Contemporary Theories Application X Definition : willingness to exert high levels of effort toward organizational goals, conditioned by the efforts ability to satisfy individual needs 3 key element 1. Intensity : how hard a person tries 2. Direction : effort directed toward & consistent with goals 3. Persistence : how long a person maintain effort Contemporary Theories 1. Hierarchy of needs = Abraham Maslow 2. Theory X & Theory Y Two Factor Theory (motivation-hygiene theory) Application Hierarchy of needs Higher-order needs (social, esteem, self actualization) = U.S Safety hierarchy = Japan, Greece, Mexico Social hierarchy = Denmark, Sweden, Netherlands, Finland Two Factor Theory = widely read & familiar among managers Motivation Coping different needs nAch = flexibility, responsibility, clear standard, rewards, clarity, commitment nAff = plans as a group, give recognition & incentives, rarely criticize/punish, use peer pressure for individual discipline nPow = negotiate goals, tasks, strategies, work unit decisions with them = give assignment involve project leadership/recognition/compensation/ symbols of power 6 choices for employees perceive inequity : Change input Change outcome Distort self perception Distort others perception Choose different referent Quit job ERG Theory = Clayton Alderfer =3 core needs : existence, relatedness, growth Three Needs Theory / Learned Needs Theory - McClelland =Needs for : achievement (nAch), power (nPow), affiliation (nAff) Equity Theory = Individual compare job inputs & outcomes with others then respond to eliminate inequities = 4 referent comparisons : self-inside, self-outside, other-inside, other-outside Expectancy Theory = strength of tendency to act in certain way depends on strength of expectation that the act followed by outcome/attractiveness of outcome

Learned Needs Theory / Three Needs Theory - McClelland X Organizational justice : overall perception of what is fair in workplace – distributive, procedural Practice & reality element 1. Effort-performance relationship = source of low motivation : likelihood of getting good performance appraisal low, no matter how hard they work 2. Performance- reward relationship = weak, demotivating : pay based on seniority, being cooperative, “kissing up” bosses 3. Rewards-personal goals relationship = limited in rewards distributed : difficult to taillor rewards to individual needs Distributive justice : Perceived fairness of amount & allocation of rewards among individuals Procedural justice : Perceived fairness of process used to determine distribution of rewards Expectency Theory Equity Theory Rewards-personal goals relationship = rewards / attractiveness of rewards satisfy individual personal goals or needs Effort-performance relationship = Exerting given amount of effort lead to performance Performance- reward relationship = performing at particular level lead to attainment of desired outcome Learned Needs Theory / Three Needs Theory - McClelland nAch = drive to excel, to achieve a set of standards nPow = need to make others behave in a way they would not otherwise nAff = desire for friendly & close interpersonal relationships

Variable-pay programs X Profit-sharing plans Distributes compensation based on established formula design around company’s profitability Greater feeling of psychological ownership on employees Variable-pay programs Piece-rate pay fixed sum for each unit of production not feasible for many job Merit-based pay Pays for individuals based on performance appraisal rating Because of unions resist, seniority-based pay where employees get same raises predomiates Rewards As Motivation Bonuses Many companies reward production employees with bonuses when profits improve Pay structure : Pay more = better qualified, highly motivated, stay longer with organization, higher morale, more productive Variable-pay programs : piece-rate, merit-based, bonuses, skill-based, profit-sharing plans, gainsharing, employee stock ownership plans Flexible benefits : modular plans, core-plus options, flexible spending accounts Intrinsic rewards : recognition programs = spontaneous & private thank-you/formal most powerful workplace motivator inexpensive Employee stock ownership plan Company-established benefit plan, employees acquire stock Gain sharing Formula-based group incentives plan uses improvement in group productivity Skill-based pay Also called competency-based / knowledge-based pay Bases pay levels on how many skills employees have / how many jobs they can do Don’t address level of level of performance, only whether someone can perform the skill