Motivation, Incentives and Organisational Chaos

“We are in the midst of a global epidemic of institutional failure. Even then, the signs were everywhere if one cared to look. It has much to do with compression of time and events”[1]. Chaotic systems are accelerating, from monopolistic platform companies implementing new market governance frameworks to alternative modes of accumulation developing out of the financial crisis and the rise of new axes of geopolitical power. The variety of new organisational models, knowledge flows and bottlenecks present opportunities and dangers to established methods of accumulation and growth, requiring alternative methods and incentives to exploit and explore such possibilities. In an organisation, the exploitation of existing knowledge and the exploration of new opportunities create methods of strategic renewal, the ability to use and find knowledge for the purposes of furthering organisational goals and constructing a shared vision. In creating a shared vision, “a sense of commonality that permeates the organization and gives coherence to diverse activities”[2], learning and motivation are fundamental as they drive forward strategic renewal.

Organisational knowledge is a series of flows or feedback/feed-forward mechanisms between individual members and the organisation itself. The 4I framework posits that in developing organisational knowledge, a feedback loop of intuiting, interpreting, integrating and institutionalising flows between individual/team innovation and institutional implementation[3] leading to the development of knowledge for the purposes of exploitation and exploration (i.e. further innovations, new methods of organising the workforce, different mental models for framing goals, etc.). “Conceiving of learning as a dynamic flow raises the possibility that these flows can be constrained”[4], meaning we can begin to see there are bottlenecks that prevent the flows of organisational learning from continuing to feedback full information.

One of the main bottlenecks, or puzzles, is motivation. It effects the direction and speed of these learning flows as it is the primary force that expresses the satisfactions and desires of an organisation’s members, stakeholders and workforce. Motivation is informed by a number of different incentives and requirements, ranging from economistic needs such as pay level and the promotion ladder to more abstract purposes such as mastery over one’s work, the level of autonomy one has and how much participation an individual and a team have in the decision-making of a company. It is also contextual, dependent upon organisational requirements, individual aptitudes and the relations between management and staff. Different organisations will have different methods of motivation that are cultivated toward their distinct place in a market, government or other system and related to the aptitudes of their stakeholder base. “The kind of participation which will be utilized will vary depending upon the level of the organization as well as upon the other factors mentioned above”[5].

In motivation being a bottleneck, it is not a negative assessment of motivation as something to overcome. Instead it’s a puzzle that requires constant attention from managerial administration so as create organisational cultures that can fit multiple identities and workforce desires. It is a dynamic of incentive structures and power matrices related to decision-making and position within different organisational contexts. “We view them as located within fields of conflicting discourses that offer a range of possible identities and modes of behavior, among which they actively position themselves. This framework allows us to explore the following questions: From the subjects’ point of view, what makes the adoption of some identities desirable, and others objectionable?”[6]

If we see organisations as vehicles of learning and adaptation for the purposes of exploiting current knowledge and resources and exploring new possibilities, the balance of motivation rests between the autonomous actions of the organisation’s members (those who intuit and interpret knowledge into usable data and saleable information) and managerial institutions (where this variety of knowledge is catalogued and institutionalised for the purpose of shared exploitation/exploration).

Looking through the lens of McGregor’s theories of motivation (theory X and theory Y), it exists on a contextual level. Theory X posits economistic means of motivating workers, noting that work is a requirement of existence and is done primarily in exchange for compensation or other benefits (in-work benefits, promotions, etc.). Theory Y suggests more abstract motivational means are important in encouraging productivity and participation. These include creativity, autonomy and some level of authority over decision-making. Neither are exclusive in an organisation, as both are required to maintain workforce participation. However, they are not necessarily hierarchal. Traditional views of management, such as scientific and/or industrial views, theorise that before autonomous or creative methods of motivation can be invoked, the baseline of economistic motivational factors must be emplaced so there are basic incentives to make individuals work. However, they are intertwining mechanisms that are inherently related. If motivation is a bottleneck to the full flow and distribution of organisational knowledge/information, then the means of motivation are multifaceted in how they prevent the realisation of these flows. In some cases, theory X motivational factors will be fundamental to encouraging workforce engagement, as in industrial economic sectors where linking wages to productivity (the post-war economic settlement) and high levels of unionisation that inculcated a culture of promotions and upskilling was the primary method of maintaining workforce participation.

However, in modern developed economies there is an increasing importance on more abstract forms of value, such as human capital and people-based (rather than process-based) knowledge, which fits in the theory Y modality. Human capital, “as one central production factor in any given economic theory stands for the stock of knowledge and qualifications that are useful and valuable, as integrated into the relevant labor force, resulting out of one education and professional training process. It relates to any individual’s ability to mobilize other production factors, to specifically combine the same and to predetermine so as to reach the expected and wished for outcome”[7], has become centrally important in economies and organisations that are people-oriented i.e. rely on knowledge bases that require interpersonal skills and individual knowledge rather than mechanistic work patterns like industrial forms of organisation.

For example, “retail as the third space”[8] presents a paradigm of service-oriented industries becoming increasingly personalised for customers, combining online and offline environments to present customers with a fully rounded retail experience. Similarly, Best Buy’s customer centricity program (which “involves tailoring stores to local markets and training employees to turn customer feedback into new business ideas”[9]) puts a focus on human capital driven innovations. As human capital becomes more fundamental to company’s strategies, the 4I feedback loop becomes more complex as individual/team desires (for autonomy and decision-making authority) come into contact (and conflict) with organisational priorities.

The current importance of human capital (retail as the third space) and increasing levels of staff turnover (particularly in human-led growth strategies where knowledge bases are primarily important) in service-predominant economies and organisations make motivation a significant factor in workplace retention and growth, where high staff turnover can lead to problems of task management, image/reputation and team/organisational dynamics[10]. Without a deep stakeholder base and organisational development, they can quickly find it difficult to build shared visions and mental models, instead flitting between short-term strategies and reacting to events.

Another element of organisational development and decision-making is the capacity to encourage internal development of members, exploiting knowledge and exploring new capacities for further growth and development. Exploration and exploitation exist on a spectrum whereby their performance distribution increases and/or decreases depending on contextual variables, with one of these being the internal competence and individual knowledge of members in performing their duties and developing skills that match their organisational code[11]. In motivational circumstances of exploitation, the organisation’s purposes favour contiguity between individual and organisational needs/desires, while in cases of exploration variable divergence of the means of doing work and achieving goals is preferred as it increases the knowledge base and provides greater advantage in contexts where high levels of performance are needed. On the other hand, exploitation favours contexts where internal organisational growth is required and where external factors (like competition) are less important, which goes on to promote greater learning and restriction of activities amongst its membership. Looking at this contextual variability and relating it to motivational factors, one can see a link to the garbage can model of organisational decision-making, within which motivational factors are continually dependent on organisational needs and their mixing with individual member desires. The choices that come out of the garbage can be chaotic but can also provide templates through which goals are achieved and both organisational and individual desires are attained.

“An organization is a collection of choices looking for problems, issues and feelings looking for decision situations in which they might be aired, solutions looking for issues to which they might be the answer, and decision makers looking for work”[12]. Linking to motivation, this means that it remains on a contextual level as organisations, rather than being rational agents who are presented with problems and then process information to come up with relevant solutions, exist in a complex abundance of problems, solutions, decision-makers and motivational factors that coalesce as flows or forces through the organisation. What matters here are the linkages between problems and solutions and between choices and competent decision-makers. Motivation in relation to knowledge flows plays the part of a linkage, determining the extent to which they can be managed and solved. If an organisational agent does not have the capability or the desire to work within the garbage can of solutions and problems, they quickly find themselves de-motivated and caught in the churn of turnover and internal movement between and within departments. If individual relevant knowledge cannot be applied, it adds to the garbage heap rather than dealing with the complexity of it.

In this complex environment with the increasing importance of individual knowledge and human capital that develops and flows up an organisation, moving through the 4I feedback loop, motivation becomes important as a method of determining the level of participation individuals and teams have in the authority of their workplace. The garbage can model of organisational decision-making shows that different individuals/teams in different contexts produce varied means to solve complex problems.

Following from the garbage can model, what comes from this is that complex institutions are “organised anarchies”[13] that require the institutionalisation of knowledge so as match problems and solutions with relevant decision-makers. This involves fine-tuning tasks and goals toward different individual aptitudes to maximise productivity and the flow of information. Motivation is key as it allows managerial administration to identify individual’s desires and areas of expertise through understanding the links between their personal visions and the company’s shared vision. This means understanding the individual personalities that can be found in an organisation.

Linking to MBTI personality types, we see the need for motivation to be contextual across the breadth of an organisation, appealing to different individual and collective organs that make up the stakeholder and knowledge bases. In contrast to scientific methods of management that attempt to identify one ideal type of managing people’s expectations and creating motivational ethos, organisations are instead a series of push and pull forces between “personal visions” and “shared visions”[14]. Recognising these personality types is important as there is no ideal method of management or decision-making. By pigeon-holing individuals into specific categories that don’t fit their personal visions or inchoate desires, administration ends up relying on coercive mechanisms for motivating a workforce that in human capital driven environments are difficult to maintain for a long period of time without high levels of exit from the organisation. As the garbage can model shows, tasks work with different decision-making entities, and matching them up is a priority if the knowledge flows organisations are reliant on are to be maintained.

We can see this use of MBTI in the University of Nebraska-Lincoln, where it was used to construct managerial administration that could craft common goals and shared visions while working through different mental models and ways of thinking. The inherent conservatism of SJ-type managers toward any change or departure on policy butted heads with NT-type managers who favoured more radical process changes and were less concerned with situational flux and uncertainty. In creating shared structures, new motivational models that combine different methods of thinking and doing were constructed that favoured both change-oriented teams and conservative teams. “While the NT managers were comfortable planning fora new system and working through the various surprises that are a natural part of  change, the SJ managers created a timetable for implementation, devised procedures for each new function, and ensured that documentation was written for each new procedure”[15].

MBTI then acts as a tool for recognising individual differences within organisational cultures and creating shared visions which use the strengths of various personality types in meeting goals. It can also be used for initiating cultural change that makes an organisation more adaptive and increases the motivation of alternative personality types over those commonly found in an organisation. Using the Sprogwheels example, the introduction of MBTI style personality typing unsettled elements of the conventional motivational structures that revolved around emotionless and hierarchical leadership, introducing different mental models that raised the motivational characteristics of certain teams/individuals and devolved others[16]. Personality typing then is a discursive tool for the construction of organisational culture and the possibility to unsettle existing rigid cultures. The individual differences between different personality types can produce new cultural methodologies while also fragmenting others. This also changes the methods of motivation necessary within a culture. Sprogwheels started with a rigid industrial management which motivated senior managers but alienated and de-motivated others, allowing “inefficiencies created by conflict and spurious communications”[17] to creep in. With the recognition of multi-faceted personalities, motivational methods moved to more emotionally intelligent and flexible methods that allowed for greater autonomy and participation from the workforce.

At a systemic level I’ve already noted that different economic systems (industrial, service sector, people-based) require distinct ways of motivating people. Looking now at the micro level as has been done through analysing personality typing, we can see using McGregor’s theory that organisational contexts require a combination of theory X factors and theory Y factors, or economistic motivators and participative motivators respectively.

Theory X methods are successful in creating a base level of motivation, as without them a significant incentive to work is gone. The need for authority and persuasion in any organisation is ever present so long as shared visions and collective goals are to be cohered and worked toward. “Within industrial organizations, managers frequently speak euphemistically of ‘selling’ an idea or a course of action to someone when both parties are fully aware that if persuasion is not successful resort will be had to authority as the means of control”[18]. However, this classical view of motivation is only relative and limited. In situations where choices for workers are minimal and skill sets are organisationally specific this motivational method is effective, but in structures where human capital and flexible knowledge flows take precedence over mechanistic methods of production/work it isn’t. In the latter case, strict coercive motivation can be detrimental as staff turnover will be higher and the productivity of remaining staff will be minimal either through resentment or through lack of desire. A shared vision may well have been developed, but if you can’t identify individual personal visions and link them together, you only develop compliance rather than commitment.

Theory Y methods can be successful in combining the personal visions of team members with a wider shared vision of collective goals and decision-making. This has been the case with Best Buy’s move to becoming a ROWE (results-only work environment) company, where productivity and employee satisfaction increased despite the increasing workload brought about by the launch of their customer centricity program. “Since the (ROWE) program’s implementation, average voluntary turnover has fallen drastically, CultureRx says. Meanwhile, Best Buy notes that productivity is up an average 35% in departments that have switched to ROWE”[19].

However, the innate paradox of autonomy as a motivational driver can be seen in the method of dynamic governance[20] where the use of circular decision-making and committee methods fosters links between management and members in an organisation. While it can provide the capacity for upward feedback from employees to managers using meetings and shared information, this also mires decision-making processes in endless bureaucratic feedback loops creating situations where decisive action may not be forthcoming or possible. The only way to seemingly implement a method like dynamic governance (which prises autonomy and the flattening of managerial hierarchies) would be to create rigid parameters through which decisions would then be filtered, thus implementing at another level an autocratic method of leadership which this model seeks to move away from. Otherwise it has the potential to devolve into endless discussion without the possibility of meaningful decision-making, demotivating participants as they are caught in repetitive feedback loops of discussion and indecisiveness.

Further, in the case of high levels of autonomy in an organisation, whether through a ROWE culture or a decentralised decision-making apparatus, the capacity for status groups to form and informal elements of power to coalesce can produce negative motivational factors. In developing these informal cliques, the effect on individual performance means that excluded members are de-motivated, as so-called “structureless”[21] organisations fail to adequately define shared goals and methods, creating situations where status games take higher priority (fighting for positions of prominence in an organisation) and leading to higher levels of employee turnover and exit. Organisationally, it creates vulnerabilities where unstructured organisations who are unable to clarify their goals or positions are undercut or overtaken by structured organisations who are able to define their positions and include more elements of their organisation’s teams than poorly structured informal groupings that rely more on coercion or ostracism than the cultivation of shared visions and goals.

These factors can lead organisation’s to increasingly focus on economistic means of increasing motivation and engagement (higher pay and more promotion opportunities) as informal hierarchies remove autonomy in a tacit manner, leading to what Senge calls a shifting the burden structure[22] where the organisation focuses on the immediate issue (of low motivation) while ignoring the fundamental problem (cliques and informal teams developing that are exclusive and take power away from a wider shared vision of organisational culture). In focusing on the economistic means (the theory X method of motivation) they end up re-centralising competences too quickly, thereby further eroding trust between manager and team and removing more autonomy rather than restructuring the various elements of the organisation that have developed informally.

The fundamental point from this is that theory X and theory Y motivational methods are a spectrum of organisational possibilities that require balancing. Autonomy is extremely useful for engaging team members and inculcating a shared vision through which personal visions can be aligned toward a common goal. It also means various personality types can be integrated into an organisation and matched with relevant tasks that meet their strengths and desires. However too much autonomy can lead to a structurelessness that is replaced by informal forms of leadership more pernicious than hierarchical management. Such balance can be seen to have been developed by Toyota’s production systems, where they combine strong rule-based parameters that all employees must follow when conducting their work. However regular staff meetings are held where each employee can voice their concerns or grievances regarding the proscribed work methods, pointing out flaws that are then fed back up the administrative chain so that work methods can be revised or an employee can be re-trained or moved into another department more suitable for their skillset[23]. Striking the balance between a participative, autonomous culture and a strong collective ethos is important in defining the methods of motivation and how they are tailored to individual needs.

These motivators are not oppositional. They exist in all organisations and influence the behaviours of individuals depending on different aptitudes and contexts. As noted, the importance is in balancing these two methods so that organisations are neither too rigid and hierarchical nor too structureless and dominated by informal power. “The problems of motivation will be solved in part by the provision of equitable rewards in the form of base salaries and in part by providing opportunities for achieving satisfaction of higher-level needs through efforts directed toward organizational objectives (the principle of integration)”[24]. It is about providing a base of economic and participative motivators and then building from there into developing a shared vision that incorporates individuals/teams’ personal visions and personal mastery i.e. the full gamut of skills, competencies and desires[25] contained within an organisation’s members. This requires different models for variable circumstances.

In different organisational contexts, understanding the various ways of motivating members is important in maintaining a strong ethos and shared vision which provide the impetus to succeed in one’s work and develop means of individual and organisational development. In comparing flat and tall organisations for example, different managerial and motivational processes are needed as they have distinct cultures that encourage and malign certain behaviours and methods of working.

In flat organisations, managerial factors such as maintaining the autonomy of your team relative to the organisation (thus not always on senior management for help) while at the same time controlling the flow of information within your team (thus maintaining a balance of democratic and autocratic methods of leadership) are rewarded. While in tall organisations the opposite managerial behaviors are rewarded, particularly regarding the extent of team autonomy where smaller teams that are strongly linked to the administrative chain of senior managers and teams are encouraged[26].

Recognising this organisational context is important when considering methods to motivate and can largely delineate within McGregor’s spectrum. Flat organisations fit the designation of theory Y motivators as they provide a large amount of autonomy to teams and individual managers while discouraging strong links to senior management. Tall organisations are closer to theory X motivators as they discourage significant levels of independent knowledge and cultivate a strong shared vision by strictly controlling learning flows, motivating instead through promotion opportunities and organisational development. Both forms have within them different contextual variables that require unique motivational methods.

Motivation exists as a bottleneck in the learning/knowledge flows of an organisation. To make knowledge more efficient and increase productivity, team members need to be engaged in the shared vision and associated mental models that structure tasks and increase the positive feedback of knowledge from individual intuition to company integration. Two of the main ways of doing this are increasing autonomy that employees have over their work, reducing strict parameters and allowing individual experimentation with how they do their work, and increasing participation in constructing and influencing an organisation’s shared vision.

However, high levels of autonomy can have varying impacts on motivation, leading to factors that re-entrench hierarchical cultures through tacit status differences. While McGregor’s theory Y motivational factors revolve around higher order effects of mastery of one’s work and the autonomy to develop individual ideas that aren’t suffocated by bureaucratic management, increasing levels of these things can lead to contradictory factors of leaderless hierarchies that de-motivate different personality types, homogenising organisational culture.

But autonomy and participation do produce clear results as with Best Buy’s introduction of ROWE, where employees are judged on results rather than on their amount of office-time or face-to-face interaction[27]. Here their appears to a greater balance of workplace autonomy and managerial oversight, creating conditions of trust where employees can be let off the leash and still maintain high levels of productivity (and higher levels in many cases) as well as increasing workplace satisfaction. The important thing here is finding balance between managerial motivation (theory X) and decentralised autonomy within teams and between individuals. In finding this balance employees can be engaged along different contextual variables and aptitudes instead of pigeon-holing them into specific personality types that don’t suit their desires or abilities. In maintaining a functioning organisational culture that encourages learning and aligns employees’ personal visions with shared vision, engaging team members through a combination of two-way communication, participation in decision-making and greater oversight of their own work produces better motivational factors as individuals feel part of a collective culture which they can contribute to and develop from.

The current socio-economic climate has moved from industrial economies to increasingly flexible, people-oriented systems that combine both market competition and governance, influencing individuals both as consumers and as stakeholders[28]. However, “there has been virtually no new idea of organization since the concepts of corporation, nation-state, and university emerged a few centuries ago”[29]. In such organisational chaos, strategy and the avoidance of ossification have become paramount for maintaining the pre-eminence of a company’s values or goals[30]. As human capital and information ecosystems create flows through organisations, those that are successful will combine motivational factors and incentives that increase the autonomy and voice of its stakeholders with an administrative structure that implements a cohesive shared vision.

[1] Dee W. Hock, The Chaordic Organization: Out of Control and Into Order

[2] Peter Senge, The Fifth Discipline

[3] Mary M. Crossan, Henry W. Lane & Roderick E. White, An Organizational Learning Framework: From Intuition to Institution

[4] Mary M. Crossan, Henry W. Lane & Roderick E. White, An Organizational Learning Framework: From Intuition to Institution

[5] Douglas McGregor, The Human Side of Enterprise

[6] Karin Garrety, The Use of Personality Typing in Organizational Change: Discourse, Emotions & the Reflexive Subject

[7] Adriana Grigorescu & Anca Chiper, The Importance of Human Capital in the Strategic Development of an Organization

[8] https://smallbiztrends.com/2019/04/things-customers-want-retail-stores.html

[9]https://web.archive.org/web/20090514075744/http://www.businessweek.com/magazine/content/06_50/b4013001.htm

[10] https://www.e-days.com/news/employee-turnover-rates-an-industry-comparison

[11] James G. March, Exploration and Exploitation in Organizational Learning

[12] Michael D. Cohen, James G. March & Johan P. Olsen, A Garbage Can Model of Organizational Choice

[13] Michael D. Cohen, James G. March & Johan P. Olsen, A Garbage Can Model of Organizational Choice

[14] Peter Senge, The Fifth Discipline

[15] Kent Hendrickson & Joan Giesecke, Myers-Briggs Type Indicator Profile and the Organization

[16] Karin Garrety, The Use of Personality Typing in Organizational Change: Discourse, Emotions & the Reflexive Subject

[17] Karin Garrety, The Use of Personality Typing in Organizational Change: Discourse, Emotions & the Reflexive Subject

[18] Douglas McGregor, The Human Side of Enterprise

[19]https://web.archive.org/web/20090514075744/http://www.businessweek.com/magazine/content/06_50/b4013001.htm

[20] John A. Buck & Gerard Endenburg, The Creative Forces of Self-Organization

[21] Jo Freeman, The Tyranny of Structurelessness

[22] Peter Senge, The Fifth Discipline

[23] Steven Spear & H. Kent Bowen, Decoding the DNA of the Toyota Production System

[24] Douglas McGregor, The Human Side of Enterprise

[25] Peter Senge, The Fifth Discipline

[26] Edwin E. Ghiselli & Jacob P. Siegel, Leadership and Managerial Success in Tall and Flat Organization Structures

[27]https://web.archive.org/web/20090514075744/http://www.businessweek.com/magazine/content/06_50/b4013001.htm

[28] https://thelibertarianideal.com/2019/04/20/amazon-as-a-vector/

[29] Dee W. Hock, The Chaordic Organization: Out of Control and Into Order

[30] https://thelibertarianideal.com/2019/11/20/organisational-ossification-and-management-theory/

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