According to Robbins & Judge (2010), motivation occurs when an individual interacts with the situation. Different people have a different reactions to different situations and they may be either motivated or discouraged depending on their levels of motivation. To explain motivation, different people put forward different theories. They include theories such as the hierarchy theory of motivation, theory X and Y, and theory the two-factor theory. Modern theories of motivation include goal-setting, equity theory, and expectancy theory.
The equity theory hypothesizes that employees should be compensated based on the time they spend doing the work and product quantity. Employees are motivated by their own rewards and the rewards of others. The expectancy theory hypothesizes that employees are not always motivated by rewards, but by their individual goals. Therefore, an employee knows that giving maximum does not mean being recognized by the management and good appraisal does not always lead to high rewards in the firm. Therefore, the motivation of employees should be achieved by understanding individual employee goals.
It is the responsibility of the firm to motivate the employee so that employee performance can improve. However, it will also depend on the priorities of the employee. The management can come up with different measures of performance for employees. All diverse employees achieving the given targets should be given rewards. Other forms of motivation include the permanent job for hardworking temporary employees, trips, assets (cars, houses, etc), and other financial rewards.