Motivating Employees Chapter 11 This may sound soft and mushy, but happy people are better for business. They are more creative and productive, they build environments where success is more likely, and you have a much better chance of keeping your best players. —Shelly Lazarus, CEO, Ogilvy & Mather Worldwide McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Identify the relationship between motivation and performance. Describe content theories of motivation. Describe process theories of motivation. Explain when financial incentives are likely to motivate employees. Describe pay plans using financial incentives. Discuss the pros and cons of keeping pay information secret. Identify ways supervisors can motivate their employees. See text page: 288

Motivation Motivation Giving people incentives that cause them to act in desired ways

How Does Motivation Work? Motivation + Ability = Performance Familiarity with the best-known theories can help supervisors think of ways to motivate employees. None are perfect, but all give supervisors some guidance. See Learning Objective 1: Identify the relationship between motivation and performance. See text page: 290

Content Theories Content theories focus on the content of the motivators. Three researchers whose content theories of motivation are widely used: Abraham Maslow David McClelland Frederick Herzberg See Learning Objective 2: Describe content theories of motivation. See text page: 290

Content Theories Psychologist Abraham Maslow assumed that people are motivated by unmet needs. When a person’s need for something is not met, the person feels driven, or motivated, to meet that need.

Maslow’s Hierarchy of Needs According to Maslow’s theory, the needs that motivate people fall into five basic categories: 1. Physiological needs are required for survival: food, water, sex, and shelter. 2. Security needs keep you free from harm. In modern society, these might include insurance, medical checkups, and a home in a safe neighborhood. 3. Social needs include the desire for love, friendship, and companionship. People seek to satisfy these needs through the time they spend with family, friends, and co-workers. 4. Esteem needs are the needs for self-esteem and the respect of others. Acceptance and praise are two ways these needs are met. 5. Self-actualization needs describe the desire to live up to your full potential. People on the path to meeting these needs will not only be doing their best at work and at home but also be developing mentally, spiritually, and physically. See Learning Objective 2: Describe content theories of motivation. See text page: 291 11-7

Maslow’s Hierarchy of Needs Maslow’s hierarchy has shortcomings. Critics have noted that the theory is based on clinical work with neurotic patients and was not tested much for relevance to the work setting.

Maslow’s Hierarchy of Needs However, the popularity of Maslow’s theory implies that it can be helpful in offering suggestions about what motivates people Applied to a work situation, Maslow’s theory means the supervisor must be aware of the current needs of particular employees.

Maslow’s Hierarchy of Needs Flextime A policy that grants employees some leeway in choosing which 8 hours a day or which 40 hours a week to work Job sharing An arrangement in which two part-time employees share the duties of one full-time job

Share of 945 U.S. Companies Offering Flexible Work Options See Learning Objective 2: Describe content theories of motivation. See text page: 293 11-11

McClelland’s Achievement-Power-Affiliation Theory Need for achievement the desire to do something better than it has been done before. Need for power the desire to control, influence, or be responsible for other people. See Learning Objective 2: Describe content theories of motivation. See text page: 293

McClelland’s Achievement-Power-Affiliation Theory Need for affiliation the desire to maintain close and friendly personal relationships. See Learning Objective 2: Describe content theories of motivation. See text page: 293

Herzberg’s Two-Factor Theory Frederick Herzberg’s research led to the conclusion that employee satisfaction and dissatisfaction stem from different sources. Dissatisfaction results from the absence of hygiene factors In contrast, satisfaction results from the presence of motivating factors

Herzberg’s Two-Factor Theory See Learning Objective 2: Describe content theories of motivation. See text page: 295 11-15

Process Theories Process theories look at the process of motivation instead of specific motivators. Two major process theories: Vroom’s expectancy-valence theory Skinner’s reinforcement theory See Learning Objective 3: Describe process theories of motivation. See text page: 295

Vroom’s Expectancy- Valence Theory Vroom decided that the degree to which people are motivated to act in a certain way depends on three things: Valence Expectancy Instrumentality See Learning Objective 3: Describe process theories of motivation. See text pages: 295-296

Vroom’s Expectancy- Valence Theory the value a person places on the outcome of a particular behavior Expectancy the perceived likelihood that the behavior will lead to the outcome. Instrumentality the perceived probability that the promised reward will actually be received.

Skinner’s Reinforcement Theory Reinforcement theory maintains that people’s behavior is influenced largely by the consequences of their past behavior. It implies that supervisors can encourage or discourage a particular kind of behavior by the way they respond to the behavior See Learning Objective 3: Describe process theories of motivation. See text page: 296

Skinner’s Reinforcement Theory A desired consequence or the ending of a negative consequence, either of which is given in response to a desirable behavior Punishment An unpleasant consequence given in response to undesirable behavior

Skinner’s Reinforcement Theory Behavior modification The use of reinforcement theory to motivate people to behave in a certain way

Motivation Theories and the Law Federal laws set requirements for overtime pay, rest breaks, health insurance for retirees, and many other areas. The Family and Medical Leave Act can pose a significant challenge to planning and scheduling because of an employee’s leave. See Learning Objective 3: Describe process theories of motivation. See text page: 297

Money as a Motivator Extrinsic reward Intrinsic reward Recognition or compensation that is extraneous to the task accomplished Intrinsic reward Personal satisfaction that comes directly from performing a task

Money as a Motivator Money motivates people when it meets their needs. If money is to work as a motivator, employees must believe they are able to achieve the financial rewards the organization offers. See Learning Objective 4: Explain when financial incentives are likely to motivate employees. See text pages: 298-300

Money as a Motivator Pay plans using financial incentives Piecework system Production bonus system Commissions Payments for suggestions

Group Incentive Plans Group incentive plan A financial incentive plan that rewards a team of workers for meeting or exceeding an objective.

Group Incentive Plans Profit-sharing plan a company sets aside a share of its profits earned during a given period and divides these profits among the employees. See Learning Objective 5: Describe pay plans using financial incentives. See text page: 300

Group Incentive Plans Gainsharing A group incentive plan in which the organization encourages employees to participate in making suggestions and decisions, then rewards the group with a share of improved earnings See Learning Objective 5: Describe pay plans using financial incentives. See text page: 300

Secrecy of Wage and Salary Information In private organizations, a typical compromise between maintaining privacy and sharing information is for the organization to publish pay ranges so employees know what they can potentially expect to earn. See Learning Objective 6: Discuss the pros and cons of keeping pay information secret. See text page: 301

How Supervisors Can Motivate Theory X the view that people dislike work and must be coerced to perform Theory Y the view that work is a natural activity and that people will work hard and creatively to achieve objectives to which they are committed

How Supervisors Can Motivate Theory Z A set of management attitudes that emphasizes employee participation in all aspects of decision making

Ways Supervisors Can Motivate Employees 11-32

Making Work Interesting Job rotation Moving employees from job to job to give them more variety Job enlargement An effort to make a job more interesting by adding more duties to it

Making Work Interesting Job enrichment The incorporation of motivating factors into a job––in particular, giving the employee more responsibility and recognition 11-34

Having High Expectations Pygmalion effect The direct relationship between expectations and performance; high expectations lead to high performance See Learning Objective 7: Identify ways supervisors can motivate their employees. See text pages: 302-304

Job Characteristics Rated Important by U.S. Workers See Learning Objective 7: Identify ways supervisors can motivate their employees. See text page: 306 11-36