1. Chapter 8: Motivation: Learning and rewards
This chapter reviews the fundamentals of reinforcement and social learning theory that every managerial leader needs to know.
Understanding the pay and performance management system is essential for leader effectiveness as a motivator.

2. Reinforcement Theory Based on the law of effect
Past actions leading to positive outcomes tend to be repeated,
whereas past actions that led to negative outcomes will diminish.
Led to the development of operant conditioning 4
B.F. Skinner is most associated with operant conditioning and he conducted numerous experiments with animals such as rats to understand how behavior is influenced by rewards and punishments
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

3. REINFORCERS The two kinds of reinforcement that increase behavior:
Positive reinforcement
Negative reinforcement
Positive reinforcement – favorable event or outcome (e.g., praise or bonus)
Negative reinforcement – removal of an unpleasant event or outcome (e.g., ending daily criticism when and employee shows up to work on time)
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

4. PUNISHMENT
The presentation of an adverse event causes a decrease in the behavior it follows; there are two kinds of punishment:
Punishment by application
Punishment by removal (also called extinction)
Punishment by application – unfavorable event or outcome (e.g., writing a letter of reprimand to an employee’s file)
Punishment by removal (also called extinction) – pleasant event or outcome is removed (e.g., withholding praise)
Remember: Reinforcers increase behavior, Punishment decreases behavior
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

5. CONTINGENCIES OF Reinforcement
Figure 8.1 on page 223
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

6. SCHEDULES OF REINFORCEMENT
Continuous - reward every response
Not seen often in organizations
Useful during the learning process (training)
Partial reinforcement - reward on a more random basis
Based on time (interval) or the number of times the response is given (ratio)
Fixed or variable (random)
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

7. Schedules of Partial Reinforcement
Figure 8.2 on page 198
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

8. Organizational behavior modification (OB Mod)
Used to increase performance and reduce absenteeism
Meta-analysis found that OB Mod increased task performance by 17%
However, results of interventions using OB Mod were stronger in manufacturing than service organizations
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

9. ABC Analysis Antecedents: What is causing the behavior?
Behavior: What is the current behavior? What is the desired behavior?
Consequences: What is currently reinforcing the behavior? What needs to be changed?
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

10. APPLIED BEHAVIOR MODIFICATION EXAMPLE
Figure 8.4 on page 200
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

11. Social Learning Theory
Extends operant conditioning
People can learn from watching other people succeed or fail.
Known as observational learning (or modeling)
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

12. THE MODELING PROCESS 1. Attention 2. Retention 3. Reproduction
4. Motivation
Attention – pay attention to behavior, especially if it is interesting or new
Retention – information stored for access in the future
Reproduction – behavior is imitated, practicing leads to improvement
Motivation – incentives do increase the modeling process.
Example: A student pays attention to another student who makes interesting comments in class. He remembers this behavior and learns that the student who participates receives extra credit points. He begins to imitate the behavior by participating.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

13. Intrinsic vs. Extrinsic Rewards
Intrinsic motivation
Gain satisfaction from the task itself
Extrinsic motivation
Performance  outcome expectancies
Satisfaction comes from the extrinsic reward (e.g., money)
Does paying someone to do a job reduce intrinsic motivation? Research says yes.
Experiments were designed in which college students were paid to do a pleasurable activity. This reduced their ratings of how fun the task was. These experiments have been replicated in work organizations. A meta-analysis of 128 studies found that extrinsic rewards reduce intrinsic motivation.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

14. Relationship Between Intrinsic and Extrinsic Rewards
Extrinsics in service of intrinsics
Motivation–work cycle match
g-XgUCA8
Extrinsics in service of intrinsics – extrinsic rewards make employees feel more competent if their autonomy is not undermined
Motivation–work cycle match – innovation occurs in phases; intrinsic rewards may be more important in the early stages of a project when ideas are generated
There is a synergistic effect between intrinsic and extrinsic rewards
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

15. What Money Can and Cannot Do
Hospital study: pay level practices and pay structures combined to affect:
Resource efficiency, patient care outcomes, and financial performance
On the other hand, tying pay directly to performance can have dysfunctional or even unethical consequences.
Example: Green Giant, a producer of frozen and canned vegetables, implemented a pay system that rewarded employees with money for removing insects from vegetables. It was later discovered that employees were bringing insects from home and putting them into the vegetables to receive the bonuses.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

16. Pay Dispersion
When employees receive different levels of rewards for individual efforts
Can cause jealously among employees and/or harm team performance
If pay dispersion creates pay inequity due to discrimination, it may result in litigation under the Equal Pay Act.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

17. Problems with Performance Reviews
Perceptions of bias in the process
Fear of punishment
Time consumed by the process
Employees don’t like negative feedback.
Employees may tune out the boss once the rating is known.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

18. The Solution Reward for the results AND the behaviors
This way, desired results are achieved, and the proper behaviors occur
Reduces potential unethical or harmful behavior
Other reward approaches:
Profit-sharing – employee bonuses based on reaching financial target such as net income
Stock options – variation of profit sharing, employees given stock
Gain-sharing – compensation is tied to unit-level performance, where revenue increases (or cost savings) are shared with employees
Recommendation: Offer mixed or aggregated compensation systems, which include individual merit pay, group incentives, and gain sharing to offset the advantages and disadvantages of different approaches.
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.

19. Leadership Implications
Leaders motivate followers with
Frequent feedback– and encourage feedback- seeking
Proper rewards – link rewards to behavior (operant conditioning)
Implementing a fair and rewarding compensation system – learn about the organizations reward system and how it works to maximize the benefits from using it
Scandura, Essentials of Organizational Behavior. © 2016, SAGE Publications.