IB Business Management HLTopic 2 — Motivation and DemotivationPaper 1 & 2Core idea~9 min read
The Later Motivation Theories
Taylor, Maslow and Herzberg all looked for one answer that fits everyone. The theories that followed accepted something more awkward and more true: people want different things, they compare themselves with each other constantly, and they only put in effort when they believe it will actually lead somewhere.
📚 What you need to know
McClelland: three acquired needs drive people at work — achievement, affiliation and power. The mix differs by person and is learned over time.
Deci and Ryan (self-determination): intrinsic motivation needs three things — autonomy, competence and relatedness.
Adams (equity theory): people compare their inputs and rewards with colleagues, and act when the comparison feels unfair.
Vroom (expectancy theory): motivation = expectancy × instrumentality × valence. If any one is zero, motivation is zero.
All four say the same underlying thing: motivation is individual, so a single reward scheme will never suit a whole workforce.
McClelland: three acquired needs
McClelland argued that these needs are learned through life experience, upbringing and culture rather than being fixed by human nature. Everyone has all three; the strengths differ.
Need
What drives them
How they behave at work
Achievement
Excelling at difficult tasks and hitting personal goals.
Takes calculated risks, wants feedback on performance, enjoys problem-solving.
Affiliation
Good relationships and being happy in the team.
Seeks approval, avoids conflict, prioritises harmony and cooperation.
Power
Influencing situations and bringing out the best in others.
Seeks leadership roles and enjoys being in control of their environment.
McClelland split power in two. Personal power is the desire to control other people. Institutional power is the desire to shape the organisation itself — and it is the second type that tends to make good managers.
The management use of this is simple and clever: give the achievement-driven person a stretching target and quick feedback, put the affiliation-driven person in a team role, and give the power-driven person something to lead. Same team, three different rewards.
Deci and Ryan: self-determination
This theory explains intrinsic motivation — wanting to do the work for its own sake. Three psychological needs have to be met.
Need
What it means
What a business can do
Autonomy
Having control and making your own choices.
Flexible hours, letting staff choose how to do the task.
Competence
Feeling capable and effective at what you do.
Training, clear feedback, tasks that stretch without overwhelming.
Relatedness
Feeling connected to other people and belonging.
Teamwork, mentoring, a culture people want to be part of.
Strengths
Weaknesses
Recognises people are not all motivated the same way, and adapts across cultures.
Origins are in Western psychology, so it may not fully fit every culture.
Used widely in business, education, sport and healthcare.
Downplays extrinsic motivators like pay, which clearly do matter.
Backed by a large body of research.
Hard to measure, since all three needs are internal.
Adams: equity theory
Adams said people do not judge their pay in isolation. They compare their own effort-to-reward ratio with a colleague’s, and it is the comparison that motivates or demotivates.
Inputs are effort, commitment, reliability and time. Rewards are pay, recognition, status and perks. The comparison is with colleagues, which is why secrecy about pay rarely holds and rarely helps.
Someone who feels under-rewarded will try to restore fairness: renegotiate their terms, put in less effort, or find a job elsewhere. Businesses reduce this by being open about how pay and promotion are decided.
Equity is not equality. Equity means fairness — people may be paid different amounts for good reasons such as experience, skill or qualifications. Equality would mean identical pay for everyone regardless of competence, which most staff would think was deeply unfair.
Vroom: expectancy theory
Vroom’s contribution is the most practical of the four. He said motivation depends on three beliefs, and because they multiply together, a zero anywhere gives you zero.
This is the theory to reach for when a case study describes a bonus scheme that failed. Ask which of the three links broke: the target was impossible, the reward was not delivered, or nobody wanted it.
If this link is weak
What the business should do
Expectancy — “I cannot hit that target however hard I try”
Improve training and set targets that stretch without being impossible.
Instrumentality — “Even if I hit it, they will not pay out”
Build trust by keeping promises, and make the reward rules transparent.
Valence — “I do not want the reward anyway”
Widen the range of rewards so people can choose what matters to them.
WORKED EXAMPLE
A shop offers a “salesperson of the month” trophy. Staff ignore it. Last year’s winner also never received the promised voucher. Use expectancy theory to explain why the scheme failed. (4 marks)
Broken link 1: instrumentality
Last year’s winner was never given the voucher, so staff no longer believe that performing well leads to the promised reward. Instrumentality has dropped close to zero.
Broken link 2: valence
A trophy has little value to most staff, so even those who could win it do not want the outcome enough to change their behaviour.
Two links near zero, so motivation is near zeroBecause the three multiply, you do not need all of them to fail. One broken link is enough to kill a reward scheme.
WORKED EXAMPLE
Two staff do identical jobs. One discovers the other is paid 15% more for the same work and output. Use equity theory to predict the likely effect. (3 marks)
Step 1: the comparison
Their inputs are identical but their rewards are not, so the lower-paid worker sees themselves as under-rewarded.
Step 2: the response
They will try to restore fairness: ask for a rise, reduce their own effort to match the pay, or start looking for another job.
Add a limit for the top band: if the pay gap is explained by experience or qualifications, the worker may accept it as fair. Equity is about perception, not arithmetic.
💡 Exam tip
Pick the theory that fits the clue. Failed bonus scheme means Vroom. Pay comparison means Adams. Different people wanting different things means McClelland.
Use the multiplication point about Vroom. It is the detail that shows you understand rather than recall.
Never confuse equity with equality — examiners specifically look for this.
For Deci and Ryan, name the need that is missing: autonomy, competence or relatedness.
Note the shared weakness: all these theories are subjective and hard to measure, which is a ready-made evaluation point.
Say that employees may need help identifying what motivates them. Reward schemes fail when firms guess.
⚠️ Common mix-up
Expectancy versus instrumentality. Expectancy is effort to performance; instrumentality is performance to reward.
Treating McClelland’s needs as fixed. He said they are learned and can change.
Assuming over-reward is harmless. It creates guilt and can unsettle a team.
Confusing personal and institutional power. One is about controlling people, the other about shaping the organisation.
Thinking self-determination rejects pay entirely. It downplays extrinsic rewards; it does not claim they are useless.
Listing all four theories. One well-applied theory beats four described ones.
Up next: Labour Turnover and Why Staff Leave — the number that tells you whether any of this motivation work is actually landing.
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