1. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-1 Motivation  Worker performance depends on  Motivation  Ability  Work environment  Motivation is the set of forces that compel behavior  Money may serve as a psychological & financial motivator

2. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-2 Motivation and Money  Taylor’s scientific management (1911)  Workers are motivated mainly by money  Suggested piece-rate system  Maslow’s theory (1943)  People are motivated by hierarchy of needs, which includes money  Herzberg (1959)  Money either dissatisfies or is neutral in its effect

3. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-3 Monetary Incentives  Bonuses: Cash & stock options  Profit sharing: Distribution of profits  Gain sharing: Reward for company performance (e.g., cost reduction)  Scanlon plan is most popular (cost reduction.)  Incentive systems  Measured daywork: Pay based on standard time  Piece rate: Pay based on pieces done

4. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-4 Maslow’s Hierarchy of Needs Self-Actualization Use of abilities Self-fulfillment Social Group Interaction Job Status Safety Physical Safety Job Security Physiology Food Shelter Ego Self Respect

5. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-5 Herzberg’s Motivation/Hygiene Factors ©Achievement ©Recognition ©Advancement ©Work itself ©Responsibility ©Personal growth ©Company policies and administration ©Supervision - technical ©Working conditions ©Interpersonal relations - supervision ©Status ©Job security ©Salary Job Dissatisfiers (Hygiene) Job Satisfiers (Motivators)

6. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-6 Job Characteristics  Motivation  Satisfaction  Job performance  Absenteeism & turnover Core Job Characteristics Psychological States Personal & Work Outcomes Hackman & Oldham