1. Motivation and Performance
chapter thirteen
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives
Explain what motivation is and why managers need to be concerned about it.
Describe from the perspectives of expectancy theory and equity theory what managers should do to have a highly motivated workforce.
Explain how goals and needs motivate people and what kinds of goals are especially likely to result in high performance.
Identify the motivation lessons that managers can learn from operant conditioning theory and social learning theory.
Explain why and how managers can use pay as a major motivation tool.

3. The Nature of Motivation
The psychological forces that determine the direction of a person’s behavior in an organization, a person’s level of effort, and a person’s level of persistence
Explains why people behave the way they do in organizations 3

4. The Nature of Motivation
Direction
possible behaviors the individual could engage in
Effort
how hard the individual will work
Persistence
whether the individual will keep trying or give up when faced with obstacles

5. The Nature of Motivation
Intrinsically Motivated Behavior
Behavior that is performed for its own sake.
Extrinsically Motivated Behavior
Behavior that is performed to acquire material or social rewards or to avoid punishment.
Prosocially motivated behavior
behavior performed to benefit or help others
Intrinsically Motivated Behavior
Behavior that is performed for its own sake.
The source of the motivation that comes from actually performing the behavior.
The sense of accomplishment and achievement derived from doing the work itself
Extrinsically Motivated Behavior
Behavior that is performed to acquire material or social rewards or to avoid punishment.
The source of the motivation is the consequences of the behavior and not the behavior itself.
Prosocially motivated behavior is behavior
that is performed to benefi t or help others. Behavior can be prosocially motivated
in addition to being extrinsically and/or intrinsically motivated. 5

6. Example – Warren Buffet
Investor Warren Buffett is giving away a large portion of his fortune to the Gates foundation
He is doing it now because he believes in the work the foundation is doing with world health issues and improving U.S. libraries and high schools 6

7. Outcomes and Inputs Outcome Input
Anything a person gets from a job or an organization
Pay, job security, autonomy, accomplishment
Input
Anything a person contributes to his or her job or organization
Time, effort, skills, knowledge, work behaviors 7

8. The Motivation Equation
Figure 13.1

9. Expectancy Theory Expectancy theory
The theory that motivation will be high when workers believe that high levels of effort lead to high performance and high performance leads to the attainment of desired outcomes.

10. Expectancy Theory Expectancy Instrumentality Valence
the belief that effort (input) will result in a certain level of performance
Instrumentality
the belief that performance results in the attainment of outcomes
Valence
how desirable each of the available outcomes from the job is to a person
Motivation will be high when workers believe:
High levels of effort will lead to high performance.
High performance will lead to the attainment of desired outcomes. 10

11. Expectancy, Instrumentality, and Valence
Figure 13.2

12. Expectancy Theory
Figure 13.3

13. Need Theories Need Theories Need
Theories of motivation that focus on what needs people are trying to satisfy at work and what outcomes will satisfy those needs.
Need
A requirement or necessity for survival and well-being.
Managers must determine what needs a worker wants satisfied and ensure that a person receives the outcomes when performing well. 13

14. Maslow’s Hierarchy of Needs
An arrangement of five basic needs that motivate behavior. Maslow proposed that the lowest level of unmet needs is the prime motivator and that only one level of needs is motivational at a time.

15. Maslow’s Hierarchy of Needs
Table 13.1

16. Alderfer’s ERG Theory Alderfer’s ERG theory
The theory that three universal needs—for existence, relatedness, and growth— constitute a hierarchy of needs and motivate behavior.
Alderfer proposed that needs at more than one level can be motivational at the same time.

17. Alderfer’s ERG Theory
Table 13.2

18. Herzberg’s Motivation-Hygiene Theory
Focuses on outcomes that lead to higher motivation and job satisfaction, and those outcomes that can prevent dissatisfaction.
Unsatisfied hygiene needs create dissatisfaction; satisfaction of hygiene needs does not lead to motivation or job satisfaction. 18

19. Herzberg’s Motivation-Hygiene Theory
Motivator needs relate to the nature of the work itself—autonomy, responsibility, interesting work.
Hygiene needs are related to the physical and psychological context of the work—comfortable work environment, pay, job security.
Many research studies have tested Herzberg’s propositions, and, by and large, the
theory fails to receive support. 63 Nevertheless, Herzberg’s formulations have contributed
to our understanding of motivation in at least two ways. First, Herzberg helped
to focus researchers’ and managers’ attention on the important distinction between
intrinsic motivation (related to motivator needs) and extrinsic motivation (related to
hygiene needs), covered earlier in the chapter. Second, his theory prompted researchers
and managers to study how jobs could be designed or redesigned so they are
intrinsically motivating.

20. McClelland’s Needs for Achievement, Affiliation, and Power
Need for Achievement
The extent to which an individual has a strong desire to perform challenging tasks well and to meet personal standards for excellence.

21. McClelland’s Needs for Achievement, Affiliation, and Power
Need for Affiliation
Concerned about establishing and maintaining good interpersonal relations, being liked, and having the people around him get along with each other
Need for Power
A desire to control or influence others

22. Equity Theory Equity Theory
A theory of motivation that focuses on people’s perceptions of the fairness of their work outcomes relative to their work inputs.
A relative outcome to input ratio comparison to oneself or to another person (referent) perceived as similar to oneself.
Equity exists when a person perceives that their outcome/input ratio to be equal to the referent’s ratio.
If the referent receives more outcomes, they should also give more inputs to achieve equity.
Inequity exists when worker’s outcome/input ratio is not equal to referent.
Underpayment inequity: ratio is less than the referent.
Workers feel they are not getting the outcomes they should for their inputs.
Overpayment inequity: ratio is higher than the referent.
Workers feel they are getting more outcomes than they should for their inputs.
Restoring Equity: Inequity creates tension in workers causing them to attempt to restore equity.
In underpayment, workers may reduce input levels to correct (rebalance) the ratio or seek a raise.
In overpayment, workers may change the referent person and readjust their ratio perception.
If inequity persists, workers will often choose to leave the organization. 22

23. Equity Theory
There are two types of inequity: underpayment inequity and overpayment inequity
(see Table 13.3 ). Underpayment inequity exists when a person’s own outcome–
input ratio is perceived to be less than that of a referent. In comparing yourself to a
referent, you think you are not receiving the outcomes you should be, given your
inputs. Overpayment inequity exists when a person perceives that his or her own
outcome–input ratio is greater than that of a referent. In comparing yourself to a referent,
you think you are receiving more outcomes than you should be, given your inputs.
Table 13.3

24. Goal Setting Theory Goal
A theory that focuses on identifying the types of goals that are most effective in producing high levels of motivation and performance and explaining why goals have these effects.
Must be specific and difficult
Focuses on motivating workers to contribute their inputs to their jobs and organizations
Considers how managers can ensure that workers focus their inputs in the direction of high performance and the achievement of organizational goals.
Goals point out what is important to the firm.
Workers should be encouraged to develop action plans to attain goals.
Goals motivate people to contribute more inputs to their jobs
Goals help people focus their inputs in the right direction 24

25. Learning Theories Learning theories
Theories that focus on increasing employee motivation and performance by linking the outcomes that employees receive to the performance of desired behaviors and the attainment of goals.
Learning
A relatively permanent change in person’s knowledge or behavior that results from practice or experience. 25

26. Operant Conditioning Theory
People learn to perform behaviors that lead to desired consequences and learn not to perform behaviors that lead to undesired consequences.
Linking specific behaviors to the attainment of specific outcomes can motivate high performance and prevent behaviors that detract from organizational effectiveness. 26

27. Operant Conditioning Tools
Positive Reinforcement
Gives people outcomes they desire when they perform organizationally functionally behaviors
Negative Reinforcement
Eliminating or removing undesired outcomes when people perform organizationally functional behaviors
Positive Reinforcement
Gives people outcomes they desire when they perform organizationally functionally behaviors
Positive reinforcers: Pay, praises, or promotions
Negative Reinforcement
Eliminating undesired outcomes once the functional behavior occurs
Negative reinforcers: criticisms, pay cuts, suspension 27

28. Operant Conditioning Tools
Extinction
Curtailing the performance of a dysfunctional behavior by eliminating whatever is reinforcing it.
Punishment
Administering an undesired or negative consequence to immediately stop a dysfunctional behavior.
Manager administers an undesired consequence to worker (verbal reprimand, demotion, pay cut). 28

29. Avoiding Side Effects of Punishment
Downplay the emotional element involved
Try to punish dysfunctional behaviors as soon as they occur
Try to avoid punishing someone in front of others
• Downplay the emotional element involved in punishment. Make it clear that you
are punishing a person’s performance of a dysfunctional behavior, not the person
himself or herself.
• Try to punish dysfunctional behaviors as soon after they occur as possible, and
make sure the negative consequence is a source of punishment for the individuals
involved. Be certain that organizational members know exactly why they are
being punished.
• Try to avoid punishing someone in front of others because this can hurt a person’s
self-respect and lower esteem in the eyes of coworkers as well as make coworkers
feel uncomfortable. 87 Even so, making organizational members aware that
an individual who has committed a serious infraction has been punished can
sometimes be effective in preventing future infractions and teaching all members
of the organization that certain behaviors are unacceptable. For example, when
organizational members are informed that a manager who has sexually harassed
subordinates has been punished, they learn or are reminded of the fact that sexual
harassment is not tolerated in the organization.

30. Organizational Behavior Modification
The systematic application of operant conditioning techniques to promote the performance of organizationally functional behaviors and discourage the performance of dysfunctional behaviors.
Used to improve productivity, efficiency, attendance, punctuality, safe work practices, and customer service
Sometimes questioned because of lack of relevance to certain work behaviors
To critics it is overly controlling and robs workers of their dignity, individuality, freedom of choice and creativity 30

31. Steps in Organizational Behavior Modification
Figure 13.4

32. Social Learning Theory
A theory that takes into account how learning and motivation are influenced by people’s thoughts and beliefs and their observations of other people’s behavior 32

33. Social Learning Theory
Vicarious Learning
Occurs when a person becomes motivated to perform a behavior by watching another person perform the behavior and be positively reinforced for doing so
Also called observational learning 33

34. Social Learning Theory
Self-reinforcer
Any desired or attractive outcome or award that a person can give himself or herself for good performance.
Self-efficacy
A person’s belief about his or her ability to perform a behavior successfully. 34

35. Pay and Motivation Pay as a Motivator
Expectancy: Instrumentality, the association between performance and outcomes, must be high for motivation to be high.
Need Theory: pay is used to satisfy many needs.
Equity Theory: pay is given in relation to inputs. 35

36. Pay and Motivation Pay as a Motivator
Goal Setting Theory: pay is linked to attainment of goals.
Learning Theory: outcomes (pay), is distributed upon performance of functional behaviors.

37. Merit Pay and Performance
Merit Pay Plan
A compensation plan that bases pay on based on individual, group and/or organization performance.
Individual plan: when individual performance (sales) can accurately measured.
Merit Pay Plan
Group plan: when group that works closely together is measured and rewarded as a group.
Organization plan: when group or individual outcomes not easily measured.
Piece-rate Pay
Employee’s pay is based on the number of units that the employee produces.
Commission Pay
Employee’s pay is based on a percentage of sales that the employee makes.
Organization-based Merit Plans
Scanlon plan—focuses on reduced expenses or cutting costs
Profit sharing—employees receive a share of an organization’s profits 37

38. Salary Increase or Bonus?
Motivational value of a bonus Is higher when:
Salary levels are unrelated to current performance.
Changes in other compensation items (cost of living, seniority) are not having a large effect in increasing compensation.
Salaries rarely change and performance does.
Benefits of Using Bonuses
Do not become permanent part of compensation
Are more directly tied to current performance
Provide more flexibility in distributing rewards 38

39. Salary Increase or Bonus?
Employee Stock Option
A financial instrument that entitles the bearer to buy shares of an organization’s stock at a certain price during a certain period of time or under certain conditions.
Uses
To attract high-level managers
To motivate employee performance through ownership in the firm 39

40. Video Case: Learn to Love Your Job
What are the three signs of a miserable job identified by Pat Lencioni, and how do they reduce productivity?
When the three signs of a miserable job are present, which of the needs identified by Maslow are not being met?
Miserable at Work? Learn to Love Your Job
Teaching Objective: To help students understand that dissatisfied workers are less motivated and therefore less productive. To identify some causes of employee dissatisfaction and identify actions managers can take to motivate employees.
Summary: Author Pat Lencioni identifies three factors he believes managers are not addressing that lead to a miserable job. Anonymity is the feeling of being invisible, or feeling like your superior has no interest in you as a person. Irrelevance is not knowing why your job matters to someone else. Immeasurement is the need workers have to gauge their level of contribution for themselves. Lencioni gives ways for managers to address these issues to increase worker satisfaction and motivation.
Questions:
What are the three signs of a miserable job identified by Pat Lencioni, and how do they reduce productivity?
Anonymity is a feeling of being invisible, irrelevance is not knowing why your job matters to someone else, and immeasurement is the need workers have to gauge their level of contribution and progress for themselves. These factors contribute to unhappiness and dissatisfaction by draining enthusiasm and excitement from workers, who become less productive.
When the three signs of a miserable job are present, which of the needs identified by Maslow are not being met?
Maslow’s higher level needs of belonging, esteem and even self-actualization are not being met when Lencioni’s three signs of a miserable job are present.
How can managers help motivate employees by addressing the three signs of a miserable job?
Managers can remove anonymity by taking time to sit down with employees and demonstrate an interest in their lives. They can make work more relevant by reminding workers how they are helping others. They can also provide tangible measures for assessing success and failure in areas which workers directly influence. 40