1. Motivating and Rewarding Employees
PART IV: Leading 10
Chapter 10
Motivating and Rewarding Employees
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2. Motivation And Individual Needs
The willingness to exert high levels of effort to reach organizational goals, conditioned by the effort’s ability to satisfy some individual need
Need
An internal state that makes certain outcomes appear attractive
Many people view motivation incorrectly: thinking it is a personal trait that some have and some don’t. In reality, motivation results from the interaction between the individual and the situation.
Motivation is the willingness to exert a persistent and high level of effort toward organizational goals, conditioned by the effort’s ability to satisfy an individual need. Motivation is a need-satisfying process.
A need is some internal state that makes certain outcomes appear attractive. An unsatisfied need creates tension; this tension drives a person to satisfy the need. A motivated employee works intensely and persistently.
However, effort and persistence will not pay off unless they are channeled in a direction that benefits the organization.
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3. Early Theories Of Motivation
Hierarchy of needs theory (Maslow)
There is a hierarchy of five human needs; as each need becomes satisfied, the next need becomes dominant.
Physiological: food, drink, shelter, sex
Safety: physical safety
Social: affiliation with others, affection, friendship
Esteem: Internal (self-respect, autonomy, and achievement); external (status, recognition, and attention)
Self-actualization: personal growth and fulfillment
According to Abraham Maslow, within every human being, the following hierarchy of needs exists. The first three are deficiency needs because they must be satisfied if the individual is to be healthy and secure. The last two are growth needs because they are related to the development and achievement of one’s potential. As each of these needs becomes substantially satisfied, the next higher need becomes dominant. .
Physiological. Hunger, thirst, shelter, sex, and other survival needs.
Safety. Security, stability, and protection from physical or emotional harm.
Social. Social interaction, affection, companionship, and friendship.
Esteem. Self-respect, autonomy, achievement, status, recognition, and attention.
Self-actualization. Growth, self-fulfillment, and achieving one’s potential
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4. Early Theories Of Motivation (cont’d)
Theory X (McGregor)
The assumption that employees dislike work, are lazy, seek to avoid responsibility, and must be coerced to perform
Theory Y
The assumption that employees are creative, seek responsibility, and can exercise self-direction
Douglas McGregor said that managers hold one of two sets of assumptions about human nature: either Theory X or Theory Y.
No hard evidence confirms that either set of assumptions is universally true. It is more likely that the assumptions of Theory X or Theory Y may or may not be appropriate, depending on the situation at hand.
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5. Early Theories Of Motivation (cont’d)
Motivation-Hygiene theory (Herzberg)
Intrinsic factors are related to job satisfaction and extrinsic factors are related to job dissatisfaction
Hygiene factors
Factors, such as working conditions and salary, that, when adequate, may eliminate job dissatisfaction but do not necessarily increase job satisfaction.
Motivators
Factors, such as recognition and growth, that can increase job satisfaction.
Frederick Herzberg asked workers to describe situations in which they felt either good or bad about their jobs. His findings are called motivation-hygiene theory. Herzberg asserted that intrinsic factors are related to job satisfaction whereas extrinsic factors are associated with dissatisfaction.
So, he called company policy, supervision, interpersonal relations, working conditions, and salary hygiene factors. When these factors are adequate, people will not be dissatisfied; however, they will not be satisfied either.
He believed that achievement, recognition, the work itself, growth, and responsibility are motivators because people find them intrinsically rewarding.
Based on his findings, Herzberg proposed the existence of a dual continuum: the opposite of “satisfaction” is “no satisfaction,” and the opposite of “dissatisfaction” is “no dissatisfaction.”
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6. Contemporary Theories Of Motivation
Three-needs theory (McClelland)
The needs for achievement, power, and affiliation are major motives in work
Need for achievement (nAch): the drive to excel, to achieve in relation to a set of standards, to strive to succeed.
Need for power (nPow): The need to make others behave in a way that they would not have behaved otherwise.
Need for affiliation (nAff): The desire for friendly and close interpersonal relationships.
David McClelland proposed the three-needs theory which asserts that there are three relevant motives or needs that motivate behavior in the workplace:
1. The need for achievement (nAch) is the need to excel, to achieve in relation to a set of standards, to succeed.
2. The need for power (nPow) is the need to shape and control the behavior of others.
3. The need for affiliation (nAff) is the desire for interpersonal relationships. He believed that these needs are acquired from the culture of a society.
Some people have a compelling drive to succeed, but they strive for personal achievement, not for the rewards of success, per se (nAch). These high achievers seek situations in which they can take responsibility for solving problems, can receive rapid unambiguous feedback on performance, and can set moderately challenging goals.
Persons with a high need for power (nPow) desire to be influential, in charge, and seek competitive, status-oriented situations.
Those who have a high need for affiliation (nAff) want to be liked and accepted by others; so, they strive for friendships, cooperation, and high-trust situations.
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7. Contemporary Theories Of Motivation (cont’d)
Equity theory (Adams)
Employees perceive what they get from a job situation (outcomes) in relation to what they put into it (inputs) and then compare their input-outcome ratio with the input-outcome ratios of relevant others.
Equity theory proposes that inequity creates tension, and that this tension can cause an employee to seek fairness. Workers compare their job inputs and outcomes with others.
There are three possible perceptions:
1. Inequity due to being under-rewarded.
2. Equity
3. Inequity due to being over-rewarded.
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8. Contemporary Theories Of Motivation: Equity Theory (cont’d)
Referent
In equity theory, the other persons, the systems, or the personal experiences against which individuals compare themselves to assess equity.
The choice of a particular set of referents is related to the information available about referents as well as to the perceived relevance.
There are four referents that an employee can use:.
Self-inside: an employee’s experiences in a different position inside the organization.
Self-outside: an employee’s experiences in a position outside of the organization.
Other-inside: an employee’s perception of persons inside the organization.
Other-outside: an employee’s perception of persons outside of the organization.
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9. Equity Theory When employees perceive an inequity they may:
Distort either their own or others’ inputs or outcomes.
Behave so as to induce others to change their inputs or outcomes.
Behave so as to change their own inputs or outcomes.
Choose a different comparison referent.
Quit their job.
Workers who perceive an inequity will react in one of the six following ways: change inputs, change outcomes, distort perceptions of self, distort perceptions of others, choose a different referent, or leave the field
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10. Job Design And Motivation
Job characteristics model (JCM)
Hackman and Oldham’s job description model:
The five core job dimensions are skill variety, task identity, task significance, autonomy, and feedback.
Internal rewards are obtained when:
An employee learns (knowledge of results) through (feedback) that he or she personally (experienced responsibility through autonomy of work) has performed well on a task that he or she cares about (experienced meaningfulness through skill variety, task identity, and/or task significance).
The Job Characteristics Model (JCM) proposes that any job can be described in terms of five core job dimensions. The core dimensions can be combined into a single index, the Motivating Potential Score (MPS), which is calculated as follows:
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11. Core Job Dimensions Skill variety Task identity Task significance
The degree to which the job requires a variety of activities so the worker can use a number of different skills and talents
Task identity
The degree to which the job requires completion of a whole and identifiable piece of work
Task significance
The degree to which the job affects the lives or work of other people
Skill variety. Does the job require workers to use different skills and abilities?
Task identity. Does the job require workers to complete identifiable pieces of work?
Task significance. Does the job have a significant impact on the lives or work of others?
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12. Core Job Dimensions (cont’d)
Autonomy
The degree to which the job provides freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out
Feedback
The degree to which carrying out the work activities required by the job results in the individual’s obtaining direct and clear information about the effectiveness of his or her performance
Autonomy. Does the job allow workers substantial freedom, discretion, and independence?
Feedback. Does the job allow workers to obtain direct, clear performance information?
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13. Expectancy Theory (Vroom)
A comprehensive theory of motivation that an individual tends to act in a certain way, in the expectation that the act will be followed by given outcome, and according to the attractiveness of that outcome to the individual.
The extent to which individuals are motivated to perform to get a reward of value to them is based on their belief that their performance will result in the reward they want.
Expectancy theory argues that an employee will be motivated to produce more when he or she believes that the effort will lead to a good performance appraisal; that a good appraisal will lead to organizational rewards; and that the rewards will satisfy the employee’s personal goals.
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14. Expectancy Theory (cont’d)
Emphasizes self interest in the alignment of rewards with employee wants.
Addresses why employees view certain outcomes (rewards) as attractive or unattractive.
Emphasizes the connections among expected behaviors, rewards, and organizational goals.
Is concerned with individual perceptions and the provision of feedback.
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15. Expectancy Relationships (Linkages)
Effort–performance
The perceived probability that exerting a given amount of effort will lead to performance
Performance–reward
The belief that performing at a particular level will lead to the attainment of a desired outcome
Attractiveness
The importance placed on the potential outcome or reward that can be achieved on the job.
This theory focuses on three relationships.
1. The effort-performance relationship is the probability perceived by the individual that exerting a given amount of effort will lead to performance.
2. The performance-rewards relationship is the degree to which an individual believes that performing at a particular level will lead to the attainment of a desired outcome.
3. The rewards-personal goals relationship is the degree to which the rewards of an organization satisfy an individual’s personal goals or needs and the attractiveness (valence) of those rewards.
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16. Flexibility: The Key To Motivating A Diverse Workforce
Recognizing the different personal needs and goals of individuals
Providing a diversity of rewards to match the varied needs of employees
Being flexible in accommodating the cultural differences within a diverse workforce when attempting to motivate workers.
When motivating a diverse workforce, flexibility is the key. Employees have different needs and goals that they hope to satisfy through work. So, the rewards system must be flexible to meet their diverse needs. Managers must also be sensitive to cultural differences. Most of the theories of motivation were developed by psychologists who were studying American workers. For instance, theories based on self-interest that are applicable in cultures that value capitalism and individualism may be of questionable value in collectivist cultures. Managers cannot assume that motivation concepts are universally applicable, so they must adjust motivation techniques according to the culture.
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17. Motivation and Compensation
Pay-for-performance programs
Compensation plans such as piece-rate plans, profit sharing, and the like that pay employees on the basis of performance measures not directly related to time spent on the job.
Before most people do anything, they look for a pay-off or reward. Therefore, managers must consider how pay can be used to motivate high levels of performance in the workplace.
Rather than paying workers for time on the job, pay-for-performance programs, such as profit sharing, lump sum bonuses, or wage incentive plans, piece rate plans, pay employees according to some performance measure.
Such pay programs are compatible with expectancy theory because workers will perceive a strong relationship between their performance and their rewards.
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18. Compensation Alternatives
Competency-based compensation
A program that pays and rewards employees on the basis of skills, knowledge, or behaviors they possess
Broad-banding
Pre-set pay level, based on the degree to which competencies exist and allow an employee to contribute to the organization.
Stock options
A program that allows employees to purchase company stock at a fixed price and profit when company performance increases its stock value.
A competency-based compensation program pays and rewards employees on the basis of their skills, knowledge, or behaviors.
One of the toughest challenges a manager can face is motivating minimum-wage workers. Money is important. But, managers should also use other rewards: for instance, employee recognition programs, praise, and employee empowerment.
Professional and technical employees are loyal to their fields of expertise, typically more so than to their employers.
To stay current, they need to update their knowledge regularly. They rarely define their workweek in terms of 9-to-5 and 5 days a week. They tend to be paid well and enjoy what they do; so money and promotions are low on their priority list. They like challenging jobs and want others to think that what they are doing is important. Managers should give professional and technical employees new assignments and challenging projects. They should be given autonomy and rewarded with educational opportunities and recognition.
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19. Work-Life Balance: Alternative Work Schedules
Flextime
A scheduling option that allows employees select what their work hours will be within some specified parameters.
Job sharing
A type part-time work that allows two or more workers to split a traditional 40-hour-a-week job
Telecommuting
A system of working at home on a computer that is linked to the office
Flextime allows employees some discretion over when they arrive and leave work. While they still work a specified number of hours, workers can vary the hours within constraints. Flextime offers several benefits: improved employee motivation and recruitment of higher qualified, more diverse workers. But, flextime is not applicable to every job. It works best with clerical tasks that require minimal employee contact with persons outside of the organization.
A special type of part-time work, job sharing allows two or more individuals to split a traditional 40-hour-a-week job. Therefore, the organization can draw upon the talents of more than one person for a given job and acquire skilled workers who are only available part-time. However, it is hard to find compatible employees who can coordinate job responsibilities.
No commute time, flexible hours, no dress code, and few interruptions are some of the benefits of telecommuting: employees working at home on a computer that is linked to their office.
The long-term future of telecommuting depends on the answers to some questions:
Will work-at-home employees be at a disadvantage in office politics? Will they be less likely to be considered for pay raises or promotions? Will non-work distractions reduce productivity?
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20. Employee Empowerment: How Entrepreneurs Motivate Employees
Giving employees power by:
Allowing them to complete the whole job.
Having employees work together across departments and functions in the organization.
Using participative decision making in which employees provide input into decisions.
Delegating decisions and duties, turning over the responsibility for carrying them out to employees.
Redesigning their jobs so they have discretion over the way they do their work.
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