Management-Changing of the guard at InsureCo Case
Analysis Using Motivation Theories
1.1 Expectancy Theory
With respect to the expectancy theory, two things can be pointed out very clearly. The first can be seen as the recruitment of an individual from outside the company to fill in the position of CEO. The second is that the entry of the new CEO, Gary, brought in new dynamics into the company which was against the expectations of its members. The trend of internal recruitment and promotions to fill in vacancies was discarded, and the new CEO brought in new personnel from his old company, despite excellent credentials and performance of the employees. Such a change led to the unfavorable consequences of lower employee morale and a decrease in the performance of the staff. (Henry Van Til, 1982)
In the quantitative study conducted by Edward Lawyer III and Lloyd Suttle, “Expectancy Theory and Job Behavior”, they analyzed the work behavior and attitude data for 69 managers over a period of one year. They concluded from this study that there is a correlation between expectancy attitudes and performance of employees. It also concluded that intrinsic reward systems have a higher impact on performance as compared to extrinsic systems. When applied within the framework of this case study, it is easy to conclude that the decline in employee performance was a result of the company’s failure to establish a system where the expectations of the employees would be met. (E. C. Wines, 1986)
1.2 ERG Theory
- The system brought into place by the new CEO Gary did not make room for any reward system for the employees – which are against the growth needs of the employees.
- Employees were not encouraged nor were their being given promotions and vacancies in the company were being filled by bringing in personnel from outside. This can be considered as against the existence need of the employees because they felt threatened about their job security. (Rushdoony, 1982)
There was immense unrest and dissatisfaction among the employees because the decision to bring in a CEO from outside was taken by the employees in a negative view who believed that the company did not trust their abilities. If one applies the ERG theory at this point then one can see that this decision was against the needs of the employees, who needed to feel appreciated and trusted their business in times of such financial turmoil in the market. Hiring Gary as the CEO not only caused confusion, but since his ideology was different from those in InsureCo, it led to conflict and difference of opinions, which can be seen from the manner in which Alan and Steve were not given credit for their work. (Douglas Frank, 1986) The fact that InsureCo had a good reputation and was growing showed that it was capable of ensuring that the presence needs of its employees were satisfied. That’s one of the reasons why Alan wanted to work at InsureCo because he wanted to start his career in well-established company with good history and reputation. However, the company met with the decline in performance because the employees were not given any public recognition for their efforts, nor were they given any monetary incentives which are another form of recognition. This means that their relatedness needs and their growth were not being satisfied. (Vishal Mangalwadi, 1986)
Douglas Frank, Less Than Conquerors: How Evangelicals Entered the Twentieth
Century (Grand Rapids, Michigan: Eerdmans, 1986)
Rushdoony, Law and Society (Vallecito, CA: Ross House Books, 1982), pp.
Vishal Mangalwadi, Truth and Social Reform (New Delhi, India: Nivedit Books, 1986).
Mary Pride, The Big Book ofHome Learning (Westchester, Illinois: Crossway Books, 1986).
Henry Van Til, The Calvinistic Concept of Culture (Philadelphia: Presbyterian and Reformed, 1959).
Peter Waldron with George Grant, Rebuilding the Walls: A Biblical Strategy for Restoring America's Greatness (Brentwood, Tennessee: Wolgemuth and Hyatt Publishers, 1987).
E. C. Wines, The Hebrew Republic (Uxbridge, Massachusetts: American Presbyterian Press, 1980)