Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Foundations of Employee Motivation C H A P T E R 5

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Motivation at Capital One Capital One has a motivated workforce by hiring people with an entrepreneurial spirit, challenging them through stretch goals, and continually evaluating individual and organizational performance. © J. Mahoney/ Richmond Times Dispatch

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Challenges of Motivating Employees Layoffs, restructuring  Damaged trust, commitment Flatter organizations  Fewer supervisors to monitor performance Changing workforce  Younger staff have different needs  Diverse workforce variety of motivation practices © J. Mahoney/ Richmond Times Dispatch

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Content theories  explain why people have different needs at different times Process theories  describe the processes through which needs are translated into behavior Content vs. Process Motivation Theories

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Needs Hierarchy Theory Self- Actualization Esteem Belongingness Safety Physiological Maslow arranged five needs in a hierarchy Satisfaction-progression process People who experience self- actualization desire more rather than less of this need

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e ERG Theory Needs Hierarchy Theory ERG Theory Self- Actualization Esteem Belongingness Safety Physiological Growth Relatedness Existence Alderfer’s model has three sets of needs Adds frustration- regression process to Maslow’s model

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Content Theories of Motivation Self- Actualization Esteem Belongingness Safety Physiological Growth Relatedness Existence Motivator--Hygiene Theory Motivators Hygienes Need for Achievement Need for Power Affiliation McClelland’s Learned Needs ERG Theory Needs Hierarchy Theory

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Pamela Grof’s high need for achievement is apparent from her many business initiatives since the age of 12. “I come from a very entrepreneurial family,” explains Grof, who founded web design company InterVisual in Calgary, Canada. Pamela Grof’s Need for Achievement © K. Morison/Calgary Herald

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 1.clarifying the firm’s purpose and shared values 2.supporting and reinforcing entrepreneurial behavior 3.creating small businesses within the larger organization Creating a Company of Entrepreneurs © K. Morison/Calgary Herald Companies support entrepreneurship by:

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Implications of Content Theories Match rewards with employee needs Offer employees a choice of rewards  people have different needs at different times Limit use of financial rewards as a source of motivation

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e E-to-P Expectancy P-to-O Expectancy Outcomes & Valences Outcome 1 + or - EffortPerformance Outcome 3 + or - Outcome 2 + or - Expectancy Theory of Motivation

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Expectancy Theory in Practice Increasing the E-to-P expectancy  training, selection, resources, clarify roles, provide coaching and feedback Increasing the P-to-O expectancy  Measure performance accurately, explain how rewards are based on past performance Increasing outcome valences  Use valued rewards, individualize rewards, minimize countervalent outcomes

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Elements of Equity Theory Outcome/input ratio  inputs -- what employee contributes (e.g. skill)  outcomes -- what employees receive (e.g. pay) Comparison other  person/people we compare ratio with  not easily identifiable Equity evaluation  compare outcome/input ratio with the comparison other

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Overreward vs Underreward Inequity You Comparison Other Outcomes Inputs Outcomes Inputs Overreward Inequity Outcomes Inputs Outcomes Inputs Underreward Inequity

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Consequences of Inequity Change inputs Change outcomes Change perceptions Leave the field Act on the comparison other Change the comparison other

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Equity Sensitivity Benevolents  Tolerant of being underrewarded Equity Sensitives  Want ratio to be equal to the comparison other Entitleds  Prefer receiving proportionately more than others

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e CDW Computer Centers has become a leading direct marketer of computers and peripherals by setting specific, challenging goals for its employees. “We set BHAGS -- which are big, hairy aggressive goals,” says CEO John A. Edwardson (shown here). Goal Setting at CDW Computer Centers © J. Robinson/ Chicago Tribune

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Specific Relevant Challenging TaskEffortTaskPerformance Effective Goal Setting Challenging Participation Commitment

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Area of Optimal Goal Difficulty High Task Performance LowModerateChallengingImpossible Effect of Goal Difficulty on Performance Goal Difficulty

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Foundations of Employee Motivation C H A P T E R 5