Motivational Theories and Their Advantages and Disadvantages

This report discusses the importance of motivation in organizations and analyzes different motivational theories such as Maslow's need hierarchy and Herzberg theory. It explores the advantages and disadvantages of these theories and highlights their relevance in motivating employees to work productively. The report also emphasizes the role of motivation in achieving organizational goals.

Report

Table of Contents
TASK 3............................................................................................................................................1
Introduction..................................................................................................................................1
Definition and importance of motivation.....................................................................................1
Theories of motivation.................................................................................................................1
Advantages and disadvantages of both the theories....................................................................2
Conclusion...................................................................................................................................3
REFERENCES................................................................................................................................4
TASK 4............................................................................................................................................5
Introduction..................................................................................................................................5
Long and short term sources of funds..........................................................................................5
Definition and importance of all the investment appraisal techniques........................................6
Calculations of payback period, ARR and NPV..........................................................................6
Analysis and application..............................................................................................................8
Conclusion...................................................................................................................................8
REFERENCES................................................................................................................................9

TASK 3
Introduction
Tesco is one of the largest retail sector organisations which are operating business at
global level. Now the enterprise have planned to open new discount stores Jack for the purpose
of dealing with high level of competition with Aldi and Lidl. HR assistant of the Jack's Store
have decided to analyse different motivational theories so that staff could be motivated to work
productively. For this purpose, Maslow's and Hearberg models of motivation along with their
advantages and disadvantages are analysed in this report.
Definition and importance of motivation
Motivation: It can be defined as an element which may drive individuals as well as
organisations towards a goal. There are three main components of it which are activation,
persistence and intensity (Cook and Artino Jr, 2016). It is very important for all the organisations
such as Tesco to motivate all its employees so that they can help to accomplish all the goals such
as establishing Jack Store successfully.
Importance of motivation:
 Motivation is very important for organisations because it can help them to reach long
term business goals with the help of highly engaged staff members.
 In order to work productively it is very important for employees to get motivated which
is possible with the efforts of management.
Theories of motivation
There are various types of theories which could be used by HR assistant of Tesco to
motivate staff members. Description of all of them is as follows:
Maslow's need hierarchy theory: It was developed by Abraham H. Maslow for the
purpose of facilitating business entities to understand the needs which are required to be fulfilled
by them to motivate staff. All the elements of it which are required to be focused by HR assistant
of Tesco are as follows:
 Basic physiological needs: Basic requirements such as food, water, sleep etc. are
required to be fulfilled by Tesco so that all the employees can work productively. Lack of
them may result in lower contribution of them in the attainment of business goals (Han
and Yin, 2016).
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 Safety needs: Components such as employment, health, property and environment are
considered as the part of these needs. When all the basic ones gets fulfilled then such type
of requirements take place which should also be focused by HR assistant of Tesco to
motivate staff.
 Social needs: When employees get proper job and health security then they look for love,
family and friendship to become social. At this stage the individuals want someone to
share their thoughts.
 Esteem needs: This stage is related to the development of confidence, respect,
achievement and self esteem where individuals want that they should be treated
appropriately within the organisation where they are working (Priess-Groben and Hyde,
2017).
 Self actualisation needs: It is last element of Maslow's needs which is related to
morality and creativity. At this stage individuals becomes aware of the things which are
required to be done by them in life.
Herzberg theory: It was developed by Fredrick Herzberg to facilitate business entities to
differentiate between the factors which may lead towards satisfaction, no satisfaction and
dissatisfaction. These are motivators and hygiene and for the HR assistant of Tesco it is very
important to understand all of them so that staff members could be motivated to help in the
successful establishment of Jack Discount store. Description of all its elements are as follows:
 Hygiene factors: These components are related to job and required to be focused by
employer to motivate staff. Some of the examples of them are salaries, fringe benefits,
job security, interpersonal relations etc. All of them will be able to provide short term
satisfaction to the staff but lack of them may lead towards dissatisfaction. In order to
motivate employees to work appropriately it is vital for HR assistant of Tesco to provide
them these elements (Herzberg Theory, 2018).
 Motivators: Recognition, sense of achievement, promotions, growth, responsibilities etc.
are some of the factors which lead towards high level of satisfaction and lack of them
may result in no satisfaction. All of them should be provided by Tesco to the staff
members so that they can work productively to establish Jack Stores successfully.
Advantages and disadvantages of both the theories
Advantages and disadvantages of Maslow's theory:
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 Advantages: It is one of the easiest methods to understand all the needs of employees so
that their productivity could be increased. It is mainly based upon human nature which
reduces difficulties for managers to understand the main requirements of staff.
 Disadvantages: This theory may result in changes in cultures of needs if it is applied on
different nations. The satisfaction level at all the stages of it vary among individuals
therefore it is very difficult to measure it accurately.
Advantages and disadvantages of Herzberg's theory:
 Advantages: With the help of this theory the managers can pay attention towards main
problems and concerns of employees so that they could be motivated to work hard.
Monetary benefits are treated as secondary elements for satisfaction in this theory
because promotions, recognition etc. are primary concerns of this model (Sahito and
Vaisanen, 2017).
 Disadvantages: This theory does not assures that a satisfied employee will work
productively because job satisfaction is considered as one of the factor which may lead to
higher work quality as it is not the only elements which may result in the same.
Conclusion
From the above discussion it can be concluded that in order to execute operations
appropriately it is very important for all the organisations to make sure that their employees are
motivated or not. For the purpose of understanding their needs and factors to motivate them
different theories could be used. These are Maslow's need hierarchy and Herzberg theory. With
the help of both of them HR assistants will be able to understand the factors which may motivate
employees to work hard.
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REFERENCES
Books and Journals:
Cook, D. A. and Artino Jr, A. R., 2016. Motivation to learn: an overview of contemporary
theories. Medical education. 50(10). pp.997-1014.
Han, J. and Yin, H., 2016. Teacher motivation: Definition, research development and
implications for teachers. Cogent Education. 3(1). p.1217819.
Priess-Groben, H. A. and Hyde, J. S., 2017. Implicit theories, expectancies, and values predict
mathematics motivation and behavior across high school and college. Journal of youth
and adolescence. 46(6). pp.1318-1332.
Sahito, Z. and Vaisanen, P., 2017. The Diagonal Model of Job Satisfaction and Motivation:
Extracted from the Logical Comparison of Content and Process Theories. International
Journal of Higher Education. 6(3). pp.209-230.
Online
Herzberg Theory. 2018. [Online]. Available through:
<https://expertprogrammanagement.com/2018/04/herzbergs-two-factor-theory/>
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TASK 4
Introduction
Zylla Limited is an enterprise that operates its business in United Kingdom. It provides
services of river crossing to goods, vehicles and individuals across a river. The company owns
various ferries and now it is planning to buy a new one for which funding is required. Financial
Director of the enterprise have planned to analyse different sources of funds so that the new
project could be funded. Apart from this, different investment appraisal techniques are also used
to analyse profitability of the project of acquiring a new ferry.
Long and short term sources of funds
Long term funds: For all the organisations it is very important to acquire monetary
resources for long run so that business could be executed properly. For this purpose, long term
funds are used. Examples of them are as follows:
 Issuing debentures: As Zylla Limited is planning to acquire a new ferry therefore the
management can issue debentures in the market which will help to arrange funds for the
same. The organisation will be required to pay interest to all the debenture holders at a
fixed rate on yearly basis (Cuervo-Cazurra, Nieto and Rodríguez, 2018).
 Retained earnings: All the companies retain a certain amount of profit every year so that
it could be used in future for growth purpose. With the help of it funding could be
arranged by Zylla Limited to acquire a new ferry.
Short term funds: All the monetary resources which are used by companies to fund da y
to day activities are considered as the part of short term funds. Description of some of them is as
follows:
 Account receivable collection: Zylla Limited require funding to fulfil working capital
requirements so that all the operations of it could be executed properly. For this purpose,
managers can take appropriate actions to collect the owed amount from debtors. It can
helps to perform day to day activities of company.
 Selling old business assets: In order to meet working capital requirements Zylla Limited
can sale its old assets. It is the easiest way of arranging funding for future operations
(Thomas and Spataro, 2016).
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Definition and importance of all the investment appraisal techniques
Zylla Limited have planned to acquire a new ferry for which investment of 150000
pounds is required to be made. In order to analyse the profitability and suitability of this new
business project the finance director have planned to use different investment appraisal
techniques. Description of all of them along with their importance is as follows:
Payback period: This technique guide the managers of organisations to determine the
time which could be taken by an investment to meet the break even point. It is very important for
finance director of Zylla to make sure that they should buy the new ferry or not (Bell, 2017).
Net present value: NPV is used by business entities for the purpose of analysing current
value of a proposed project to determine that it will be able to provide benefits to the enterprise
or not. The importance of it for Zylla is very high because it can guide finance director to
determine that investment of 150000 pounds will be profitable for it or not.
Accounting rate of return: It is an investment appraisal technique which could be used
in Zylla Limited by the accounting professionals to analyse the percentage of return on the
investment. It is important to the entity because ignoring it may result in inappropriate decision
(Accounting rate of return. 2020).
Calculations of payback period, ARR and NPV
Pay back period: Formula= Completed years+ [Proposed investment– CCI for
completed year] / Cash inflow of next year
Calculation for cumulative cash inflow is as follows:
Pay back period: 2+ (150000 – 125275) /88375
=2+ 2.28
=4.28 years
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Net present value: Formula= Total discounted cash inflow – proposed investment for the
project
NPV: 359973 – 150000
=209973
Accounting rate of return: Formula= Average net profit / initial investment *100
Calculation of net profit is as follows:
Years Cash Inflow Depreciation Net income
First year 55,230 21000 34230
Second year 70,045 21000 49045
Third year 88,375 21000 67375
Forth year 79,870 21000 58870
Fifth year 57,555 21000 36555
Total profits 246075
Calculation of dep: Initial investment – Scrap value / life of project
= 150000 – 45000 / 5
= 21000
Average profit: Total profits / life of project
= 246075 / 5
= 49215
ARR: 49215/ 150000 * 100
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= 32.81%
Analysis and application
From the above calculations it has been determined that the investment will be able to
meet the BEP point in 4.28 years. NPV of the proposed investment is 209973 which is very high
and it reflects that decision of making this investment will be beneficial for Zylla Limited.
Calculations of ARR are showing that the rate of return for it will be 32.81% which could be
acquired on the investment of 150000 to buy a new ferry (Elyamany and El-Nashar, 2016). On
the basis of above analysis it has been recommended to Zylla Limited that it should acquire a
new ferry because it will be profitable for the entity.
Conclusion
From the above discussion it has been concluded that all the business entities should
formulate future decisions carefully so that possibility of losses of monetary funds could be
reduced. While planning to invest in a new project it is vital for companies to acquire appropriate
funding for same purpose. Different sources which could be used to fund a new project are
issuing debenture, retained earning, selling business assets etc. In order to determine profitability
and suitability of a project different investment appraisal techniques could be used. These are
payback period, net present value and accounting rate of return.
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REFERENCES
Books and Journals:
Bell, P., 2017. Introducing the Net Present Value Profile.
Cuervo-Cazurra, A., Nieto, M. J. and Rodríguez, A., 2018. The impact of R&D sources on new
product development: Sources of funds and the diversity versus control of knowledge
debate. Long Range Planning. 51(5). pp.649-665.
Elyamany, A. H. and El-Nashar, W. Y., 2016. Estimating life cycle cost of improved field
irrigation canal. Water resources management. 30(1). pp.99-113.
Thomas, A. and Spataro, L., 2016. The effects of pension funds on markets performance: A
review. Journal of Economic Surveys. 30(1). pp.1-33.
Online
Accounting rate of return. 2020. [online]. Available through:
<https://xplaind.com/393885/arr>
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