Evaluating Theories of Motivation in Project Management

Introduction

Banking sector continues to be one of the most important economic sectors and one of the most rapid growing businesses in Albania in the last 10 year (Bank of Albania, 2010, www.bankofalbania.org ).

Societe Generale Albania (SGAL), previously named Banka Popullore, started its activity on 1st of March 2004. In April 2007, Societe Generale Group acquired 75.01% of the shares of this bank. SGAL has its head office in Tirana and is present allover Albania with 41 operation branches. At the end of 2009, the bank had 379 employees, both Albanian and French nationality (Annual Report 2009, 2010, www.societegenerale.al ).

The case study

Being one of the most important economic sectors has created enough space for operation of 17 Banks in a relatively small market like Albania. With such a high competition it is very important that banks stay always in line with economic developments and react fast toward customer needs for new products or adaptation. Societe Genereale Albania Bank is quite small and there are frequently high pressures for sharing resources in order to complete in time and with budget different operational or business initiatives. These needs has made mandatory for bank management to apply a matrix organizational layout.

Matrix organizational structures are quite complicated when it comes to management and control of staff performance. They bring the employee in front of two managers, the usual department manager and the temporary project manager. There a lot of researches and studies for motivation in standard organizational structure, but the topic is considered as less explored when it comes to project management (Dwivedula and Bredillet, 2009).

Theories of motivations

“Motivation is the driving force within individuals that compels them physiologically and psychologically to pursue one or more goals to fulfill their needs or expectations,” (Lam and Tang, 2003).

There are currently a lot of theories to explain the nature of motivation and help mangers on addressing it according to their needs. These theories do not conflict between them, which means the manager can use any of them or even combine them (Birnberg, Luft and Shields, 2007).

This assignment will be focused in two theories; The hierarchy of needs as one of the first ones and most well known by all kind of managers and the dual-structure theory since it was developed based on a research on engineers and accounts, which is about the same environment and employee nature as in SGAL Bank. Another reason for selecting these theories is the fact that both of them have as a starting point the fulfillment of basic human needs and in the development countries we meet a high demand of these needs.

The Hierarchy of Needs

The theory is well known and was developed by Abraham Maslow in 1940. According to this theory the needs are organized in five main groups of needs that stay together in the form of a pyramid (Maslow, 1943):

Physiological Needs; they stay in the bottom of the pyramid and include the basic needs of every human being such as: the need for food, drink, education, medical care, etc. Every organization can provide these needs by providing good working condition and a salary to their employees.

Security Needs; includes the need for feeling safe and secure, having a secure job, having a home and a future. The organization can satisfy these needs by offering job continuity, health insurance and retirement plans.

Belongingness Needs; includes the needs of humans to love and be loved, to be accepted by others, to take and give friendship. Most of this needs get satisfied by the family ties, but this is not enough since we spend a considerable time of our life in our works. Managers and direct supervisors can play a significant role to satisfy these needs by encouraging the work in group, enhance their communication with employees and provided basis for social interaction between employees.

Esteem Needs; the needs of this group can be divided into two major needs, the need for self respect and the need for being respected by others. Both department managers and project managers can satisfy this by giving the staff a job title, awards, recognition of merits, benefits etc.

Self-Actualization Needs; is the highest level of the hierarchy and includes the need we have to be the one we want to be in order to be self fulfilled. If all the other levels of the hierarchy are fully satisfied, it does not remain a lot for the managers to do to satisfy this need. All they need to take care is to make sure the individual has a challenging job and that other needs of lower level do not become deficient.

According to the theory the needs of each level should be satisfied before going to the next level until we reach the self-actualization needs, however if during our road to the top of hierarchy, a lower level of need become deficient again, the individual returns to that level (Moorhead and Griffin, 1995).

Despite the fact that the theory is well recognized among many organization and managers due to the intuitive logic and easy understanding, the theory is not fully validated either by Maslow or any other research, in contrary many deficiencies have been identified (Wahba and Bridwell, 1976)

The most common criticism is the limited number of people used in his research and coming out with conclusions which applies to everybody (Boeree, 2006, http://webspace.ship.edu/cgboer/maslow.html). Such a conclusion of course does not look very scientific.

Another important one are the constrains that Maslow put on the self-actualization. He pointed out that the self actualization is in the top of his hierarchy and can be reached only when all the other needs are satisfy. In opposite to this there are many examples where people show outputs of self-actualization by being fare from fulfillment of their basic or belongingness needs (examples of artists and scientist).

It is important to mention that if we carefully evaluate the hierarchy we see that the most basic needs, up to the third level, are usually satisfied by the government and/or organization rules and regulation. If we go up in the hierarchy of needs, we see that there are direct supervisors and team members who help to satisfy the needs and turn them in motivators for improving job performance.

The Dual-Structure Theory

The theory was developed by Herzberg on late 1950s based on a research with a couple of hundred engineers and accounts (Herzberg, 1968). The finding of this research proved that different set of factors were connected with different feelings about work. The motivation of an employee goes in a two step process, first satisfying the employee (eliminate any factor which may bring dissatisfaction, fulfill the hygiene factors) and second go with motivation factors. The motivation factors would result at the end with satisfied and motivated employees who can have a long term and positive job performance.

The hygiene factors (salary, company policies, competence, interpersonal relations, working conditions, etc) when they exist, they are in placed by the company strategy and/or governments rules and they are not directly related to the performance and ability of the employee. In opposite with them, the employee can get the motivation factors (recognition, achievement, work itself, advancement, and responsibility) by his involvement and his work but also by the ability of his manager to give them (McCrimmon, 2008).

The combination of these factors can set employee in four situations (Herzberg, 1987):

Satisfied and motivated employee. It is a target situation for having the best performance, there is not a lot to be done if you have employee being in this status.

Satisfied but not motivated. If the employees are in this status, it means the hygiene factors are all accomplished and the managers should find the way to apply motivation factors and change the status; otherwise the de-motivated employee will bring low productivity and bad quality.

Not satisfied but motivated. In this case it is the company who should change its policies and rules and try to change the situation. An employee is not expected to stay longer in this status.

Not satisfied and not motivated. The worst situation, both company and managers have a lot to do. These employees will bring to the business apart from the low productivity and bad quality a lot of complains, strikes and no communication.

The theory has been analyzed more than any other theory in the field of organizational behavior (Pinder, 1998) and the results are quite contradictory. Studies and researchers which use the same method support the theory, other ones criticize it for the research population used, which is limited only to accountants and engineers. The theory does not take into account the individual differences, since a motivation factor can depend on individual age and/or organizational model (House and Wigdor, 1967).

Herzberg’s theory states that money does not motivate employees but only satisfies them (Herzberg, 1968), due to this statement the theory is widely discussed and analyzed in studies and researches about the rewarding and motivation (Beel, 2007).The rewords supporters are totally against it and they say it does not have evidences to prove that money is not a motivation. Another aspect of critics is the fact that the theory does not take in consideration the circumstances, what does motivate an employee today, not necessary satisfy and motivate another one tomorrow (Robbins, 2005).

Visual presentation of the dual structure theory (http://www.tutor2u.net/business/people/motivation_theory_herzberg.asp, Nov 2010)

As displayed in this graphic the theory goes though two major phases, first eliminate the dissatisfaction by providing all the hygiene factors and then start applying motivation factors and have motivated employee and high performance.

Motivation in Project management

PRINCE2 manual defines a project as:

“a management environment that is created for the purpose of delivering one or more business products according to a specified business case.”

Another definition is:

“a temporary organization that is needed to produce a unique and pre-define outcome or result at a pre-specified time using pre-determined resources”.

Being a temporary organization and with specific targets, the project organization is a different structure than a normal organization unit and different rules and practices are applied in every aspect of organizational behavior, including motivation.

Description of case study

In 2008, Societe Generale Albania started a fifteen months project for migration of existing core banking system. The project team was composed by more than twenty high qualified employees coming from different departments and sectors, different education and different professional background. Many different positions were defined as part of the project such as; translators, business analysts, IT developers, organization and even a public relationship specialist. The bank knew since the beginning that such a challenging and multidimensional project could not succeed within the specified time and budget without a motivated team.

To achieve a motivated team, SGAL manly considered the assumption that people are motivated by money. This assuming was coming from their experience with the sales force in the branch network and missing of experience on running projects. They provided project staff with a simple bonus schema based on their performance with a maximum of one monthly salary. The bonus was delivered once in the middle of the project and once in the end of it.

In addition to this bank has tried to provide good working condition, apply policy on compensation and benefit, apply payment of social and health insurances, apply Global Employee Share Ownership program, so staff has not only the status of employee but also have a shareholder status (BHFM/SGO/REF, 2007), and also apply some flexibility working hours.

Analysis

It is important to highlight since the beginning that motivation in project is different from motivation in standard organization infrastructure. There are 2 major differences (Schmid & Adams, 2008), the first one is related to the fact that in projects, tasks and leaders are temporary. Considering that projects are a temporary organization, than can a project manager do something to motivate its employee, even if the organization motivation is not in the required level? The second difference is that each project goes through some main phases; planning, executing, monitoring and closing, so different factors should be used to motivate the team in different project statuses.

If we get back and see, company has already addressed most of the hygiene factors, but because of the no experience on the field the bank has totally under evaluated the job security factor. A few months before the end of the project, two key persons, data migration manager and accounting business analyst resign from the project. The main reasons for that were the missing of a clear view for their position in the bank at the end of the project and continues overload. According to the Herzberg theory, if job security factor is not addressed the result is to have dissatisfied employee, and a dissatisfied employee can not stay with the company for a long period and either have a good performance. There are two issues coming from this: the management of the bank failed to provide the security for the job continuity and the project manager failed to plan a proper work-life balance and properly manage the overload.

Failing in providing these factors had become precedent for staff leaving the project and the company just before the closing phase of the project and causing delays and increase lack of self-confidence among other members. As a result of this, high qualified staff found themselves de-motivated.

If we go up in the hierarchy of needs we don’t see evidences for fulfill the social needs of the project team. SGAL management did not organize any social activities during the project. Only at the end of the project, when the success was evident, the company organized a party. The project management from the other side attempted to do some socialization between team members, but that was on a limited number of people and not on regular basis. According to Dwivedula and Bredillet (2010) a positive work climate of the group is achieved when all members have task interdependence, one common objective to achieve and of course a good relationship and constant communication with each other. Social activities are important to have a positive work environment, but the project manager has to be very careful and evaluate each situation so, if one person intrinsic motivation is alienated then it may bring the spillover effect and de-motivated the entire team (Schmid and Admas, 2008).

From Herzberg dual-structure theory we know that satisfied employee is not enough to have motivated employee. Project and organization management had addressed the recognitions and achievements factors by establishing an internal magazine distributed monthly to all bank staff and fully dedicated to the project team and their achievements.

We indicated above that SGAL management allowed some of the project team members to have flexible working hours, this was a very positive thing, which properly addresses the status factor by making them fill different and appreciated.

How where the staff selected to be part of the project? Where they volunteering or just appointed without their will? Most of the team was appointed to the project. According to a research made by Aller, Lyth and Mallak (2008) the creation of project team using co-mingling method (volunteering to the project positions) gives an interest and motivated team. By selecting this method there are also chances that the project staff has the appropriate skills and abilities to make the job. Despite the fact that this research is addressed to the setup of teams in university projects, it can be useful and applicable in creation of every project team. When used and combined with other methods this would help on achieving of a high job satisfaction level of the team members.

Conclusion

Employee performance is determined by three main components:

ability to do the job;

work environment; and

motivation (Griffin, 1990, p.437)

The first two ones can be better addressed by the permanent organization of the bank as most probably they need time and investments. Staff not being able to perform an activity may need to be trained to do so, good working environment also need investments and time to be in placed. Motivation from the other side is something which can immediately improve the performance if managed properly.

Projects by definition are a temporary organization; this automatically excludes or reduces them from addressing ability and work environment and totally focus on the motivation. To motivate staff means to provide them with a motive to do the tasks. A successful project manager is somebody who is able to find the motives which apply to each employee and turn them from common worker to extraordinary ones.

Maslow’s hierarchy of needs and Herzberg’s dual-structure theory are valid models of motivation in project management and in development countries. These models should not be seen as frozen theories; they should be properly evaluated, used and interpreted by each project manager to stimulate team members, growth their individual development, reach projects goals and increase productivity in organization. However we should always keep in mind that some people may have exceptions form this hierarchy.

The bank can help its project leader by performing surveys which would tell what the employee’s preferences for job motivation are. Often the strongest motivators for employee are the things they miss more in their job.