INDIVIDUAL DIFFERENCES

PERSONALITY  Unique set of traits and characteristics that are relatively stable over time and determine a person’s preferences and behavior.  Does personality matter?  Implication?  Adjust styles/practices to the personality  Consider personality when assigning jobs/teams  Which dimensions of personality?

SELF-ESTEEM (SELF CONCEPT)  How we perceive ourselves in terms of our abilities, competencies, and effectiveness  Global, role-specific, job-based, organization-based  High self esteem is related to higher performance, commitment, loyalty, and longevity.  What can managers do to foster high self esteem?

LOCUS OF CONTROL  The extent to which people believe their actions determine what happens to them in life.  Internal  External  Why is locus of control important?  Performance?  Incentive Systems?

JUNGS TYPOLOGY ä 16 personality types based on 4 sets of preferences ä Extraversion vs. Introversion ä Sensation vs. Intuition (N)—Perception ä How a person becomes aware of ideas, facts ä Sensation: practical, orderly, precise, unambiguous ä Intuition: future oriented, dislike precision--jump to conclusions, inspiration ä Thinking vs. Feeling—Judgment ä Making judgments about perceptions ä Thinking: Analytic and logical, impersonal; principles over people ä Feeling: Subjective on the basis of values; ä Perception vs. Judgment

SELF-PERCEPTION ä Group member 2 and group member 3 attempt to identify group member #1’s type ä Group member #1 then reports their results to the group. Also indicate if you have you taken the assessment before and if so, whether the results were the same. ä Group member #1: Do you agree with the results? Why or why not? ä Group members #2 and 3: Do you agree with #1’s results? ä As a group: ä Were there any differences between #1’s self perceptions and the way 2 and 3 perceive #1? ä What do the results suggest #1’s strengths and weaknesses are? ä Repeat the process for Group members #2 and #3

IMPLICATIONS FOR THE GROUP ä Based on these results, what are some potential strengths and weaknesses of the group? ä Where might there be potential areas of synergy? ä Where might there be potential areas for conflict?

THE “BIG FIVE”: Conscientiousness  The degree to which a person is dependable, organized, thorough, perseverant, honest  Most consistent personality predictor of performance  Also predicts lack of problem behavior

THE “BIG FIVE”: Emotional Stability  The degree to which a person is NOT anxious, depressed, moody, emotionally unstable, temperamental.  May predict job performance in what type of jobs?

THE “BIG FIVE”: Emotional Stability  The degree to which a person is NOT anxious, depressed, moody, emotionally unstable, temperamental.  May predict job performance in what type of jobs?  High stress (e.g., customer relations)

THE “BIG FIVE”: Agreeableness  The extent to which a person is polite, good natured, flexible, cooperative, trusting.  May predict job performance in jobs…

THE “BIG FIVE”: Agreeableness  The extent to which a person is polite, good natured, flexible, cooperative, trusting.  May predict job performance in jobs…  Teamwork; customer relations

THE “BIG FIVE”: Extraversion  The degree to which a person is sociable, talkative, assertive, active, ambitious.  May predict job performance in what type of jobs?

THE “BIG FIVE”: Extraversion  The degree to which a person is sociable, talkative, assertive, active, ambitious.  May predict job performance in what type of jobs? ä Extensive interaction (management, sales)

MOTIVATION

MOTIVATION DEFINED ä Willingness to exert high levels of effort to reach organizational goals.

Good to Great (by Jim Collins) ä “Motivating people is the greatest waste of time managers engage in. If you have the right people on the bus, you don’t need to worry about them being motivated.”

BASIC ASSUMPTIONS ä Everyone is motivated ä Key? ä Two types of motivation ä Intrinsic ä Extrinsic

TYPES OF MOTIVATION ä Extrinsic Motivation: ä "What gets rewarded gets done" ä Based on extrinsic/tangible rewards an/or punishment ä Intrinsic Motivation: ä "What is rewarding gets done" ä Based on intrinsic/intangible rewards

HERZBERG ä Movement vs. Motivation ä KITA ä What’s wrong with KITA? With movement?

Motivation Theories ä Need (Maslow & ERG) ä Equity ä Reinforcement ä Expectancy Theory ä Goal-Setting Theory

Needs (stage of development) ä Maslow l Self actualization l Self esteem l Social (love) l Safety l Physiological ä Alderfer (ERG) l Growth l Relatedness l Existence

NEED THEORIES OF MOTIVATION ä What are the implications of need-based theories for managers?

NEED THEORIES OF MOTIVATION What are the implications of need-based theories for managers? ä Identify employee needs ä First satisfy lower level needs ä Then focus on higher level ä Individualized HR practices

TODAY’S TOPIC ä Motivation

EQUITY THEORY ä People compare their outcome/input ratio to that of others ä Conclusions ä Ratios are equal (equity exists) ä Ratios are unequal (inequity exists)

RESPONSES TO EQUITY/INEQUITY ä Equity: Maintenance ä Inequity: ä Change Inputs ä Change Outcomes ä Quit

REINFORCEMENT THEORY ä Behavior is a function of consequences ä Behavior that is rewarded persists ä To increase behavior ä Positive reinforcement ä negative reinforcement

REINFORCEMENT THEORY ä To reduce behavior ä Extinction ä Punishment ä Immediacy is crucial ä Implications?

EXPECTANCY THEORY People are motivated to do that which they believe is possible and valuable ä Expectancy: Belief that you can perform ä Instrumentality: Belief that performance will lead to an outcome ä Valence: Value of the outcome

EXPECTANCY THEORY ä According to expectancy theory, what must managers do to motivate their employees? ä Clarify expectations ä Utilize realistic standards ä Link valued rewards to performance ä Individualize rewards

GOAL SETTING THEORY ä People naturally set goals ä Benefits of Goals: ä Increase effort ä Direct effort ä Increase persistence ä Most effective goals are:

Goal setting (MBO) works... ä specific (time, targets, measurements) ä difficult (“stretch targets”) but... ä attainable (expectancy theory) ä participative (must accept goal) ä prioritize, and then: ä provide feedback ä create explicit, valent rewards

Motivation Theories ä Need (Maslow & ERG) ä Equity ä Reinforcement ä Expectancy Theory ä Goal-Setting Theory

Effective Incentives: ä Clearly linked to key desired behaviors ä (Reinforcement, Expectancy) ä Those that fulfill strategic objectives ä Avoid rewarding undesirable behaviors

REWARDING B  BUT WE REWARD:  Quarterly earnings  Making the numbers  Shipping on time  Reporting good news; agreeing with the boss  Individual effort  WE HOPE FOR:  Long-term growth  Setting challenging goals  Total Quality  Candor  Teamwork

Effective Rewards: ä Clearly linked to specific key desired behaviors ä (Reinforcement, Expectancy) ä Those that fulfill strategic objectives ä Clearly defined targets and expectations ä Goal setting, Expectancy ä Measurable ä Goal Setting ä Fair/equitable (Be consistent) ä (Equity Theory) ä Reward proportional to behavior ä Equity theory

Effective Rewards: ä Reward ASAP after behavior ä Reinforcement Theory ä Challenging yet realistic (under employees’ control) ä Goal Setting, Expectancy ä Intrinsic Motivation ä Valued Rewards ä Expectancy ä Individualized (Need Theories; Individual differences)

NORDSTROMS ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä What do you see as its strengths? ä Any concerns/questions regarding the system? ä Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By management? ä What (if any) changes would you recommend?

NORDSTROMS ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä What do you see as its strengths?

NORDSTROMS ä “This is Your Business. Treat it Like Your Own Business.” F FHighest sales productivity F FEarnings > $80,000 F FCompound growth in sales, earnings, stores sq. ft. F FHighly, educated workforce

NORDSTROMS ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä What do you see as its strengths? ä Any potential concerns?

NORDSTROMS ä ä “It’s fear that Provides Great Customer Service” F FLocal 1001 publicity campaign F FUnion complaint with Washington Dept. L & I F FNLRB charges F F$15 million reserve against earnings F Fshareholder class action suit F Femployee class action suit F FWall Street Journal story F F60 Minutes TV story ä “This is Your Business. Treat it Like Your Own Business.” F FHighest sales productivity F FEarnings > $80,000 F FCompound growth in sales, earnings, stores sq. ft. F FHighly, educated workforce

NORDSTROMS ä Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By management?

NORDSTROMS

ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä What do you see as its strengths? ä Any concerns/questions regarding the system? ä Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By management? ä What (if any) changes would you recommend?

CONCLUSIONS FEffective incentive systems can be powerful motivators & focus attention on critical behaviors. FHowever, performance pressures can cause participants to engage in undesirable behaviors. ä maximize the statistic in counter-productive ways ä willful distortion FStrong internal controls must be present to prevent manipulation. FSystems must clearly communicate that explicit pressure and gaming behavior is unacceptable and subject to detection and punishment.