Two-Factor Theory: How to Create Happier Employees in 2 Simple Steps

Illustration of three characters being hopping around

Much of what the world understands about motivation at work comes from American psychologist Frederick Herzberg, who published “One more time: How do you motivate employees?” in the Harvard Business Review in 1968. In the article, Herzberg put forth an idea known as the Two-Factor Theory.


Illustration of three characters being hopping around

What is the Two-Factor Theory?

The Two-Factor Theory is based on Herzberg’s findings that there are only two types of factors that cause a worker to either be satisfied or dissatisfied at work: motivation factors and hygiene factors. He disputes popular practices thought to increase or instill motivation, like fringe benefits, human relations training, and shorter work weeks, claiming that the effects of such practices are minimal compared to these two main categories. Let’s take a closer look.

Motivation Factors

These are based on an employee’s need to achieve personal growth and can lead to greater employee satisfaction. When present in the workplace, they often result in better employee performance:

  • Work that is stimulating
  • Recognition for one’s achievement
  • A fair level of responsibility
  • The chance to do something meaningful
  • Opportunities for growth

Hygiene Factors

These factors address issues that can lead to dissatisfaction. While getting them right doesn’t necessarily mean a worker will love their job, getting them wrong does mean that employees will probably be frustrated and, as a result, less engaged:

  • Salary
  • Fair company policies and administration
  • Quality working relationships
  • Satisfactory working conditions
  • The right amount of quality supervision
  • Job security

Herzberg goes on to say that to improve employee motivation, employers need to provide job enrichment. He suggests they do that through vertical integration, or giving workers more ownership over a silo of work, such as by increasing employee accountability, authority, or task difficulty. This approach to cultivating happier employees is used by many top companies

The Benefits of Happy Employees

Higher Productivity

A University of Warwick study found that happy employees are about 12% more productive, while unhappiness leads to a drop in productivity by as much as 10%.

That makes sense, doesn’t it? When your team is happy, they’ll be motivated to work harder. They’ll also be more engaged, which will allow them to focus better and get more done in less time. 

Greater Creativity

We know creativity is a good thing for work. Research from Cornell on the impact of happiness shows that “a positive affect”—aka happiness—can foster creativity since it “facilitates systematic, careful, cognitive processing,” which leads to more flexibility, innovation, and efficiency. When your team is happy, they’ll have an easier time focusing, creating, and adjusting to new demands and problems as needed. 

Better Employee Retention

Finally, happy team members tend to stick around longer than unhappy ones. Why shouldn’t they? If they enjoy where they are and what they do, there isn’t much incentive to make a change. This is important because employee turnover is expensive.

It costs roughly twice an employee’s annual salary to fill a vacant position, says Deloitte principle and HR researcher Josh Bersin. That means replacing a top manager making $100,000 a year could cost $200,000.  

Doesn’t it just seem better (and more cost effective) to make sure your team enjoys working for your company? 

Implementing the Two-Factor Theory

To put the Two-Factor Theory into action and improve employee happiness in your workplace, you must: 

Eliminate Dissatisfaction

First things first, you need to take a look at the hygiene factors mentioned above and make sure that they aren’t causing dissatisfaction among your employees.

To do this properly, you’ll need to gauge every employee’s satisfaction level on an individual basis. Each person on your team is unique and looks at their job through their own personal lens. What may qualify as satisfactory to one team member may deeply bother the next. Whether you sit down with everyone individually or send the team a poll to fill out, make sure you can identify your employees’ specific pain points. 

You can start by removing any policies or practices that encourage micromanaging, ensuring your workplace is a bully- and harassment-free zone, and making sure your staff’s salaries are up to industry standards and are fair across race and gender. 

Properly Motivate Your Employees

Once you’ve addressed the problematic hygiene factors and eliminated as many causes of team dissatisfaction as possible, it’s time to motivate. Someone who is satisfied at work (not just not dissatisfied) will perform better and introduce new and innovative ideas. Again, you’ll need to drill down into the motivation factors for each of your employees. Some may care most about getting more responsibility and others about getting more recognition. The modern worker wants a job that is purposeful—both challenging and meaningful. 

Employees also want to be included in decision-making processes and feel empowered as respected members of the team. Don’t be afraid to slowly increase the amount of responsibility you give to team members that have demonstrated they can handle it. And don’t forget to recognize your team for all of their hard work. Nobody likes to feel unappreciated. If your employees feel like they aren’t valued by you and your organization, motivation will plummet.

Fortunately, employee recognition isn’t difficult. Make time to congratulate your team on jobs well done and be sure to recognize spectacular individual efforts in front of the rest of your staff. Consider using an app to help track your recognition process, but make sure the actual moment of recognition is personal and catered to the person receiving your gratitude. 

Criticisms of the Two-Factor Theory

While the Two-Factor Theory has been used and loved for over half a century, it’s not without its shortcomings and detractors. The theory’s most prominent criticisms include:

  • That it only applies to white-collar workers. Some people suggest that Hertzog’s theory, developed from interviews with white-collar workers, doesn’t apply to other types of employees
  • That everybody is motivated by different things, and that reducing motivation to two types of factors doesn’t capture individual nuance. 

While these arguments have merit, they don’t mean the model is useless. Far from it! They just mean that team leaders planning to put the Two-Factor Theory into practice need to consider their specific circumstances and make sure their plans will work for them. 

In Conclusion

The Two-Factor Theory is a respected motivational framework and I encourage you to try it and see if it helps you produce happier employees that work more productively, produce more creatively, and are less likely to start job hunting.

Just remember to follow the simple two-step process: First, eliminate common dissatisfactions from your workplace—like bad company policies, micromanagement, and low salaries—then, properly motivate your team by ensuring their work is challenging and meaningful, that they have an appropriate amount of responsibility, and that they’re recognized for their hard work and outstanding performance. 

Good luck!

November 18, 2019