1. Foundations of Employee Motivation McGraw-Hill/Irwin McShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Employee Motivation and Engagement at Rackspace Rackspace hosting has a highly motivated and engaged workforce by rewarding performance, fulfilling personal needs, and providing strengths-based feedback. 5-2

3. Motivation Defined  The forces within a person that affect the direction, intensity, and persistence of voluntary behavior  Exerting particular effort level (intensity), for a certain amount of time (persistence), toward a particular goal (direction). 5-3

4. Employee Engagement Emotional and cognitive motivation, self-efficacy to perform the job, a clear understanding of one’s role in the organization’s vision and a belief that one has the resources to perform the job 5-4

5. Drives and Needs  Drives (aka-primary needs, fundamental needs, innate motives) Neural states that energize individuals to correct deficiencies or maintain an internal equilibrium Prime movers of behavior by activating emotions Self-concept, social norms, and past experience Drives (primary needs) Needs Decisions and Behavior 5-5

6. Drives and Needs  Needs Goal-directed forces that people experience. Drive-generated emotions directed toward goals Goals formed by self-concept, social norms, and experience Self-concept, social norms, and past experience Drives (primary needs) Needs Decisions and Behavior 5-6

7. Self- actual- ization Physiological Safety Belongingness Esteem Seven categories capture most needs Five categories placed in a hierarchy Need to know Need for beauty Maslow’s Needs Hierarchy Theory 5-7

8. Maslow’s Needs Hierarchy Theory  Lowest unmet need has strongest effect  When lower need is satisfied, next higher need becomes the primary motivator  Self-actualization -- a growth need because people desire more rather than less of it when satisfied Self- actual- ization Physiological Safety Belongingness Esteem Need to know Need for beauty 5-8

9. Evaluating Maslow’s Theory  Lack of support for theory  People have different hierarchies – don’t progress through needs in the same order  Needs change more rapidly than Maslow stated Self- actual- ization Physiological Safety Belongingness Esteem Need to know Need for beauty 5-9

10. What Maslow Contributed to Motivation Theory  More holistic Integrative view of needs  More humanistic Influence of social dynamics, not just instinct  More positivistic Pay attention to strengths, not just deficiencies 5-10

11. What’s Wrong with Needs Hierarchy Models?  Wrongly assume that everyone has the same needs hierarchy (i.e. universal)  Instead, likely that each person has a unique needs hierarchy Shaped by our self-concept -- values and social identity 5-11

12. Learned Needs Theory  Needs are amplified or suppressed through self-concept, social norms, and past experience  Therefore, needs can be “learned” (i.e. strengthened or weakened through training) 5-12

13. Three Learned Needs Need for achievement Need to reach goals, take responsibility Want reasonably challenging goals Need for affiliation Desire to seek approval, conform to others wishes, avoid conflict Effective executives have lower need for social approval Need for power Desire to control one’s environment Personalized versus socialized power 5-13

14. Four-Drive Theory Drive to Bond Drive to Learn Drive to form relationships and social commitments Basis of social identity Drive to satisfy curiosity and resolve conflicting information Drive to Defend Need to protect ourselves Reactive (not proactive) drive Basis of fight or flight Drive to Acquire Drive to take/keep objects and experiences Basis of hierarchy and status 5-14

15. Features of Four Drives Innate and hardwired everyone has them Independent of each other no hierarchy of drives Complete set no drives are excluded from the model 5-15

16. How Four Drives Affect Motivation 1. Four drives determine which emotions are automatically tagged to incoming information 2. Drives generate independent and often competing emotions that demand our attention 3. Mental skill set relies on social norms, personal values, and experience to transform drive-based emotions into goal- directed choice and effort 5-16

17. Four Drive Theory of Motivation Social norms, personal values, and experience transform drive-based emotions into goal-directed choice and effort Drive to Acquire Social norms Drive to Bond Drive to Learn Drive to Defend Personal values Past experience Mental skill set resolves competing drive demands Goal-directed choice and effort 5-17

18. Implications of Four Drive Theory Provide a balanced opportunity for employees to fulfil all four drives employees continually seek fulfilment of drives avoid having conditions support one drive more than others 5-18

19. E-to-P Expectancy P-to-O Expectancy Outcomes & Valences Outcome 1 + or - EffortPerformance Outcome 3 + or - Outcome 2 + or - Expectancy Theory of Motivation 5-19

20. Increasing E-to-P and P-to-O Expectancies  Increasing E-to-P Expectancies Assuring employees they have competencies Person-job matching Provide role clarification and sufficient resources Behavioral modeling  Increasing P-to-O Expectancies Measure performance accurately More rewards for good performance Explain how rewards are linked to performance 5-20

21. Increasing Outcome Valences  Ensure that rewards are valued  Individualize rewards  Minimize countervalent outcomes 5-21

22. Making Every Day Count in NYC New York City mayor Michael Bloomberg has challenging goals to accomplish, and he doesn’t want any of his remaining tenure wasted. Bloomberg had special clocks installed in a dozen city government offices that count down how many days remain in his mayoral term. 5-22

23. Goal Setting The process of motivating employees and clarifying their role perceptions by establishing performance objectives 5-23

24. Effective Goal Setting Characteristics Specific -- measureable change within a time frame Relevant – within employee’s control and responsibilities Challenging – raise level of effort Accepted (commitment) – motivated to accomplish the goal Participative (sometimes) – improves acceptance and goal quality Feedback – information available about progress toward goal 5-24

25. Characteristics of Effective Feedback 1. Specific – connected to goal details 2. Relevant – Relates to person’s behavior 3. Timely – to improve link from behavior to outcomes 4. Sufficiently frequent Employee’s knowledge/experience task cycle 5. Credible – trustworthy source 5-25

26. Feedback Through Strengths-Based Coaching  Maximizing the person’s potential by focusing on their strengths rather than weaknesses  Motivational because: people inherently seek feedback about their strengths, not their flaws person’s interests, preferences, and competencies stabilize over time 5-26

27. Multisource Feedback  Received from a full circle of people around the employee  Provides more complete and accurate information  Several challenges 5-27

28. Evaluating Goal Setting and Feedback  Goal setting has high validity and usefulness  Goal setting/feedback limitations: Focuses employees on measurable performance Motivates employees to set easy goals (when tied to pay) Goal setting interferes with learning process in new, complex jobs 5-28

29. Keeping Pay Equitable at Costco Costco Wholesale CEO Jim Sinegal (shown in this photo) thinks the large wage gap between many executives and employees is blatantly unfair. “Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong,” says Sinegal, whose salary and bonus are a much smaller multiple of what his staff earn. 5-29

30. Organizational Justice Distributive justice Perceived fairness in outcomes we receive relative to our contributions and the outcomes and contributions of others Procedural justice Perceived fairness of the procedures used to decide the distribution of resources 5-30

31. Emotions Emotions Attitudes Attitudes Behaviors Behaviors Distribution Principles Distributive Justice Perceptions Procedural Justice Perceptions Structural Rules Social Rules Organizational Justice Components 5-31

32. Elements of Equity Theory Outcome/input ratio inputs -- what employee contributes (e.g., skill) outcomes -- what employee receives (e.g., pay) Comparison other person/people against whom we compare our ratio not easily identifiable Equity evaluation compare outcome/input ratio with the comparison other 5-32

33. Correcting Inequity Feelings Reduce our inputsLess organizational citizenship Increase our outcomesAsk for pay increase Increase other’s inputsAsk coworker to work harder Reduce other’s outputs Ask boss to stop giving other preferred treatment Change our perceptions Start thinking that other’s perks aren’t really so valuable Change comparison other Compare self to someone closer to your situation Leave the fieldQuit job Actions to correct inequityExample 5-33

34. Equity Sensitivity  Outcome/input preferences and reaction to various outcome/input ratios  Benevolents tolerant of being underrewarded  Equity Sensitives want ratio to be equal to the comparison other  Entitleds prefer proportionately more than others 5-34

35. Evaluating Equity Theory  Good at predicting situations unfair distribution of pay/rewards  Difficult to put into practice doesn’t identify comparison other doesn’t indicate relevant inputs or outcomes  Equity theory explains only some feelings of fairness procedural justice is as important as distributive justice 5-35

36. Procedural Justice  Perceived fairness of procedures used to decide the distribution of resources  Higher procedural fairness with: Voice Unbiased decision maker Decision based on all information Existing policies consistently Decision maker listened to all sides Those who complain are treated respectfully Those who complain are given full explanation 5-36

37. Foundations of Employee Motivation 5-37 McGraw-Hill/Irwin McShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.