Having appropriate processes, skills, and tools is not sufficient to achieve efficiency and effectiveness. Why? Because they do not directly motivate people. Motivation is a simple yet tricky concept. The leading motivation theory is Victor Vroom's expectancy theory. It has been proved remarkably consistent with observations, at least in Western culture (motivation is culture-dependent).

Expectancy theory: The strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.
- S. P. Robbins, Organizational Behavior, 11th edition

The principles of the expectancy theory are straightforward:

1. Effort will be recognized in performance appraisal. It's not, for example, if I achieve challenging objectives but no one notices it.
2. A good performance appraisal will lead to organizational rewards. It doesn't, for example, if I get a good performance appraisal but there is never any money/training/promotion/[name your reward] left for me.
3. Rewards will be personally attractive. They're not, for example, if I get a raise and more responsibility when all I want is to spend more time with my family. (Michael Wade wrote an eloquent post about what people are looking for in the workplace)

(I have yet to find a company where managers understand these three relationships.)

You might think that this stuff is just for HR and top management. You're wrong. In most organizations, employees at all levels have the power to influence the performance-reward process. I am really fed up with whiners who complain about not being respected or about the managers not knowing anything but who never voice their opinion. The design and efficiency of the performance-reward system is everyone's responsibility!

Additionally, the system can work at all levels. Team leaders, project managers, business unit managers, and so on, all have power over some factors of the performance-reward system, such as performance appraisal, training, projects people work on, and roles. In other words, many people beside managers are ? knowingly or not ? involved in the system. Given the impact of the performance-reward system on motivation, and the impact of motivation on, well, everything (success, atmosphere, etc.), it's worthwhile for each of us to take a few minutes to think about how we can help making it better in our organization.