1. © 2012 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Motivation II: Equity, Expectancy, and Goal Setting Chapter Seven

2. 7-2 After reading the material in this chapter, you should be able to: LO7.1 Discuss the role of perceived inequity in employee motivation. LO7.2 Describe the practical lessons derived from equity theory. LO7.3 Explain Vroom’s expectancy theory. LO7.4 Describe the practical implications of expectancy theory. LO7.5 Identify five practical lessons to be learned from goal-setting research. LO7.6 Specify issues that should be addressed before implementing a motivational program.

3. 7-3 Equity Theory Equity theory  model of motivation that explains how people strive for fairness and justice in social exchanges or give-and-take relationships

4. 7-4 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. 7-5 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. 7-6 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. 7-7 Dynamics of Perceived Inequity 1.People have varying sensitivities to perceived equity and inequity 2.Inequity can be reduced in a variety of ways

8. 7-8 Negative and Positive Inequity Figure 7-1

9. 7-9 Thresholds of Equity and Inequity Equity sensitivity  reflects an individual’s “different preferences for, tolerances for, and reactions to the level of equity associated with any given situation”

10. 7-10 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. 7-11 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. 7-12 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  quality of the interpersonal treatment people receive when procedures are implemented.

13. 7-13 Question? Employees at Globe Trade have always felt that resources and rewards are allocated unfairly at work. Such employee perceptions reflect _________. A.Distributive justice B.Interpersonal justice C.Equitable justice D.Procedural justice

14. 7-14 Practical Lessons from Equity Theory No matter how fair management thinks the organization’s policies, procedures, and reward system are, each employee’s perception of the equity of those factors is what counts. Managers benefit by allowing employees to participate in making decisions about important work outcomes

15. 7-15 Practical Lessons from Equity Theory Employees should be given the opportunity to appeal decisions that affect their welfare. Managers can promote cooperation and teamwork among group members by treating them equitably

16. 7-16 Practical Lessons from Equity Theory Employees’ perceptions of justice are strongly influenced by the leadership behavior exhibited by their managers Managers need to pay attention to the organization’s climate for justice.

17. 7-17 Question? At work, if Jamal's outcome to input ratio is greater than that of Tony's (his relevant co- worker), Jamal will experience A.Equity. B.No satisfaction. C.Positive inequity. D.High dissatisfaction.

18. 7-18 Expectancy Theory of Motivation Expectancy theory  Holds that people are motivated to behave in ways that produce valued outcomes.

19. 7-19 Vroom’s Expectancy Theory Motivation boils down to the decision of how much effort to exert in a specific task situation. Expectancy  represents an individual’s belief that a particular degree of effort will be followed by a particular level of performance.

20. 7-20 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

21. 7-21 Vroom’s Expectancy Theory Instrumentality  A performance  outcome perception Valence  the positive or negative value people place on outcomes Outcomes  different consequences that are contingent on performance

22. 7-22 Question? Niles believes that he will be promoted if he meets his sales goals. This is his ___________ perception. A.Expectancy B.Instrumentality C.Valence D.Outcome

23. 7-23 Managerial and Organizational Implications of Expectancy Theory

24. 7-24 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

25. 7-25 Question? Dana believes in designing challenging jobs for her employees. This is an implication of _________ theory. A.Equity B.Motivation C.Expectancy D.Reinforcement

26. 7-26 Goals: Definition and Background Goal  what an individual is trying to accomplish  object or aim of an action

27. 7-27 Goals: Definition and Background Management by objectives  management system incorporating participation in decision making, goal setting, and feedback

28. 7-28 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. 7-29 Insights from Goal-Setting Research 1.Specific high goals lead to greater performance  Goal specificity – quantifiability of a goal 2.Feedback enhances the effect of specific, difficult goals 3.Participative goals, assigned goals, and self-set goals are equally effective.

30. 7-30 Insights from Goal-Setting Research 4.Action planning facilitates goal accomplishment.  Action plan outlines the activities or tasks that need to be accomplished in order to obtain a goal. 5.Goal commitment and monetary incentives affect goal-setting outcomes  Goal commitment – extent to which an individual is personally committed to achieving a goal

31. 7-31 Question? Julia wants to become a successful heart surgeon. This reflects Julia's A.Expectancy B.Perception C.Goal D.Personality

32. 7-32 Practical Application of Goal Setting Step 1: Set goals  Use time and motion studies, average past performance, benchmarking  Should be SMART

33. 7-33 Practical Application of Goal Setting Two additional recommendations: 1.For complex tasks, managers should train employees in problem-solving techniques and encourage them to develop a performance action plan

34. 7-34 Practical Application of Goal Setting 2.Because of individual differences, it may be necessary to establish different goals for employees performing the same job.

35. 7-35 Guidelines for Writing SMART Goals

36. 7-36 Practical Application of Goal Setting Step 2: Promote goal commitment  Involve employees in the goal setting and action planning process  Have managers explain the rationale behind higher level goals

37. 7-37 Practical Application of Goal Setting Step 3: Provide support and feedback  ensure that each employee has the necessary abilities, training, technology/equipment, and information needed to achieve his or her goals

38. 7-38 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? A.Specific B.Measurable C.Attainable D.Time-bound

39. 7-39 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?

40. 7-40 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?