Motivation and Empowerment 8 Motivation and Empowerment

Chapter Objectives Recognize and apply the difference between intrinsic and extrinsic rewards. Motivate others by meeting their higher-level needs. Apply needs-based theory of motivation. Implement individual and systemwide rewards. Avoid the disadvantages of “carrot-and-stick” motivation. Implement empowerment by providing the five elements of information, knowledge, discretion, meaning, and rewards.

Motivation The forces either internal or external to a person that arouse enthusiasm and persistence to pursue a certain course of action * According to Gallup Organization, when all employees are highly motivated, customers are 70% more loyal, turnover drops 70% & Profits jump 40%

Ex. 8.1 A Simple Model of Motivation Need Creates desire to fulfill needs (money, friendship, recognition, achievement Behavior Results in actions to fulfill needs Rewards Satisfy needs: intrinsic or extrinsic rewards Feedback Reward informs person whether behavior was appropriate and should be used again

Types of Rewards Intrinsic Rewards Extrinsic Rewards Internal satisfactions a person receives in the process of performing a particular action Extrinsic Rewards Rewards given by another person, typically a supervisor, such as pay increases and promotions Systemwide Rewards Rewards that apply the same to all people within an organization or within a specific category or department

Rewards Intrinsic rewards appeal to higher needs, i.e., satisfaction, fulfillment, etc. Extrinsic rewards appeal to lower needs, i.e., need for more money, bonuses, benefits, etc Leader’s job is to help followers achieve intrinsic rewards Traditional management takes a “carrot- stick” approach – achievement of extrinsic rewards

Ex. 8.2 Examples of Intrinsic and Extrinsic Rewards Individual Large merit increase Feeling of self-fulfillment Pride in being part of a “winning” organization System-wide Insurance benefits

Ex. 8.3 Needs of People and Motivation Methods Conventional management Leadership Lower needs Higher needs Carrot and stick (Extrinsic) Empowerment (Intrinsic) Growth and fulfillment Control people Best effort Adequate effort

Ex. 8.4 Maslow’s Hierarchy of Needs Need Hierarchy Fulfillment on the Job Opportunities for advancement, autonomy, growth, creativity Self-actualization Needs Esteem Needs Recognition, approval, high status, increased responsibilities Belongingness Needs Work groups, clients, coworkers, supervisors Safety Needs Safe work, fringe benefits, job security Physiological Needs Heat, air, base salary Physiological, safety and belongingness are deficiency needs

Ex. 8.5 Herzberg’s Two-Factor Theory Highly Satisfied Motivators Achievement Recognition Responsibility Work itself Personal growth Area of Satisfaction Motivators influence level of satisfaction Neither Satisfied nor Dissatisfied Hygiene Factors Work conditions Pay/security Co. policies Supervisors Area of Dissatisfaction Hygiene factors influence level of dissatisfaction Interpersonal. relationships Highly Dissatisfied

Herzberg’s Two-Factor Theory Work characteristics associated with dissatisfaction are different from those pertaining to satisfaction Good hygiene factors remove dissatisfaction, but does not increase motivation Motivators raise satisfaction, and hence productivity Hygiene factors similar to Maslow’s deficiency needs

Acquired Needs Theory McClelland’s theory that proposes that certain types of needs are acquired during an individual’s lifetime Three needs most frequently studied: Need for achievement – need to accomplish difficult/challenging tasks Need for affiliation – desire to form personal relationships, avoid conflict Need for power – need to influence/control others

McClelland’s theory People with high achievement needs are entrepreneurial and innovative People with high affiliation needs are successful integrators (brand and project managers) People with high power needs are usually CEOs. They pursue a path of continuous promotion

Reinforcement Theory This, and subsequent theories apply to extrinsic rewards This looks at the relationship between behaviour and its consequences It involves behviour modification Positive reinforcement is administration of pleasant and rewarding consequences following a behaviour Negative reinforcement is the withdrawal of unpleasant consequences in order to encourage desired behaviour

Expectancy Theory This theory suggests that motivation depends on the individual’s mental expectations about their ability to perform tasks and received the desired results. Associated with Vroom All 3 factors necessary

Ex. 8.6 Key Elements of Expectancy Theory Will putting effort into the task lead to the desired performance? E > P expectancy Effort Performance Will high performance lead to the desired outcomes? P > O expectancy Performance Outcomes Valence – value of outcomes (pay, recognition, other rewards) Are the available outcomes highly valued? Motivation

Equity Theory A theory that proposes that people are motivated to seek social equity in the rewards they expect for performance Depends on their perception of how fairly they are treated

Carrot & Stick Approaches These tend to: Diminish intrinsic rewards; always looking for extrinsic rewards Extrinsic rewards temporary Extrinsic rewards assume people are driven by lower needs Organizations now too complex for carrot & stick approaches Carrot & stick tend to destroy people’s motivation to work as a group (competitive rather than cooperative)

Empowerment The “thing” these days; move from carrot & stick and need to control, to providing people with power, info and authority that enable people to satisfy intrinsic rewards Requires shifting power down and sharing it

Requirements for Empowerment: information, knowledge, discretion, meaning, and rewards Employees receive info about company performance Employees receive appropriate training (knowledge & skills) Employees have power to make substantive decisions Employees understand the meaning and impact of their jobs Employees are rewarded based on company performance (rather than individuals)

Empowerment & Other issues Empowerment today: Continuum from no decision discretion, to being responsible for decision & strategy Difficult for hierarchical organizations to empower (share power) Other approaches to motivation (individual and organizationwide motivation): job enrichment, employee ownership, etc