Saturday, December 7, 2013

Motivation - external incentives

In the last byte, we looked at the early evolution of the study of internal need that acts as a motivation. In today's byte, we look at the evolution of the external incentives that lead to motivation.

A look at the literature on economic assumptions that initiate motivation in human would get us to identify that a differential piece-rate system was developed pretty early in organizations. The underlying assumption in all these cases was that: people are motivated by self-interest and economic gains.

The most significant of the scholars who approached human motivation with this economic assumption was Adam Smith. He laid the cornerstone of modern free enterprise system of economics when he formulated the "invisible hand" and free market to explain the motivation to human behavior.  The "invisible hand" refers to the unseen forces of a free market system that shape the most efficient use of people, money, and resources for productive means.

The basic assumption here is that people are motivated by self-interest for economic gains to provide the necessities and conveniences of life. Thus employees would have a higher productivity when they are motivated by self interest. A more recent focus in this concept of self-interest in the corporate centers is called - "enlightened" self interest. In this case, an individual don’t just look at what is in his/her best interest, but also recognize the self-interest of other people.

This was further supported by the Hawthorne studies, where a positive relation between positive effects of pay on productivity was identified. In addition, social and inter-personal motives were also highlighted. We shall continue this discussion in the next byte.

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