CHAPTER 6 © 1998 by Prentice Hall 6-1 Motivation: From Concepts to Applications Set me anything to do as a task, and it is inconceivable the desire I have to do something else. -- G.B. Shaw

CHAPTER 6 © 1998 by Prentice Hall 6-2 Chapter Outline nManagement By Objectives nEmployee Recognition Programs nEmployee Involvement Programs nVariable Pay Programs nSkill-Based Pay Plans nFlexible Benefits nSpecial Issues in Motivation

CHAPTER 6 © 1998 by Prentice Hall 6-3 Motivation: From Concepts to Applications nIdentify the four ingredients common to MBO programs nExplain why managers might want to use employee involvement programs nContrast participative management with employee involvement nDefine quality circles nExplain how ESOPs can increase employee motivation nContrast gainsharing and profit sharing nDescribe the link between skill-based pay plays and motivation theories nExplain how flexible benefits turn benefits into motivators nContrast the challenges of motivating professional employees versus low-skilled employees nContrast the challenges in motivating professional employees with temporary workers Learning Objectives

CHAPTER 6 © 1998 by Prentice Hall 6-4 Management by Objectives nA program that encompasses –specific goals –participatively set –for an explicit time period –with feedback on goal progress nMBO operationalizes the concept of objectives by devising a process by which objectives cascade down through the organization. nThe result is a hierarchy of objectives that links objectives at one level to those at the next level. nFor the individual employee, MBO provides specific personal performance objectives.

CHAPTER 6 © 1998 by Prentice Hall 6-5 Exhibit 6-1 Cascading of Objectives Overall Organizational Objectives Overall Organizational Objectives XYZ Company Consumer Products Division Industrial Products Division Divisional Objectives Divisional Objectives Departmental Objectives Departmental Objectives Individual Objectives Individual Objectives Production Sales Customer Service Marketing Research Develop

CHAPTER 6 © 1998 by Prentice Hall 6-6 Linking MBO and Goal-Setting Theory nGoal Setting Theory Demonstrates that: –hard goals result in a higher level of individual performance, –specific hard goals result in higher levels of performance than do no goals or generalized goals, and –feedback on one’s performance leads to higher performance nMBO directly advocates specific goals and feedback.

CHAPTER 6 © 1998 by Prentice Hall 6-7 Employee Recognition Programs nWhat Are Employee Recognition Programs –Programs that use multiple sources and recognizes both individual and group accomplishments. nLinking Programs and Reinforcement Theory –Consistent with the reinforcement theory, rewarding a behavior with recognition immediately following that behavior is likely to encourage its repetition. nEmployee Recognition Programs in Practice –In contrast to most other motivators, recognizing an employee’s superior performance often costs little or no money, making them highly attractive to industry.

CHAPTER 6 © 1998 by Prentice Hall 6-8 Employee Involvement Programs nA participative process that uses the entire capacity of employees and is designed to encourage increased commitment to the organization’s success. nExamples of Employee Involvement –Participative Management –Representative Participation –Work Councils –Board Representatives –Quality Circles –Employee Stock Ownership Plans

CHAPTER 6 © 1998 by Prentice Hall 6-9 Exhibit 6-2 How a Typical Quality Circle Operates Solutions Recommended Problem Review Problem Selection Solutions Reviewed Decision Problem Identification

CHAPTER 6 © 1998 by Prentice Hall 6-10 Variable-Pay Programs nA portion of an employee’s pay is based on some individual and/or organizational measure of performance. –piece-rate pay plans –profit-sharing plans –gainsharing plans nLinking Variable-Pay Plans and Expectancy Theory –evidence supports the importance of this linkage, especially for operative employees working under piece-rate systems. –group and organization wide incentives reinforce and encourage employees to sublimate personal goals for the best interests of their department or organization.

CHAPTER 6 © 1998 by Prentice Hall 6-11 Skill-Based Pay Plans nPay levels based on how many skills employees have or how many jobs they can do. nWhat’s the appeal of skill-based pay? –Management’s perspective flexibility facilitates communication lessens “protective territory” behavior nIs there a Downside? –People can “top out” –Employee frustration can increase –Skills become obsolete –Paying people for acquired skills not used

CHAPTER 6 © 1998 by Prentice Hall 6-12 Flexible Benefits nAllowing employees to tailor their benefit program to meet their personal needs by picking and choosing from a menu of benefit options.

CHAPTER 6 © 1998 by Prentice Hall 6-13 Motivating Professionals nHow are “Professionals” different? –Receive a great deal of “intrinsic” satisfaction from their work. –Strong and long-term commitment to their field of expertise –Well paid/ Chief reward is work itself. –Value support –More focused on work as central life interest. nHow do we motivate professionals? –Provide challenging projects –Give them autonomy in follow interests and structure work. –Reward with educational opportunities. –Recognize their contributions.

CHAPTER 6 © 1998 by Prentice Hall 6-14 Motivating Contingent Workers nNo simple solutions to motivating contingent workers. –Contingent or temporary workers have little or no job security/stability, therefore they don’t identify with the organization or display the commitment of permanent employees. –Contingent or temporary workers are typically provided with little or no health care, pensions, or similar benefits. nGreatest motivating factor is the opportunity to gain permanent employment. nMotivation is also increased if the employee sees that the job he or she is doing for the firm can develop salable skills.

CHAPTER 6 © 1998 by Prentice Hall 6-15 Motivating the Diversified Work Force nNot all employees are motivated by money. –flexibility is the key to maximizing your employees’ motivation by understanding and responding to the diversity of needs. specially designed work schedules flexible compensation plans flexible benefits plans physical work settings child care elderly care flexible work hours job sharing flexible leave work teams

CHAPTER 6 © 1998 by Prentice Hall 6-16 Motivating the Low- Skilled Service Worker nOne of the most challenging problems in industry today. –Many “plans” have been tried, almost all unsuccessfully flexible work schedules broader responsibility for inventory, scheduling, and hiring creation of a “family” atmosphere among employees nUnless pay and benefits rise significantly, continued high turnover can be expected.

CHAPTER 6 © 1998 by Prentice Hall 6-17 Motivating People Doing Highly Repetitive Tasks nMotivating individuals in these jobs can be made through careful selection: –People vary in their tolerance for ambiguity. –Many individuals prefer jobs that have a minimal amount of discretion and variety. nHigh pay and careful selection can reduce: –recruitment problems and high turnover, however, this –doesn’t necessarily lead to highly motivated workers. nCreative personnel programs have exhibited some success by providing: –clean and attractive work surroundings, ample work breaks and opportunity to socialize during breaks, and empathetic supervisors.

CHAPTER 6 © 1998 by Prentice Hall 6-18 Summary and Implications for Managers nRecognize Individual Differences –Employees have different needs. –Don’t treat them all alike. –Spend the time necessary to understand what’s important to each employee. nUse Goals and Feedback nAllow Employees to Participate in Decisions That Affect Them nLink Rewards to Performance –Employees must perceive a clear linkage. nCheck the System for Equity