Motivation II: Equity, Expectancy, and Goal Setting Chapter Seven Motivation II: Equity, Expectancy, and Goal Setting McGraw-Hill/Irwin Organizational Behavior: Key Concepts, Skills & Best Practices, 3/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Process Theories Two approaches of motivation Content (Need) theories : What causes motivation? (Previous Chapter) Process theories : How motivation occurs? Cognition (or perception) plays a major role Equity theory, Expectancy theory, Goal setting theory

Equity Theory Adams Equity theory holds that motivation is a function of fairness in social exchanges Two primary components of exchanges Input Output (Outcomes) Issue : whether or not one receives adequate outcomes (rewards) for his/her contributed inputs

The Individual-Organization Exchange Relationship Inputs include education/training, skills, creativity, seniority, age, personality traits, effort expended, and personal appearance Outcome include pay/bonuses, fringe benefits, challenging assignments, job security, promotions, status symbols, recognition, and participation in important decisions.

The Individual-Organization Exchange Relationship People make equity evaluations by comparing the perceived fairness of their employment exchange to that of relevant others Comparing their input-outcome ratios with the input-outcome ratios of relevant others Relevant others informational availability perceived relevance

Negative and Positive Inequity Figure 7-1

Negative and Positive Inequity Negative inequity - Comparison in which another person receives greater outcomes for similar inputs Feelings of deprivation, Anger Positive inequity - Comparison in which another person receives less outcomes for similar inputs Feelings of guilt

Dynamics of Perceived Inequity People have varying sensitivities to perceived equity and inequity Inequity can be reduced in a variety of ways

Thresholds of Equity and Inequity Equity sensitivity - An individual’s tolerance for negative and positive inequity Benevolents have a higher tolerance for negative inequity Sensitives adhere to a strict norm of reciprocity and are quickly motivated to resolve both negative and positive inequity Entitleds have no tolerance for negative inequity expect to obtain greater output/input ratios than comparison others and become upset when this is not the case

Reduction of Inequity Five choices to reduce inequity Change their inputs or outcomes Induce others’ inputs or outcomes Distorts cognitively either their own or others’ inputs or outcomes Choose a different comparison others Quit their job

Organizational Justice Organizational Justice : The extent to which people perceive that they are treated fairly at work Distributive justice - The perceived fairness of how resources and rewards are distributed Procedural justice - The perceived fairness of the process and procedures used to make allocation decisions (e,g., voice) Interactional justice - Extent to which people feel fairly treated when procedures are implemented (e.g., truthful communication and respect)

Organizational Justice Research demonstrates that employees’ perceptions of distributive, procedural, and interactional justice are positively related with job performance, job satisfaction, organizational commitment, and OCB, and negatively related with intentions to quit Even if someone is dissatisfied with distributive outcomes, when procedural and/or interactional justice are working, he/she tends to be accepting the decision

Practical Lessons from Equity Theory Equity theory provides managers with yet another explanation of how beliefs and attitudes (cognitive processes) affect job performance Research emphasizes the need for managers to pay attention to employees’ perceptions of what is fair and equitable Communication is important The others: (skip)

Expectancy Theory Vroom’s Expectancy theory - Holds that people are motivated to behave in ways that produce valued outcomes Based on hedonism Can be applied to the situation that involves a choice

Expectancy Theory People will choose to behave in a way that gives the most expected utility The expected utility is a function of expectancy, instrumentality, and valence Effort Performance Reward Expectancy Instrumentality Valence

Expectancy Theory Expectancy - Belief that effort leads to a specific level of performance Effort performance perception Probability (0 ~ 1.0) Factors influencing expectancy perceptions Self-esteem Self-efficacy Previous success at the task Help received from others Information necessary to complete the task Good materials and equipment to work with

Expectancy Theory Instrumentality Valence Performance  outcome perception Outcomes : refer to different consequences or rewards that are contingent on performance -1.0 ~ 1.0 Valence The value of outcome For research purpose, -10 ~ +10, for instance

Expectancy Theory (Ex) Job choice Effort Performance Outcomes (Valence) Outcome 1 (Social Status) (7) Becoming a CPA Outcome 2 (Salary) (9) Outcome 3 (Interesting work) (3) Effort Outcome 1(Social Status) (7) Becoming Outcome 2 (Salary) (9) a Stewardess Outcome 3 (Interesting work) (3) Which alternative would you choose? The alternative with greater expected utility 0.8 <11.3> 0.9 <5.65> -0.8 0.5 0.7 0.5 <10.1> <7.07> 0.5 0.7

Expectancy Theory and Managerial Implications Managers can improve their subordinates’ motivation by increasing Expectancy Improving self-efficacy Providing coaching, information, resources Instrumentality Valid and accurate performance ratings Matching reward with those performance ratings Valence Identifying rewards valued by subordinates

Goal Setting Theory Locke Having the strongest empirical evidence Goal – what an individual is trying to accomplish Management by objectives (MBO) Management system incorporating participative goal setting and feedback

Goal Setting Theory How Does Goal Setting Work (Motivational mechanism) Goals direct attention Goals regulate effort Goals increase persistence Goals foster the development and application of task strategies and action plans

Insights from Goal-Setting Research Difficult goals lead to higher performance Specific, difficult goals lead to higher performance for simple rather than complex tasks Goal specificity – quantifiability of a goal Feedback enhances the effect of specific, difficult goals

Relationship between Goal Difficulty and Performance Figure 7-2

Insights from Goal-Setting Research Participative goals, assigned goals, and self-set goals are equally effective Goal commitment affect goal-setting outcomes Goal commitment – extent to which an individual is personally committed to achieving a goal Difficult goals lead to higher performance only when employees are committed to their goals

Practical Application of Goal Setting Step 1: Set goals (“SMART”, p.191) Specific, Measurable, Attainable, Results oriented, Time bound Step 2: Promote goal commitment Step 3: Provide support and feedback

Managerial Actions for Enhancing Goal Commitment Provide valued outcomes for goal accomplishment Raise employees’ self-efficacy about meeting goals by: Providing adequate training Role modeling for desired behaviors and actions Persuasively communicating confidence in the employees ability to attain the goal Have employees make a public commitment to the goal

Managerial Actions for Enhancing Goal Commitment Communicate an inspiring vision and explain how individual goals relate to accomplishing the vision. Allow employees to participate in setting the goals. Behave supportively rather than punitively. Break a long-term goal (i.e., a yearly goal) into short-term sub-goals. Ensure that employees have the resources required to accomplish the goal.