1. Management, 6e Schermerhorn
Prepared by
Cheryl Wyrick
California State Polytechnic University Pomona
John Wiley & Sons, Inc

2. COPYRIGHT
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3. Chapter 14 Motivation and Rewards
Planning Ahead
Why is motivation important?
What are the different types of individual needs?
What are the insights of process theories of motivation?
What role does reinforcement play in motivation?
What are the trends in motivation and compensation?
Schermerhorn - Chapter 14

4. Importance of Motivation
Reward
work outcome of positive value to the individual
motivational work settings are rich in rewards for productive workers
Schermerhorn - Chapter 14

5. Importance of Motivation
Motivation and Rewards
Extrinsic Rewards
value outcomes given by one person to another
examples include:
bonuses
promotions
special assignments
awards
Schermerhorn - Chapter 14

6. Importance of Motivation
Motivation and Rewards
Intrinsic Rewards
self-administered
occur as part of the job itself
examples include:
feelings of competency
personal development
self-control
Schermerhorn - Chapter 14

7. Importance of Motivation
Rewards and Performance
respect diversity
clearly understand what people want from work
allocate rewards to satisfy the interests of both individuals and the organization
Schermerhorn - Chapter 14

8. Content Theories of Motivation
Hierarchy of Needs Theory
lower order and higher order needs affect behavior
deficit principle
a satisfied need is not a motivator of behavior
progression principle
a need at one level does not become activated until the next lower need is satisfied
Schermerhorn - Chapter 14

9. Content Theories of Motivation
ERG Theory
Alderfer’s three needs
existence - physiological and material well-being
relatedness - satisfying interpersonal relationships
growth - continued psychological growth and development
any/all needs can influence behavior at one time
frustration-regression principle
already satisfied need can influence behavior when a higher need cannot be satisfied
Schermerhorn - Chapter 14

10. Content Theories of Motivation
Two-Factor Theory
Herzberg
satisfier factors (job content)
things related to the nature of the job itself
source of job satisfaction and motivation
hygiene factors (job context)
things related more to the work setting
source of job dissatisfaction
Schermerhorn - Chapter 14

11. Content Theories of Motivation
Acquired Needs Theory
McClelland
Need for Achievement (nAch)
desire to do something better, solve problems, master complex tasks
Need for Power (nPower)
desire to control, influence, or be responsible for others
Need for Affiliation (nAff)
desire to establish and maintain friendly relations with others
Schermerhorn - Chapter 14

12. Content Theories of Motivation
Acquired Needs Theory (con’t)
People develop these needs over time
Each need is associated with a distinct set of work preferences
managers are encouraged to recognize the strength of each need within themselves and others
create work environments responsive to the strength of each need
Schermerhorn - Chapter 14

13. Content Theories of Motivation
Acquired Needs Theory (con’t)
Workers high in (nAch) prefer
individual responsibility for results
achievable but challenging goals
feedback on performance
Schermerhorn - Chapter 14

14. Content Theories of Motivation
Acquired Needs Theory (con’t)
Workers high in (nPower) prefer
control over other people
to have an impact on people and events
to bring public recognition and attention
Schermerhorn - Chapter 14

15. Content Theories of Motivation
Acquired Needs Theory (con’t)
Two types of power
personal
manipulation for personal gratification
social
directed towards group or organizational objectives
Schermerhorn - Chapter 14

16. Process Theories of Motivation
Equity Theory
Adams
perceived inequity is a motivating state
people are motivated to restore equity
change
work inputs
rewards received
comparison points
situation
Schermerhorn - Chapter 14

17. Process Theories of Motivation
Equity Theory (con’t)
Pay is a common source of equity controversy
gender equity
women earn an average of 75% of what men earn
comparable worth
jobs of similar value based on required education, training, and skills should receive similar pay
Schermerhorn - Chapter 14

18. Process Theories of Motivation
Expectancy Theory
Vroom
expectancy - working hard will result in desired level of performance
instrumentality - successful performance will be followed by rewards
valence - value of rewards and other work related outcomes
Schermerhorn - Chapter 14

19. Process Theories of Motivation
Expectancy Theory (con’t)
Motivation (M), expectancy (E), instrumentality (I), and valence (V) are related to one another in a multiplicative fashion
M = E x I x V
If either E, I or V is low, motivation will be low!
Schermerhorn - Chapter 14

20. Process Theories of Motivation
Goal-Setting Theory
Locke
task goals can be motivating if
properly set
well managed
goals clarify role expectations
Schermerhorn - Chapter 14

21. Process Theories of Motivation
Goal-Setting Theory (con’t)
Management by Objectives (MBO)
joint goal setting by managers and employees
participation option
how to achieve goals instead of what the goals are
Schermerhorn - Chapter 14

22. Reinforcement Theory of Motivation
Reinforcement Strategies
Skinner
Operant Conditioning
applying law of effect to control behavior by manipulating its consequences
Schermerhorn - Chapter 14

23. Reinforcement Theory of Motivation
Reinforcement Strategies
positive reinforcement
negative reinforcement
punishment
extinction
Schermerhorn - Chapter 14

24. Reinforcement Theory of Motivation
Positive Reinforcement
increase the frequency of desirable behavior by making a pleasant consequence contingent on its occurrence
Schermerhorn - Chapter 14

25. Reinforcement Theory of Motivation
Positive Reinforcement (con’t)
Successful implementation is based on
law of contingent reinforcement
reward delivered only if desired behavior is exhibited
law of immediate reinforcement
the more immediate the delivery of a reward, the more reinforcement value it has
Schermerhorn - Chapter 14

26. Reinforcement Theory of Motivation
Negative Reinforcement
increases the frequency of desirable behavior by making the avoidance of unpleasant consequence possible
example: nagging until a task is completed
Schermerhorn - Chapter 14

27. Reinforcement Theory of Motivation
Punishment
eliminating undesired behavior by administering an unpleasant consequence upon the occurrence of that behavior
example: docking pay for being late
Schermerhorn - Chapter 14

28. Reinforcement Theory of Motivation
Extinction
decreases the frequency of an undesirable behavior by making the removal of a pleasant consequence contingent on its occurrence
example: stop giving social approval when someone is disruptive
Schermerhorn - Chapter 14

29. Reinforcement Theory of Motivation
Ethical Issues
Criticisms of reinforcement theory
ignores individuality
restricts freedom of choice
ignores the possibility of other types of motivation
Schermerhorn - Chapter 14

30. Reinforcement Theory of Motivation
Ethical Issues
Advocates state
improved safety
decreased absenteeism and tardiness
increased productivity
behavior control is a necessary part of management
Schermerhorn - Chapter 14

31. Motivation and Compensation
Pay for Performance
Merit pay
awards a pay increase in proportion to individual performance contributions
consistent with equity, expectancy, and reinforcement theories
Schermerhorn - Chapter 14

32. Motivation and Compensation
Incentive Compensation Systems
Bonus pay
lump-sum payments based on the accomplishment of specific performance targets
one-time payment based on extraordinary contribution
Schermerhorn - Chapter 14

33. Motivation and Compensation
Incentive Compensation Systems
Profit-sharing
employees receive a proportion of net profits earned by the organization during a stated performance period
Gain Sharing
groups of employees to share in any savings realized through their efforts to reduce costs and increase productivity
Schermerhorn - Chapter 14

34. Motivation and Compensation
Incentive Compensation Systems
Employee stock ownership
employees own stock in the company that employs them
often used as way to save jobs and prevent business closings
Schermerhorn - Chapter 14

35. Motivation and Compensation
Incentive Compensation Systems
Stock options
Employees are given the right to buy shares at a future date at a fixed price
when the price has risen one can exercise the option to buy the stock at a discount and realize a financial gain
most common at senior executive level
Schermerhorn - Chapter 14

36. Motivation and Compensation
Incentive Compensation Systems
Pay for knowledge
skills-based pay
pay based on number of job-relevant skills mastered
entrepreneurial pay
workers put part of their compensation at risk in return for the opportunity to pursue ideas and participate in any resulting profits
Schermerhorn - Chapter 14