Armstrong contends (2007: 119) that ‘[o]ne of the most fundamental concerns of reward management is how high levels of performance can be achieved by motivating people’. In so doing, he draws attention to an important triangular relationship, and one that is implied in the terms of the above question, and one which will be the focus of this essay, namely the relation between motivation, performance and reward. Broadly speaking, the relationship is figured in the understanding that clear and desirable rewards will motivate people in organisations to work hard and thus will result in high performance. The notion of employee retention – ‘the best way to retain people’ – is a different but related concept. People are more likely to remain in organisations, I submit, where there is a clear and productive relationship between the three factors mentioned in Armstrong’s summation. For this reason, inter alia, and as Armstrong articulates (ibid.), [t]he development of a performance culture is a typical aim of reward strategy’. However, despite these fairly unequivocal assertions, motivation itself is not a clear, monovalent concept. Indeed, there are multiple theories of motivation, various practices for implementing and evoking it, and competing positions on its efficacy and correlation with performance. In this essay, I will juxtapose two central theories of motivation – content theory and process theory – in order to analyse the manifold nature of the term, and to consider how these two broad theories of motivation, of which there are many respective components – can be applied in practice as a means of conceptualizing employee reward and retention.

The need to conceptualise motivation in theoretical terms is made evident when one considers the practical implications of the relation between motivation, performance and reward. Only by establishing a clear model of motivation, a theory of how it functions, can performance be modeled and rewards managed. The proof of the theory is then evidenced in practice, and a clear understanding of motivation theory allows for changes and developments to be made to practice and performance. As Armstrong has argued (2007: 119), ‘[m]otivation theories provide essential guidance on the practical steps required to develop effective reward systems’, and ‘there is nothing so practical as a good theory’. Two such prominent theories are the content theory and process theory of motivation. Prior to an analysis of these two schools of thought however, a necessary preliminary is an overview of what is meant by motivation theory in general. Broadly speaking, theories of motivation are concerned with what inspires or causes people to act, and how this process of inspiration takes place:

Motivation theory is concerned with what ‘moves’ people to do something – what influences people to behave in certain ways. It explains the factors that affect the effort that they put into their work, their levels of engagement and contribution and discretionary behaviour. (Armstrong, 2007: 119)

Clearly, motivation theory is a wide-reaching discipline; behind almost every human action there is a conceptual space for theories of motivation. The essential difference between the two schools under present discussion – the content theory of motivation as opposed to the process theory – lies not so much in the nature of the things that move people to do something, the influences per se, but rather with their origins. In other words, the essential question the two schools differ on is the following: from where does the individual derive his/her motivation? To cite the useful conceptual précis offered by London (1997: 179), it can be said that: ‘[c]ontent theories describe what people want and distinguish between intrinsic and extrinsic needs’ whilst ‘[p]rocess theories describe how people decide what to do’. There are also, as London notes, ‘theories of goal setting and feedback (Locke) explain mechanisms that help keep people on target and evaluate their progress’, but it is important to note that the notion of reward is already intrinsic to both theories of motivation. Goal-setting theories and reinforcement theories, as I note below, privilege reward in particular, but the notions of reward and recognition are nevertheless contained in more general analyses of both schools of motivational thought. Broadly speaking, therefore, it can be said that the content theory of motivation privileges the internal factors that influence and inform human behavior. By contrast, process theories of motivation consider the thought processes and cognitive aspects of motivation. Content theory is ontological in its theoretical approach: it is concerned with the nature of motivation, and the factors that constitute it. Process theory, on the other hand, is epistemological: it relates to the mechanisms and processes by which we theorise and understand motivation. The implications of this distinction for clarifying the best way to retain and reward individuals in organisations are significant.

Although something of an oversimplification, there is a distinction between content and process theories of motivation that can be broadly described as a respective emphasis on internal and external factors respectively. Content theories of motivation privilege the individual; they consider his/her needs, goals and aspirations per se. As such, content theories of motivation are highly theoretical, and frequently adduce models of motivation that apply to all individuals and in all contexts; they are internally defined, and thus universal, rather than dependent upon environmental or context-specific factors. One such prominent theory of motivation is Maslow’s hierarchy of needs. As Erez et al. acknowledge (2001: 354) ‘[t]here have been a number of need theories that have stimulated research in the field of work motivation, of which Maslow’s has been without doubt the most popular’. Needs theories of motivation are content theories because they consider the internal factors that are defined by the individual: ‘need models depict a content theory concerned with features of the individual […] that energize and sustain behaviour’ (ibid.). Maslow posited a hierarchy of needs, whereby there a five distinct categories of need: physiological needs, safety needs, belongingness needs, esteem needs, and self-actualization needs. These are figured in increasing order of importance, and a lower level need must necessarily be satisfied before a higher level need; in other words, one must have fulfilled one’s belongingness need before being able to achieve one’s esteem needs, for example. The last category, self-actualization needs, is never fully fulfilled, and remains an ongoing quest for reward and recognition. Importantly as a content theory of motivation, Maslow’s needs ‘can be considered universal’ (Erez et al., 2001: 355). This theoretical model has significant implications for best practice in terms of organisational employee reward and retention. In terms of planning a reward strategy, the management of an organisation must consider the necessity of fulfilling employee needs according to the Maslow hierarchy; in other words, the strategy adopted must privilege various employee needs and motivating factors in the correct order. This means, for example, that an employee must feel he/she belongs in an organisation, that he/she fits in, before he/she can be rewarded for his/her effort and thus feel a sense of self-esteem. This has implications for practice. Consider the use of IPR (Individual Performance Review) in certain organisations analysed by Redman & Wilkinson (2009: 201), who found that performance was improved by establishing a sense of belongingness (through close relations between management and staff), which then allowed for a greater sense of esteem, and presumably, increased motivation. As the authors noted with regard to their study:

Not only did IPR visibly and symbolically demonstrate to staff their value and importance to the organisation but the manager also personally cared about their well-being. In some of the accounts of appraisers [adduced in the text case study] there were classic human-relations descriptions of the IPR encounter going well beyond the boundaries of work relations.

This relates to the importance, given the theoretical basis for a need-based model of motivation, of what Ramundo (1994) called ‘the bargaining manager’, namely the individual who concerns him/herself with ‘enhancing organizational results through effective negotiation’ [emphasis mine]. The emphasis on negotiation – rather than a one-way process of individual desires or external factors – is a useful means of figuring motivation and reward, and highlights how both content theory and process theory come together when individual needs (embodied by the employee) meet external and organisational goals and objectives (embodied by the ‘bargaining manager’). This follows closely the Maslowian model of needs, and thus indicates that content theories of motivation have clear practical implications. However, and as a number of theorists have noted, caution should be exercised when highlighting the importance of either content or process theories of motivation at the expense of the other. In other words, there are manifold facets to motivation theory, such that an exclusive focus on either content or process theory inevitably reduces the complexity of the motivation-performance-reward dynamic. As Redman & Wilkinson have articulated, content theories frequently run the risk of over-emphasizing the role of the individual, and underplaying the importance of environmental and external factors as influences on motivation. The IPR model adduced above, for example, when interpreted according to the Maslow principle of needs (a content theory of motivation), could be considered to place too much emphasis on internal factors (a sense of belongingness, self esteem and so forth), and insufficient emphasis on a process theory approach, which would consider how the individual performs a cost-benefit analysis of their activity, considers the potential long term rewards, and sacrifices more emotional, individualised elements in favour of a more rational, analytical approach. Redman & Wilkinson (2009: 153) thus draw attention to this potential problem with an exclusively content based approach:

Focusing on motivation as an individual skill presupposes that people are unaffected by their conditions of work or the way that they are treated. Factors once considered the responsibility of management or personnel are individualised such that the emphasis on control systems, job design, pay rates or being a ‘good employer’ becomes the straightforward problem of hiring the most appropriately ‘skilled people’.

The cost-benefit model of motivation – wherein an individual rationally and dispassionately weighs up the pros and cons of a particular action – is a process theory model, and downplays the content theory emphasis on emotional, internal considerations. In practice, both theories are useful, and can be applied in tandem, in order to maximise the efficacy of reward management, and to ensure the optimum retention of employees. As Erez et al. have noted (2001: 354), the point at which the two theories come together is in their approach to outcomes. The means in which a certain act’s outcomes and consequences are conceptualized by the individual constitutes the difference between the two approaches, but they nevertheless have this important consideration in common, such that:

The two theories converge in their mutual concern, with the valence associated with the outcomes of a specific act. Need theory considers the type and level of the valence associated with an act, whereas expectancy theory adds the perceived probability of the outcomes.

This convergence becomes more apparent when a comparison is made between two prominent forms of motivation theory, one which is content based and the other which could be described as a process theory model. In the former case, Alderfer’s ERG theory, as with Maslow’s hierarchy of needs, posits a model of interrelated needs, defining these as existence, relatedness, and growth needs respectively. Effectively, and as Avery has summarised (2001: 64), Alderfer thereby ‘condensed Maslow’s five motivational factors or levels into three: existence (physiological and safety needs), relatedness (socialization and esteem needs), and growth (self actualization’. The most important implication of Alderfer’s condensed needs model of motivation is that, like Maslow’s hierarchical model, it posits an interrelation between the various elements of the individual’s collective needs, such that they are always dependent on one another. Just as in Maslow, the lower hierarchical strata must be fulfilled before a higher category of need can be fulfilled, the levels of need are interdependent in Alderfer’s model, such that (ibid.), ‘[a]ccording to Alderfer, all needs can be simultaneously active, and the lack of a higher ordered need satisfaction makes lower level needs more important’. The implications of this theory for the best practice of retention and recognition of employees in the workplace are important and many. A perceived lack of one need, as I note above, has implications for one’s assessment of the others, and thus a lack of, for example, of feeling of growth and development amongst employees would have, according to Alderfer’s model, serious implications for their existence (the physiological and safety elements of the Maslowian equation), and thus their likelihood of staying at the company. Avery (2001: 66) highlights the importance of such a process theory for clarifying the best way to both retain and reward employees:

If employees are not feeling worth in the organization, they may seek greater fulfillment of their existence needs, possibly through greater need to know their position is secure within the department, or enhanced concern about their salary which would provide them with items to satisfy their physiological needs.

Another content theory of motivation, the two-factor theory (or the motivation-hygiene theory), posited by Herzberg, highlights a number of external, environmental (i.e. workplace) elements which are contingent with the fulfillment of an individual’s perceived needs. Avery (2001: 67) articulates how this model fits into the aforementioned theories of motivation, and how recognition and retention are implicated in the model:

This theory postulates that there are two factors that serve to either satisfy employees if they are present in the work place (motivators), or cause dissatisfaction of employees if these items are absent (hygiene factors). Motivators include achievement, recognition, work itself, responsibility, advancement and growth; whereas hygiene factors include company policies, supervision, working conditions, salary, status and job security, among others […].

Vroom’s expectancy theory, by contrast, is a process theory of motivation, and refers to a model of motivation which, as Isaac et al. summarise (2001: 212), ‘suggests that individuals, acting through self-interest, adopt courses of action perceived as maximizing the probability of desirable outcomes for themselves’. Vroom contends in his expectancy theory of motivation that ‘people consciously choose particular courses of action, based upon perceptions, attitudes, and beliefs, as a consequence of their desires to enhance pleasure and avoid pain’ (ibid.). Contained in this model is thus one of the inherent features of the process theory of motivation, namely the individual’s assessment, through a rational cost-benefit analysis, of the likely outcomes of his/her action, alongside how desirable those outcomes happen to be. Different process theories have been formulated – reinforcement theory highlights the importance of reward as a form of extrinsic motivator, goal-setting theory has important applications as a means of using the mechanics of the process theory to formalize and articulate targets and outcomes – but each of these shares this focus on the external outcomes of action. This element, as I note above, is what unites the two theories, although each conceptualises it in very different ways.

The most salient differences between the different conceptualizations are, as I indicate above, the way in which motivation is derived in the first instance, and the temporality of decision making. In the case of content theories of motivation, for example, the factors that move the individual are derived largely from the self. Secondly, and with regard to the temporal focus of the individual’s decision making, the content theory of motivation emphasises the ‘here and now’ of the decision making process; it is based on feelings (of belongingness, esteem and so forth) at the time of the action. By contrast, the process theory of motivation allows for a longer term approach, in which the individual considers not merely the short term nature of the action, but how it fits into a broader scheme of costs and benefits, desirable and undesirable outcomes. The implications for clarifying the best way to retain and reward people in organisations are considerable. The very ontology of managing motivation is implicated in both models. In the content theory of motivation, and as I adduce above in the form of the IPR studies, reward and effectively retention (justifying the individual’s contribution, and increasing his/her esteem and belongingness and thus probability of remaining with the organisation) are both achieved through a synchronous approach. The manager, or motivator, achieves high performance from the employee by fulfilling his/her needs, according to the hierarchy outlined in the theory (whether it be Maslow, McClelland or any other needs based model), and both before, during and after the action. By contrast, process models of motivation are more concerned with deriving motivation through a diachronous methodology, whereby the desirability of the action is pre-established by contrasting the less favourable present situation with the more favourable outcomes of a given action. This diachronous approach is at its most effective when there is a clear marriage of desirable individual outcomes and organisational goals; it is the responsibility of the motivator (i.e. the manager of the organisation) to reward individuals where these two are closely aligned. As Isaac et al. (ibid.) note in their analysis of leadership through process theories of motivation, the ‘desire to maximize self-interest provides aspiring leaders with unique opportunities to assume leadership roles by simultaneously meeting both follower needs and organizational requirements’. The same could be said of effective managers, who incorporate the principles of both process and content theories of motivation in order to bring together the triumvirate of a successful organisation: motivation, performance and reward. Where these three are closely aligned both conceptually and in practice – in other words, when a clear and cogent theory of motivation is in place – the fourth variable, namely the retention of employees, follows as a consequence of high motivation, strong performance, and fulfilling rewards. Both content and process theories of motivation assist in clarifying the best way to bring put these concepts into practice.