1. Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART 3........................ Understanding People in Organizations

2. Copyright ©2003 Prentice Hall, Inc. 8 - 2 Chapter 8 Motivating, Satisfying, and Leading Employees

3. Copyright ©2003 Prentice Hall, Inc. 8 - 3 “A leader is best when people barely know he exists, when his work is done… they will say: We did it ourselves.” ~ Lao-Tzu, c. 600 B.C. “Leadership is the art of getting someone else to do something you want done because he wants to do it.” ~ Dwight D. Eisenhower, 1890 - 1969

4. Copyright ©2003 Prentice Hall, Inc. 8 - 4 Key Topics Psychological contracts in the workplace Job satisfaction and employee morale Theories of employee motivation Job satisfaction and employee motivation Managerial styles of leadership

5. Copyright ©2003 Prentice Hall, Inc. 8 - 5 Psychological Contract A Set of Employment Expectations Contributions: What does each employee expect to contribute to the organization? Inducements: What will the organization provide to each employee in return?

6. Copyright ©2003 Prentice Hall, Inc. 8 - 6 Satisfied Employees Are More Productive and More Committed Job Satisfaction: Degree of enjoyment employees derive from doing their jobs High Morale: An overall positive employee attitude toward the workplace Low Turnover: A low percentage of employees leave each year MORALE TURNOVER MORALE

7. Copyright ©2003 Prentice Hall, Inc. 8 - 7 Raising Morale Is a High Priority When Unemployment Is Low NA

8. Copyright ©2003 Prentice Hall, Inc. 8 - 8 Fortune Magazine’s 100 Best Companies to Work For Edward Jones#1 Cisco Systems#15 Microsoft#28 Patagonia#41 Starbucks#58 Wal-Mart#94 “It's not easy being good these days at least if you're an employer.” Source: Fortune Magazine, February 4 th, 2002

9. Copyright ©2003 Prentice Hall, Inc. 8 - 9 Highly Motivated Employees Are Critical to Business Success  Classical  Behavior: The Hawthorne Studies  Contemporary Motivation: The set of forces that cause people to behave in certain ways

10. Copyright ©2003 Prentice Hall, Inc. 8 - 10 The Human Resources Model Theory X and Theory Y Theory X  People are lazy.  People lack ambition and dislike responsibility.  People are self-centered.  People resist change.  People are gullible and not very bright. Theory Y  People are energetic.  People are ambitious and seek responsibility.  People can be selfless.  People want to contribute to business growth and change.  People are intelligent.

11. Copyright ©2003 Prentice Hall, Inc. 8 - 11 Maslow’s Hierarchy of Needs Self- Actualization Needs Esteem Needs Social Needs Security Needs Physiological Needs General Examples Organizational Examples Self-FulfillmentChallenging Job Self-ActualizationNeeds StatusJob Title Esteem Needs FriendshipFriends at Work Social Needs StabilityPension Plan Security Needs ShelterSalary Physiological Needs

12. Copyright ©2003 Prentice Hall, Inc. 8 - 12 Hygiene Factors Supervisors Working Conditions Interpersonal Relations Pay & Security Company Policies & Administration Motivation Factors Achievement Recognition The Work Itself Responsibility Advancement & Growth Two Factor Theory DissatisfactionSatisfaction

13. Copyright ©2003 Prentice Hall, Inc. 8 - 13 Expectancy Theory Effort- Performance Issue Performance- Reward Issue Rewards- Personal Goals Issue Individual Effort Individual Performance Organizational Rewards Personal Goals

14. Copyright ©2003 Prentice Hall, Inc. 8 - 14 Equity Theory Employees evaluate their treatment relative to the treatment of others Inputs: Employee contributions to their jobs Outputs: What employees receive in return The perceived ratio of contribution to return determines perceived equity

15. Copyright ©2003 Prentice Hall, Inc. 8 - 15 Strategies for Enhancing Job Satisfaction and Morale  Reinforcement/behavior modification  Management by objectives  Participative management and empowerment  Job enrichment and job redesign  Modified work schedules

16. Copyright ©2003 Prentice Hall, Inc. 8 - 16 Reinforcement / Behavior Modification Theory Positive Reinforcement PunishmentPunishment When rewards are tied directly to performance When negative consequences are attached directly to undesirable behavior

17. Copyright ©2003 Prentice Hall, Inc. 8 - 17 Identifying Resources Counseling Setting Verifiable Goals & Clear Plans Meeting Management by Objectives Collaborative Goal-setting Collaborative Goal Setting & Planning Communicating Organizational Goals & Plans Periodic Review Evaluation

18. Copyright ©2003 Prentice Hall, Inc. 8 - 18 Participative Management and Empowerment Increasing job satisfaction by encouraging participation Team management represents a growing trend

19. Copyright ©2003 Prentice Hall, Inc. 8 - 19 Job Enrichment and Job Redesign Job Enrichment: Adding one or more motivating factors to job activities Job Redesign: Designing a better fit between workers and their jobs Combining tasks Forming natural work groups Establishing client relationships

20. Copyright ©2003 Prentice Hall, Inc. 8 - 20 Work share programs Flextime programs and alternative workplace strategies Telecommuting and virtual offices Modified Work Schedules

21. Copyright ©2003 Prentice Hall, Inc. 8 - 21 Sample Flextime Scheduling Joe Sue Pat6:00A.M.7:00A.M.8:00A.M.9:00A.M.10:00A.M.11:00A.M.12:00NOON1:00P.M.2:00P.M.3:00P.M.4:00P.M.5:00P.M.6:00P.M. FlexibleTimeCoreTimeFlexibleTimeCoreTimeFlexibleTime

22. Copyright ©2003 Prentice Hall, Inc. 8 - 22 Evaluating Modified Schedules and Alternative Workplaces Advantages More satisfied, committed employees Less congestion Disadvantages Challenging to coordinate and manage Poor fit for some workers

23. Copyright ©2003 Prentice Hall, Inc. 8 - 23 The process of motivating others to work to meet specific objectives Managerial Leadership

24. Copyright ©2003 Prentice Hall, Inc. 8 - 24  Challenge the process  Inspire a shared vision  Enable others to act  Model the way  Encourage the heart Five Fundamental Leadership Practices Source: www.theleadershipchallenge.com

25. Copyright ©2003 Prentice Hall, Inc. 8 - 25 Leadership at General Electric “Four E’s of GE Leadership” A high energy level The ability to energize others around common goals The edge to make tough decisions The ability to consistently execute and deliver on promises Source: Jack Welch Tells It Straight from the Gut, Anderson Assets, Winter 2002

26. Copyright ©2003 Prentice Hall, Inc. 8 - 26 Managerial Styles Contingency Approach The appropriate style in any situation is contingent on the unique elements of that situation Contingency Approach The appropriate style in any situation is contingent on the unique elements of that situation Autocratic Style Democratic Style Free-rein Style

27. Copyright ©2003 Prentice Hall, Inc. 8 - 27 Motivation and Leadership in the Twenty-first Century Motivation Security and pay are no longer enough Leadership  “Coach” mentality  Diversity  Flexibility

28. Copyright ©2003 Prentice Hall, Inc. 8 - 28 Chapter Review Describe psychological contracts Discuss the importance of job satisfaction and employee morale Summarize the most important theories of employee motivation Describe strategies to improve job satisfaction and employee motivation Discuss different managerial styles