1. Effective Management, by Williams South-Western College Publishing Copyright © 2002 Chapter 14 Motivation

2. Effective Management, by Williams South-Western College Publishing Copyright © 2002 2 What Would You Do? Motivation at Diamond International Corporation 4What motivates employees? 4How can you get them excited about their work? 4How can you improve morale?

3. Effective Management, by Williams South-Western College Publishing Copyright © 2002 3 After discussing this section, you should be able to: Learning Objectives What is Motivation? ¬explain the basics of motivation.

4. Effective Management, by Williams South-Western College Publishing Copyright © 2002 4 Components of Motivation Initiation Persistence Direction

5. Effective Management, by Williams South-Western College Publishing Copyright © 2002 5 Basics of Motivation Effort and Performance Need Satisfaction Extrinsic and Intrinsic Rewards Motivating With the Basics

6. Effective Management, by Williams South-Western College Publishing Copyright © 2002 6 A Basic Model of Work Motivation and Performance Effort Initiation Direction Persistence Performance Adapted From Figure 14.2

7. Effective Management, by Williams South-Western College Publishing Copyright © 2002 7 Effort and Performance 4Job performance Thow well someone performs the job 4Motivation Teffort put forth on the job 4Ability Tcapability to do the job 4Situational Constraints Texternal factors affecting performance Job Performance = Motivation X Ability X Situational Constraints

8. Effective Management, by Williams South-Western College Publishing Copyright © 2002 8 Need Satisfaction 4Needs: Tphysical or psychological requirements Tmust be met to ensure survival and well being 4Unmet needs motivate people 4Three approaches TMaslow TAlderfer TMcClelland

9. Effective Management, by Williams South-Western College Publishing Copyright © 2002 9 Needs Classification of Different Theories Maslow’s Hierarchy Self-Actualization Esteem Belongingness Safety Physiological Alderfer’s ERG Growth Relatedness Existence McClelland’s Learned Needs Power Achievement Affiliation Higher Order Needs Lower Order Needs Adapted From Table 14.1

10. Effective Management, by Williams South-Western College Publishing Copyright © 2002 10 Adding Need Satisfaction to the Model Adapted From Figure 14.3 Unsatisfied Need Tension Energized to Take Action Effort Initiation Direction Persistence Performance Satisfaction

11. Effective Management, by Williams South-Western College Publishing Copyright © 2002 11 Extrinsic and Intrinsic Rewards 4Extrinsic Rewards Ttangible and visible to others Tgiven contingent on performance 4Intrinsic Rewards Tnatural rewards Tassociated with the task for its own sake

12. Effective Management, by Williams South-Western College Publishing Copyright © 2002 12 Adding Rewards to the Model Adapted From Figure 14.4 Extrinsic Rewards Intrinsic Rewards Effort Initiation Direction Persistence PerformanceSatisfaction Unsatisfied Need Tension Energized to Take Action

13. Effective Management, by Williams South-Western College Publishing Copyright © 2002 13 Motivating with the Basics 4Ask people what their needs are 4Satisfy lower order needs first 4Expect people’s needs to change 4Satisfy higher order needs by looking for ways to allow employees to experience intrinsic rewards

14. Effective Management, by Williams South-Western College Publishing Copyright © 2002 14 After discussing this section, you should be able to: Learning Objectives How Perceptions and Expectations Affect Motivation ­use equity theory to explain how employees’ perceptions of fairness affect motivation. ®use expectancy theory to describe how workers’ expectations about rewards, effort, and the link between rewards and performance influence motivation.

15. Effective Management, by Williams South-Western College Publishing Copyright © 2002 15 Equity Theory Components of Equity Theory How People React to Perceived Inequity Motivating with Equity Theory

16. Effective Management, by Williams South-Western College Publishing Copyright © 2002 16 Components of Equity Theory 4Inputs Temployee contributions to the organization 4Outcomes Trewards employees receive from the organization 4Referents Tcomparison others 4Outcome/input (O/I) ratio Outcomes self Inputs self Outcomes other Inputs other =

17. Effective Management, by Williams South-Western College Publishing Copyright © 2002 17 Inequity 4When a person’s O/I ratio differs from their referent’s O/I ratio 4Underreward Treferent’s O/I ratio is greater than yours Texperience anger or frustration 4Overreward Treferent’s O/I ratio is less than yours Texperience guilt, in theory

18. Effective Management, by Williams South-Western College Publishing Copyright © 2002 18 How People React to Perceived Inequity 4Reduce inputs 4Increase outcomes 4Rationalize inputs or outcomes 4Change the referent 4Leave

19. Effective Management, by Williams South-Western College Publishing Copyright © 2002 19 Adding Equity Theory to the Model Adapted From Figure 14.5 Perceived Equity/Inequity Perceived Equity/Inequity Effort Initiation Direction Persistence PerformanceSatisfaction Unsatisfied Need Tension Energized to Take Action Intrinsic Rewards Extrinsic Rewards Restoring Equity decrease inputs increase outcomes rationalize inputs/outcomes change referent leave

20. Effective Management, by Williams South-Western College Publishing Copyright © 2002 20 Motivating with Equity Theory 4Look for and correct major inequities 4Reduce employees’ inputs 4Make sure decision-making process is fair Tdistributive justice Tprocedural justice

21. Effective Management, by Williams South-Western College Publishing Copyright © 2002 21 Expectancy Theory Components of Expectancy Theory Motivating with Expectancy Theory

22. Effective Management, by Williams South-Western College Publishing Copyright © 2002 22 Components of Expectancy Theory 4Valence Tattractiveness or desirability of reward or outcome 4Expectancy Tperceived relationship between effort and performance 4Instrumentality Tperceived relationship between performance and rewards Motivation = Valence X Instrumentality X Expectancy

23. Effective Management, by Williams South-Western College Publishing Copyright © 2002 23 Adding Equity Theory to the Model Adapted From Figure 14.6 Effort Initiation Direction Persistence PerformanceSatisfaction Unsatisfied Need Tension Energized to Take Action Intrinsic Rewards Extrinsic Rewards Restoring Equity decrease inputs increase outcomes rationalize inputs/outcomes change referent leave Perceived Equity/Inequity Perceived Equity/Inequity ValenceInstrumentality Expectancy

24. Effective Management, by Williams South-Western College Publishing Copyright © 2002 24 Motivating with Expectancy Theory 4Systematically gather information to find out what employees what from their jobs 4Clearly link rewards to individual performance 4Empower employees to enhance expectancy perceptions

25. Effective Management, by Williams South-Western College Publishing Copyright © 2002 25 After discussing this section, you should be able to: Learning Objectives How Rewards and Goals Affect Motivation ¯explain how reinforcement theory works and how it can be used to motivate °describe the components of goal-setting theory and how managers can use it to motivate workers ±discuss how the entire motivation model can be used to motivate workers

26. Effective Management, by Williams South-Western College Publishing Copyright © 2002 26 Reinforcement Theory Components of Reinforcement Theory Motivating with Reinforcement Theory

27. Effective Management, by Williams South-Western College Publishing Copyright © 2002 27 Components of Reinforcement Theory 4Positive reinforcement Tdesirable consequence strengthens behavior 4Negative reinforcement Twithholding unpleasant consequence strengthens behavior 4Punishment Tunpleasant consequence weakens behavior 4Extinction Tno consequence weakens behavior

28. Effective Management, by Williams South-Western College Publishing Copyright © 2002 28 Adding Reinforcement Theory to the Model Adapted From Figure 14.7 Reinforcement Contingencies Effort Initiation Direction Persistence PerformanceSatisfaction Unsatisfied Need Tension Energized to Take Action Intrinsic Rewards Extrinsic Rewards Restoring Equity decrease inputs increase outcomes rationalize inputs/outcomes change referent leave Perceived Equity/Inequity Perceived Equity/Inequity ValenceInstrumentalityExpectancy Schedules of Reinforcement

29. Effective Management, by Williams South-Western College Publishing Copyright © 2002 29 Schedules for Delivering Reinforcement Continuous Intermittent

30. Effective Management, by Williams South-Western College Publishing Copyright © 2002 30 Intermittent Reinforcement Schedules 4Interval Schedules Tconsequence delivered after time passes Ttwo types âfixed âvariable 4Ratio Schedules Tconsequence delivered after behavior occurs Ttwo types âfixed âvariable

31. Effective Management, by Williams South-Western College Publishing Copyright © 2002 31 Motivating with Reinforcement Theory 4Identify, measure, analyze, intervene, and evaluate 4Don’t reinforce the wrong behavior 4Correctly administer punishment at the appropriate time 4Choose the simplest and most effective schedule of reinforcement

32. Effective Management, by Williams South-Western College Publishing Copyright © 2002 32 What Really Works? Financial, Nonfinancial, and Social Rewards Overall Performance and Rewards 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success63%

33. Effective Management, by Williams South-Western College Publishing Copyright © 2002 33 What Really Works? (cont’d) Nonfinancial Rewards 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 87% Probability of success 96% Financial, Nonfinancial, and Social Rewards 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success84% Performance in Manufacturing Organizations Financial Rewards

34. Effective Management, by Williams South-Western College Publishing Copyright © 2002 34 What Really Works? (cont’d) Nonfinancial Rewards 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success54% Probability of success 61% Social Rewards 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success61% Performance in Service Organizations Financial Rewards

35. Effective Management, by Williams South-Western College Publishing Copyright © 2002 35 What Really Works? (cont’d) Nonfinancial and Social Rewards 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 73% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 72% Performance in Service Organizations Financial and Nonfinancial Rewards

36. Effective Management, by Williams South-Western College Publishing Copyright © 2002 36 Goal-Setting Theory Components of Goal-Setting Motivating with Goal-Setting

37. Effective Management, by Williams South-Western College Publishing Copyright © 2002 37 Components of Goal-Setting Theory 4Goal Specificity Tthe clarity of goals 4Goal Difficulty Thow challenging goals are 4Goal Acceptance Thow well goals are agreed to or understood 4Performance Feedback Tinformation on goal progress

38. Effective Management, by Williams South-Western College Publishing Copyright © 2002 38 Adding Goal-Setting Theory to the Model Adapted From Figure 14.8 Effort Initiation Direction Persistence PerformanceSatisfaction Unsatisfied Need Tension Energized to Take Action Intrinsic Rewards Extrinsic Rewards Restoring Equity decrease inputs increase outcomes rationalize inputs/outcomes change referent leave Perceived Equity/Inequity Perceived Equity/Inequity ValenceInstrumentalityExpectancy Reinforcement Contingencies Schedules of Reinforcement Goals

39. Effective Management, by Williams South-Western College Publishing Copyright © 2002 39 Motivating with Goal-Setting Theory 4Assign specific, challenging goals 4Make sure workers truly accept organizational goals 4Provide frequent, specific performance- related feedback

40. Effective Management, by Williams South-Western College Publishing Copyright © 2002 40 Motivating with the Integrated Model Motivating with the Basics Motivating with Equity Theory Motivating with Expectancy Theory Motivating with Reinforcement Theory Motivating with Goal-Setting Theory

41. Effective Management, by Williams South-Western College Publishing Copyright © 2002 41 What Really Happened? Motivation at Diamond International Corporation 4100 Club Tearn points for positive behavior Treduced absenteeism & costs 4The recognition program restored equity 4Feedback helped reinforce goals