Unit 2: Motivating Your Team

2a. Apply motivation theories to motivate employees and the organization as a whole

  • Which theory do you see being applied to motivate you in your current or past organization?
  • What are the main differences between needs-based theories and process motivational theories?
  • How can you use these theories as a leader in your business or organization?

Motivation is what energizes, maintains, and controls behavior. Motivated employees tend to have a high level of innovation and produce higher-quality work. There are two main sources of motivation: internal and external. Within this, managers can motivate people using several motivation theories: need-based, behavior-based, cognition-based, and job-oriented.

Maslow's Hierarchy of Needs is a needs-based motivational theory that includes human needs, which a leader can leverage to motivate others. The levels in the hierarchy include physiological, safety, love/belonging, esteem, and self-actualization. The ERG Theory addresses that humans are motivated based on three main needs: existence, relatedness, and growth. These needs are based on Maslow's earlier work.

One behavior-based theory is the Two-Factor Theory of Motivation, which looks at hygiene factors like working conditions and salary. In contrast, motivators are intrinsic and relate to the job, such as achievement, interesting work, and growth opportunities. 

Cognition-based theories include the Equity Theory, which says we compare our inputs and outputs to others and are more motivated if there is equality between salary and inputs but less motivated if, for example, someone is earning more but is perceived to give fewer inputs and outputs to the organization. Expectancy Theory says we will put in as much effort as we expect to receive rewards (either intrinsic or extrinsic rewards). 

Job-based theories look at factors such as job design, job enlargement, and job rotation to attempt to motivate people based on ensuring their work is rewarding.

To review, see Motivation Theories and How to Apply Motivation as a Leader.


2b. Compare and contrast the variety of ways entrepreneurial leaders communicate effectively

  • What is the communication process?
  • How does non-verbal communication impact leaders?
  • What medium of communication should be used in a variety of situations?
  • What are the directions of communication?

Managerial communication is key for effective entrepreneurial leaders. For effective communication, understanding the meaning of encoding, medium, decoding, effects, and noise are important, as they are how messages are received. 

Leaders engage in oral communication, often in decisional roles or informational roles. Communication types can include oral, written, and non-verbal communication. Daily interactions with managers might include reading, speaking, listening, and writing. Within these types of communication, understanding what influences communication, such as perception, interaction, involvement, and organizational design, can help us be better communicators as leaders. When we consider non-verbal communication, this might include boy language, eye contact, facial expressions, posture, touch, and space.

When we communicate as leaders, we want to consider the information channel and its level of richness. For example, a face-to-face conversation is high in richness, while a formal written document is low in richness. As leaders in our organization, knowing when to use verbal versus written communication is important, such as using written communication when conveying facts but using verbal communication if feelings and emotions are involved. 

Organizational communication travels in many directions: downward, laterally, upward, and diagonally. 

To review, see Communication Types and Channels and Types of Communication.


2c. Identify methods to manage and motivate human capital, such as through intrinsic and extrinsic means

  • How does ethics impact employee motivation?
  • How might you, as an entrepreneur, ensure diversity and inclusion to grow your business?
  • What are some methods of employee development and investing in human capital that can help your business succeed?

Ethics and social responsibility can assist in motivating employees, as most people prefer to work with an ethical company. Stereotyping can lead to discriminatory behavior, which leads to prejudice and ingroup favoritism. We want to avoid these as we try to motivate people. Part of avoiding these assumptions is ensuring we follow the law regarding diversity, such as avoiding discrimination based on age, disability, genetic information, national origin, pregnancy, race/color, religion, and sex. We also addressed sexual harassment and equal pay as part of our discussion on diversity and multiculturalism. 

Investing in human capital and allowing for talent development through performance management can help build profitable and successful companies. 

To review, see:



2d. Propose elements of organizational culture to apply to a business

  • What external environment elements are important to consider as part of goal setting?
  • What is the main difference between a mechanistic and an organic organizational structure?
  • How does the Competing Values Framework assist us in developing a company culture?
  • How do you set SMART goals?

This section addresses elements of organizational culture and how culture can impact goal-setting within organizations. The external environment consists of economic forces, technological forces, sociocultural forces, national disasters, and government and political forces. Understanding these elements and changes for each will help the entrepreneur make better, more informed decisions.

Part of organizational culture also involves organizational structures. Most small start-ups begin as an organic structure, with few policies and rules, but eventually end up being a mechanistic structure, a more formalized structure that is usually necessary to facilitate running a larger organization. 

One of the important elements of culture involves the internal environment, such as ensuring all employees have shared values, providing the structure and systems are in place to help the organization meet goals, and, of course, making sure the people with the right mix of skills and abilities work for the organization. According to the Competing Values Framework, we can look at organizations as either internally or externally focused and their level of control to try and determine company culture.

Winning organizations, big or small, set goals with these cultural elements in mind. Companies should always set SMART goals, which are specific, measurable, attainable, realistic, and time-bound.

To review, see Culture and Goal Setting.


Unit 2 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • Competing Values Framework
  • Equity Theory
  • ERG Theory
  • Expectancy Theory
  • external environment
  • Maslow's Hierarchy of Needs
  • mechanistic structure
  • motivation
  • organic structure
  • SMART goals
  • Two-Factor Theory of Motivation   
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