Motivating Employees CHAPTER 9 The Future of Business The Essentials 4 th Edition Gitman & McDaniel Prepared by Deborah Baker Chapter 9 Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved © George Doyle / Stockbyte / Getty Images

2 Learning Goals CHAPTER 9 1What are the basic principles of Frederick Taylor’s concept of scientific management? 2What did Elton Mayo’s Hawthorne studies reveal about worker motivation? 3 What is Maslow’s hierarchy of needs, and how do these needs relate to employee motivation? 4 How are McGregor’s Theories X and Y and Ouchi’s Theory Z used to explain worker motivation?

3 Learning Goals (continued) CHAPTER 9 5What are the basic components of Herzberg’s motivator-hygiene theory? 6 What four contemporary theories on employee motivation offer insights into improving employee performance? 7 How can managers redesign existing jobs to increase employee motivation and performance? 8 What initiatives are organizations using today to motivate and retain employees?

4 1 What are the basic principles of Frederick Taylor’s concept of scientific management? 1 Early Theories of Motivation

Divide work and responsibility according to who is better suited to each task. 3. Encourage cooperation between workers and managers. 2. Scientifically select, train, teach, and develop workers. 1. Develop a scientific approach for each elements of a person’s job. Taylor’s Principles of Scientific Management

6 2 What did Elton Mayo’s Hawthorne studies reveal about worker motivation? 2 The Hawthorne Studies

7 Hawthorne Effect The Hawthorne Effect 2 The phenomenon that employees perform better when they feel singled out for attention or feel that management is concerned about their welfare.

8 3 What is Maslow’s hierarchy of needs, and how do these needs relate to employee motivation? 3 Maslow’s Hierarchy of Needs

9 Maslow’s hierarchy of needs Maslow’s Hierarchy of Needs A theory of motivation developed by Abraham Maslow; holds that humans have five levels of needs and act to satisfy their unmet needs. At the base of the hierarchy are fundamental physiological needs, followed in order by safety, social, esteem, and self-actualization needs. 3

10 4 How are McGregor’s Theories X and Y and Ouchi’s Theory Z used to explain worker motivation? 4 Theories X, Y and Z

11 McGregor’s Theory X  The average person dislikes work and will avoid it if possible  People must be controlled, directed, or threatened with punishment  The average person prefers to be directed, avoids responsibility, is unambitious, and wants security 4

12 McGregor’s Theory Y 4  Work is as natural as play or rest  Workers can be motivated using positive incentives  The average person seeks out responsibility

13 Ouchi’s Theory Z 4  Long-term employment  Slow career development  Moderate specialization  Group decision making  Individual responsibility  Informal control over the employee  Concern for workers

14 5 What are the basic components of Herzberg’s motivator-hygiene theory? 5 Herzberg’s Motivator-Hygiene Theory

15 CONCEPT check What did Elton Mayo’s studies reveal about employee productivity? How can a manager use an understanding of Maslow’s hierarchy to motivate employees? How do the Theory X, Theory Y, and Theory Z management styles differ? 5

16 6 What four contemporary theories on employee motivation offer insights into improving employee performance? 6 Contemporary Views on Motivation

17 Expectancy Theory Managers should do the following to motivate employees:  Determine the rewards valued by each employee  Determine the desired performance level and communicate it to employees  Make the performance level attainable  Link rewards to performance  Determine what factors might counteract the effectiveness of an award  Make sure the reward is adequate for the level of performance 6

18 Equity Theory 6 Employees evaluate their outcomes in relation to their inputs and compare to their past experience in… 1.A different position in the current organization 2.A different organization or… 3.Another employee’s experience inside the organization 4.Another employee’s experience outside the organization

19 Employee Choices if an Inequity Exists 6 Leave the situation Look at situation from different perspective Distort their perception of others Distort their perception of themselves Change job benefits and income Change work habits

20 goal-setting theory Goal-Setting Theory A theory of motivation based on the premise that an individual’s intention to work toward a goal is a primary source of motivation. 1.Specific goals lead to a higher level of performance 2.More difficult goals lead to better performance 3.Feed back on progress toward the goal enhances performance Components: 6

21 reinforcement theory Reinforcement Theory People do things because they know that certain consequences will follow. Positive Negative None 6 Consequences:

22 CONCEPT check Discuss the three relationships central to expectancy theory. Explain the comparison process that is a part of equity theory. How does goal-setting theory contribute to our understanding of motivation? What are the main elements of reinforcement theory? 6

23 7 How can managers redesign existing jobs to increase employee motivation and performance? 7 From Motivation Theory to Application

24 Motivational Job Design Job Enlargement Job Enrichment Job Rotation 7

25 Work-Scheduling Options 7 Flextime Employees decide what their work hours will be Compressed Workweek Fitting 40 hours into a shorter workweek Job Sharing Allows two individuals to split the tasks and hours of a workweek Telecommuting Employees work from home via a linked computer

26 Economic Incentives Bonuses Stock Options Gain Sharing Profit Sharing Piece-Rate Plans 7

27 CONCEPT check Explain the difference between job enlargement and job enrichment. What are the four work-scheduling options that can enhance employee performance? Are all employees motivated by the same economic incentives? Explain. 7

28 What initiatives are organizations using today to motivate and retain employees? 8 Trends in Employee Motivation 8

29 Trends in Employee Motivation Work-life benefits Employee ownership Education and training 8

30 The Rising Costs of Absenteeism  Alternative work arrangements  Ability to leave for children’s school functions  Telecommuting  Compressed work weeks Top programs for reducing unscheduled absences 8

31 Turnover 1.Better compensation elsewhere 2.Career opportunities elsewhere 3.Dissatisfaction with potential for career development Biggest reasons for increasing turnover rates 8

32 CONCEPT check What benefits can an organization derive from training and educational opportunities, and stock ownership programs? Why are sabbaticals growing in popularity as work- life balance tools? Why are absenteeism and turnover rates increasing and what is the impact on companies? 8