Understanding what motivates an organization's employees is central to the study of I–O psychology. Work motivation is a set of energetic forces that originate both within and outside of individuals, to initiate work-related behavior, and to determine its form, direction, intensity, and duration. Motivation involves providing someone with an incentive to do something; proper incentives should outweigh the cost of the actions required to achieve them.

Motivation can be intrinsic (consisting of internal factors within a person, such as the desire to succeed) or extrinsic (consisting of external factors, such as monetary incentives). Motivation also involves three psychological processes: arousal (which initiated action), direction (the path taken to accomplish goals), and intensity (the vigor and amount of energy employees put into reaching the goal).

Job satisfaction reflects employees' overall assessment of their job through emotions, behaviors, and attitudes about their work experience. Satisfaction with one's job has theoretical and practical utility linked to important job outcomes, such as attitudinal variables, absenteeism, employee turnover, and job performance.

Theories of Workplace Motivation

There are many theories about what motivates employees to work. Some are drawn from the larger field of psychology while others are specific to I–O psychology. Below are several theories. 

Expectancy Theory

The expectancy theory of motivation proposes that people believe there is a relationship between effort, performance, and outcome. The outcome in expectancy theory is often a reward given for the desired behavior. Under this theory, individuals place a value on the reward and then put forth the effort they believe is worthy of such a reward. An example of expectancy theory in the workplace would be a manager offering a car as a bonus (the reward) to the salesperson who makes the year's greatest number of sales (the effort).

Goal-Setting Theory

Goal-setting theory suggests that employees will be more motivated if they have specific goals to meet. A manager applying this to the workplace might assign a specific numerical goal to her workers, such as a target number of sales. There are some drawbacks to applying this theory. It can be detrimental to performance on certain types of tasks, and having too many goals can become distracting and counterproductive.

Social Exchange and Equity Theory

Social-exchange and equity theory examines the impact of exchange on motivation. There are three types of exchange relationships that people perceive they have with organizations: (1) a committed relationship held together by moral obligation, (2) a relationship based on demands and contributions, and (3) a relationship based on inequity, in which a person thinks that they are receiving less than they are giving. A manager who uses social-exchange theory might try to emphasize that the company is more of a family than a workplace in order to achieve the first type of relationship.

Need Theory

McClelland's need theory proposes three main categories of learned human behavior called manifest needs. The three main needs are the need for achievement, power, and affiliation. The amount and type of need varies by individual. People with a high need for achievement are very concerned with doing their best work and setting goals to help them get there. If one does not have a high need for achievement, there is usually a lack in motivation. The need for power takes two forms: socialized power, which benefits a group, and personalized power, which benefits the self. People with a high need for affiliation expect a more personalized relationship with others at work. A manager who applies need theory will want to hire employees with a high need for achievement.

Two-Factor Theory

Herzberg's two-factor theory describes two factors, motivation and hygiene, that lead to job satisfaction and productivity in the workplace. Motivation factors include achievement, responsibility, advancement, and growth. Hygiene factors include working conditions, status, technical supervision, policy, and administration. This theory also highlights the importance of rewards systems; simple recognition is often enough to motivate employees and increase job satisfaction.

Job-Characteristics Model

The job-characteristics model (JCM) maintains five important elements that motivate workers and performance: skill variety, task identity, task significance, autonomy, and job feedback. The individual elements are then thought to lead to positive outcomes through three psychological states: experienced meaningfulness, experienced responsibility, and the knowledge of results.

Psychological-Empowerment Theory

The psychological-empowerment theory posits that there is a distinction between empowering practices and cognitive motivational states. Empowering practices often occur through a competent manager who empowers employees by practices such as sharing information, creating autonomy, and creating self-managed teams.

Methods of Improving Job Satisfaction

Job satisfaction has a strong positive correlation with life satisfaction, and as such, improving job satisfaction should be considered a priority. (Interestingly, despite popular and media assumptions to the contrary, studies have shown a nebulous relationship between job satisfaction and employee productivity.) Some of the methods below can improve employee job satisfaction.

Flexible Scheduling

Some research has found that flexible working arrangements, such as flextime and telecommuting, can have positive effects on job satisfaction, but the effects are primarily seen when employees have some control over their schedules. Individuals who telecommute most of the work week are more satisfied with their jobs than are traditional employees who commute to a physical office location.

Telecommuting

Flexible work arrangements, such as telecommuting, can have positive effects on employee satisfaction.

Professional Development

Career-development programs can provide excitement and satisfaction at various stages by identifying employees' talents early on and providing opportunities for learning. These programs can lead to employee job satisfaction and flexibility. Mentoring benefits and strengthens the employer-employee relationship. For individuals who have a high need for affiliation (as reflected in need theory), mentoring can be a powerful motivator. Identifying talent of employees plays to their strengths and enhances feelings of competency.

Effective Management

Good managers should be able to identify the talents of their employees, make sure they have the resources they need to perform well, respect their opinions, and push them to advance. Managers should develop relationships and provide an environment that is conducive to development. Effective management skills include encouraging an open climate for dialogue with employees; providing employees with ongoing feedback regarding performance; helping employees understand the strategies of the organization; helping employees identify multiple and realistic options for their career growth and development within the organization; and helping employees compile meaningful, business-driven personal-development plans.

Employee Influence

There are benefits when an organization allows for employee influence. Allowing employees to have a voice in the organization creates intrinsic motivation for them to increase the quality of their performance because they care about the company as a whole. However, extrinsic reward systems also play a role in employee satisfaction, as suggested by expectancy theory. Reward systems include compensation, bonuses, raises, job security, benefits, and various other methods of reward for employees. Sometimes recognition alone is enough of a reward.

Employee recognition

Recognition is often enough of a reward to improve employee satisfaction and increase motivation.

Creativity

On the cutting edge of research pertaining to motivation in the workplace is the integration of motivation and creativity. Essentially, according to research by Ambrose and Kulik, the same variables that predict intrinsic motivation are associated with creativity. Allowing employees to choose creative and challenging tasks has been shown to improve motivation.