2. Motivation and Performance
chapter thirteen
Motivation and Performance
McGraw-Hill/Irwin
Contemporary Management, 5/e
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

3. Learning Objectives
Explain what motivation is and why managers need to be concerned about it.
Describe from the perspectives of expectancy theory and equity theory what managers should do to have a highly motivated workforce.
Explain how goals and needs motivate people and what kinds of goals are especially likely to result in high performance.

4. Learning Objectives
Identify the motivation lessons that managers can learn from operant conditioning theory and social learning theory.
Explain why and how managers can use pay as a major motivation tool.

5. The Nature of Motivation
The psychological forces that determine the direction of a person’s behavior in an organization, a person’s level of effort, and a person’s level of persistence
Explains why people behave the way they do in organizations

6. The Nature of Motivation
Direction - possible behaviors the individual could engage in
Effort - how hard the individual will work
Persistence - whether the individual will keep trying or give up

7. Question? What behavior is performed for its own sake?
Intrinsically Motivated Behavior
Extrinsically Motivated Behavior
Centrally Motivated Behavior
Inherently Motivated Behavior
The correct answer is “A” - Intrinsically Motivated Behavior. See next slide

8. The Nature of Motivation
Intrinsically Motivated Behavior
Behavior that is performed for its own sake.
The source of the motivation that comes from actually performing the behavior.
The sense of accomplishment and achievement derived from doing the work itself

9. The Nature of Motivation
Extrinsically Motivated Behavior
Behavior that is performed to acquire material or social rewards or to avoid punishment.
The source of the motivation is the consequences of the behavior and not the behavior itself.

10. Outcomes and Inputs Outcome Input
Anything a person gets from a job or an organization
Pay, job security, autonomy, accomplishment
Input
Anything a person contributes to his or her job or organization
Time, effort, skills, knowledge, work behaviors

11. The Motivation Equation
Figure 13.1

12. Expectancy Theory Motivation will be high when workers believe:
High levels of effort will lead to high performance.
High performance will lead to the attainment of desired outcomes.

13. Expectancy Theory Major Factors of Motivation
Expectancy - the belief that effort (input) will result in a certain level of performance
Instrumentality - the belief that performance results in the attainment of outcomes
Valence - how desirable each of the available outcomes from the job is to a person

14. Expectancy, Instrumentality, and Valence
Figure 13.2

15. Expectancy Theory
Figure 13.3

16. Need Theories Need Need Theories
A requirement or necessity for survival and well-being.
Need Theories
People are motivated to obtain outcomes at work that will satisfy their needs
Managers must determine what needs a worker wants satisfied and ensure that a person receives the outcomes when performing well.

17. Maslow’s Hierarchy of Needs
Self-
actualization
Realize one’s
full potential
Use abilities
to the fullest
Esteem
Feel good
about oneself
Promotions
and recognition
Belongingness
Social
interaction, love
Interpersonal
relations, parties
Safety
Security, stability
Job security,
health insurance
Physiological
Food, water,
shelter
Basic pay level
to buy items
Needs
Description
Examples
Lower-level needs must be satisfied before higher-level needs are addressed.
Highest-level needs
Lowest-level needs
Table 13.1

18. Adequate pay for necessities
Alderfer’s ERG Theory
After lower level needs satisfied, person seeks higher needs. When
unable to satisfy higher needs, lower needs motivation is raised.
Growth
Self-development,
creative work
Continually
improve skills
Relatedness
Interpersonal
relations, feelings
Good relations,
accurate feedback
Existence
Food, water,
clothing, and shelter
Adequate pay for necessities
Needs
Description
Examples
Highest-level needs
Lowest-level needs
Table 13.2

19. Alderfer’s ERG Theory
As lower level needs become satisfied, a person seeks to satisfy higher-level needs
A person can be motivated by needs at more than one level at the same time
When people experience need frustration they will focus on satisfying the needs at the next-lowest level

20. Herzberg’s Motivation-Hygiene Theory
Focuses on outcomes that lead to higher motivation and job satisfaction, and those outcomes that can prevent dissatisfaction.
Unsatisfied hygiene needs create dissatisfaction; satisfaction of hygiene needs does not lead to motivation or job satisfaction.

21. Herzberg’s Motivation-Hygiene Theory
Motivator needs relate to the nature of the work itself—autonomy, responsibility, interesting work.
Hygiene needs are related to the physical and psychological context of the work—comfortable work environment, pay, job security.

22. McClelland’s Needs for Achievement, Affiliation, and Power
Need for Achievement
A strong need to perform challenging tasks well and meet personal standards for excellence

23. McClelland’s Needs for Achievement, Affiliation, and Power
Need for Affiliation
Concerned about establishing and maintaining good interpersonal relations, being liked, and having the people around him get along with each other
Need for Power
A desire to control or influence others

24. Equity Theory Equity Theory
Focuses on people’s perceptions of the fairness (or lack of fairness) of their work outcomes in proportion to their work inputs.

25. Equity Theory
A relative outcome to input ratio comparison to oneself or to another person (referent) perceived as similar to oneself.
Equity exists when a person perceives that their outcome/input ratio to be equal to the referent’s ratio.
If the referent receives more outcomes, they should also give more inputs to achieve equity.

26. Outcomes < Outcomes Outcomes > Outcomes
Equity Theory
Condition
Person Referent
Example
Equity
Outcomes = Outcomes
Inputs Inputs
Worker contributes
more inputs but also
gets more outputs
than referent
Underpayment
Outcomes < Outcomes
gets the same outputs
as referent
Overpayment
Outcomes > Outcomes
same inputs but also
Table 13.3

27. Equity Theory
Inequity exists when worker’s outcome/input ratio is not equal to referent.
Underpayment inequity: ratio is less than the referent.
Workers feel they are not getting the outcomes they should for their inputs.
Overpayment inequity: ratio is higher than the referent.
Workers feel they are getting more outcomes than they should for their inputs.

28. Equity Theory
Restoring Equity: Inequity creates tension in workers causing them to attempt to restore equity.
In underpayment, workers may reduce input levels to correct (rebalance) the ratio or seek a raise.
In overpayment, workers may change the referent person and readjust their ratio perception.
If inequity persists, workers will often choose to leave the organization.

29. Goal Setting Theory
Focuses on motivating workers to contribute their inputs to their jobs and organizations
Considers how managers can ensure that workers focus their inputs in the direction of high performance and the achievement of organizational goals.

30. Goal Setting Theory Goal
What a person is trying to accomplish through his efforts and behaviors
Must be specific and difficult
Goals point out what is important to the firm.
Workers should be encouraged to develop action plans to attain goals.

31. Goal Setting Theory
Goals motivate people to contribute more inputs to their jobs
Goals help people focus their inputs in the right direction

32. Learning Theories
Managers can increase employee motivation and performance by the ways they link the outcomes that employees receive to the performance of desired behaviors in an organization and the attainment of goals

33. Learning Theories Learning
A relatively permanent change in person’s knowledge or behavior that results from practice or experience.

34. Operant Conditioning Theory
People learn to perform behaviors that lead to desired consequences and learn not to perform behaviors that lead to undesired consequences.
Linking specific behaviors to the attainment of specific outcomes can motivate high performance and prevent behaviors that detract from organizational effectiveness.

35. Question?
Which operant conditioning tool administers an undesired consequence to immediately stop a dysfunctional behavior?
Positive reinforcement
Negative reinforcement
Extinction
Punishment
The correct answer is “D” – punishment. See slide 13-39

36. Operant Conditioning Tools
Positive Reinforcement
Gives people outcomes they desire when they perform organizationally functionally behaviors
Positive reinforcers: Pay, praises, or promotions

37. Operant Conditioning Tools
Negative Reinforcement
Eliminating undesired outcomes once the functional behavior occurs
Negative reinforcers: criticisms, pay cuts, suspension

38. Operant Conditioning Tools
Extinction
Curtailing the performance of a dysfunctional behavior by eliminating whatever is reinforcing it.
Punishment
Administering an undesired/negative consequence to immediately stop a dysfunctional behavior.
Manager administers an undesired consequence to worker (verbal reprimand, demotion, pay cut).

39. Avoiding Side Effects of Punishment
Downplay the emotional element involved
Try to punish dysfunctional behaviors as soon as they occur
Try to avoid punishing someone in front of others

40. Organizational Behavior Modification
Managers systematically apply operant conditioning techniques to promote the performance of organizationally functional behaviors and discourage the performance of dysfunctional behaviors

41. Organizational Behavior Modification
Used to improve productivity, efficiency, attendance, punctuality, safe work practices, and customer service
Sometimes questioned because of lack of relevance to certain work behaviors
To critics it is overly controlling and robs workers of their dignity, individuality, freedom of choice and creativity

42. Steps in Organizational Behavior Modification
Figure 13.4

43. Social Learning Theory
Proposes that motivation results not only from direct experience of rewards and punishments but also from a person’s thoughts and beliefs

44. Social Learning Theory
Vicarious Learning (Observational Learning)
Occurs when a person becomes motivated to perform a behavior by watching another person perform the behavior and be positively reinforced for doing so

45. Social Learning Theory
Self-Reinforcement
Any desired or attractive outcome or award that a person can give himself or herself for good performance.
Self-efficacy
A person’s belief about his or her ability to perform a behavior successfully.

46. Pay and Motivation Pay as a Motivator
Expectancy: Instrumentality, the association between performance and outcomes, must be high for motivation to be high.
Need Theory: pay is used to satisfy many needs.
Equity Theory: pay is given in relation to inputs.

47. Pay and Motivation Pay as a Motivator
Goal Setting Theory: pay is linked to attainment of goals.
Learning Theory: outcomes (pay), is distributed upon performance of functional behaviors.

48. Merit Pay and Performance
Merit Pay Plan
A compensation plan that bases pay on based on individual, group and/or organization performance.
Individual plan: when individual performance (sales) can accurately measured.

49. Merit Pay and Performance
Merit Pay Plan
Group plan: when group that works closely together is measured and rewarded as a group.
Organization plan: when group or individual outcomes not easily measured.

50. Salary Increase or Bonus?
Motivational Value of a Bonus Is Higher When:
Salary levels are unrelated to current performance.
Changes in other compensation items (cost of living, seniority) are not having a large effect in increasing compensation.
Salaries rarely change and performance does.

51. Salary Increase or Bonus?
Benefits of Using Bonuses
Do not become permanent part of compensation
Are more directly tied to current performance
Provide more flexibility in distributing rewards

52. Salary Increase or Bonus?
Employee Stock Option
A financial instrument that entitles the bearer to buy shares of an organization’s stock at a certain price during a certain period of time or under certain conditions.
Uses
To attract high-level managers
To motivate employee performance through ownership in the firm

53. Discussion Question? Which merit pay plan is the most effective?
Piece rate
Commission
Scanlon plan
Profit sharing
There is no one best answer. Students should discuss the advantages and disadvantages of each. Students should also discuss a typical firm that might use each plan.

54. Examples of Merit Pay Plans
Piece-rate Pay
Employee’s pay is based on the number of units that the employee produces.
Commission Pay
Employee’s pay is based on a percentage of sales that the employee makes.
Organization-based Merit Plans
Scanlon plan—focuses on reduced expenses or cutting costs
Profit sharing—employees receive a share of an organization’s profits

55. Movie Example: Mr. Holland’s Opus
As a manager, is it important for Principal Jacobs to know the motivations of her subordinates?
Mr. Holland’s Opus
Glenn Holland (Richard Dreyfuss) has always wanted to write a great American symphony. To pay the bills he takes a job as a high school music teacher, thinking it will be a temporary place. Along the way he discovers the importance of family and providing young minds a compass. His opus is not “notes on a page”, but the thousands of young lives he has touched.
In this scene, Principal Jacobs (Olympia Dukakis) is talking to Mr. Holland (Richard Dreyfuss) about his reasons for being a teacher.
What is Mr. Holland’s motivation?
Is Mr. Holland driven by achievement, affiliation or power?
As a manager, is it important for Principal Jacobs to know the motivation of her subordinates?