Management, 6e Schermerhorn Prepared by Cheryl Wyrick California State Polytechnic University Pomona John Wiley & Sons, Inc

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Chapter 14 Motivation and Rewards Planning Ahead Why is motivation important? What are the different types of individual needs? What are the insights of process theories of motivation? What role does reinforcement play in motivation? What are the trends in motivation and compensation? Schermerhorn - Chapter 14

Importance of Motivation Reward work outcome of positive value to the individual motivational work settings are rich in rewards for productive workers Schermerhorn - Chapter 14

Importance of Motivation Motivation and Rewards Extrinsic Rewards value outcomes given by one person to another examples include: bonuses promotions special assignments awards Schermerhorn - Chapter 14

Importance of Motivation Motivation and Rewards Intrinsic Rewards self-administered occur as part of the job itself examples include: feelings of competency personal development self-control Schermerhorn - Chapter 14

Importance of Motivation Rewards and Performance respect diversity clearly understand what people want from work allocate rewards to satisfy the interests of both individuals and the organization Schermerhorn - Chapter 14

Content Theories of Motivation Hierarchy of Needs Theory lower order and higher order needs affect behavior deficit principle a satisfied need is not a motivator of behavior progression principle a need at one level does not become activated until the next lower need is satisfied Schermerhorn - Chapter 14

Content Theories of Motivation ERG Theory Alderfer’s three needs existence - physiological and material well-being relatedness - satisfying interpersonal relationships growth - continued psychological growth and development any/all needs can influence behavior at one time frustration-regression principle already satisfied need can influence behavior when a higher need cannot be satisfied Schermerhorn - Chapter 14

Content Theories of Motivation Two-Factor Theory Herzberg satisfier factors (job content) things related to the nature of the job itself source of job satisfaction and motivation hygiene factors (job context) things related more to the work setting source of job dissatisfaction Schermerhorn - Chapter 14

Content Theories of Motivation Acquired Needs Theory McClelland Need for Achievement (nAch) desire to do something better, solve problems, master complex tasks Need for Power (nPower) desire to control, influence, or be responsible for others Need for Affiliation (nAff) desire to establish and maintain friendly relations with others Schermerhorn - Chapter 14

Content Theories of Motivation Acquired Needs Theory (con’t) People develop these needs over time Each need is associated with a distinct set of work preferences managers are encouraged to recognize the strength of each need within themselves and others create work environments responsive to the strength of each need Schermerhorn - Chapter 14

Content Theories of Motivation Acquired Needs Theory (con’t) Workers high in (nAch) prefer individual responsibility for results achievable but challenging goals feedback on performance Schermerhorn - Chapter 14

Content Theories of Motivation Acquired Needs Theory (con’t) Workers high in (nPower) prefer control over other people to have an impact on people and events to bring public recognition and attention Schermerhorn - Chapter 14

Content Theories of Motivation Acquired Needs Theory (con’t) Two types of power personal manipulation for personal gratification social directed towards group or organizational objectives Schermerhorn - Chapter 14

Process Theories of Motivation Equity Theory Adams perceived inequity is a motivating state people are motivated to restore equity change work inputs rewards received comparison points situation Schermerhorn - Chapter 14

Process Theories of Motivation Equity Theory (con’t) Pay is a common source of equity controversy gender equity women earn an average of 75% of what men earn comparable worth jobs of similar value based on required education, training, and skills should receive similar pay Schermerhorn - Chapter 14

Process Theories of Motivation Expectancy Theory Vroom expectancy - working hard will result in desired level of performance instrumentality - successful performance will be followed by rewards valence - value of rewards and other work related outcomes Schermerhorn - Chapter 14

Process Theories of Motivation Expectancy Theory (con’t) Motivation (M), expectancy (E), instrumentality (I), and valence (V) are related to one another in a multiplicative fashion M = E x I x V If either E, I or V is low, motivation will be low! Schermerhorn - Chapter 14

Process Theories of Motivation Goal-Setting Theory Locke task goals can be motivating if properly set well managed goals clarify role expectations Schermerhorn - Chapter 14

Process Theories of Motivation Goal-Setting Theory (con’t) Management by Objectives (MBO) joint goal setting by managers and employees participation option how to achieve goals instead of what the goals are Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Reinforcement Strategies Skinner Operant Conditioning applying law of effect to control behavior by manipulating its consequences Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Reinforcement Strategies positive reinforcement negative reinforcement punishment extinction Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Positive Reinforcement increase the frequency of desirable behavior by making a pleasant consequence contingent on its occurrence Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Positive Reinforcement (con’t) Successful implementation is based on law of contingent reinforcement reward delivered only if desired behavior is exhibited law of immediate reinforcement the more immediate the delivery of a reward, the more reinforcement value it has Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Negative Reinforcement increases the frequency of desirable behavior by making the avoidance of unpleasant consequence possible example: nagging until a task is completed Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Punishment eliminating undesired behavior by administering an unpleasant consequence upon the occurrence of that behavior example: docking pay for being late Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Extinction decreases the frequency of an undesirable behavior by making the removal of a pleasant consequence contingent on its occurrence example: stop giving social approval when someone is disruptive Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Ethical Issues Criticisms of reinforcement theory ignores individuality restricts freedom of choice ignores the possibility of other types of motivation Schermerhorn - Chapter 14

Reinforcement Theory of Motivation Ethical Issues Advocates state improved safety decreased absenteeism and tardiness increased productivity behavior control is a necessary part of management Schermerhorn - Chapter 14

Motivation and Compensation Pay for Performance Merit pay awards a pay increase in proportion to individual performance contributions consistent with equity, expectancy, and reinforcement theories Schermerhorn - Chapter 14

Motivation and Compensation Incentive Compensation Systems Bonus pay lump-sum payments based on the accomplishment of specific performance targets one-time payment based on extraordinary contribution Schermerhorn - Chapter 14

Motivation and Compensation Incentive Compensation Systems Profit-sharing employees receive a proportion of net profits earned by the organization during a stated performance period Gain Sharing groups of employees to share in any savings realized through their efforts to reduce costs and increase productivity Schermerhorn - Chapter 14

Motivation and Compensation Incentive Compensation Systems Employee stock ownership employees own stock in the company that employs them often used as way to save jobs and prevent business closings Schermerhorn - Chapter 14

Motivation and Compensation Incentive Compensation Systems Stock options Employees are given the right to buy shares at a future date at a fixed price when the price has risen one can exercise the option to buy the stock at a discount and realize a financial gain most common at senior executive level Schermerhorn - Chapter 14

Motivation and Compensation Incentive Compensation Systems Pay for knowledge skills-based pay pay based on number of job-relevant skills mastered entrepreneurial pay workers put part of their compensation at risk in return for the opportunity to pursue ideas and participate in any resulting profits Schermerhorn - Chapter 14