1. Motivation II: Equity, Expectancy, and Goal Setting
Chapter Seven
Motivation II: Equity, Expectancy, and Goal Setting
McGraw-Hill/Irwin
Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved.

2. After reading the material in this chapter, you should be able to:
Discuss the role of perceived inequity in employee motivation.
Describe the practical lessons derived from equity theory.
Explain Vroom’s expectancy theory.
Describe the practical implications of expectancy theory.
Identify five practical lessons to be learned from goal-setting research.
Specify issues that should be addressed before implementing a motivational program.

3. Equity Theory Equity theory
Holds that motivation is a function of fairness in social exchanges

4. The Individual-Organization Exchange Relationship
An employee’s inputs, for which he expects a just return, include education/training, skills, creativity, seniority, age, personality traits, effort expended, and personal appearance.

5. The Individual-Organization Exchange Relationship
On the outcome side the organization provides such things as pay/bonuses, fringe benefits, challenging assignments, job security, promotions, status symbols, recognition, and participation in important decisions.

6. Negative and Positive Inequity
Negative inequity
Comparison in which another person receives greater outcomes for similar inputs.
Positive inequity
Comparison in which another person receives lesser outcomes for similar inputs.

7. Dynamics of Perceived Inequity
People have varying sensitivities to perceived equity and inequity
Inequity can be reduced in a variety of ways

8. Negative and Positive Inequity
Figure 7-1

9. Thresholds of Equity and Inequity
Equity sensitivity
An individual’s tolerance for negative and positive equity

10. Thresholds of Equity and Inequity
Benevolents
people who have a higher tolerance for negative inequity prefer their outcome/input ratio to be lower than ratios from comparison others
Sensitives
adhere to a strict norm of reciprocity and are quickly motivated to resolve both negative and positive inequity

11. Thresholds of Equity and Inequity
Entitleds
have no tolerance for negative inequity
expect to obtain greater output/input ratios than comparison others and become upset when this is not the case.

12. Organizational Justice
Distributive justice
The perceived fairness of how resources and rewards are distributed.
Procedural justice
The perceived fairness of the process and procedures used to make allocation decisions.
Interactional justice
Extent to which people feel fairly treated when procedures are implemented.

13. Question?
Employees at Globe Trade have always felt that resources and rewards are allocated unfairly at work. Such employee perceptions reflect _________.
Distributive justice
Interpersonal justice
Equitable justice
Procedural justice
The correct answer is “A” – distributive justice.
AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application
Difficulty:  Hard Page:  178

14. Practical Lessons from Equity Theory
Employees are more likely to accept and support organizational change when they believe it is implemented fairly and when it produces equitable outcomes.
Managers can promote cooperation and teamwork among group members by treating them equitably.
Equity theory provides managers with yet another explanation of how beliefs and attitudes affect job performance.
Research emphasizes the need for managers to pay attention to employees’ perceptions of what is fair and equitable.

15. Practical Lessons from Equity Theory
Treating employees inequitably can lead to litigation and costly court settlements.
Employees’ perceptions of justice are strongly influenced by the leadership behavior exhibited by their managers
Managers should pay attention to the organization’s climate for justice
Managers benefit by allowing employees to participate in making decisions about important work outcomes.
Employees should be given the opportunity to appeal decisions that affect their welfare.

16. Question?
At work, if Jamal's outcome to input ratio is greater than that of Tony's (his relevant co-worker), Jamal will experience
Equity.
No satisfaction.
Positive inequity.
High dissatisfaction.
The correct answer is “C” – positive inequity.
AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application
Difficulty:  Hard Page:  176

17. Expectancy Theory of Motivation
Holds that people are motivated to behave in ways that produce valued outcomes.

18. Vroom’s Expectancy Theory
Motivation boils down to the decision of how much effort to exert in a specific task situation.
Expectancy
Belief that effort leads to a specific level of performance.
Managers are advised to enhance effort  performance expectancies by helping employees accomplish their performance goals.
Important for managers to influence employees’ instrumentalities and to monitor valences for various rewards.

19. Expectancy
The following factors influence an employee’s expectancy perceptions:
Self-esteem.
Self-efficacy.
Previous success at the task.
Help received from others.
Information necessary to complete the task.
Good materials and equipment to work with

20. Vroom’s Expectancy Theory
Instrumentality
A performance  outcome perception
Valence
The value of a reward or outcome
Outcomes
refer to different consequences that are contingent on performance

21. Question?
Niles believes that he will be promoted if he meets his sales goals. This is his ___________ perception.
Expectancy
Instrumentality
Valence
Outcome
The correct answer is “B” – instrumentality. See p. 182.

22. Managerial and Organizational Implications of Expectancy Theory

23. Managerial and Organizational Implications of Expectancy Theory
Some workers value interesting work and recognition more than money
Extrinsic rewards can lose their motivating properties over time and may undermine intrinsic motivation

24. Question?
Dana believes in designing challenging jobs for her employees. This is an implication of _________ theory.
Equity
Motivation
Expectancy
Reinforcement
The correct answer is “C” – expectancy. See previous slide.

25. Prerequisites to Linking Performance and Rewards
Managers need to develop and communicate performance standards to employees
Managers need valid and accurate performance ratings with which to compare employees

26. Prerequisites to Linking Performance and Rewards
Managers need to determine the relative mix of individual versus team contribution to performance and then reward accordingly
Managers should use the performance ratings to differentially allocate rewards among employees

27. Goals: Definition and Background
what an individual is trying to accomplish
Management by objectives
management system incorporating participation in decision making, goal setting, and feedback

28. How Does Goal Setting Work
Goals direct attention
Goals regulate effort
Goals increase persistence
Goals foster the development and application of task strategies and action plans

29. Insights from Goal-Setting Research
Difficult goals lead to higher performance
Specific, difficult goals lead to higher performance for simple rather complex tasks
Goal specificity – quantifiability of a goal
Feedback enhances the effect of specific, difficult goals

30. Insights from Goal-Setting Research
Participative goals, assigned goals, and self-set goals are equally effective
Goal commitment and monetary incentives affect goal-setting outcomes
Goal commitment – extent to which an individual is personally committed to achieving a goal

31. Question?
Julia wants to become a successful heart surgeon. This reflects Julia's
Expectancy
Perception
Goal
Personality
The correct answer is “C” - goal
AACSB:  Group-individual dynamics Bloom's Taxonomy:  Application
Difficulty:  Easy Page:  186

32. Relationship between Goal Difficulty and Performance
Figure 7-2

33. Practical Application of Goal Setting
Step 1: Set goals
Step 2: Promote goal commitment
Step 3: Provide support and feedback

34. Guidelines for Writing SMART Goals

35. Question?
Jim is the manager of a sales team at Woo Automotive. He expects his salespeople to sell 250 cars per week. Which guideline for writing SMART goals does this violate?
Specific
Measurable
Attainable
Time-bound
The correct answer is “C” – attainable. See previous slide.

36. Managerial Actions for Enhancing Goal Commitment
Provide valued outcomes for goal accomplishment.
Raise employees’ self-efficacy about meeting goals by:
Providing adequate training
Role modeling desired behaviors and actions
Persuasively communicating confidence in the employees ability to attain the goal

37. Managerial Actions for Enhancing Goal Commitment
Have employees make a public commitment to the goal.
Communicate an inspiring vision and explain how individual goals relate to accomplishing the vision.
Allow employees to participate in setting the goals.

38. Managerial Actions for Enhancing Goal Commitment
Behave supportively rather than punitively.
Break a long-term goal (i.e., a yearly goal) into short-term sub-goals.
Ensure that employees have the resources required to accomplish the goal.

39. Supplemental Slides
Slides contain extra non-text examples to integrate and enhance instructor lectures
Slide 36: A General Model of Expectancy Theory
Slides 37: Expectancy Theory Application
Slide 38: Goal Setting
Slide 39: Movie Example: Mr. Holland’s Opus
Slide 40: Video discussion slide

40. A General Model of Expectancy Theory
Outcome 1
High Effort
Performance
Goal
Outcome 2
Expectancy: “What are my chances of reaching my goal if I work hard?”
Outcome 3
Instrumentality: “What are my chances of getting various outcomes if I achieve my goal?
Decision
To Exert
Effort
Valence: “How much do I value these outcomes?”
Expectancy: “What are my chances of reaching my goal if I slack off?”
Notes:
Topic: Vroom’s expectancy theory .
The figure in the above slide depicts a general model of Vroom’s theory.
It outlines variables that influence and individual’s level of motivation
Source: Organizational Behavior 1 Ed. Kinicki & Kreitner, BPI/Irwin, Pp
Outcome 1
Low Effort
Outcome 2
Performance
Goal
Outcome 3

41. Expectancy Theory Application
STEP 1 Valence represents the value placed on outcomes. Calculate the valence for all levels of performance. The equation is:
Performance Valence = [(Instrumentality1 x Valence1) + (I2 x V2) + (I3 x V3) + … (In x Vn)]
STEP 2 Calculate the force on an individual to exert different levels of effort. Force represents the strength of an individual’s intention to respond in a particular manner. The equation is:
Force = the sum of [Expectancy x Performance Valence] for all levels of performance associated with one level of effort.
STEP 3 Compare force values for each performance level.
See above slide for steps.
See next slide for expectancy theory example.
Source: R. Kreitner, A. Kinicki, Organizational Behavior 5th ed. Burr Ridge, IL McGraw-Hill, 2001 Instructors Manual
7-41

42. Goal Setting
Read an article by Latham and Locke on “Goal Setting-A Motivational Technique that Works”

43. 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?

44. Video Case: Hot Topic
What unique features does the culture at Hot Topic have? How do these features contribute to their success?
What benefits do you like that are offered by Hot Topic? Are they different than the benefits you have heard about from your parents or others?
How does Hot Topic keep itself current with what its customers and employees want?
Hot Topic offers some unique benefits - the best example of which is the concert reimbursement program. Programs such as this helps the company learn about their constituents.
The benefits mentioned in the video include the concert reimbursement program, on-site massages, health fairs, cell phone discounts, and scholarship reimbursement programs. Some of these benefits are very different from traditional benefits - offering unique benefits is becoming a trend as the generations in the workforce change.
McLaughlin mentions that she likes to talk to her customers. This allows her to keep an eye on the “pulse” of her market. The Torrid store line was the result of Hot Topic customers who were “plus size” not being able to find clothes to fit them in the store.

45. Video Case: Motivation Convention
Are people fundamentally different today than in the past? Why do workers need to be “buttered up” more today?
What are some different types of incentives employees are given today to “motivate” them? What have you received in terms of different incentives from your employers?
Why is motivating employees so important - do you think it makes that big of a difference?
Employees today are knowledge workers and new generations are entering the workforce. This requires employers to provide different and often creative incentives to be motivated. Employers can’t simply tell their employees to do it or else… The labor market will soon be a sellers market favoring the worker - employers have to retain their employees and keep them happy…
Employers are offering their employees everything from food items to barbeque grills to vacation packages as incentive. As illustrated in the video case, a little personal touch by way of a picture of the employee on a chocolate is sure to “sweeten them up”…
Motivation is crucial to the organization’s survival. We are in a global marketplace and organizational efficiency and effectiveness is necessary for its survival in these market conditions. The key to efficiency and effectiveness is the employee - it is the employee who makes the organization run and if they are not motivated, the firm will not be as good as it could be…