1. Motivating People Chapter Eleven
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2. Learning Objectives
LO1 Understand principles for setting goals that motivate employees. LO2 Give examples of how to reward good performance effectively. LO3 Describe the key beliefs that affect people’s motivation. LO4 Explain ways in which people’s individual needs affect their behavior.

3. Learning Objectives (cont.)
LO 5 Define ways to create jobs that motivate. LO 6 Summarize how people assess and achieve fairness. LO 7 Identify causes and consequences of a satisfied workforce.

4. Motivating People Motivation
Forces that energize, direct, and sustain a person’s efforts.
Energize effort is concerned with the choices that people make about how much effort to put forth in their jobs.
Direction of effort is concerned with the choices that people make in deciding where to put forth effort in their jobs.
Sustain effort is concerned with the choices that people make about how long they will put forth effort.
Managers must motivate people to:
Join the organization,
Remain in the organization
Come to work regularly
Perform
Exhibit good citizenship

5. Motivating People Managers must motivate people to:
Join the organization,
Remain in the organization
Come to work regularly
Perform
Exhibit good citizenship

6. Effort and Performance
Initiation
Direction
Persistence
When most people think of work motivation, they think that working hard (effort) should lead to doing a good job (performance). Figure 13.2 shows a basic model of work motivation and performance, displaying this process. The first thing to notice about Figure 13.2 is that this is a basic model of work motivation and performance. In practice, it's almost impossible to talk about one without mentioning the other. Not surprisingly, managers often confuse the two, saying things such as "Your performance was really terrible last quarter. What's the matter? Aren't you as motivated as you used to be?" In fact, motivation is just one of three primary determinants of job performance.
When most people think of work motivation, they think that working hard (effort) should lead to doing a good job (performance). However, motivation is just one of three determinates of job performance.
1.1

7. Effort and Performance
Job Performance = Motivation x Ability x Situational Constraints
Job performance
how well someone performs the job
Motivation
effort put forth on the job
Ability
capability to do the job(knowledge, skills, talent0
Situational Constraints
external factors affecting performance(tools, policies, resources)
Since job performance is a multiplicative function of motivation times ability times situational constraints, job performance will suffer if any one of these components is weak.
Job Performance = Motivation x Ability x Situational Constraints
In this formula, job performance is how well someone performs the requirements of the job. Motivation, as defined above, is effort, the degree to which someone works hard to do the job well. Ability is the degree to which workers possess the knowledge, skills, and talent needed to do a job well. And, situational constraints are factors beyond the control of individual employees, such as tools, policies, and resources that have an effect on job performance.
Since job performance is a multiplicative function of motivation times ability times situational constraints, job performance will suffer if any one of these components is weak.
All the motivation in the world won't translate into high performance when you have little ability and high situational constraints. Motivation is just one of the influences on performance and it is important to remember that it is not the only influence.

8. Need Theory
Needs
physical or psychological requirements that must be met to ensure survival and well being
Unmet needs motivate people
unmet need creates an uncomfortable, internal state of tension that must be resolved
When a need is met, it no longer motivates.
Three approaches:
Maslow’s Hierarchy of Needs
Alderfer’s ERG Theory
McClelland’s Learned Needs Theory
Needs are the physical or psychological requirements that must be met to ensure survival and well being. As shown in the left side of Figure 13.3, a person's unmet need creates an uncomfortable, internal state of tension that must be resolved. For example, if you normally skip breakfast, but then get stuck working through lunch, chances are you'll be so hungry by late afternoon that the only thing you'll be motivated to do is find something to eat. So, according to needs theories, people are motivated by unmet needs. But once a need is met, it no longer motivates. When this occurs, people become satisfied.

9. Maslow’s Need Hierarchy
A conception of human needs organizing needs into a hierarchy of five major types.

10. Maslow Arranged Needs in a Hierarchy
Physiological - food, water, sex, and shelter.
Safety or security - protection against threat and deprivation.
Social - friendship, affection, belonging, and love.
Ego - independence, achievement, freedom, status, recognition, and self esteem.
Self-actualization - realizing one’s full potential, becoming everything one is capable of being.

11. Alderfer’s ERG Theory Alderfer’s ERG theory
A human needs theory postulating that people have three basic sets of needs that can operate simultaneously.

12. Alderfer’s ERG Theory Existence needs Relatedness needs Growth needs
all material and physiological desires.
Relatedness needs
involve relationships with other people and are satisfied through the process of mutually sharing thoughts and feelings.
Growth needs
motivate people to productively or creatively change themselves or their environment.

13. McClelland Said Managers Seek Achievement, Affiliation, and Power
Need for achievement
a strong orientation toward accomplishment and an obsession with success and goal attainment.
Need for affiliation
reflects a strong desire to be liked by other people
Need for power
a desire to influence or control other people

14. Needs Classification McClelland’s Learned Needs Alderfer’s ERG
Maslow’s
Hierarchy
Higher-Order Needs
Lower-Order Needs
Self-Actualization
Esteem
Belongingness
Safety
Physiological
Growth
Relatedness
Existence
Power
Achievement
Affiliation
Things become even more complicated when we consider the different predictions made by these theories. According to Maslow, needs are arranged in a hierarchy from low (physiological) to high (self-actualization). Within this hierarchy, people are motivated by their lowest unsatisfied need. And, as needs are met, they work their way up the hierarchy from physiological to self-actualization needs. By contrast, Alderfer says that people can be motivated by more than one need at a time. Furthermore, he suggests that people are just as likely to move down the needs hierarchy as up, particularly when unable to achieve satisfaction at the next higher need level. McClelland, on the other hand, argues that the degree to which particular needs motivate varies tremendously from person to person, with some people being motivated primarily by achievement, and others by power or affiliation. Moreover, McClelland says that needs are learned, not innate. Lower order needs are concerned with safety and with physiological and existence requirements. However, higher order needs are concerned with relationships (belongingness, relatedness, and affiliation); challenges and accomplishments (esteem, self-actualization, growth, and achievement); and influence (power). Studies generally show that higher order needs will not motivate people as long as lower order needs remain unsatisfied.
1.2

15. Adding Needs Satisfaction to the Model

16. Designing Jobs that Motivate
What leads to effort? In part, needs do, but rewards are important too.
Extrinsic rewards
Rewards given to a person by the boss, the company, or some other person.
Intrinsic reward
Reward a worker derives directly from performing the job itself.

17. The Most Important Rewards
Good benefits
Health insurance
Job security
Vacation time
Interesting work
Learning new skills
Independent work situations
Extrinsic
Intrinsic
1.3

18. Adding Rewards to the Model

19. Achieving Fairness Equity theory
A theory stating that people assess how fairly they have been treated according to two key factors: outcomes and inputs.

20. Achieving Fairness Outcomes Inputs
refer to the various things the person receives on the job: recognition, pay, benefits, satisfaction, security, job assignments, and punishments
Inputs
refer to the contributions the person makes to the organization: effort, time, talent, performance, extra commitment, and good citizenship

21. Inequity
When a person’s O/I ratio differs from their referent’s O/I ratio
Kinds of inequity
Underreward
your O/I ratio is worse than yours referent’s O/I ratio
experience anger or frustration
Overreward
your O/I ratio is better than yours referent’s I/O ratio
experience guilt
There are two kinds of inequity, underreward and overreward. Underreward occurs when a referent's O/I ratio is better than your O/I ratio. In other words, the referent you compare yourself to is getting more outcomes relative to his or her inputs than you are. When people perceive that they have been underrewarded, they tend to experience anger or frustration. For example, when a manufacturing company received notice that some important contracts had been canceled, management cut employees’ pay by 15 percent in one plant but not in another. Just as equity theory predicts, theft doubled in the plant that received the pay cut. Likewise, employee turnover increased from 5 percent to 23 percent.
By contrast, overreward occurs when a referent's O/I ratio is worse than your O/I ratio. In this case, you are getting more outcomes relative to your inputs than your referent is. In theory, when people perceive that they have been overrewarded, they experience guilt. Not surprisingly, people have a very high tolerance for overreward. It takes a tremendous amount of overpayment before people decide that their pay or benefits are more than they deserve.

22. How People React to Perceived Inequity
Reduce inputs
Increase outcomes
Rationalize inputs or outcomes
Change the referent
Leave
In the case of underreward, this usually translates into frustration or anger, while with overreward the reaction is guilt. In turn, these reactions leads to tension and a strong need to take action to restore equity in some way. At first, a slight inequity may not be strong enough to motivate an employee to take immediate action. However, if the inequity continues or there are multiple inequities, tension may build over time until a point of intolerance is reached, and the person is energized to take action. There are five ways in which people try to restore equity when they perceive that they have been treated unfairly: reducing inputs, increasing outcomes, rationalizing inputs or outcomes, changing the referent, or simply leaving. These will be discussed in terms of the inequity associated with underreward, which is much more common than the inequity associated with overreward.
People who perceive that they have been underrewarded may try to restore equity by decreasing or withholding their inputs (i.e., effort). Increasing outcomes is another way in which people try to restore equity. This might include asking for a raise or pointing out the inequity to the boss and hoping that she takes care of it. Another method of restoring equity is to rationalize or distort inputs or outcomes. So instead of actually decreasing inputs or increasing outcomes, employees restore equity by making mental or emotional "adjustments" in their O/I ratios or the O/I ratios of their referents. Changing the referent is another way of restoring equity. In this case, people compare themselves to someone other than the referent they had been using for previous O/I ratio comparisons. Since people usually choose to compare themselves to others who hold the same or similar jobs or are otherwise similar, they may change referents to restore equity when their personal situations change, such as a decrease in job status or pay. Finally, when reducing inputs, increasing outcomes, rationalizing inputs or outcomes, or changing referents doesn't restore equity, employees may leave by quitting their jobs, transferring, or increasing absenteeism.

23. Adding Equity Theory to Model

24. Performance-Related Beliefs
Expectancy theory
A theory proposing that people will behave based on their perceived likelihood that their effort will lead to a certain outcome and on how highly they value that outcome.
People will be motivated to the extent to which they believe that their effort will lead to good performance, that good performance will be rewarded, and that they will be offered attractive rewards.
People make conscious choices about their motivation.

25. If You Try Hard, Will You Succeed?
Expectancy
Employees’ perception of the likelihood that their efforts will enable them to attain their performance goals.

26. Components of Expectancy Theory
Valence
Expectancy
Instrumentality
Valence is simply the attractiveness or desirability of various rewards or outcomes. Expectancy theory recognizes that the same reward or outcome, say, a promotion, will be highly attractive to some people, highly disliked by others, and for some, may not make much difference one way or the other. Accordingly, when people are deciding how much effort to put forth, expectancy theory says that they will consider the valence of all possible rewards and outcomes that they can receive from their jobs. The greater the sum of those valences, each of which could be positive, negative, or neutral, the more effort people will choose to put forth on the job.
Expectancy is the perceived relationship between effort and performance. When expectancies are strong, employees believe that their hard work and efforts will result in good performance, so they work harder. By contrast, when expectancies are weak, employees figure that no matter what they do or how hard they work, they won't be able to perform their jobs successfully, so they don't work as hard.
Instrumentality is the perceived relationship between performance and rewards. When instrumentality is strong, employees believe that improved performance will lead to better and more rewards, and they will choose to work harder. When instrumentality is weak, employees don't believe that better performance will result in more or better rewards, so they will choose not to work as hard.
Expectancy theory holds that for people to be highly motivated, all three variables—valence, expectancy, and instrumentality—must be high. Thus, expectancy theory can be represented by the following simple equation:
Motivation = Valence x Instrumentality x Expectancy

27. Expectancy Theory Valence Expectancy Instrumentality
The attractiveness or desirability of various rewards or outcomes.
Expectancy
The perceived relationship between effort and performance.
Instrumentality
The perceived relationship between performance and rewards.
Motivation=Valence x Expectancy x Instrumentality

28. Basic Concepts of Expectancy Theory
Exhibit 11.3

29. Managerial Implications of Expectancy Theory
Increase expectancies
Identify positively valent outcomes
Make performance instrumental toward positive outcomes

30. Motivating with Expectancy Theory
Systematically gather information to find out what employees want from their jobs
Clearly link rewards to individual performance
Empower employees to make decisions which enhance expectancy perceptions
Systematically gather information to find out what employees want from their jobs. In addition to individual managers’ directly asking employees what they want from their jobs (see "Motivating with Equity Theory"), companies still need to survey their employees regularly to determine their wants, needs, and dissatisfactions. Since people consider the valence of all the possible rewards and outcomes that they can receive from their jobs, regular identification of wants, needs, and dissatisfaction gives companies the chance to turn negatively valent rewards and outcomes into positively valent rewards and outcomes, thus raising overall motivation and effort.
Take clear steps to link rewards to individual performance in a way that is clear and understandable to employees. Unfortunately, most employees are extremely dissatisfied with the link between pay and performance in their organizations. Other than making sure there is a connection between pay and performance in their companies (See Chapter 11 for a discussion of compensation strategies), another way for managers to establish a clearer link between pay and performance is to publicize the way in which pay decisions are made.
Empower employees to make decisions if you really want them to believe that their hard work and efforts will lead to good performance. If valent rewards are linked to good performance, people should be energized to take action. However, this works only if they also believe that their efforts will lead to good performance. One of the ways in which managers destroy the expectancy that hard work and effort will lead to good performance is by restricting what employees can do or by ignoring employees' ideas.
3.2

31. Adding Expectancy Theory to Model

32. Reinforcing Performance
Law of effect
A law formulated by Edward Thorndike in 1911 stating that behavior that is followed by positive consequences will likely be repeated.
Reinforcers
Positive consequences that motivate behavior.
Organizational behavior modification (OB Mod) is the application of reinforcement theory in organizational settings.

33. Reinforcing Performance
Four key consequences of behavior either encourage or discourage people’s behavior:
Positive reinforcement
Negative reinforcement
Punishment
Extinction

34. Reinforcing Performance
Positive reinforcement
applying a consequence that increases the likelihood of a person repeating the behavior that led to it
Examples:
Compliments, letters of commendation, favorable performance evaluations, pay raises
Negative reinforcement
Removing or withholding an undesirable consequence.
Example:
taking an employee off probation because of improved performance

35. Reinforcing Performance
Punishment
Administering an aversive consequence.
Example:
Criticizing an employee, assigning an unappealing task, sending a worker home without pay.
Extinction
Withdrawing or failing to provide a reinforcing consequence.
Examples:
Not giving a compliment, forgetting to say thanks, setting impossible performance goals

36. The Consequences of Behavior
Exhibit 11.2

37. Reinforcing Performance
Be careful what you reinforce
Identify which kinds of behaviors to reinforce, and those to discourage
Reward system has to support firm’s strategy
Be creative in use of reinforcers
Consider prizes (e.g. palm pilots) not money
Use non-monetary rewards

38. Reinforcing Performance
Should you punish mistakes?
Managers who overuse punishment or use it inappropriately create a climate of fear in the workplace.
Causes people to focus on short term
Causes people to focus on themselves, not others
To manage mistakes effectively
Recognize that everyone makes mistakes
Praise people who deliver bad news to their bosses
Punish inaction, not good-faith efforts
Talk about your failures with your people, and show how you learned from them
Give people second, and maybe third chances
Encourage people to try new things, and don’t punish them if they don’t work out.

39. Reinforcing Performance
Feedback is essential reinforcement
Managers should:
consider all potential causes of poor performance
pay full attention when employees ask for feedback
give feedback according to guidelines in Chapter 10
Possible sources of feedback
customers
work statistics
performance reviews
Managers should actively seek feedback and avoid negative emotions when receiving it.

40. Adding Reinforcement Theory to Model

41. Setting Goals Goal-setting theory
A motivation theory stating that people have conscious goals that energize them and direct their thoughts and behaviors toward a particular end.

42. Four Characteristics of Motivational goals
Exhibit 11.1

43. Setting Goals Stretch goals
Targets that are particularly demanding, sometimes even thought to be impossible.
Two types of stretch goals
Vertical - aligned with current activities
Horizontal - involve people’s professional development
Reward for performance - don’t punish for not meeting stretch goals

44. Setting Goals Goal setting must be paired with other management tools
It is important that a single productivity goal not be established if there are other important dimensions of performance.
The manager who wants to motivate creativity should establish creativity goals along with productivity goals.
Set your own goals, too
Personal statement of purpose comprised of:
distant, inspiring vision
a mid-distant goal along the way
near-term objectives to start working on immediately

45. The Greatest Management Principle in the World

46. Adding Reinforcement Theory to Model

47. Managers Can Make Work More Varied and Interesting
Job rotation is changing from one routine task to another to alleviate boredom.
Job enlargement is similar to job rotation in that people are given different tasks to do.
Job enrichment means that jobs are restructured or redesigned by adding higher levels of responsibility.

48. Herzberg Proposed Two Important Job-Related Factors
Hygiene factors
Characteristics of the workplace, such as company policies, working conditions, pay, and supervision, that can make people dissatisfied.
Motivators
Factors that make a job more motivating, such as additional job responsibilities, opportunities for personal growth and recognition, and feelings of achievement

49. Herzberg Proposed Two Important Job-Related Factors
Contributions of Herzberg’s theory
highlights distinction between extrinsic rewards (hygiene factors) and intrinsic rewards (motivators)
reminds managers to use motivators as well as extrinsic rewards
sets the stage for theories that explain how manager’s can enrich people’s jobs.

50. Hackman and Oldham
Psychological states occur when people are working on enriched jobs, that is, jobs that offer the following five core job dimensions:
Skill variety – different job activities involving several skills and talents.
Task identity – the completion of a whole, identifiable piece of work.
Task significance – an important, positive impact on the lives of others.
Autonomy – independence and discretion in making decisions.
Feedback – information about job performance.
Growth need strength is the degree to which individuals want personal and psychological development.

51. The Hackman and Oldham Model of Job Design
Exhibit 11.5

52. Job Characteristics Model
Skill variety: The degree to which a job entails a variety of different activities, which demand the use of a number of different skills and talents by the jobholder
Task identity: The degree to which the job requires completion of a whole and identifiable piece of work, that is, doing a job from beginning to end with a visible outcome
Task significance: The degree to which the job has a substantial impact on the lives or work of other people, whether in the immediate organization or in the external environment
Autonomy: The degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out
Feedback: The degree to which carrying out the work activities required by the job results in the individual being given direct and clear information about the effectiveness of his or her performance
© 2007 Thomson/South-Western. All rights reserved.

53. The Hackman and Oldham Model of Job Enrichment
Growth need strength
The degree to which individuals want personal and psychological development.

54. Empowerment Empowerment
The process of sharing power with employees, thereby enhancing their confidence in their ability to perform their jobs and their belief that they are influential contributors to the organization.

55. Empowerment Must be Done Right
One disadvantage is that managers undermine it by sending mixed messages.
Empowerment encourages the following beliefs among employees:
They perceive meaning in their work, meaning that their job fits their values and attitudes.
They feel competent, or capable of performing their jobs with skill.
They have a sense of self-determination, of having some choice over the tasks, methods, and pace of their work.
They have an impact; they have some influence over important strategic, administrative, or operating decisions or outcomes on the job.

56. Procedural Justice Procedural justice
Using fair process in decision making and making sure others know that the process was as fair as possible.
To increase likelihood that process will be seen as fair:
make it open and visible,
state decision criteria in advance rather than after the fact
make sure that the most appropriate people make the decisions
give people a chance to participate in the decision-making process
provide an appeal process that allows people to question decisions safely and receive complete answers

57. Job Dissatisfaction
Job dissatisfaction creates a workforce that is more likely to exhibit:
Higher turnover
Higher absenteeism
Less good citizenship among employees
More grievances and lawsuits
Strikes
Stealing, sabotage, and vandalism
Poorer mental & physical health
Fewer injuries
Poor customer service
Lower productivity and profits

58. Quality of Work Life Companies are improving the quality of work life
Quality of work life (QWL) programs
Programs designed to create a workplace that enhances employee well-being.

59. QWL Programs Adequate and fair compensation
A safe and healthy environment
Jobs that develop human capacities
A chance for personal growth and security
A social environment that fosters personal identity, freedom from prejudice, a sense of community, and upward mobility
Constitutionalism, or the rights of personal privacy, dissent, and due process
A work role that minimized infringement on personal leisure and family needs
Socially responsible organizational actions

61. Psychological Contracts
A set of perceptions of what employees owe their employers, and what their employers owe them.

62. Video: SAS
What impact does the multitude of benefits available at SAS have on employee motivation?
What are the advantages of the SAS model?