1. Lecture 7 MOTIVATION PART 2: PROCESS THEORIES

2. Class Overview Lecture - process theories of motivation –expectancy theory –equity theory –Porter-Lawler integrated model Group exercise: Critical Incident “Salary versus Commission”

3. Introduction Why process theories? These theories focus upon those internal processes that give rise to goal directed behavior They highlight the importance of stimulus conditions (rewards) and personal expectations

4. Expectancy Theory Explains workers motivation in terms of anticipated rewards the psychological force on an employee to exert effort is a function of two factors: –Expectancies in future –Attractiveness of specific outcomes

5. Expectancy & Valence Expectancies - probabilities ranging from zero to one: –Effort  Performance What is the probability that my effort will result in successful performance? –Performance  Outcome Will my good performance result in my obtaining the outcome or reward? Attractiveness of outcomes are evaluated in terms of their their valence (from -1 to +1)

6. Expectancy Theory (cont.) Motivation can be quantitatively expressed in this theory by assigning a probability “score” to each type of employee expectation Motivation can be expressed as: (  P) x (P  O) x (V) = Motivational Force

7. Simple Example Task: racing an Indy Car My Effort-Performance expectancy: 0.5 My Performance-Outcome expectancy: 1.0 My valence for winning +1.0 Total motivational force = 0.5 * 1.0 * 1.0 = 0.5 John Andretti’s Effort Performance expectancy = 0.9 His total motivational force = 0.9

8. Implications of Expectancy Theory Employees must perceive a close link between effort and performance –requires careful selection, training, and job design Employees must perceive a close and consistent link between rewards and performance –requires careful compensation design and administration, performance review, and communications

9. Equity Theory Primary assumption: people compare their situation to that of relevant others Specifically, we compare our efforts and our rewards with those of others Equity theory proposes that people will strive to restore equity if they feel an imbalance exists It is this desire to restore equity that is the cause of goal directed behavior

10. Effort and Rewards Inputs: All contributions that a person makes to the employment relationship –effort, years and type of education, prior experience, training Outcomes: Anything provided by an employee’s job –e.g. pay, benefits, working conditions, company car

11. Comparisons Comparison other: The person with which an individual compares his/her inputs and outcomes –typical relevant others: coworkers, boss, subordinates, professional peers, friends : O s : I s  O o : I o

12. Example 1 I work 8 hours a day and produce 50 widgets My coworker Rob also produces 50 widgets in the same period We both receive $500 a week, but Rob gets to use the company car on weekends Equity?

13. Example 2 Rob and I both work 5 days every week We both get paid the same $500 I have a PhD, but Rob has a Bachelor’s degree Equity?

14. Behavior under Inequity Under inequity we can try to change: –our behavior, our outcomes, others behavior, others outcomes Lower ratio status - employee feels undercompensated: –Increase outcomes by asking for raise –Decrease inputs by being less productive –Decrease comparison other’s outcomes by persuading boss to alter B’s pay –Increase B’s inputs by pressuring him/her to work harder

15. Behavior under Inequity Higher ratio status - employee feels overcompensated –decrease outcomes? Unlikely –increase others outcomes? Difficult –decrease others inputs? Possible, but easier to... –increase own inputs. What typically will occur is that over paid employees may increase the quality of their output relative to more equitably paid workers

16. Behavior under Inequity If inequity can’t be rectified, then the individual may choose to pursue any of the following options: –Alter perceptions of situation to make inequity disappear –Select a different comparison other –Leave the work setting by getting a new job

17. Porter-Lawler’s Model of Motivation Integrates both content and process theories into one interactive model Content theories: discuss what motivates people to perform; e.g. theories of Maslow, Herzberg, and McClelland Process theories: discuss how rewards control behavior; e.g. expectancy, equity, reinforcement, social learning theories

18. Conclusions of Porter-Lawler’s Model A checklist for managers to use in motivating employees; managers should: –Offer valued rewards –Create perceptions that effort will lead to rewards –Design jobs so that effort leads to high performance –Hire qualified employees

19. Conclusions of Porter-Lawler’s Model (cont.) –Train employees in the correct manner for performing their task –Design tasks so that performance is measurable –Design reward systems so that rewards are tied to performance –Ensure that rewards are viewed as fair and equitable

20. Group Exercise Critical incident “Salary versus Commission” (pp. 88-89) Individually read the incident As a group, discuss the three questions and write down your answers I will call on you, so be prepared to defend your answers