1. Motivation Unit 2.5

2. IB Specification  Understand/identify motivation theory Taylor, Mayo, Maslow, McGregor, Herzberg, McClelland  Analyze the intrinsic and extrinsic needs to be satisfied at work What are the rewards that motivate employees  Financial vs. non financial  Apply content theory to given situations  Evaluate alternative financial reward and non- financial reward packages Impact of packages on job satisfaction, motivation, and productivity

3. Motivation  Is the result of internal or external processes that arouse enthusiasm or persistence to pursue a certain course of action  Refers to the forces which cause people to behave in certain ways

4. Motivation  Job Performance is a function of ability and motivation  Provides purpose and enhances passion it enables performance Decreases employee turnover and absenteeism  Extrinsic vs Intrinsic  Monetary vs Non monetary

5. States of Motivation  High productivity  Energy with tension  High Intensity  Counter productive  Tension with energy  Low intensity  Well intended, but little productivity  Limited energy, limited tension  Burnout  Anxiety  Tension without energy Positive attitude Negative attitude High Energy Low Energy

6. Financial/Monetary Motivation  Methods of Payment Wages  Time and piece rates Salary Commission Performance related pay (PRP) Employee share ownership Fringe payments

7. Non-Financial/Non- Monetary Motivation  Job Enrichment  Job enlargement  Empowerment  Teamwork  Positive reinforcement  effective discipline and punishment  fair treatment of employees  satisfy employee needs  work-related goals

8. Motivation Theory  Taylor  Mayo  Maslow  McGregor  Herzberg  McClelland

9. Taylor  Worker is motivated by self interest  Conducted ‘time and motion’ studies each worker was timed when performing a task,  this provided the basis for the worker’s level of output per day if it took a worker 2 minutes to perform a task, then this could be done 30 times per hour, and 240 times in an 8-hour day# If the worker completed more than his designated number of tasks per day, then he would be eligible for a monetary bonus.

10. F.W. Taylor (1856-1915) Taylor was a mechanical engineer who sought to improve industrial efficiency. Taylor is regarded as the father of scientific management, and was one of the first management consultants

11. Principles of scientific management (1911)

12. Replace rule-of-thumb work methods with methods based on a scientific study of the tasks. Scientifically select, train, and develop each employee rather than passively leaving them to train themselves. Taylor's scientific management consisted of four principles: Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task“ Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.

13. Taylor deduced that ‘money is the only motivator’

14. Taylor introduced differentiated piece rate system, fatigue study, division of labor, standardization of work.

15. Taylor’s ideas were integrated into Henry Ford’s mass production of the Model T

16. McDonald’s Corp. uses Taylor principles of manufacturing rigor and consistency to the restaurant business. Computerization has improved efficiency and given managers more direct control. the catering procedures require cooking temperature to be same throughout the world training is also the same inspection is strict, unwavering, consistent wages are paid on differentiated piece rate plus wage system

17. Taylor  Establish specific work targets  Pay workers for task/goals met  System before the man  Provide regular feedback  believed that efficiency and discipline were the two greatest features of a good manager and a good workforce  Pushed labour costs lower  Management now a ‘science’ There was ‘one right way’ for work performance Standards and standard operating procedures

18. Taylor Problems: Worker specialization, repetition, little skill required less leverage in negotiations with employer Lenin applied Taylor theory to Russian industry power rests with management centralization discipline and control of worker In 1911 US Congress passed law banning use of stopwatches in the work place Assumed humans are like machines that workers satisfied only by money He failed to recognise the high level of alienation and low levels of morale and motivation that this system produces in the workforce.

19. Mayo  Hawthorne Studies Attention by manager is a motivator  Work is a group activity Sense of belonging and recognition more important than the physical conditions of the job  Informal groups have much power  Manager communication is strong motivator

20. Abraham Maslow 1908 – 1970 American psychologist His needs hierarchy was not developed until late 1960’s and was taught in most B-schools by 1972

21. Maslow’s Hierarchy of Needs Physiological Needs Safety or Security Needs Social Needs Esteem Needs Self-Actualization Needs

23. Maslow  Once a need is satisfied it is no longer a motivating factor  Once a need is satisfied the next level will emerge as the depressed need seeking to be satisfied  Lower level needs are finite but hihger level needs are infinite  Levels are interdependent and overlapping  There is not necessarily a direct cause and effect relationship between needs and behavior  Measurement of satisfaction is not possible

24. 1.Not everyone has the same needs 2. Identification of worker’s need is difficult 3. Money is necessary to satisfy the physical needs AND important for esteem and status 4. Self actualization needs are never permanently achieved Problems with Maslow Theory

26. Herzberg: Two Factor Motivation Theory Hygiene factors With = worker is non-dissatisfied Without = worker is dissatisfied Money/pay Company policies working conditions Security status Motivators Achievement, recognition, growth, interest in job

27. Herzberg  Motivator factors are intrinsic in nature Improving motivator factors increases job satisfaction  Recognition  Responsibility Personal growth  Hygiene factors are extrinsic in nature Improving hygiene factors decreases job dissatisfaction  Working conditions  Coworker relations  Supervisor quality  Wages/salary

28. Insistent perception about money: Taylor How money moves to the job, worker, productivity its ability to motivate in the more repetitive, boring jobs Job enrichment is expensive Job improvement difficult in recession Relying on what people say defining satisfied and dissatisfied Some employees don’t want job enrichment prefer the money Ignores benefits and wisdom of teams synergistic effect of teams increased satisfaction increased productivity Problems with Herzberg Theory

30. Douglas McGregor, 1906 – 1964 Theory X Theory Y (1960)

31. McGregor  Theory X The average human has an inherent dislike for work and will avoid it if he can  workers must be controlled and threatened  average worker prefers to be directed, dislikes responsibility, and desires security  Theory Y The worker likes his job and chooses to be there  commitment to organization, accepts responsibility

32. Theory X— Managers: Utilize Autocratic approach Expect less intrinsic motivation Use extrinsic motivation; punishment as discipline Theory Y — Managers: Enable, encourage intrinsic motivation Have positive approach; fill the emotional tank Utilize more democratic and decentralized approach Most firms behave according to Theory X at Shop Floor Level and Theory Y at Management level McGregor

33. David McClelland 1917-1998 Yale University PhD Professor at Wesleyan and Harvard

34. McClelland’s Acquired Needs Theory  Individual needs are acquired over time and are shaped by life experiences. Need to Achieve Need for Affiliation Need for power  Training programs can modify/shape a person’s need profile  Used the Thematic Apperception Test A fairly reliable test for the 3 needs

35. McClelland nAch People with high nAch seek to excel Risk vs. Outcome vs. Success  Tend to avoid both low risk AND high risk endeavors Avoid low risk b/c easy success is not achievement Avoid high risk b/c of chance of failure Prefer to work alone or with other high achievers Goals need to be reachable/reasonable nAch can be taught Feedback necessary for improvement  Money is a form of feedback but not a motivator for person with high nAch

36. McClelland nAff  People with high nAff need harmonious relationships Need to be accepted by others Tend to conform to group norms Prefer work that provides personal interaction Perform well in customer service and sales situations

37. McClelland nP  Managers with high need for institutional power will be more effective  Personal power Need to direct others  This is perceived as undesirable  Institutional power Social power  Seeks to organize efforts of others to further goals of organization

38. McClelland  Organizations with more employees with high need to achieve will be more successful these workers are constantly thinking of ways to improve  There has to be a better way generally interested in Herzberg motivators like job specific feedback rather than attitudinal feedback  those with high nAch not usually the best leaders job oriented and work to capacity  have hard time with those who do not

39. Peter Drucker 1909-2005  The pre-eminent modern management thinker  Emphasized that money is most important reward incentive He believed money in fact did motivate Investment banking/banking operates on this model  Believed management and business have a strong social responsibility Business managers have an obligation to take responsibility for the common good