CHAPTER 9 Motivation

Learning Objectives 9-1. Explain what motivation is and why managers need to be concerned about it. 9-2. Describe from the perspectives of expectancy theory and equity theory what managers should do to have a highly motivated workforce. 9-3. Explain how goals and needs motivate people and what kinds of goals are especially likely to result in high performance. 9-4. Identify the motivation lessons that managers can learn from operant conditioning theory and social learning theory. 9-5. Explain why and how managers can use pay as a major motivation tool.

The Nature of Motivation (1 of 4) The psychological forces that determine the direction of a person’s behavior in an organization, a person’s level of effort, and a person’s level of persistence Why is a waiter polite and attentive? Why might a teacher buy supplies for her first-grade class? Why might an employee work the extra hour to see that a project is well done? Motivation © LWA/Dann Tardif/Blend Images/ Corbis RF

The Nature of Motivation (2 of 4) Direction Possible behaviors an individual could engage in Effort How hard an individual will work Persistence Whether an individual will keep trying or give up A central task for a manager is to motivate employees tap into these psychological forces to improve their performance, and in turn, that of the organization.

The Nature of Motivation (3 of 4) Intrinsically Motivated Behavior Behavior that is performed for its own sake Extrinsically Motivated Behavior Behavior that is performed to acquire material or social rewards or to avoid punishment Prosocially Motivated behavior Behavior performed to benefit or help others The more one enjoys his or her job, or finds it interesting or challenging, the more likely intrinsic motivation will come into play. Should someone find themselves in an unchallenging, boring job, the more likely it is that they will look for extrinsic rewards rather than intrinsic rewards.

The Nature of Motivation (4 of 4) Outcome Anything a person gets from a job or an organization Pay, job security, autonomy, accomplishment Input Anything a person contributes to his or her job or organization Time, effort, skills, knowledge, work behaviors Outcomes Extrinsically motivated: pay, job security, benefits, and vacation time Prosocially motivated: improving the lives or well-being of others Inputs Employees behaviors, efforts, and persistence

The Motivation Equation Figure 9.1 Jump to Appendix 1 for long description

Expectancy Theory Expectancy Theory The theory that motivation will be high when workers believe that high levels of effort lead to high performance and high performance leads to the attainment of desired outcomes Expectancy theory, Victor H. Vroom (1960s) popular theory of work motivation focuses on all three parts of the motivation equation: inputs, performance, and outcomes

Expectancy Theory (1 of 2) A perception about the extent to which effort will result in a certain level of performance Instrumentality A perception about the extent to which performance results in the attainment of outcomes Valence How desirable each of the available outcomes from a job or organization is to a person Expectancy: Effort will result in a level of performance. Employees will work hard if they believe they can attain high performance—organizations must provide the resources that support performance. Instrumentality: Performance leads to outcomes. Workers are motivated only if they think performance leads to an outcome—managers must link performance to outcomes. Valence: How desirable an outcome is to a person. Workers have preferences for outcomes—managers must determine which outcomes are valued.

Topics for Discussion (1 of 5) Discuss why two people with similar abilities may have very different expectancies for performing at a high level. [LO 9-2] Expectancy is a person’s perception about the extent to which effort (an input) will result in a certain level of performance. Two people with similar abilities may have very different expectancies for performing at a high level. One employee may think that a high level of effort will lead to high performance, while another may think that a high level of effort will not result in high performance.   These employees may have similar abilities, but their managers may not provide the same motivation for the two employees. Managers who encourage their employees and express confidence in their ability to perform at a high level will likely have employees with higher expectancies than managers who do not encourage or support their employees. Also, the employees may receive different training, another factor in expectancy level. Managers who provide training to ensure that employees have the expertise needed for high performance, will have employees with higher expectancies than managers who do not provide training for their employees.

Expectancy, Instrumentality, and Valence Figure 9.2 Jump to Appendix 2 for long description.

Topics for Discussion (2 of 5) Describe why some people have low instrumentalities even when their managers distribute outcomes based on performance. [LO 9-2] Instrumentalities include perceptions that people have about the extent to which performance at a certain level will result in the attainment of outcomes. One important aspect of instrumentality is the linking of outcomes to performance. Employees will only be motivated to perform at a high level if they think high performance will lead to (is instrumental for attaining) rewards and benefits.   Besides linking outcomes to performance, managers need to clearly communicate this linkage to subordinates. Managers who only apply the outcome aspect, but do not clearly communicate to employees how this works and the steps necessary to achieve desired outcomes, are missing the other half of the equation. Consequently, these managers may have employees with low instrumentalities, despite their efforts to base outcomes on performance.

Expectancy Theory (2 of 2) Figure 9.3 Jump to Appendix 3 for long description.

Need Theories Need Need Theories A requirement or necessity for survival and well- being Need Theories Theories of motivation that focus on what needs people are trying to satisfy at work and what outcomes will satisfy those needs Basic premise is that people are motivated to obtain outcomes at work to satisfy their needs Managers need to determine what needs an employee is working to obtain. Once this has been determined, the manager can see that those outcomes are provided, thereby encouraging the employee to perform at a high level.

Maslow’s Hierarchy of Needs Level Needs Description Examples of How Managers Can Help People Satisfy These Needs at Work Highest-level needs Self-actualization needs The needs to realize one’s full potential as a human being. Giving people the opportunity to use their skills and abilities to the fullest extent possible. Next to highest-level needs Esteem needs The needs to feel good about oneself and one’s capabilities, to be respected by others, and to receive recognition and appreciation. Granting promotions and recognizing accomplishments. Medium-level needs Belongingness needs Needs to social interaction, friendship, affection, and love. Promoting good interpersonal relations and organizing social functions such as company picnics and holiday parties. Next to lowest-level needs Safety needs Needs for security, stability, and a safe environment Providing job security, adequate medical benefits, and safe working conditions. Lowest-level needs (most basic or compelling) Physiological needs Basic needs for things such as food, water, and shelter that must b met in order for a person to survive. Providing a level of pay that enables a person to buy food and clothing and have adequate housing. Maslow’s hierarchy of needs. Abraham Maslow, psychologist. Five basic needs that motivate behavior. Prime motivator (physiological needs, such as food and water) is the lowest level. Once these needs are met, a person is able to move up the hierarchy of needs. The lowest level of unsatisfied needs motivates behavior; once this level of needs is satisfied, a person tires to satisfy the needs at the next level.

Herzberg’s Motivation-Hygiene Theory (1 of 2) A need theory that distinguishes between motivator needs (related to the nature of the work itself) and hygiene needs (related to the physical and psychological context in which the work is performed) and proposes that motivator needs must be met for motivation and job satisfaction to be high Frederick Herzberg Distinction between intrinsic motivation (related to motivator needs) and extrinsic motivation (related to hygiene needs). Although research-tested, has not received much support.

Herzberg’s Motivation-Hygiene Theory (2 of 2) Motivator needs relate to the nature of the work itself and how challenging it is. Hygiene needs are related to the physical and psychological context in which the work is performed. Workers are dissatisfied when hygiene needs are not met. When they are met, workers are not dissatisfied. However, this does not necessarily translate into high levels of motivation or job satisfaction.

McClelland’s Needs for Achievement, Affiliation, and Power (1 of 2) Need for Achievement A strong desire to perform challenging tasks well and meet personal standards for excellence People with a high need for achievement often set clear goals for themselves and like to receive performance feedback.

McClelland’s Needs for Achievement, Affiliation, and Power (2 of 2) Need for Affiliation Extent to which an individual is concerned about establishing and maintaining good interpersonal relations, being liked, and having the people around him or her get along with each other Need for Power Extent to which an individual desires to control or influence others High needs for achievement: first-line and middle managers. High needs for power: upper managers and U.S. presidents. High needs for affiliation: not necessarily good managers.

Equity Theory (1 of 4) Equity Theory A theory of motivation that focuses on people’s perceptions of the fairness of their work outcomes relative to their work inputs J. Stacey Adams 1950s When an employee believes that his or her outcomes or inputs are equal to the referent’s ration, then equity exists.

Equity Theory (2 of 4) Equity Inequity Justice, impartiality, and fairness to which all organizational members are entitled Inequity Lack of fairness The equity theory depends on the perception of fairness. The text gives the example of Maria Sanchez and Claudia King, working in a shoe store in a large mall.

Equity Theory (3 of 4) Table 9.2

Equity Theory (4 of 4) Underpayment Inequity Overpayment Inequity Exists when a person perceives that his or her own outcome–input ratio is less than the ratio of a referent Overpayment Inequity Exists when a person perceives that his own outcome–input ratio is greater than the ratio of a referent Inequity can be either a perceived underpayment or an overpayment. If Sally believes that her own outcome-input is less than John’s, there is underpayment. If Jose perceives that his outcome-input ratio is greater than Randall’s, there is overpayment inequity.

Topics for Discussion (3 of 5) Analyze how professors try to promote equity to motivate students. [LO 9-2] Equity theory is a motivation theory that concentrates on fairness and people’s perception of the fairness of their work outcomes relative to their inputs. Equity is achieved when a person perceives that his or her own outcome-input ratio is equal to a referent’s outcome-input ratio.   Professors try to promote equity to motivate students by establishing standards of performance in their courses. A professor should specify the inputs that will be required for a student to achieve certain outcomes. For example, the amount of work, effort, class participation, and enthusiasm needed to get an “A” in a course should be equal for all students. If one student contributes significantly more inputs that another student, that student should receive a higher grade, or outcome. A student who fails to contribute even minimal requirements of input should not be allowed to pass the course, a desired outcome. By standardizing these specifications and refraining from giving some students “special treatment,” professors can help ensure that students will feel that their input-outcome ratio is equal to a referent’s ratio, be it another student, or their own ratios in other courses. Motivation is highest when as many people as possible perceive that they are being equitably treated.

Equity and Justice in Organizations (1 of 2) Distributive Justice A person’s perception of the fairness of the distribution of outcomes in an organization Procedural Justice A person’s perception of the fairness of the procedures that are used to determine how to distribute outcomes in an organization If employees perceive that the distribution of sales bonuses are fair, they are more likely to be more motivated. But if employees feel that an appraisal system that determined distributions is unfair, then motivation is likely to suffer.

Equity and Justice in Organizations (2 of 2) Interpersonal Justice A person’s perception of the fairness of the interpersonal treatment he or she receives from whoever distributes outcomes to him or her Informational Justice A person’s perception of the extent to which his or her manager provides explanations for decisions and the procedures used to arrive at them Both interpersonal justice and information justice impact motivation; the higher they are, the more likely it is that motivation will be high. Interpersonal justice is displayed in the respect that a manager affords subordinates. Information justice occurs when employees feel that the manager has fully explained outcomes distributions.

Goal-Setting Theory Goal-Setting Theory Focuses on identifying the types of goals that are most effective in producing high levels of motivation and performance and explaining why goals have these effects All organizations have goals, but specific goals may be different at different levels. While salespeople might work to meet their monthly goals, the CEO and upper management work to ensure profitability. © Stockbyte/ Punchstock Images RF

Topics for Discussion (4 of 5) Describe three techniques or procedures that managers can use to determine whether a goal is difficult. [LO 9-3] A goal is what a person is trying to accomplish through his or her efforts and behavior. Difficult goals are hard but possible to attain.   One technique that managers can use to determine if a goal is difficult is to look at the number of people who achieve the goal. If practically everyone achieves a goal, it is likely an easy rather than a difficult goal. Moderate goals are also more easily attainable than difficult goals, with about half of the people able to attain these goals. By comparison, difficult goals are those that less than half of the people attain. Another technique is for managers to examine how motivation is affected by the goal. Difficult goals motivate people to contribute more inputs to their jobs. They cause people to put forth high levels of effort. Difficult goals cause people to be more persistent when they run into difficulties than easy, moderate, or vague goals. If the goal is having these effects on employee behavior, it is probably a difficult goal. One other technique is to examine the direction toward which employees focus their inputs. Specific, difficult goals let people know on what they should be focusing their attention. Managers can determine if employees are developing action plans to help them attain the goal and effectively manage their time. If the goal is motivating this kind of behavior, it is probably a difficult goal.

Learning Theories (1 of 2) Theories that focus on increasing employee motivation and performance by linking the outcomes that employees receive to the performance of desired behaviors and the attainment of goals

Learning Theories (2 of 2) Learning A relatively permanent change in person’s knowledge or behavior that results from practice or experience An employee may be motivated to accomplish more in a designated timeframe, to come in earlier, or to keep their workspace neat if there are specific outcomes tied to their behavior.

Operant Conditioning Theory (1 of 3) People learn to perform behaviors that lead to desired consequences and learn not to perform behaviors that lead to undesired consequences B.F. Skinner, psychologist People are motivated or not, based on their desired outcomes. Managers can tie specific outcomes to specific behaviors requested of the employee.

Operant Conditioning Theory (2 of 3) Positive Reinforcement Giving people outcomes they desire when they perform organizationally functional behaviors Negative Reinforcement Eliminating undesired outcomes when people perform organizationally functional behaviors Positive reinforcers: pay, praise, promotion Negative reinforcers: threats, docking pay

Operant Conditioning Theory (3 of 3) Extinction Curtailing the performance of a dysfunctional behavior by eliminating whatever is reinforcing them Punishment Administering an undesired or negative consequence when dysfunctional behavior occurs Punishments: verbal reprimands, pay cuts, temporary suspensions, demotions, and firings. Unintended side effects: resentment, loss of self-respect, a desire for retaliation.

Topics for Discussion (5 of 5) Discuss why managers should always try to use positive reinforcement instead of negative reinforcement. [LO 9-4] Positive reinforcement gives people outcomes they want when they perform behavior that contributes to organizational effectiveness. Negative reinforcement also encourages members to perform organizationally functional behavior, but does this by eliminating or removing undesired outcomes once the functional behavior is performed. People are motivated by negative reinforcement because they want to stop receiving undesired outcomes.   Managers should always try to use positive reinforcement instead of negative reinforcement for a variety of reasons. Negative reinforcement can create a very unpleasant workplace characterized by threats and control. People do not like to be nagged, threatened, or exposed to other negative outcomes as a “motivation” for doing their jobs. Employees who are subjected to negative reinforcement may resent their managers and try to get back at them through sabotage of their work, if they quit or are fired.

Social Learning Theory (1 of 3) A theory that takes into account how learning and motivation are influenced by people’s thoughts and beliefs and their observations of other people’s behavior Vicarious learning: people can be motivated by observing other people performing a behavior and being reinforced for doing so. Self-reinforcement: people can be motivated to control their behavior themselves . Self-efficacy: people’s beliefs about their ability to successfully perform a behavior affect motivation.

Social Learning Theory (2 of 3) Vicarious Learning Learning that occurs when a learner is motivated to perform a behavior by watching another person perform and be reinforced for doing so Also called observational learning To promote vicarious learning, managers should strive to have the learner meet the following conditions: • The learner observes the model performing the behavior. • The learner accurately perceives the model’s behavior. • The learner remembers the behavior. • The learner has the skills and abilities needed to perform the behavior. • The learner sees or knows that the model is positively reinforced for the behavior.

Social Learning Theory (3 of 3) Self-Reinforcer Any desired or attractive outcome or award that a person can give himself or herself for good performance Self-Efficacy A person’s belief about his or her ability to perform a behavior successfully When members of an organization control their own behavior through self-reinforcement, managers do not need to spend as much time as they ordinarily would trying to motivate and control behavior through the administration of consequences because subordinates are controlling and motivating themselves. Self-efficacy influences motivation both when managers provide reinforcement and when workers themselves provide it. The greater the self-efficacy, the greater the motivation and performance.

Pay and Motivation (1 of 2) Pay as a Motivator Expectancy: Instrumentality, the association between performance and outcomes (such as pay), must be high for motivation to be high. Need Theory: Pay is used to satisfy many needs. Equity Theory: Pay is given in relation to inputs.

Pay and Motivation (2 of 2) Pay as a Motivator Goal-Setting Theory: Pay is linked to attainment of goals. Learning Theory: Outcomes (pay), is distributed upon performance of functional behaviors.

Merit Pay and Performance Merit Pay Plan A compensation plan that bases pay on performance Merit pay can be given to individuals or groups, or based on organizational performance. Merit-based pay can enhance motivation.

Salary Increase or Bonus? Employee Stock Option A financial instrument that entitles the bearer to buy shares of an organization’s stock at a certain price during a certain period of time or under certain conditions Stock options can attract high-level managers. Stock price = price bearer can buy at Vesting conditions = when the bearer can buy (timeframe or performance target) Exercise price = generally at market price on date granted.

Examples of Merit Pay Plans (1 of 2) Piece-Rate Pay Employee’s pay is based on the number of units that the employee produces. Commission Pay Employee’s pay is based on a percentage of sales that the employee makes. Piece-rate: Lincoln Electric uses to pay employee base on product Commission pay: sales, for example Neiman Marcus

Examples of Merit Pay Plans (2 of 2) Scanlon Plan Focuses on reducing expenses or cutting costs Profit Sharing A share of an organization’s profits Joseph Scanlon Union leader (1920s) Members of an organization are motivated to propose and implement cost-cutting strategies because a percentage of the cost savings achieved during a specified time is distributed to the employees.

BE THE MANAGER What are you going to do? It would appear that the analysts have little motivation to fill out the forms. There appears to be no specific reward for filling out the forms, even though they contain important information on the productivity of each person. You should talk to the analysts and find out why they are not filling out the forms well and why they are late. After talking with the employees, and consulting with your boss, you should try to come up with incentives for the analysts to fill out the forms accurately and on time. Completing the forms should be part of the employee's performance appraisal and linked to merit increases.