1. Chapter 5: Motivation Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. Learning Objectives After reading this chapter, you should be able to: »Define motivation. »Describe expectancy theory and the three beliefs that help determine how work effort is directed. »Understand the two qualities that make goals strong predictors of task performance, according to goal setting theory. »Describe what it means to be equitably treated according to equity theory and how employees respond when they feel a sense of inequity. »Describe psychological empowerment and the four beliefs that determine how empowered employees feel. »Understand how motivation affects job performance and organizational commitment. 5-2

3. What is Motivation? Motivation is defined as a set of energetic forces that originates both within and outside an employee, initiates work-related effort, and determines its direction, intensity, and persistence. »Motivation is a critical consideration because job performance is largely a function of two factors: motivation and ability. 5-3

4. Motivation and Effort Figure 5-1 5-4

5. Discussion Questions What makes you decide to direct your effort to work assignments rather than taking a break or wasting time? What makes you decide to be a “good citizen” by helping out a colleague or another student? 5-5

6. Expectancy Theory Expectancy theory describes the cognitive process that employees go through to make choices among different voluntary responses. »Employee behavior is directed toward pleasure and away from pain or, more generally, toward certain outcomes and away from others. 5-6

7. Expectancy Theory Figure 5-2 5-7

8. Expectancy Theory, Cont’d Expectancy represents the belief that exerting a high level of effort will result in the successful performance of some task. »Expectancy is a subjective probability, ranging from 0 to 1 that a specific amount of effort will result in a specific level of performance (abbreviated E → P). »Self-efficacy is defined as the belief that a person has the capabilities needed to execute the behaviors required for task success. –Past accomplishments, vicarious experiences, verbal persuasion, emotional cues 5-8

9. Sources of Self-Efficacy Figure 5-3 5-9

10. Expectancy Theory, Cont’d Instrumentality represents the belief that successful performance will result in some outcome(s). Instrumentality is a set of subjective probabilities, each ranging from 0 to 1 that successful performance will bring a set of outcomes (abbreviated P → O). »OB in Sports Valence reflects the anticipated value of the outcomes associated with performance (abbreviated V). »Can be positive, negative, or zero 5-10

11. Expectancy Theory, Cont’d What exactly makes some outcomes more “positively valenced” than others? In general, outcomes are deemed more attractive when they help satisfy needs. »Needs can be defined as cognitive groupings or clusters of outcomes that are viewed as having critical psychological or physiological consequences. 5-11

12. Commonly Studied Needs in OB Table 5-1 5-12

13. Expectancy Theory, Cont’d Extrinsic motivation is motivation that is controlled by some contingency that depends on task performance. Intrinsic motivation is motivation that is felt when task performance serves as its own reward. OB on Screen »Talladega Nights Meaning of money — the degree to which they view money as having symbolic, not just economic, value. »Achievement, respect, and freedom 5-13

14. Extrinsic and Intrinsic Outcomes Table 5-2 5-14

15. Expectancy Theory, Cont’d Total “motivational force” to perform a given action can be described using the following formula: Motivational Force = E  P x Σ[(P  O) x V] The Σ symbol in the equation signifies that instrumentalities and valences. Motivational force equals zero if any one of the three beliefs is zero. 5-15

16. Goal Setting Theory Goal setting theory views goals as the primary drivers of the intensity and persistence of effort. »Assigning employees specific and difficult goals will result in higher levels of performance. What is a difficult goal? 5-16

17. Goal Difficulty and Task Performance Figure 5-4 5-17

18. Goal Setting Theory, Cont’d Why do specific and difficult goals have such positive effects? »Assignment of a specific and difficult goal shapes people’s own self-set goals — the internalized goals that people use to monitor their own task progress. »Goals trigger the creation of task strategies, defined as learning plans and problem-solving approaches used to achieve successful performance. 5-18

19. Goal Setting Theory, Cont’d Moderators on Task Performance »Feedback consists of updates on employee progress toward goal attainment. »Task complexity reflects how complicated the information and actions involved in a task are, as well as how much the task changes. »Goal commitment is defined as the degree to which a person accepts a goal and is determined to try to reach it. 5-19

20. Goal Setting Theory Figure 5-5 5-20

21. Equity Theory Equity theory acknowledges that motivation doesn’t just depend on your own beliefs and circumstances but also on what happens to other people. »Employees create a “mental ledger” of the outcomes (or rewards) they get from their job duties. 5-21

22. Equity Theory, Cont’d You compare your ratio of outcomes and inputs to the ratio of some comparison other — some person who seems to provide an intuitive frame of reference for judging equity. “Cognitive calculus” »Ratio of outcomes to inputs is balanced between you and your comparison other. 5-22

23. Equity Theory, Cont’d “Cognitive calculus,” cont’d »Your ratio of outcomes to inputs is less than your comparison other’s ratio. –Any imbalance in ratios triggers equity distress — an internal tension that can only be alleviated by restoring balance to the ratios. »Your ratio of outcomes to inputs is greater than your comparison other’s ratio. »Change your comparison other. 5-23

24. Three Possible Outcomes of Equity Theory Comparisons Figure 5-6 5-24

25. Psychological Empowerment Psychological empowerment reflects an energy rooted in the belief that work tasks contribute to some larger purpose. »Meaningfulness captures the value of a work goal or purpose, relative to a person’s own ideals and passions. »Self-determination reflects a sense of choice in the initiation and continuation of work tasks. »Competence captures a person’s belief in his or her capability to perform work tasks successfully. »Impact reflects the sense that a person’s actions “make a difference”—that progress is being made toward fulfilling some important purpose. 5-25

26. Designing Compensation Systems Do the elements provide difficult and specific goals for channeling work effort? »Lump sum bonuses and gainsharing have been credited with improvements in employee productivity. Consider the correspondence between individual performance levels and individual monetary outcomes. Merit pay represents the most common element of organizational compensation plans. 5-26

27. Compensation Plan Elements ELEMENTDESCRIPTION Individual-Focused Piece-RateA specified rate is paid for each unit produced, each unit sold, or each service provided. Merit PayAn increase to base salary is made in accordance with performance evaluation ratings. Lump-Sum BonusesA bonus is received for meeting individual goals but no change is made to base salary. The potential bonus represents “at risk” pay that must be re-earned each year. Base salary may be lower in cases in which potential bonuses may be large. Recognition AwardsTangible awards (gift cards, merchandise, trips, special events, time off, plaques) or intangible awards (praise) are given on an impromptu basis to recognize achievement. Table 5-3 5-27

28. Compensation Plan Elements, Cont’d ELEMENTDESCRIPTION Unit-Focused Gainsharing A bonus is received for meeting unit goals (department goals, plant goals, business unit goals) for criteria controllable by employees (labor costs, use of materials, quality). No change is made to base salary. The potential bonus represents “at risk” pay that must be re-earned each year. Base salary may be lower in cases in which potential bonuses may be large. Organization-Focused Profit Sharing A bonus is received when the publicly reported earnings of a company exceed some minimum level, with the magnitude of the bonus contingent on the magnitude of the profits. No change is made to base salary. The potential bonus represents “at risk” pay that must be re-earned each year. Base salary may be lower in cases in which potential bonuses may be large. Table 5-3 5-28

29. How Important is Motivation? Strongest performance effect is self-efficacy / competence; people who feel a sense of internal self-confidence tend to outperform those who doubt their capabilities. Difficult goals are the second most powerful motivating force. The motivational force created by high levels of valence, instrumentality, and expectancy is the next most powerful motivational variable for task performance. Perceptions of equity have a somewhat weaker effect on task performance. 5-29

30. Effects of Motivation on Performance and Commitment Figure 5-7 5-30

31. Takeaways Motivation is defined as a set of energetic forces that originates both within and outside an employee, initiates work-related effort, and determines its direction, intensity, and persistence. Expectancy theory describes the cognitive process that employees go through to make choices among different voluntary behaviors. Effort is directed toward behaviors when effort is believed to result in performance (expectancy), performance is believed to result in outcomes (instrumentality), and those outcomes are anticipated to be valuable (valence). 5-31

32. Takeaways, Cont’d Goal setting theory describes the impact of assigned goals on the intensity and persistence of effort. Goals become strong drivers of motivation and performance when they are difficult and specific. Specific and difficult goals affect performance by increasing self-set goals and task strategies. Those effects occur more frequently when employees are given feedback, tasks are not too complex, and goal commitment is high. Rewards are equitable when a person’s ratio of outcomes to inputs matches those of some relevant comparison other. A sense of inequity triggers equity distress. Underreward inequity typically results in lower levels of motivation or higher levels of counterproductive behavior. Overreward inequity typically results in cognitive distortion, in which inputs are reevaluated in a more positive light. 5-32

33. Takeaways, Cont’d Psychological empowerment reflects an energy rooted in the belief that tasks are contributing to some larger purpose. Psychological empowerment is fostered when work goals appeal to employees’ passions (meaningfulness), employees have a sense of choice regarding work tasks (self-determination), employees feel capable of performing successfully (competence), and employees feel they are making progress toward fulfilling their purpose (impact). Motivation has a strong positive relationship with job performance and a moderate positive relationship with organizational commitment. Of all the energetic forces subsumed by motivation, self-efficacy/competence has the strongest relationship with performance and commitment. Slide 5-33