant conditioning. Essentially, the concept describes how the effects of praise and reward can be used to refine behavior. While this can be seen throughout life, you can apply the concept when motivating your workforce.

For instance, praising one of your employees (in front of their peers is best) after they made a nice improvement in their numbers during the previous week will result in a greater urge to repeat, or top, those numbers in hopes of further praise. A few examples of positive reinforcements in the workplace are social praise in public, sales incentives & bonuses as well as creative rewards such as early departure from work, casual dress days and in-office game/personal time.


After a while, positive reinforcement will become less effective as they will become accustomed to the praise. Withholding the reward unless performance is continually improved upon will help shape the productivity. To illustrate this concept, imagine a bookkeeper that has been openly rewarded for getting the expenses entered in 8 hours. But you have found that the 8-hour timeframe has become the norm. If you feel the job can be done in 5 hours you must praise their performance only as the timeframe improves and ignore slower results.

Achievement Motivation Theory

The desire to achieve the absolute best results possible is an amazing trait to find in coworkers (They are usually entrepreneurs). Those who strive to achieve share these three major characteristics:

  1. They favor a work environment in which they are able to assume responsibility for solving problems.
  2. They tend to take calculated risks and to set moderate, attainable goals.
  3. They need continuing recognition and feedback about their progress so that they know how well they are doing.

Furthermore, these high achievers have been found to carry two different goals – mastery and performance. Which means that as a leader you must recognize what makes these workers tick. The high achievers who strive for mastery of tasks are driven by developing themselves internally and are rewarded by becoming increasingly skilled. Performance based achievers need to be the best. They find satisfaction by completing their duties better than their coworkers.

Needs Hierarchy Theory

Sometimes called Maslow’s Hierarchy of Needs, the concept illustrates human needs, arranged in order of importance. The lower needs on this pyramid must be fulfilled before one can achieve the next higher level:

Maslow's Hierarchy of Needs

This chart is important for entrepreneurs and leaders to understand. For example, if an employee is lacking self-esteem or self-fulfillment in their life, there is little chance of them becoming an extremely remarkable addition to your team. You must recognize and create solutions for your staff to become truly satisfied in their life before you can achieve the results you desire.

Motivator-Hygiene Theory

Also called the Two-Factor Theory, the Motivator-Hygiene Theory isn’t backed by a lot of supporting data in the psychology/research world. But it has transformed many organizations in terms of employee motivation. The concept is based on the suggestion that an employee has two needs:

  1. Motivator Needs – These produce job satisfaction and are considered higher needs. They can be satisfied by providing stimulating, challenging and absorbing work. Meeting these demands will result in job satisfaction. However, the lack of a challenging job will not create job dissatisfaction.
  2. Hygiene Needs – These produce job dissatisfaction and are considered lower needs. A few examples of these needs are a company policy, working conditions, wages paid and other external factors that can directly affect a worker such as their supervisor. Meeting these needs does not result in job satisfaction but rather prevents job dissatisfaction.

The take away from this concept is that as you oversee your organization, it is important to emphasize job enrichment. Put in other words, be sure to maximize the potential of every single employee by consciously recognizing the opportunities to promote satisfaction and demote dissatisfaction in the workplace.

Equity Theory

Ensuring that your employees feel equal amongst their peers is extremely important when creating a motivated workforce. The equity theory describes how workers assess their efforts and outcomes on the job by calculating a “productivity ratio.” They then (most likely unconsciously) compare their ratio to the perceived ratios of their coworkers.

Further studies have expanded on this theory by classifying three types of equatorial behaviors:

  1. Benevolent – These workers feel satisfied when under-rewarded compared to coworkers and feel guilty when equally or over-rewarded.
  2. Equity-Sensitive – These workers believe everyone should be rewarded fairly. They dislike when they are under-rewarded and guilty when over-rewarded.
  3. Entitled – These workers feel they should be over-rewarded in comparison to their coworkers and dislike anything less.

The important idea here is that you must keep a careful eye on the workforce’s perceptions in regards to pay and rewards.

Goal Setting Theory

The goal setting theory is somewhat common sense but it reinforces the fact that a worker’s motivation shares a direct relationship with their goals. This theory was developed by Edward Locke and illustrates that by setting specific and challenging goals for your team motivation will provoke extreme productivity. From profit goals for your sales force to timeframe goals for your research team, your overall business will benefit greatly by implementing this strategy.

Valence-Instrumentality-Expectancy (VIE) Theory

This theory may be one of the most important concepts for motivation – but is often overlooked by most businesses. The VIE theory states that people are motivated to perform as expected because of the prospect of personal advancement such as a pay-raise or promotion. Put in other words, workers who aspire for a better status at work will do anything they believe will get them their desired results.

So what does this mean for your business? It conveys the fact you must clearly illustrate what actions you are looking for when it comes to your employee’s possible pay-raises, bonuses and promotions.

The Pygmalion Effect

The final concept on this list encapsulates the above ideas. The Pygmalion Effect produces a self-fulfilling prophecy in which your expectations about the level of your employees’ job performance can directly influence their performance. Put in other words, managers who expect high performance tend to get high performance and those who expect poor performance tend to get poor performance.


As a leader, understanding your team’s underlying desires and their motivating forces will be essential for your continued success. I hope these psychology concepts help you grow as an entrepreneur. Please feel free to share this post and I’d love to hear your thoughts on this in the comment section below. Thank you and good luck!

About the Author: Bradley Gauthier is co-founder of New Methods. And is passionate about helping big thinking entrepreneurs achieve their dreams. He has been a serial entrepreneur since the age of 12 when he created an online marketing firm. Connect with him on Twitter, Google+, LinkedIn & Facebook.

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