1. CHAPTER 16 Managing Employee Motivation and Performance Managing Employee Motivation and Performance Copyright © by Houghton Mifflin Company. All rights reserved. PowerPoint Presentation by Charlie Cook

2. Copyright © by Houghton Mifflin Company. All rights reserved. 16–2 The Nature of Motivation Motivation –The set of forces that cause people to behave in certain ways. –The goal of managers is to maximize desired behaviors and minimize undesirable behaviors. The Importance of Motivation in the Workplace –Determinants of Individual Performance Motivation—the desire to do the job.Motivation—the desire to do the job. Ability—the capability to do the job.Ability—the capability to do the job. Work environment—the resources to do the job.Work environment—the resources to do the job. Motivation –The set of forces that cause people to behave in certain ways. –The goal of managers is to maximize desired behaviors and minimize undesirable behaviors. The Importance of Motivation in the Workplace –Determinants of Individual Performance Motivation—the desire to do the job.Motivation—the desire to do the job. Ability—the capability to do the job.Ability—the capability to do the job. Work environment—the resources to do the job.Work environment—the resources to do the job.

3. Copyright © by Houghton Mifflin Company. All rights reserved. 16–3 The Motivation Framework Search for ways to satisfy need Choice of behavior to satisfy need Determination of future needs and search/choice for satisfaction Evaluation of need satisfaction Need or deficiency Figure 16.1 The motivation processes through a series of discreet steps. Content, process, and reinforcement perspectives on motivation address different parts of this process.

4. Copyright © by Houghton Mifflin Company. All rights reserved. 16–4 Historical Perspectives on Motivation The Traditional Approach –Frederick Taylor (Scientific Management) –Assumptions: Managers know more than workers.Managers know more than workers. Economic gain (money) is the primary motivation for performance.Economic gain (money) is the primary motivation for performance. Work is inherently unpleasant.Work is inherently unpleasant. The Human Relations Approach –Emphasized the role of social processes in the workplace. –Assumptions: Employees want to feel useful and and important.Employees want to feel useful and and important. Employees have strong social needs, more important than money.Employees have strong social needs, more important than money. Maintaining the appearance of employee participation is important.Maintaining the appearance of employee participation is important. The Traditional Approach –Frederick Taylor (Scientific Management) –Assumptions: Managers know more than workers.Managers know more than workers. Economic gain (money) is the primary motivation for performance.Economic gain (money) is the primary motivation for performance. Work is inherently unpleasant.Work is inherently unpleasant. The Human Relations Approach –Emphasized the role of social processes in the workplace. –Assumptions: Employees want to feel useful and and important.Employees want to feel useful and and important. Employees have strong social needs, more important than money.Employees have strong social needs, more important than money. Maintaining the appearance of employee participation is important.Maintaining the appearance of employee participation is important.

5. Copyright © by Houghton Mifflin Company. All rights reserved. 16–5 Historical Perspectives on Motivation (cont’d) The Human Resource Approach –Assumptions: Employee contributions are important and valuable to the employee and the organization.Employee contributions are important and valuable to the employee and the organization. Employees want to and are able to make genuine contributions.Employees want to and are able to make genuine contributions. Management’s job is to encourage participation and create a work environment that motivates employees.Management’s job is to encourage participation and create a work environment that motivates employees. The Human Resource Approach –Assumptions: Employee contributions are important and valuable to the employee and the organization.Employee contributions are important and valuable to the employee and the organization. Employees want to and are able to make genuine contributions.Employees want to and are able to make genuine contributions. Management’s job is to encourage participation and create a work environment that motivates employees.Management’s job is to encourage participation and create a work environment that motivates employees.

6. Copyright © by Houghton Mifflin Company. All rights reserved. 16–6 Content Perspectives on Motivation Content Perspectives –Approaches to motivation that try to answer the question, “What factors in the workplace motivate people?” Content Perspectives of Motivation –Maslow’s Hierarchy of Needs –Herzberg’s Two-Factor Theory –McClelland’s Achievement, Power, and Affiliation Needs –Aldefer’s ERG Theory Content Perspectives –Approaches to motivation that try to answer the question, “What factors in the workplace motivate people?” Content Perspectives of Motivation –Maslow’s Hierarchy of Needs –Herzberg’s Two-Factor Theory –McClelland’s Achievement, Power, and Affiliation Needs –Aldefer’s ERG Theory

7. Copyright © by Houghton Mifflin Company. All rights reserved. 16–7 Content Perspectives on Motivation (cont’d) The Need Hierarchy Approach –Maslow’s Hierarchy of Needs People must, in a hierarchical order, satisfy five groups of needs:People must, in a hierarchical order, satisfy five groups of needs: –Physiological needs for basic survival and biological function. –Security needs for a safe physical and emotional environment. –Belongingness needs for love and affection. –Esteem needs for positive self-image/self-respect and recognition and respect from others. –Self-actualization needs for realizing one’s potential for personal growth and development. –Weakness of Maslow’s theory Five levels of need are not always present.Five levels of need are not always present. Ordering or importance of needs is not always the same.Ordering or importance of needs is not always the same. Cultural differences.Cultural differences. The Need Hierarchy Approach –Maslow’s Hierarchy of Needs People must, in a hierarchical order, satisfy five groups of needs:People must, in a hierarchical order, satisfy five groups of needs: –Physiological needs for basic survival and biological function. –Security needs for a safe physical and emotional environment. –Belongingness needs for love and affection. –Esteem needs for positive self-image/self-respect and recognition and respect from others. –Self-actualization needs for realizing one’s potential for personal growth and development. –Weakness of Maslow’s theory Five levels of need are not always present.Five levels of need are not always present. Ordering or importance of needs is not always the same.Ordering or importance of needs is not always the same. Cultural differences.Cultural differences.

8. Copyright © by Houghton Mifflin Company. All rights reserved. 16–8 Maslow’s Hierarchy of Needs Self- actualization Esteem Belongingness Security PhysiologyFood Achievement Status Friendship Stability Job Friends Pension Base NEEDS General ExamplesOrganizational Examples job Challenging title at work plan salary Figure 16.2

9. Copyright © by Houghton Mifflin Company. All rights reserved. 16–9 Content Perspectives on Motivation (cont’d) The ERG Theory (Alderfer) –People’s needs are grouped into three overlapping categories—existence, relatedness, and growth. –Maslow’s hierarchy is collapsed into three levels: Existence needs related to physiological and security needs.Existence needs related to physiological and security needs. Relatedness needs that are similar to belongingness and esteem by others.Relatedness needs that are similar to belongingness and esteem by others. Growth needs encompass needs for self-esteem and self- actualization.Growth needs encompass needs for self-esteem and self- actualization. –ERG theory assumes that: Multiple needs can be operative at one time (there is no absolute hierarchy of needs).Multiple needs can be operative at one time (there is no absolute hierarchy of needs). If a need is unsatisfied, a person will regress to a lower-level need and pursue that need (frustration-regression).If a need is unsatisfied, a person will regress to a lower-level need and pursue that need (frustration-regression). The ERG Theory (Alderfer) –People’s needs are grouped into three overlapping categories—existence, relatedness, and growth. –Maslow’s hierarchy is collapsed into three levels: Existence needs related to physiological and security needs.Existence needs related to physiological and security needs. Relatedness needs that are similar to belongingness and esteem by others.Relatedness needs that are similar to belongingness and esteem by others. Growth needs encompass needs for self-esteem and self- actualization.Growth needs encompass needs for self-esteem and self- actualization. –ERG theory assumes that: Multiple needs can be operative at one time (there is no absolute hierarchy of needs).Multiple needs can be operative at one time (there is no absolute hierarchy of needs). If a need is unsatisfied, a person will regress to a lower-level need and pursue that need (frustration-regression).If a need is unsatisfied, a person will regress to a lower-level need and pursue that need (frustration-regression).

10. Copyright © by Houghton Mifflin Company. All rights reserved. 16–10 Content Perspectives on Motivation (cont’d) The Two-Factor Theory (Herzberg) –People’s satisfaction and dissatisfaction are influenced by two independent sets of factors—motivation factors and hygiene factors. –Theory assumes that job satisfaction and job dissatisfaction are on two distinct continuums: Motivational factors (work content) are on a continuum that ranges from satisfaction to no satisfaction.Motivational factors (work content) are on a continuum that ranges from satisfaction to no satisfaction. Hygiene factors (work environment) are on a separate continuum that ranges from dissatisfaction to no dissatisfaction.Hygiene factors (work environment) are on a separate continuum that ranges from dissatisfaction to no dissatisfaction. Motivation is a two-step process:Motivation is a two-step process: –Ensuring that the hygiene factors are not deficient and not blocking motivation. –Giving employees the opportunity to experience motivational factors through job enrichment. The Two-Factor Theory (Herzberg) –People’s satisfaction and dissatisfaction are influenced by two independent sets of factors—motivation factors and hygiene factors. –Theory assumes that job satisfaction and job dissatisfaction are on two distinct continuums: Motivational factors (work content) are on a continuum that ranges from satisfaction to no satisfaction.Motivational factors (work content) are on a continuum that ranges from satisfaction to no satisfaction. Hygiene factors (work environment) are on a separate continuum that ranges from dissatisfaction to no dissatisfaction.Hygiene factors (work environment) are on a separate continuum that ranges from dissatisfaction to no dissatisfaction. Motivation is a two-step process:Motivation is a two-step process: –Ensuring that the hygiene factors are not deficient and not blocking motivation. –Giving employees the opportunity to experience motivational factors through job enrichment.

11. Copyright © by Houghton Mifflin Company. All rights reserved. 16–11 The Two- Factor Theory of Motivation Satisfaction No satisfaction Motivation Factors Achievement Recognition The work itself Responsibility Advancement and growth DissatisfactionNo dissatisfaction Hygiene Factors Supervisors Working conditions Interpersonal relations Pay and security Company policies and administration Figure 16.3

12. Copyright © by Houghton Mifflin Company. All rights reserved. 16–12 Content Perspectives on Motivation (cont’d) Individual Human Needs (McClelland) –The need for achievement The desire to accomplish a goal or task more effectively than in the past.The desire to accomplish a goal or task more effectively than in the past. –The need for affiliation The desire for human companionship and acceptance.The desire for human companionship and acceptance. –The need for power The desire to be influential in a group and to be in control of one’s environment.The desire to be influential in a group and to be in control of one’s environment. Individual Human Needs (McClelland) –The need for achievement The desire to accomplish a goal or task more effectively than in the past.The desire to accomplish a goal or task more effectively than in the past. –The need for affiliation The desire for human companionship and acceptance.The desire for human companionship and acceptance. –The need for power The desire to be influential in a group and to be in control of one’s environment.The desire to be influential in a group and to be in control of one’s environment.

13. Copyright © by Houghton Mifflin Company. All rights reserved. 16–13 Process Perspectives on Motivation Process Perspectives –Approaches to motivation that focus on why people choose certain behavioral options to satisfy their needs and how they evaluate their satisfaction after they have attained their goals. Process Perspectives of Motivation –Expectancy Theory Process Perspectives –Approaches to motivation that focus on why people choose certain behavioral options to satisfy their needs and how they evaluate their satisfaction after they have attained their goals. Process Perspectives of Motivation –Expectancy Theory

14. Copyright © by Houghton Mifflin Company. All rights reserved. 16–14 Process Perspectives on Motivation (cont’d) Expectancy Theory –Motivation depends on how much we want something and how likely we are to get it. –Assumes that: Behavior is determined by a combination of personal and environmental forces.Behavior is determined by a combination of personal and environmental forces. People make decisions about their own behavior in organizations.People make decisions about their own behavior in organizations. Different people have different types of needs, desires, and goals.Different people have different types of needs, desires, and goals. People choose among alternatives of behaviors in selecting one that that leads to a desired outcome.People choose among alternatives of behaviors in selecting one that that leads to a desired outcome. Motivation leads to effort, when combined with ability and environmental factors, that results in performance which, in turn, leads to various outcomes that have value (valence) to employees.Motivation leads to effort, when combined with ability and environmental factors, that results in performance which, in turn, leads to various outcomes that have value (valence) to employees. Expectancy Theory –Motivation depends on how much we want something and how likely we are to get it. –Assumes that: Behavior is determined by a combination of personal and environmental forces.Behavior is determined by a combination of personal and environmental forces. People make decisions about their own behavior in organizations.People make decisions about their own behavior in organizations. Different people have different types of needs, desires, and goals.Different people have different types of needs, desires, and goals. People choose among alternatives of behaviors in selecting one that that leads to a desired outcome.People choose among alternatives of behaviors in selecting one that that leads to a desired outcome. Motivation leads to effort, when combined with ability and environmental factors, that results in performance which, in turn, leads to various outcomes that have value (valence) to employees.Motivation leads to effort, when combined with ability and environmental factors, that results in performance which, in turn, leads to various outcomes that have value (valence) to employees.

15. Copyright © by Houghton Mifflin Company. All rights reserved. 16–15 Process Perspectives on Motivation (cont’d) Elements of Expectancy Theory –Effort-to-Performance Expectancy The employee’s perception of the probability that effort will lead to a high level of performance.The employee’s perception of the probability that effort will lead to a high level of performance. –Performance-to-Outcome Expectancy The employee’s perception of the probability that performance will lead to a specific outcome—the consequence or reward for behaviors in an organizational setting.The employee’s perception of the probability that performance will lead to a specific outcome—the consequence or reward for behaviors in an organizational setting. Elements of Expectancy Theory –Effort-to-Performance Expectancy The employee’s perception of the probability that effort will lead to a high level of performance.The employee’s perception of the probability that effort will lead to a high level of performance. –Performance-to-Outcome Expectancy The employee’s perception of the probability that performance will lead to a specific outcome—the consequence or reward for behaviors in an organizational setting.The employee’s perception of the probability that performance will lead to a specific outcome—the consequence or reward for behaviors in an organizational setting.

16. Copyright © by Houghton Mifflin Company. All rights reserved. 16–16 Process Perspectives on Motivation (cont’d) Elements of Expectancy Theory (cont’d) –Valence An index of how much an individual values a particular outcome.An index of how much an individual values a particular outcome. It is the attractiveness of the outcome to the individual.It is the attractiveness of the outcome to the individual. –Attractive outcomes have positive valences and unattractive outcomes have negative valences. –Outcomes to which an individual is indifferent have zero valences. –For motivated behavior to occur: Both effort-to-performance expectancy and performance-to-outcome expectancy probabilities must be greater than zero.Both effort-to-performance expectancy and performance-to-outcome expectancy probabilities must be greater than zero. The sum of the valences must be greater than zero.The sum of the valences must be greater than zero. Elements of Expectancy Theory (cont’d) –Valence An index of how much an individual values a particular outcome.An index of how much an individual values a particular outcome. It is the attractiveness of the outcome to the individual.It is the attractiveness of the outcome to the individual. –Attractive outcomes have positive valences and unattractive outcomes have negative valences. –Outcomes to which an individual is indifferent have zero valences. –For motivated behavior to occur: Both effort-to-performance expectancy and performance-to-outcome expectancy probabilities must be greater than zero.Both effort-to-performance expectancy and performance-to-outcome expectancy probabilities must be greater than zero. The sum of the valences must be greater than zero.The sum of the valences must be greater than zero.

17. Copyright © by Houghton Mifflin Company. All rights reserved. 16–17 Process Perspectives on Motivation (cont’d) The Expectancy Model of Motivation Environment MotivationEffortPerformance Ability Outcome Valence OutcomeValence OutcomeValence Figure 16.4

18. Copyright © by Houghton Mifflin Company. All rights reserved. 16–18 Using Reward Systems to Motivate Performance Designing Effective Reward (cont’d) –Reward system must meet an individual’s needs. –Rewards should compare favorably with other organizations. –Distribution of rewards must be perceived to be equitable. –Reward system must recognize different needs. New Approaches –Merit system A reward system whereby people get different pay raises at the end of the year depending on their overall job performance.A reward system whereby people get different pay raises at the end of the year depending on their overall job performance. –Incentive system A reward system whereby people get different pay amounts at each pay period in proportion to what they do.A reward system whereby people get different pay amounts at each pay period in proportion to what they do. Designing Effective Reward (cont’d) –Reward system must meet an individual’s needs. –Rewards should compare favorably with other organizations. –Distribution of rewards must be perceived to be equitable. –Reward system must recognize different needs. New Approaches –Merit system A reward system whereby people get different pay raises at the end of the year depending on their overall job performance.A reward system whereby people get different pay raises at the end of the year depending on their overall job performance. –Incentive system A reward system whereby people get different pay amounts at each pay period in proportion to what they do.A reward system whereby people get different pay amounts at each pay period in proportion to what they do.