Motivating and Rewarding Employees www.epowerpoint.com

Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Chapter 8 Motivating & Rewarding Employees Chapter 9 Leadership & Trust Chapter 10 Communication & Interpersonal Skills Chapter 8 Motivating & Rewarding Employees

Chapter Guide Motivation Overview Theories of Motivation Early Theories: Maslow’s Hierarchy of Needs; McGregor’s Theories of X and Y; Hertzberg’s Two-Factors Theory Contemporary Theories: Three-Needs Theory; The Job Characteristics Model; Equity Theory; Expectancy Theory Further Discussion Issues Diverse workforce; Pay for Performance or Time; Minimum-wage Workers; Professional Employees; Technical Workers; Flexible Work options.

Overview Motivation Motivation is the willingness to exert a persistent and high level of effort toward organizational goals.

Need is some internal state that makes certain outcomes Overview Motivation and Need Need is some internal state that makes certain outcomes appear attractive.

Components of Motivation Overview Components of Motivation Needs Organizational Goals Effort Motivation

The Motivation Process Overview The Motivation Process Unsatisfied Need Unsatisfied Need Search Behavior Tension Reduction of Tension An unsatisfied need creates tension; this tension drives a person to satisfy the need. A motivated employee works intensely and persistently. However, effort and persistence will not pay off unless they are channeled in a direction that benefits the organization. Satisfied Need Drives

Early Theories of Motivation Early Motivation Theory Early Theories of Motivation Maslow’s Hierarchy of Needs MacGregor’s Theories X and Y Herzberg’s Two-Factor Theory

Self Esteem Social Safety Physiological Maslow’s Hierarchy of Needs Early Motivation Theory 1: Abraham Maslow Maslow’s Hierarchy of Needs Self Esteem Social Safety Physiological

Maslow’s Hierarchy of Needs Early Motivation Theory 1: Abraham Maslow Maslow’s Hierarchy of Needs Is predetermined in order of importance. Lower level needs had to be satisfied before the next higher level need would motivate employees. Might create misunderstanding (1 or 5 needs)

Accept Responsibility Early Motivation Theory 2: Douglas McGregor Theory X Workers Dislike Work Avoid Responsibility Little Ambition Theory Y Workers Enjoy Work Accept Responsibility Self-Directed Douglas McGregor proposed in 1960 in his book The Human Side of Enterprise that managers hold one of two sets of assumptions about human nature, and named them Theory X and Theory Y. Seeing people as irresponsible and lazy, managers who follow Theory X assume the following: Employees inherently dislike work and will try to avoid it. Since employees dislike work, they must be coerced, controlled, or threatened to achieve goals. Employees avoid responsibilities and seek formal direction, if possible. Most workers place security above all other work-related factors and will display little ambition. Seeing people as responsible and conscientious, managers who follow Theory Y assume the following: Employees can view work as being as natural as rest or play. When committed to their objectives, people will exercise self-direction and self-control The average person can learn to accept, even seek, responsibility. Many workers besides managers have innovative decision-making skills. No hard evidence confirms that either set of assumptions is universally true. It is more likely that the assumptions of Theory X or Theory Y may or may not be appropriate, depending on the situation at hand.

Herzberg’s Two-Factor Theory Early Motivation Theory 3: Frederick Herzberg Herzberg’s Two-Factor Theory Job satisfaction and job dissatisfaction are created by different factors. Hygiene factors: environmental factors that create job dissatisfaction. Motivators: psychological factors that create job satisfaction. Attempted to explain why job satisfaction does not result in increased performance. The opposite of satisfaction is not dissatisfaction, but rather no satisfaction.

Herzberg’s Two-Factor Theory Early Motivation Theory: Frederick Herzberg Herzberg’s Two-Factor Theory Hygiene Factors Motivators Quality of supervision Salary and benefits Company policies Working conditions Relations with others Security and status Career advancement Recognition Work itself Responsibility Advancement Growth By asking people “what do you fell exceptional good or bad about your job”, Frederick Herzberg identified two categories of factors affect people’s motivation in their their jobs. His findings are called motivation-hygiene theory. Herzberg asserted that intrinsic factors are related to job satisfaction whereas extrinsic factors are associated with dissatisfaction. So, he called company policy, supervision, interpersonal relations, working conditions, and salary hygiene factors. When these factors are adequate, people will not be dissatisfied; however, they will not be satisfied either. He believed that achievement, recognition, the work itself, growth, and responsibility are motivators because people find them intrinsically rewarding. High Job Dissatisfaction Job Satisfaction High

Satisfaction-Dissatisfaction Early Motivation Theory: Frederick Herzberg Contrasting Views of Satisfaction-Dissatisfaction Traditional View Satisfaction Dissatisfaction Motivators Herzberg‘s View No Satisfaction Hygiene Factors No Dissatisfaction Based on his findings, Herzberg proposed the existence of a dual continuum: the opposite of “satisfaction” is “no satisfaction,” and the opposite of “dissatisfaction” is “no dissatisfaction.”

Contemporary Theories of Motivation Contemporary Motivation Theory Contemporary Theories of Motivation Three-Needs Theory Equity Theory The Job Characteristics Model Expectancy Theory

The Theory of Needs Need for Achievement David Power McClelland Contemporary Motivation Theory 1: David McClelland The Theory of Needs David McClelland Need for Achievement (nAch) Power (nPow) Affiliation (nAff) David McClelland asserts that there are three relevant motives or needs that motivate behavior in the workplace, which he believed are acquired from the culture of a society.: The need for achievement (nAch) is the need to excel, to achieve in relation to a set of standards, to succeed. The need for power (nPow) is the need to shape and control the behavior of others. The need for affiliation (nAff) is the desire for interpersonal relationships. The consistent findings in the areas High achievement need people prefers job satisfaction with personal responsibilities,feedback and intermediate degree of risk. High achievement need people are NOT necessarily good managers, especially in large organizarions. High need for power People can be trained to stimulate their achivement need Some people have a compelling drive to succeed, but they strive for personal achievement, not for the rewards of success, per se (nAch). These high achievers seek situations in which they can take responsibility for solving problems, can receive rapid unambiguous feedback on performance, and can set moderately challenging goals. Persons with a high need for power (nPow) desire to be influential, in charge, and seek competitive, status-oriented situations. Those who have a high need for affiliation (nAff) want to be liked and accepted by others; so, they strive for friendships, cooperation, and high-trust situations.

Equity Theory Employees perceive what they get from Contemporary Motivation Theory 2: J Stacey Adams Equity Theory Employees perceive what they get from a job situation (outcomes) in relation to what they put into it (inputs) and then compare their input-outcome ratio with the input-outcome ratios of relevant others.

Equity Theory Outputs typically include: Inputs typically include: Contemporary Motivation Theory: J Stacey Adams Equity Theory Outputs typically include: Financial rewards Intangibles that include: Recognition & Praise Reputation Responsibility Sense of Achievement Sense of Advancement Job Security Inputs typically include: Effort Loyalty & trust Hard Work Commitment Skill Ability Tolerance Support of colleagues

Equity Theory Employee’s Ratio Comparison* Perception Outcomes A Motivation Theory: J Stacey Adams Equity Theory Ratio Comparison* Employee’s Perception Outcomes A Inputs A Outcomes B Inputs B < Inequity (Under-Rewarded) = Equity Equity theory seeks to find how the outcome of job influence motivation, and proposes that inequity creates tension, which then would cause an employee to seek fairness. Workers compare their job inputs and outcomes with others. There are four referents that an employee can use: (1) Self-inside: an employee’s experiences in a different position inside the organization. (2) Self-outside: an employee’s experiences in a position outside of the organization. (3) Other-inside: an employee’s perception of persons inside the organization. (4) Other-outside: an employee’s perception of persons outside of the organization. There are three possible perceptions: inequity due to being under-rewarded, equity, or inequity due to being over-rewarded. Workers who perceive an inequity will react in one of the six following ways: change inputs, change outcomes, distort perceptions of self, distort perceptions of others choose a different referent, or leave the field. Two key properties of the theory: relative and conceived > Inequity (Over-Rewarded) *Where A is the employee, and B is a relevant other or referent.

Equity Theory Referent Motivation Theory: J Stacey Adams Equity Theory Referent The other persons, the systems, or the personal experiences against which individuals compare themselves to assess equity. The choice of a particular set of referents is related to the information available about referents as well as to the perceived relevance.

Inequity people’s choice Motivation Theory: J Stacey Adams Inequity people’s choice When employees perceive an inequity they may: Distort either their own or others’ inputs or outcomes. Behave so as to induce others to change their inputs or outcomes. Behave so as to change their own inputs or outcomes. Choose a different comparison referent. Quit their job.

The Job Characteristics Model Contemporary Motivation Theory 3: J Richard Hackman Skill Variety Task Identity Task Significance Autonomy Feedback The Job Characteristics Model The Job Characteristics Model (JCM) proposes that any job can be described in terms of the following five core job dimensions: Skill variety. Does the job require workers to use different skills and abilities? Task identity. Does the job require workers to complete identifiable pieces of work? Task significance. Does the job have a significant impact on the lives or work of others? Autonomy. Does the job allow workers substantial freedom, discretion, and independence? Feedback. Does the job allow workers to obtain direct, clear performance information? Richard Hackman and Greg Oldhan proposed the framework to analyze and design jobs in 1977.

Examples of High and Low Job Characteristics Motivation Theory: Job Characteristic Model Examples of High and Low Job Characteristics Characteristics Examples Skill Variety High variety The owner-operator of a garage who does electrical repair, rebuilds engines, does body work, and interacts with customers Low variety A bodyshop worker who sprays paint eight hours a day Task Identity High identity A cabinetmaker who designs a piece of furniture, selects the wood, builds the object, and finishes it to perfection Low identity A worker in a furniture factory who operates a lathe to make table legs Task Significance High significance Nursing the sick in a hospital intensive-care unit Low significance Sweeping hospital floors Autonomy High autonomy A telephone installer who schedules his or her own work for the day, and decides on the best techniques for a particular installation Low autonomy A telephone operator who must handle calls as they come according to a routine, highly specified procedure Feedback High feedback An electronics factory worker who assembles a radio and then tests it to determine if it operates properly Low feedback An electronics factory worker who assembles a radio and then routes it to a quality control inspector who tests and adjusts it The figure above offers examples of job activities that rate high and low for each characteristic.

The Job Characteristics Model Motivation Theory: Job Characteristic Model The Job Characteristics Model The first three dimensions--skill variety, task identity, and task significance--combine to create meaningful work. The jobs that possess autonomy give the worker a feeling of personal responsibility for the results. If a job provides feedback, the worker will know how well he or she is performing. From the standpoint of motivation, the model tells that internal rewards are obtained by a worker when one learns (knowledge of results) that he or she personally (experienced responsibility) has done well on a task that he or she cares about (experienced meaningfulness). The more that these three elements are present, the greater will be the employee’s motivation, performance, and satisfaction. The links between job dimensions and outcomes are moderated by the strength of the individual’s growth need: that is, by his or her desire for self-esteem and self-actualization. Therefore, those with high growth needs are more likely to experience the psychological states when their jobs are enriched than those with low growth need. Research has shown the following: The model is a usable framework for defining the core characteristics in a cross-section of jobs. Workers whose jobs rate high on core job dimensions are generally more motivated, satisfied, and productive than workers whose jobs rate low. Job dimensions influence personal and work outcome by operating through the critical psychological states rather than influencing outcomes directly.

An individual tends to act in a certain way, in the expectation that Contemporary Motivation Theory 4: Victor Vroom Expectancy Theory An individual tends to act in a certain way, in the expectation that the act will be followed by given outcome, and according to the attractiveness of that outcome.

Expectancy Theory Individual Effort Individual Performance Contemporary Motivation theory: Victor Vroom Expectancy Theory Individual Effort Individual Performance Organizational Rewards 1 2 3 3. Rewards - Personal Goals relationship 1. Effort - Performance relationship 2. Performance - Rewards relationship Expectancy theory argues that an employee will be motivated to produce more when he or she believes that the effort will lead to a good performance appraisal; that a good appraisal will lead to organizational rewards; and that the rewards will satisfy the employee’s personal goals. This theory focuses on three relationships. The effort-performance relationship is the probability perceived by the individual that exerting a given amount of effort will lead to performance. The performance-rewards relationship is the degree to which an individual believes that performing at a particular level will lead to the attainment of a desired outcome. The rewards-personal goals relationship is the degree to which the rewards of an organization satisfy an individual’s personal goals or needs and the attractiveness of those rewards. Individual Goals

Contemporary Motivation Issues Other issues Contemporary Motivation Issues How to motivate a diverse workforce How to Pay -- for performance or time How to motivate minimum-wage workers How to motivate professional and technical employees How to use flexible work options

Motivate Diverse Workforce Other issues 1: Diversity of workforce Motivate Diverse Workforce Recognize people have different needs Be aware of cultural differences When motivating a diverse workforce, flexibility is the key. Employees have different needs and goals that they hope to satisfy through work. So, the rewards system must be flexible to meet their diverse needs. Managers must also be sensitive to cultural differences. Managers cannot assume that motivation concepts are universally applicable, so they must adjust motivation techniques according to the culture. Most of the theories of motivation were developed by psychologists who were studying American workers. For instance, theories based on self-interest that are applicable in cultures that value capitalism and individualism may be of questionable value in collectivist cultures.

The Key To Motivating A Diverse Workforce Other issues: Diversity of workforce The Key To Motivating A Diverse Workforce Recognizing the different personal needs and goals of individuals Providing a diversity of rewards to match the varied needs of employees Being flexible in accommodating the cultural differences within a diverse workforce Motivating a diverse workforce through flexibility: Men desire more autonomy than do women. Women desire learning opportunities, flexible work schedules, and good interpersonal relations.

Use Pay to Motivate Pay for Performance Pay for Time Pay for Other issues 2: payment Use Pay to Motivate Pay for Performance Pay for Time Pay for Competency Before most people do anything, they look for a pay-off or reward. Therefore, managers must consider how pay can be used to motivate high levels of performance in the workplace. Pay-for-performance programs are getting popular these days, such as profit sharing, lump sum bonuses, or wage incentive plans, piece rate plans, pay employees according to some performance measure. Such pay programs are compatible with expectancy theory because workers will perceive a strong relationship between their performance and their rewards. Competency-based compensation program pays and rewards employees on the basis of their skills, knowledge, or behaviors.

Pay-for-performance programs Other issues 2: payment Pay-for-performance programs pay employees on the basis of performance measures not directly related to time spent on the job

Motivate Minimum-wage Workers Other issues 3: Minimum wage workers Motivate Minimum-wage Workers Money is important, but not the only reward that people seek Other rewards can help motivating Recognition program Praise Empowering One of the toughest challenges a manager can face is motivating minimum-wage workers. Money is important. But, managers should also use other rewards: for instance, employee recognition programs, praise, and employee empowerment. ---- to overcome one of most common misunderstandings.

Professional and Technical Employees Other issues 4: Professional and technical Tend to like Challenges from jobs May not be interested in becoming managers Professional and Technical Employees Loyal to their profession rather than their employers Strong and long-term commitment to their field Professional and technical employees are loyal to their fields of expertise, typically more so than to their employers. To stay current, they need to update their knowledge regularly. They rarely define their workweek in terms of 9-to-5 and 5 days a week. They tend to be paid well and enjoy what they do; so money and promotions are low on their priority list. They like challenging jobs and want others to think that what they are doing is important. Managers should give professional and technical employees new assignments and challenging projects. They should be given autonomy and rewarded with educational opportunities and recognition. To motivate Professional and technical employees ……

Motivating Professionals & Technical Employees Other issues 4: Professional and technical Motivating Professionals & Technical Employees Motivators Job challenge Organizational support of their work New assignments Autonomy Training and educational opportunities Recognition ……

Flexible Work Options Compressed Workweek Job Sharing Flextime Other issues 5: Flexibility Flexible Work Options Compressed Workweek Job Sharing Flextime Telecommuting Flexible work options refers any other arrangement than 8 hours a day 5 days per week A compressed workweek consists of four ten-hour days. This schedule allows employees time off to take care of personal business. But studies have shown that there are drawbacks: for instance, decrease in service to customers, decrease in productivity, and under-utilization of equipment. A special type of part-time work, job sharing allows two or more individuals to split a traditional 40-hour-a-week job. Therefore, the organization can draw upon the talents of more than one person for a given job and acquire skilled workers who are only available part-time. However, it is hard to find compatible employees who can coordinate job responsibilities. Flextime allows employees some discretion over when they arrive and leave work. While they still work a specified number of hours, workers can vary the hours within constraints. Flextime offers several benefits: improved employee motivation and recruitment of higher qualified, more diverse workers. But, flextime is not applicable to every job. It works best with clerical tasks that require minimal employee contact with persons outside of the organization. No commute time, flexible hours, no dress code, and few interruptions are some of the benefits of telecommuting: employees working at home on a computer that is linked to their office. The long-term future of telecommuting depends on the answers to some questions. Will work-at-home employees be at a disadvantage in office politics? Will they be less likely to be considered for pay raises or promotions? Will non-work distractions reduce productivity?

Chapter Summary Motivation process Meaning of needs Hierarchy of needs theory Theory X vs. Theory Y Motivation-hygiene theory

Chapter Summary Equity theory Expectancy theory Jobs designs to maximize performance Workforce diversity and motivation