Motivating Self and Others Chapter 4 Motivating Self and Others

Chapter Outline What is Motivation? Needs Theories of Motivation Process Theories of Motivation Motivating for Specific Organizational Goals Motivating to Accommodate Individual Differences Responses to the Reward System Beware the Signals That Are Sent by Rewards Caveat Emptor: Motivation Theories Are Culture-Bound Motivation in Practice: Perhaps Rewards are Overrated This material is found in the beginning of the chapter.

Motivating Self and Others Questions for Consideration What do theories tell us about motivating ourselves and others? How do we motivate for specific organizational circumstances and/or individual differences? Are rewards always necessary? This material is found in the beginning of the chapter.

What is Motivation? Motivation The processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal Intensity: how hard a person tries Direction: where effort is channeled Persistence: how long effort is maintained This material is found on page 116-117.

Theory X and Theory Y Theory X Theory Y The assumption that employees dislike work, are lazy, dislike responsibility, and must be coerced to perform. Theory Y The assumption that employees like work, are creative, seek responsibility, and can exercise self-direction. This material is found on page 116-117. Theory Y suggests that: Employees inherently dislike work and, whenever possible, will attempt to avoid it. Since employees dislike work, they must be coerced, controlled, or threatened with punishment to achieve goals. Employees will avoid responsibilities and seek formal direction whenever possible. Most workers place security above all other factors associated with work and will display little ambition. Employees can view work as being as natural as rest or play. People will exercise self-direction and self-control if they are committed to the objectives. The average person can learn to accept, even seek, responsibility. The ability to make innovative decisions is widely dispersed throughout the population and is not necessarily the sole province of those in management positions.

Motivators Intrinsic Extrinsic A person’s internal desire to do something, due to such things as interest, challenge, and personal satisfaction. Extrinsic Motivation that comes from outside the person, such as pay, bonuses, and other tangible rewards. This material is found on page 116-117.

Needs Theories of Motivation Maslow’s hierarchy of needs Herzberg’s two factor theory (motivation-hygiene theory) Alderfer’s ERG theory McClelland’s theory of needs Basic idea: Individuals have needs that, when unsatisfied, will result in motivation This material is found on page 117-121.

Maslow’s Hierarchy of Needs Physiological includes hunger, thirst, shelter, sex and other bodily needs Safety includes security and protection from physical and emotional harm Social includes affection, belongingness, acceptance, and friendship Esteem includes internal esteem factors such as self-respect, autonomy, and achievement; and external esteem factors such as status, recognition, and attention Self-actualization the drive to become what one is capable of becoming; includes growth, achieving one’s potential, and self-fulfilment This material is found on page 120-121.

Herzberg’s Motivation-Hygiene Theory Hygiene factors - necessary, but not sufficient, for healthy adjustment extrinsic factors; context of work company policy and administration unhappy relationship with employee's supervisor poor interpersonal relations with one's peers poor working conditions Motivators - the sources of satisfaction intrinsic factors; content of work achievement recognition challenging, varied or interesting work responsibility advancement This material is found on page 120-121.

Alderfer’s ERG Theory Existence Relatedness Growth concerned with providing basic material existence requirements Relatedness desire for maintaining important interpersonal relationships Growth intrinsic desire for personal development This material is found on page 120-121.

McClelland’s Theory of Needs Need for Achievement The drive to excel, to achieve in relation to a set of standards, to strive to succeed Need for Power The need to make others behave in a way that they would not have behaved otherwise Need for Affiliation The desire for friendly and close interpersonal relationships This material is found on page 120-121.

Exhibit 4-1 Summarizing the Various Needs Theories This material is found on page 120-121.

Exhibit 4-1 Summarizing the Various Needs Theories This material is found on page 120-121.

Process Theories of Motivation Looks at the actual process of motivation Expectancy theory Goal-setting theory This material is found on page 121-126.

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. The theory focuses on three relationships: Effort-performance relationship or the probability perceived by the individual that exerting a given amount of effort will lead to performance. Performance-reward relationship or the degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome. Rewards-personal goals relationship or the degree to which organizational rewards satisfy an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual. This material is found on page 122-123.

Exhibit 4-2 Expectancy Theory Individual Effort Individual Performance Organizational Rewards Personal Goals 1 2 3 This material is found on page 122-123. 1. Effort -performance relationship (expectancy) 2. Performance -reward relationship (instrumentality) 3. Rewards - personal goals relationship (valence)

Exhibit 4-3 Steps to Increasing Motivation, Using Expectancy Theory This material is found on page 123-126.

Goal-Setting Theory The theory that specific and difficult goals lead to higher performance. Goals tell an employee what needs to be done and how much effort will need to be expended. Specific goals increase performance; difficult goals, when accepted, result in higher performance than do easy goals; and feedback leads to higher performance than does nonfeedback. Specific hard goals produce a higher level of output than does the generalized goal of “do your best.” The specificity of the goal itself acts as an internal stimulus. This material is found on page 123-126.

Management by Objectives A program that encompasses specific goals participatively set for an explicit time period with feedback on goal progress MBO operationalizes the concept of objectives by devising a process by which objectives cascade down through the organization. The result is a hierarchy of objectives that links objectives at one level to those at the next level. For the individual employee, MBO provides specific personal performance objectives. This material is found on page 124-126.

Exhibit 4-4 Cascading of Objectives Overall Organizational Objectives XYZ Company Consumer Products Division Industrial Products Divisional Departmental Individual Production Sales Customer Service Marketing Research Develop This material is found on page 124-126.

Linking MBO and Goal-Setting Theory Goal Setting Theory Demonstrates that: hard goals result in a higher level of individual performance, specific hard goals result in higher levels of performance than do no goals or generalized goals, and feedback on one’s performance leads to higher performance MBO directly advocates specific goals and feedback. This material is found on page 124-126.

Motivating for Specific Organizational Goals Motivating to Show People Matter employee recognition plans linking recognition and reinforcement Motivating for Improved Productivity individual-based incentives: piece rate group-based incentives: gainsharing organizational-based incentives: profit-sharing, ESOPs Motivating to Encourage Learning skill-based pay programs to encourage new learning Motivating for Organizational Change stretch targets Motivating To Accommodate Individual Differences flexible benefits This material is found on page 126-136.

Motivating to Show People Matter Employee Recognition Programs Programs that use multiple sources and recognizes both individual and group accomplishments. Linking Programs and Reinforcement Theory Consistent with reinforcement theory, rewarding a behaviour with recognition immediately following that behaviour is likely to encourage its repetition. Employee Recognition Programs in Practice In contrast to most other motivators, recognizing an employee’s superior performance often costs little or no money, making them highly attractive to industry. This material is found on page 126-127.

Motivating for Improved Productivity A portion of an employee’s pay is based on some individual and/or organizational measure(s) of performance. piece-rate pay plans profit-sharing plans gainsharing plans Linking variable-pay plans and expectancy theory evidence supports the importance of this linkage, especially for operative employees working under piece-rate systems. group and organization wide incentives reinforce and encourage employees to sublimate personal goals for the best interests of their department or organization. This material is found on page 127-132.

Variable Pay Programs Piece-rate pay plans Gainsharing Workers are paid a fixed sum for each unit of production completed. Gainsharing An incentive plan where improvements in group productivity determine the total amount of money that is allocated. Profit-sharing plans Organization wide programs that distribute compensation based on some established formula designed around a company’s profitability. Employee stock ownership plans (ESOPs) Company-established benefit plans in which employees acquire stock as part of their benefits. This material is found on page 127-131.

Exhibit 4-5 Comparing Various Pay Programs This material is found on page 132.

Skill-Based Pay Plans Pay levels based on how many skills employees have or how many jobs they can do. What’s the appeal of skill-based pay? Management’s perspective flexibility facilitates communication lessens “protective territory” behaviour Is there a downside? People can “top out” Employee frustration can increase Skills become obsolete Paying people for acquired skills not used This material is found on page 132.

Motivating For Organizational Change Stretch Targets Relatively new technique: A virtually unachievable goal that forces an organization to significantly alter its processes. Team Based Autonomy Empowered Structural Accommodation Bureaucratic Immunity This material is found on page 133-134. Teams that successfully handle stretch targets need to be autonomous and empowered. Autonomy refers to the ability of the group working on the goal to control the situation themselves. Teams that were successful were also empowered, which meant that they had power over resources and power to propose and implement changes as necessary. Successful stretch target teams must also know that top management supports them. Successful teams experienced the structural accommodation of their organizations, meaning they had unlimited access to information and the power to change organizational procedures if necessary. Successful teams with stretch targets were also given bureaucratic immunity. This meant that they were not subject to the bureaucratic review process of other projects, and reported only to top management.

Individual Differences and Flexible Benefits Allowing employees to tailor their benefit program to meet their personal needs by picking and choosing from a menu of benefit options. Specially designed work schedules flexible compensation plans flexible benefits plans physical work settings child care elderly care flexible work hours job sharing flexible leave work teams Link to expectancy theory: increases motivation by increasing the valence of the reward This material is found on page 129-130.

Motivating Professionals How are “professionals” different? Receive a great deal of “intrinsic” satisfaction from their work. Strong and long-term commitment to their field of expertise Well paid/ Chief reward is work itself. Value support More focused on work as central life interest. How do we motivate professionals? Provide challenging projects Give them autonomy in follow interests and structure work. Reward with educational opportunities. Recognize their contributions. This material is found on page 134-135.

Motivating Contingent Workers No simple solutions to motivating contingent workers. Contingent or temporary workers have little or no job security/stability, therefore they don’t identify with the organization or display the commitment of permanent employees. Contingent or temporary workers are typically provided with little or no health care, pensions, or similar benefits. Greatest motivating factor is the opportunity to gain permanent employment. Motivation is also increased if the employee sees that the job he or she is doing for the firm can develop salable skills. This material is found on page 135-136.

Motivating Low-Skilled Service Workers Many 15- to 24-year-olds have “McJobs” with pay levels near minimum wage To motivate employees want more respect make jobs more appealing raise pay levels find unusual ways to motivate: flexible work schedules broader responsibility for inventory, scheduling, and hiring creation of a “family” atmosphere among employees This material is found on page 136.

Responses to the Reward System Equity Theory Fair Process Material pertinent to this illustration is found on pages 137-140. Equity Theory: Individuals compare their job inputs and outcomes with those of others and then respond so as to eliminate any inequities. Fair Process: Concern for fairness in the process of distributing rewards.

Equity Theory Individuals compare their job inputs and outcomes with those of others and then respond so as to eliminate any inequities. Equity theory recognizes that individuals are concerned not only with the absolute amount of rewards for their efforts, but also with the relationship of this amount to what others receive. Historically, equity theory focused on: distributive justice or the perceived fairness of the amount and allocation of rewards among individuals. however, equity should also consider procedural justice or the perceived fairness of the process used to determine the distribution of rewards. This material is found on page 137-139.

Exhibit 4-6 Equity Theory Perception due to being underrewarded O/IA < O/IB This material is found on page 137. O/IA = O/IB Equity Inequity due to being overrewarded O/IA > O/IB

Responses to Inequity Change Inputs Change Outcomes Adjust Perceptions of Self Adjust Perceptions of Others Choose a Different Referent Leave the Field This material is found on page 138-139.

Fair Process Distributive Justice Procedural Justice Perceived fairness of the amount and allocation of rewards among individuals Procedural Justice Perceived fairness of the process used to determine the distribution of rewards Interactional Justice The quality of the interpersonal treatment received from another This material is found on page 139-140.

Exhibit 4-7 Management Reward Follies But we reward: The best individual team members Proven methods and no mistakes Technical achievements and accomplishments Tight control over operations, resources Another year’s efforts Quarterly earnings Shipment on schedule, even with defects Reporting good news We hope for: Teamwork and collaboration Innovative thinking and risk taking Development of people skills Employee involvement and empowerment High achievement Long-term growth Commitment to total quality Candor This material is found on page 140-141. A recent survey suggests that three themes seem to account for some of the biggest obstacles in dealing with the folly. First, individuals are unable to break out of old ways of thinking about reward and recognition practices. This is demonstrated in such things as an emphasis on quantifiable behaviours, to the exclusion of non-quantifiable behaviours; employees having an entitlement mentality (i.e., they don’t support changing the reward system because they are comfortable with the current behaviours that are rewarded), and management being reluctant to change the existing performance system. A second factor is that organizations often don’t look at the big picture of their performance system. Consequently, rewards are allocated at subunit levels, with the result that units often compete against each other. Finally, both management and shareholders often focus on short-term results, rather than rewarding employees for planning for longer ranges.

Abolishing Rewards Alfie Kohn suggests that organizations should focus less on rewards, more on creating motivating environments Abolish incentives Re-evaluate evaluation Create conditions for authentic motivation Collaboration Content Choice This material is found on page 143-146. Abolish incentives. Pay people generously and fairly, make sure people don’t feel exploited, and then make sure that pay is not on their minds. Re-evaluate evaluation. Rather than making performance appraisals look and feel like a punitive effort—who gets raises, who gets promoted, who is told they’re performing poorly—the performance evaluation system might be structured more like a two-way conversation to trade ideas and questions, done continuously, not as a competition. Create the conditions for authentic motivation. A noted economist recently summarized the evidence about pay for productivity as follows: “Changing the way workers are treated may boost productivity more than changing the way they are paid.” Collaboration. People are more likely to perform better in well-functioning groups where they can get feedback and learn from each other. Content. People are generally the most motivated when their jobs give them an opportunity to learn new skills, provide variety in the tasks that are performed, and enable them to demonstrate competence. Choice. “We are most likely to become enthusiastic about what we are doing—and all else being equal, to do it well—when we are free to make decisions about the way we carry out a task.”

Summary Need Theories Goal Setting Theory Expectancy Theory Be aware that individuals differ in their levels and types of needs Goal Setting Theory Clear and difficult goals lead to higher levels of employee productivity. Expectancy Theory Offers a relatively powerful explanation of employee productivity, absenteeism, and turnover. Equity Theory Strongest when predicting absence and turnover behaviours. Weakest when predicting differences in employee productivity. This material is found on page 147-148.

Implications Recognize Individual Differences Use Goals and Feedback Employees have different needs. Don’t treat them all alike. Spend the time necessary to understand what’s important to each employee. Use Goals and Feedback Allow Employees to Participate in Decisions That Affect Them Link Rewards to Performance Employees must perceive a clear linkage. Check the System for Equity This material is found on page 147-148.

Exhibit 4-8 Compensation of Canada’s Five Best-Paid CEOs (1998) Exhibit prepared for Ethical Dilemma Exercise, p. 153.