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3.3 Human Resources Theories

PLEASE NOTE: This book is currently in draft form; material is not final.

Learning Objectives

  1. Define and understand the differences between human relations vs. human resources.
  2. Identify key people in human resources theories.
  3. Discuss and learn about motivation theories.
  4. Discuss and explain Douglas McGregor’s Theory Y and Theory X.
  5. Analyze Rensis Likert’s Participative Decision Making Theory

In the previous section, you were introduced to the research of Elton Mayo and Kurt Lewin under the banner of human relations theories. In this section, we’re going to further our understanding of theory in organizations by examining those theoretical perspectives that fall into the human resources camp.

The notion of human resources as a general category for a variety of management related theories was originally proposed by Raymond Miles.Miles, R. E. (1965). Human relations or human resources? Harvard Business Review, 43(4), 148–157. First and foremost, Miles’ human resource theories posits that all workers are reservoirs of untapped resources. Miles believed that each and every worker comes into an organization with a variety of resources that management can tap into if they try. “These resources include not only physical skills and energy, but also creative ability and the capacity for responsible, self-directed, self-controlled behavior.”Miles, R. E. (1965). Human relations or human resources? Harvard Business Review, 43(4), 148–157, pg. 150.

Under this perspective then, managers should not be focused on controlling employees or getting them to “buy-in” to decisions, which are the hallmarks of scientific management and human relations. Instead, the primary task of management should be the creation of a working environment that fosters employee creativity and risk taking in an effort to maximize and tap into the resources employees bring to the job. As such, communication in this perspective must be constant and bi-directional and participation in decision-making must include both management and workers. Miles explains that his human resources model “recognized the untapped potential of most organizational members and advocated participation as a means of achieving direct improvement in individual and organizational performance.” Miles, R. E., & Ritchie, J. B. (1971). Participative management: Quality vs. quantity. California Management Review, 13(4), 48–56., p. 48. To help us understand human resources, we are going to describe how human resources differ from human relations and discuss some key people in human resources.

Human Relations vs. Human Resources Theories

To understand the notions of human relations and human resources is to understand Raymond MilesMiles, R. E. (1965). Human relations or human resources? Harvard Business Review, 43(4), 148–157. original ideas on both concepts. Miles, as explained above, articulated a very clear theoretical perspective that was high on communication, high on tapping into employee resources, and high on employee input in decision making. These ideas were not his, but he did create a clear categorization scheme where he delineated between two groups of researchers whom he labeled human relations and human resources. While Miles believes these two groups exist, he also admits that these groups exist primarily in how managers interpret and apply various pioneers of the field of management, so the researchers who fall into the human relations camp often discuss concepts that seem to fall within Miles’ own human resources framework. Table 3.2 "Human Relations vs. Human Resources" provides a list of the major differences that Miles believed existed between human relations and human resources.

Table 3.2 Human Relations vs. Human Resources

Human Relations Human Resources
Worker Needs Workers need to belong, be liked, and be respected. While workers need to belong, be liked, and be respected, workers also want to creatively and effectively contribute to worthwhile goals.
Worker Desires Workers really desire to feel as though they are a useful part of the organization. Workers really desire to exercise initiative, responsibility, and creativity, so management should allow for these.
Outcomes If worker needs and desires are filled, they will willingly cooperate and comply with management. Management should tap into worker capabilities and avoiding wasting untapped resources.
Job Satisfaction When employee needs and desires are met, they’ll be more satisfied. When employees feel that they have self-direction and control and are able to freely use their creativity, experience, and insight they will be more satisfied.
Productivity Job satisfaction and reduced resistance to formal authority will lead to more productive workers. When employees feel that they have self-direction and control and are able to freely use their creativity, experience, and insight they will be more productive .
Management Goal Managers should strive to ensure that all employees feel like they are part of the team. Managers should help employees discover hidden talents and ensure that all workers are able to fully use their range of talents to help accomplish organizational goals.
Decision Making Management should allow employees to offer input on routine decisions and be willing to discuss these decisions, but management should keep important decisions to themselves. Management should allow and encourage employees to freely participate in the decision making process with all types of decisions. In fact, the more important the decision is, the more the manager should seek out his employee resources in the decision making process.
Information Sharing Information sharing is a useful tool when helping employees feel like they are part of the group. Information sharing is vital for effective decision making and should include the full range of creativity, experience, and insight from employees.
Teamwork Management should allow teams to exercise moderate amounts of self-direction and control. Management should encourage teamwork and continually look for greater areas where teams can exercise more control.

Key People in Human Resources Theories

As we see in Table 3.2 "Human Relations vs. Human Resources", there some key differences between human relations and human resources theories. These differences can be broken down into two basic categories: motivation and decision making. The rest of this section is going to both of these areas and the key people who researched these phenomena.

Motivation Theories

Abraham Maslow’s Hierarchy of Needs

Many other theorists tried to explain the importance of the human resources approach. One of these individuals was Abraham Maslow.Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50, 370–96. He is widely known for his creation of Maslow’s Hierarchy of NeedsModel that suggests there are certain levels of human motivation and each level must be met before moving to the next level. Shaped like a pyramid, the model shows that human’s most basic need from lowest to highest is physical, then safety, love/belonging, esteem, and self-actualization.. In order to get employees to work, he tried to understand what motivates people. He came up with five needs that need to be satisfied at one stage before moving on to another stage. Malsow felt that needs vary from person and person and that individuals want their need fulfilled. One must determine what is the motivational factor (Figure 3.1 "Maslow’s Hierarchy of Needs").

Physiological Needs. The first level of Maslow’s Hierarchy of Needs is psychological, which means that physical needs such as food and water need to be met before moving to the next level. If workers do not make enough money to buy food and water, then it will be hard for them to continue working.

Safety Needs. The second level is called safety. Workers need to be in a safe environment and know that their bodies and belongings will be protected. If workers don’t feel secure, then they will find it hard to work efficiently. Think of the many occupations that are highly unsafe. According to an article on the CNN Money websiteChristie, L. (2011, August 26). America’s most dangerous jobs: The 10 most dangerous jobs in America. In CNNMoney [website]. Retrieved from http://money.cnn.com/galleries/2011/pf/jobs/1108/gallery.dangerous_jobs/index.html, the top ten most dangerous jobs in the United States are as follows:

  1. Fisherman
  2. Logger
  3. Airplane Pilot
  4. Farmer and Rancher
  5. Mining Machine Operator
  6. Roofer
  7. Sanitation Worker
  8. Truck Driver/Deliveryman
  9. Industrial Machine Repair
  10. Police Officer

According to Maslow’s basic theoretical premise, these individuals will have a harder time worrying about needs at the higher levels unless they can overcome the inherent lack of safety within these jobs.

Love, Affection, and Belongingness Needs. The third layer is called love, affection, and belongingness needs. Maslow believed that if an individual met the basic physiological and safety needs, then that individual would start attempting to achieve love, affection, and belongingness needs next, “He [or she] will hunger for affectionate relations with people in general, namely, for a place in his [or her] group, and he [or she] will strive with great intensity to achieve this goal.”Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50, 370–96, pg. 381. Maslow believed that organizations would have better worker retention and satisfaction if they kept their employees in a cohesive environment. Furthermore, if a worker feels isolated or ostracized from their environment, then he or she would feel less motivated to work, which will lead to a decrease in overall productivity.

Esteem Needs. The fourth layer is called esteem, and is represented by two different sets of needs according to Maslow. First, individuals are motivated by the “desire for strength, for achievement, for adequacy, for confidence in the face of the world, and for independence and freedom.”Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50, 370–96, pg. 381. Maslow goes on to discuss a second subset of esteem needs, “we have what we may call the desire for reputation or prestige (defining it as respect or esteem from other people), recognition, attention, importance or appreciation.”Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50, 370–96, pg. 381–382. While Maslow originally separated these two lists from each other, they clearly have more in common than not. If employees do not feel that their input is valued at the organization, they will seek out other places of employment that will value their input, because humans have an intrinsic need to be appreciated for their efforts.

Self-Actualization Needs. The fifth layer is called self-actualization, and it is the hardest to attain. Self-actualization “refers to the desire for self-fulfillment, namely, to the tendency for [a person] to become actualized in what he [or she] is potentially. This tendency might be phrased as the desire to become more and more what one is, to become everything that one is capable of becoming.” Maslow goes on to explain, “A musician must make music, an artist must paint, a poet must write, if he [or she] is to be ultimately happy. What a man [or woman] can be, he [or she] must be. This need we may call self-actualization [emphasis in original].”Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50, 370–96, pg. 382. Maslow felt that if individuals can have their needs met in order of the layers, then they would be both motivated and seek opportunities to excel.

All in all, Maslow’s hierarchy of needs helps us understand how to motivate workers to strive for more in the organization. Hence, communication is very important, because we need to understand what our employees need in order to motivate them to work more proficiently and productively.

Figure 3.1 Maslow’s Hierarchy of Needs

Frederick Herzberg’s Motivation-Hygiene Theory

Another researcher to enter into the fray of human motivation was Frederick Herzberg. Originally trained as a clinical psychologist, over the course of Herzberg’s career he switched focused and became one of the first researchers in the growing field of industrial psychology. The original notion of Frederick Herzberg’s Motivation-Hygiene TheorySimilar to Maslow’s Heirarachy of Needs, but focues on what motivated humans to work. He also focus on what demotivated workers to have a positve or negative job attitues. was that traditional perspectives on motivation, like Maslow’s, only looked at one side of the coin—how to motivate people. Herzberg and his original colleaguesHerzberg, F., Mausner, B., & Snyderman, B. S. (1959). The motivation to work. New York, NY: Wiley. theorized that what ultimately motivated individuals to work were not necessarily the same factors that led to demotivation at work. In Herzberg’s worldview, motivation on the job should lead to satisfied workers, but he theorized that satisfaction and dissatisfaction were not opposite ends of one continuum. Instead, he predicted that the factors that lead to positive job attitudes (and thus motivation) were different from the factors that lead to negative job attitudes (and thus demotivation). For the purposes of his theory, he called the factors that led to positive job attitudes motivatorsThe list of factors that lead to positive job attitudes according to motivation theorist Frederick Herzberg. and those factors that led to negative job attitudes hygiene factorsThe list of factors that led to negative job attitudes according to motivation theorist Frederick Herzberg.. In Table 3.3 "Motivators and Hygiene Factors" the basic motivators and hygiene factors are listed. Notice that the motivators are all centered around ideas that are somewhat similar to the esteem needs and self-actualization needs of Abraham Maslow. On the other hand, the hygiene factors all examine the context of work.

Table 3.3 Motivators and Hygiene Factors

Motivators Hygiene Factors
Achievement Policy and administration
Recognition Micromanagement
Advancement Relationships (Supervisor, Peers, & Subordinates)
The work itself Job security
Responsibility Personal life
Potential for promotion Work conditions
Potential for personal growth Status
Salary

Upon looking at Table 3.3 "Motivators and Hygiene Factors", you may notice that Salary is centered between both motivators and hygiene factors. In The Managerial Choice Herzberg reversed his previous thinking that salary was purely a hygiene factor, “Although primarily a hygiene factor, it [salary] it also often takes on some of the properties of a motivator, with dynamics similar to those of recognition for achievement.” Herzberg, F. (1976). The managerial choice: To be efficient and to be human. Homewood, IL: Dow-Jones-Irwin, pg. 71.

Decision Making

Douglas McGregor’s Theory X and Theory Y

As we discussed earlier, the classical perspective felt that leadership should control and order subordinates. Then, in the human relations approach, we learned that superiors need to cultivate and support their employees. Douglas McGregorMcGregor, D. (1960). The human side of enterprise. New York: McGraw-Hill., a management professor at the Massachusetts Institute of Technology in the 1950s and 1960s, felt that there are two different perspectives, which he termed as Theory XThis approach is similar to the scientific management approach, where workers are expected to only work. In this perspective, managers believe that workers are apathetic towards work and people need direction. In addition, managers believe that workers are not smart, do not seek advancement, and avoid responsibility. and Theory YThis approach is similar to the human relations approach. In this perspective, managers believe that people want to succeed and they can excel if you give them the right to be creative. In addition, people want to work, seek direction, and are ambitious.. These theories were based on assumptions that managers have about their workers.

McGregor defined a Theory X manager who believes that most people do not like work. Workers are not smart or creative. People do not care about the organization, and will adequately work when there are promises for rewards and potential punishments. Moreover, Theory X manager believes that people want to have direction in order to evade responsibility.

On the other hand, Theory Y managers feel that people want to do what is best for the organization and can direct themselves under the right conditions. Table 3.4 "Differences between Theory X & Theory Y" illustrates the differences between Theory X and Theory Y.

Table 3.4 Differences between Theory X & Theory Y

Theory X Theory Y
People dislike work and find ways to avoid it People perceive work as natural and find it enjoyable
Workers want to avoid responsibility People want responsibility
Want direction Prefer self-direction
Resists change Wants to work toward organizational goals
Not intelligent Have the potential to develop & adapt
Not creative Are intelligent
Managers must control, reward, and/or punish employees to maintain performance Are creative
Work conditions need to be set to achieve worker & organizational goals

Rensis Likert’s Participative Decision Making Theory

The last major theorist we are going to explore related to the human resources side of management theory is Rensis Likert’s Participative Decision Making (PDM) TheoryThis model has four systems that are based on effectively functioning groups that are related throughout the organization. Hence, Likert felt that with accurate understanding of human performance in variability and contrasts, then organizations could be more productive.. Likert originally explored the idea of how organizational leaders make decisions in his book The Human Organization.Likert, R. (1967). The human organization: Its management and value. New York: McGraw-Hill. Likert’s ideas were based in the notion that supervisors with strong worker productivity tended to focus on the human aspects of subordinate problems while creating teams that emphasized high achievement. In other words, these supervisors were employee centered and believed that effective management required treating employees as humans and not just worker bees. Likert further noted that these highly productive leaders also tended to involve subordinates in the decision making process. Out of this basic understanding of productive versus unproductive management, Likert created a series of four distinct management styles.

System 1: Exploitive Authoritative. System 1, exploitative authoritative management, starts with the basic issue of trust. Under this system of management, the manager simply does not trust subordinates and has no confidence in subordinate decision making capabilities. Because of this lack of trust, all decisions are simply decided upon by people at the upper echelons of the hierarchy and then imposed on the workers. Communication under these leaders is typically unidirectional (from management to workers), and employees are motivated to comply with management dictates out of fear.

System 2: Benevolent Authoritative. System 2, benevolent authoritative management, starts with the basic notion that decision making should be situated with those in managerial positions. Because managers believe that decision making should be theirs and theirs alone, managers believe that workers will simply comply with managerial dictates because of the manager’s legitimate right to make decisions. This type of management almost takes on a master-servant style relationship. As for communication, subordinates are not free to discuss decisions or any job-related matters with their superiors. Ultimately, employ motivation to comply with managerial dictates is done through a system of rewards.

System 3: Consultative. System 3, consultative management, starts with a lot more trust in employee decision making capabilities. However, the manager may either not have complete confidence in employee decision making or may have the ultimate responsibility for decisions made, so he or she does not allow workers to just make and implement decisions autonomously. Typically, the manager seeks input from workers and then uses this input to make the ultimate decision. Under consultative management, communication, decision making participation, and teamwork is fair, and employees tend to be more motivated and satisfied than the previous two styles of management. However, consultative management can be very effective if, and only if, the input process is conducted legitimately. One of the biggest mistakes some managers make is to use pseudo-consultative practices where they pretend to seek out input from subordinates even though the actual decision has already been made. Pseudo-consultative decision making is just a different flavor of benevolent authoritative management.

System 4: Participative. System 4, participative management, is built on the goal of ensuring that decision making and organizational goal attainment is widespread throughout the organizational hierarchy. In these organizations, organizational leaders have complete confidence in worker ability to make and implement decisions, so workers are constantly encouraged to be very active in the decision making process. Under participative management, communication, decision making participation, and teamwork is good, and employees tend to be motivated and satisfied.

These four different systems characterize many of the classical theories discussed in this chapter. For instance, System 1 is similar to the scientific management approach t and System 4 has characteristics from the human relations approach. Likert believed that an organization’s performance is based on the systems or structures in place for the workers. Thus, Likert believed that organizations could incorporate some aspects from the scientific management approach, human relations, and human resource approach in order to maximize organizational outcomes.

Key Takeaways

  • Human Resources encourages an environment where employees have the ability to be creative and take risks in order to maximize outcomes.
  • Human resources places an emphasis on more communication than human relations.
  • Maslow’s hierarchy of needs help us to understand what motivates people in organizations.
  • Herzberg’s theory focuses on what motivates individuals to work and he also focused on what factors lead individuals to demotivation at work.
  • McGregor’s Theory X and Theory Y are assumptions that managers have about their employees. They differ in the type of communication involved as well as the expectations of workers.
  • Rensis Likert’s ideas were based on the idea that supervisors are employee centered and to treat all employess as unique humans rather than just another worker.

Exercises

  1. What do you think are the most important characteristics between human relations and human resources? Which do you prefer? Why?
  2. Which motivation theory is more applicable in the workplace? Why?
  3. Create your own hypothetical Maslow’s hierarchy of needs. What would motivate you to work in an organization. Use Figure 3.1 "Maslow’s Hierarchy of Needs" as a guide when creating your pyramid.