What Makes People Effective?
This chapter, contributed by Edward E. Lawler, outlines the processes and ideas by which an organization can create a virtuous spiral –a symbiosis between individual employees and their organization to work towards achieving everyone’s goals. People in an organization perform well when they are properly motivated. The organization needs to know what motivates its people to be responsible, and willing to provide, the components it needs to succeed. The capabilities and the competencies of an organization are determined by the caliber of its employees. In order to succeed, and organization must obligate themselves to acquire the best and most capable people, and keep them satisfied in their working environment. How do we determine whether a person is able to perform at their highest potential? We need to know what motivates them. Each person has their own values and sources of motivation. There are a lot of speculations that have been made to explain why people make the choices they do in work, and what they would interpret as an ideal reward. FACTORS THAT AFFECT MOTIVATION

The first concept explored is the causes of performance. Lawler uses the equation: PERFORMANCE = MOTIVATION x ABILITY
It is a simple equation that states that that performance relies on two factors. Workers who are motivated don’t always have the skills to produce great results, and those who are highly skilled won’t produce results without motivation. Psychologists have an explanation of why people are motivated to work, coined as expectancy theory. This theory claims that people are generally rational decision makers who act in ways that fulfill their own needs and reach their own goals. But sometimes they misperceive reality and assess situations incorrectly. The theory widely accepts that all people are largely different in their needs and the importance they