CHAPTER 10: Motivating and Rewarding Employees



CHAPTER 10 - MOTIVATING AND REWARDING EMPLOYEES

LEARNING OUTCOMES

After reading this chapter, students should be able to:

1. Define and explain motivation.

2. Compare and contrast early theories of motivation.

3. Compare and contrast contemporary theories of motivation.

4. Discuss current issues in motivating employees.

5.

|Opening Vignette – Best Practices at Best Buy |

|SUMMARY |

|Do traditional workplaces reward long hours instead of efficient hours? Wouldn’t it make more sense to have a workplace in which “people can |

|do whatever they want, whenever they want, as long as the work gets done?” Well, that’s the approach that Best Buy is taking.1 And this |

|radical workplace experiment, which obviously has many implications for employee motivation, has been an interesting and enlightening journey |

|for the company. |

|In 2002, then-CEO Brad Anderson (now the company’s vice chairman) introduced a carefully crafted program called ROWE (Results-Only Work |

|Environment). ROWE was the inspiration of two HRM managers at Best Buy, Cali Ressler and Jody Thompson, who had been given the task of taking |

|a flexible work program that was in effect at corporate headquarters in Minnesota and developing it for everyone in the company. Ressler and |

|Thompson said, “We realized that the flexible work program was successful as employee engagement was up, productivity was higher, but the |

|problem was the participants were being viewed as ‘not working.’ ” And that’s a common reaction from managers who don’t really view flexible |

|work employees as “really working because they aren’t in the office working traditional hours.” The two women set about to change that by |

|creating a program in which “everyone would be evaluated solely on their results, not on how long they worked.” |

|The first thing to understand about ROWE The first step in implementing ROWE was a culture audit at company headquarters, which helped them |

|establish a baseline for how employees perceived their work environment. After four months, the audit was repeated. The second phase involved |

|explaining the ROWE philosophy to all the corporate employees and training managers on how to maintain control in a ROWE workplace. In the |

|third phase, work unit teams were free to figure out how to implement the changes. From 2005 to 2007, productivity jumped 41 percent and |

|voluntary turnover fell to 8 percent from 12 percent. And employees say that the freedom has changed their lives. “They don’t know if they |

|work fewer hours—they’ve stopped counting—but they are more productive.” |

|Teaching notes |

|Ask students to identify what motivates them. |

|What motivational theories might apply to U.S. workers today? |

|How do effective managers help motivate their employees? |

|Do you think that motivation theories and practices that motivate individuals at a U.S. based company would be effective in explaining and |

|generating motivation in other countries? If so, which countries? If not, why? (Most motivation theories are US based and are culture bound)|

WHAT IS MOTIVATION

1 Definition

1. Many incorrectly view motivation as a personal trait.

2. Motivation is the result of the interaction between the individual and the situation.

a) Individuals differ in motivational drive.

b) An individual’s motivation varies from situation to situation.

3. Motivation refers to the process by which a person’s efforts are energized, directed, and sustained toward attaining a goal.

4. Function of three key elements: energy, direction and persistence.

a) The energy element is a measure of intensity.

1) When someone is motivated, he or she puts forth effort and tries hard.

2) Quality and intensity must be measured.

b) The effort must be channeled in a direction that benefits the organization.

1) Effort directed toward, and consistent with, the organization’s goals.

a) Persistence is the 3rd key element.

1) We want employees to persist in putting forth effort to achieve those goals.

Teaching Notes ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

WHAT DO EARLY THEORIES OF MOTIVATION SAY?

1 Introduction

1. In the 1950s three specific theories were formulated.

a) Now considered questionably valid, are probably still the best-known explanations for employee motivation.

b) The hierarchy of needs theory.

c) Theories X and Y.

d) The two-factor theory, motivation-hygiene theory.

e) Three needs theory.

2. Although more-valid explanations of motivation have been developed, students should know these theories because:

a) They represent the foundation from which contemporary theories grew.

b) Practicing managers regularly use these theories and their terminology.

2 What Is Maslow’s Hierarchy of Needs Theory?

3. The best-known theory of motivation.

4. Within every human being, there exists a hierarchy of five needs.

a) Physiological needs.

b) Safety needs.

c) Social needs.

d) Esteem needs.

e) Self-actualization needs.

5. As each need is substantially satisfied, the next need becomes dominant. (Exhibit 10-1.)

6. No need is ever fully gratified, a substantially satisfied need no longer motivates.

7. To motivate, you need to understand where that person is in the hierarchy and focus on satisfying needs at or above that level.

8. Widely recognized, particularly among practicing managers, its popularity can be attributed to the theory’s intuitive logic and ease of understanding.

9. Research does not generally validate the theory.

10. Maslow had no empirical substantiation for his theory, and several studies found no support.

3 What Is McGregor’s Theory X and Theory Y?

11. Douglas McGregor proposed two distinct views of the nature of human beings.

a) A basically negative view, labeled Theory X.

b) A basically positive view, labeled Theory Y.

12. McGregor concluded that a manager’s view of human nature, and therefore his or her approach to management, is based on a group of assumptions, either positive or negative.

13. Theory X assumes that physiological and safety needs dominate the individual.

14. Theory Y assumes that social and esteem needs are dominant.

15. McGregor held to the belief that the assumptions of Theory Y were the most valid.

16. There is no evidence to confirm either set of assumptions.

4 What Is Herzberg’s Two Factor Theory?

17. An individual’s attitude toward his or her work can very well determine success or failure.

18. Herzberg investigated the question “What do people want from their jobs?”

a) Exhibit 10-2 represents Herzberg’s findings, also called the Motivation-Hygiene Theory.

19. He concluded that certain characteristics were consistently related to job satisfaction (factors on the left side of Exhibit 10-2) and others to job dissatisfaction (the right side of Exhibit 10-2).

a) Intrinsic factors such as achievement, recognition, and responsibility were related to job satisfaction.

b) When dissatisfied, they tended to cite extrinsic factors such as company policy and administration, supervision, interpersonal relationships, and working conditions.

20. The opposite of satisfaction is not dissatisfaction, as was traditionally believed.

a) Removing dissatisfying characteristics does not necessarily make the job satisfying.

b) Exhibit 10-3, the opposite of “satisfaction” is “no satisfaction,” and the opposite of “dissatisfaction” is “no dissatisfaction.”

21. Managers who eliminate factors that create job dissatisfaction bring about peace but not motivation.

a) The factors that eliminate job dissatisfaction were characterized as hygiene factors.

b) To motivate people on their jobs, emphasize motivators, those factors that increase job satisfaction.

22. The criticisms of the theory include the methodology Herzberg used and his failure to account for situational variables.

23. Much of the enthusiasm for enriching jobs can be attributed to Herzberg’s findings.

a) Herzberg focused on the organization’s effect on the individual.

|From the Past to the Present |

|Deciding how work tasks should be performed is of interest to managers. Researchers have been curious about the ideal approach to work |

|design. They want to know the importance of attitudes toward work and the employees' experiences, both good and bad, that workers reported. |

|What he discovered changed the way we view job design. The fact that job dissatisfaction and job satisfaction were the results of different |

|aspects of the work environment was critical. |

|How do different work designs help motivate employees? |

5 What Is McClelland’s Three-Needs Theory?

24. David McClelland and others have proposed the three-needs theory.

25. Need for achievement (nAch)—the drive to excel, to achieve in relation to a set of standards, to strive to succeed.

a) Striving for personal achievement rather than for the rewards of success per se (nAch).

b) The desire to do something better or more efficiently than it has been done before.

c) High achievers differentiate themselves from others by their desire to do things better.

d) They seek situations in which they can attain personal responsibility for finding solutions to problems, in which they can receive rapid and unambiguous feedback, and in which they can set moderately challenging goals.

e) High achievers dislike succeeding by chance.

f) They avoid what they perceive to be very easy or very difficult tasks.

26. Need for power (nPow)—the need to make others behave in a way that they would not have behaved otherwise;

a) The need for power (nPow) is the desire to have impact and to be influential.

b) Individuals high in nPow enjoy being “in charge,” strive for influence over others, and prefer to be in competitive and status-oriented situations.

27. Need for affiliation (nAff)—the desire to be liked and accepted by others.

a) This need has received the least attention by researchers.

b) Striving for friendships, prefer cooperative situations rather than competitive ones, and desire relationships involving a high degree of mutual understanding.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

HOW DO CONTEMPORARY THEORIES EXPLAIN MOTIVATION

1 What is Goal-Setting Theory? (Exhibit 10-4)

28. Goal-setting theory - says that specific goals increase performance and that difficult goals, when accepted, result in higher performance than do easy goals.

29. Working toward a goal is a major source of job motivation.

30. Specific and challenging goals are superior motivating forces.

31. The specificity of the goal itself acts as an internal stimulus.

32. Participatively set goals elicit superior performance; in other cases, individuals performed best when their manager assigned goals. Participation is probably preferable to assigning goals when employees might resist accepting difficult challenges.

33. People will do better if they get feedback on how well they’re progressing toward their goals because feedback helps identify discrepancies between what they’ve done and what they want to do.

34. Self-generated feedback—where an employee monitors his or her own progress—has been shown to be a more powerful motivator than feedback coming from someone else.

2 Three other contingencies influence the goal-performance relationship:

35. Goal commitment - is most likely when goals are made public, when the individual has an internal locus of control, and when the goals are self-set rather than assigned.

36. Self-efficacy refers to an individual’s belief that he or she is capable of performing a task. The higher your self-efficacy, the more confidence you have in your ability to succeed in a task.

37. National culture - well adapted to North American countries because its main ideas align reasonably well with those cultures. It assumes that subordinates will be reasonably independent (not a high score on power distance), that people will seek challenging goals (low in uncertainty avoidance), and that performance is considered important by both managers and subordinates (high in assertiveness).

3 How Does Job Design Influence Motivation?

38. Job design refers to the way tasks are combined to form complete jobs.

39. Managers can design motivating jobs by using the job characteristics model (JCM), developed by J. Richard Hackman and Greg R. Oldham. This model helps managers describe any job in terms of five core job dimensions.

a) Skill variety.

b) Task identity.

c) Task significance.

d) Autonomy.

e) Feedback.

40. Exhibit 10-5 presents the model.

a) The first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work.

b) Jobs that possess autonomy give the job incumbent a feeling of personal responsibility for the results.

c) If a job provides feedback, the employee will know how effectively he or she is performing.

41. Research on the JCM has found that the first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work.

a) If these three characteristics exist in a job, we can predict that the person will view his or her job as being important, valuable, and worthwhile.

42. Jobs that possess autonomy give the job incumbent a feeling of personal responsibility.

43. Jobs that provide feedback let the employee know how effectively he or she is performing.

44. JCM suggests that internal rewards are obtained when an employee learns (knowledge of results through feedback) that one personally (experienced responsibility through autonomy of work) has performed well on a task that one cares about (experienced meaningfulness through skill variety, task identity, and/or task significance).

a) The links between the job dimensions and the outcomes are moderated or adjusted by the strength of the individual’s growth need (the person’s desire for self-esteem and self-actualization).

45. Individuals with a high growth need are more likely to experience the psychological states when their jobs are enriched than are their counterparts with a low growth need.

46. Job enrichment (vertical expansion of a job by adding planning and evaluation responsibilities): Individuals with low growth need don’t tend to achieve high performance or satisfaction by having their jobs enriched.

47. Exhibit 10-6 depicts guidelines for job redesign based on the JCM .

4 What is Equity Theory?

48. Employees make comparisons.

49. There is considerable evidence that employees compare themselves to others and that inequities influence the degree of effort that employees exert.

50. Developed by J. Stacey Adams, equity theory says that employees perceive what they get from a job situation (outcomes) in relation to what they put into it (inputs) and then compare their input-outcome ratio with the input-outcome ratio of relevant others. (See Exhibit 10-7.)

a) If they perceive their ratio to be equal to those of the relevant others with whom they compare themselves, a state of equity exists.

b) If the ratios are unequal, inequity exists; that is, workers view themselves as under-rewarded or over-rewarded.

51. The referent is an important variable in equity theory.

52. There are three referent categories: “other,” “system,” and “self.”

a) Other includes other individuals with similar jobs in the same organization and also includes friends, neighbors, or professional associates.

b) The system considers organizational pay policies and procedures and the administration of that system.

c) Self refers to input-outcome ratios that are unique to the individual. It reflects past personal experiences and contacts.

53. The choice of a particular set of referents is related to the information available about referents as well as the perceived relevance.

54. When employees perceive an inequity, they might:

a) distort either their own or others’ inputs or outcomes,

b) behave so as to induce others to change their inputs or outcomes,

c) behave so as to change their own inputs or outcomes,

d) choose a different comparison referent,

e) quit their job.

55. Individuals are concerned with both absolute rewards and the relationship of those rewards to what others receive.

56. On the basis of one’s inputs, such as effort, experience, education, and competence, one compares outcomes such as salary levels, raises, recognition, and other factors.

57. A perceived imbalance in input-outcome ratios relative to others’ creates tension.

58. The theory establishes four propositions relating to inequitable pay. (See Exhibit 10-7.)

59. Whenever employees perceive inequity, they will act to correct the situation.

5 Distributive justice - is the perceived fairness of the amount and allocation of rewards among individuals.

60. More recent research has focused on looking at issues of procedural justice, which is the perceived fairness of the process used to determine the distribution of rewards.

61. This research shows that distributive justice has a greater influence on employee satisfaction than procedural justice, while procedural justice tends to affect an employee’s organizational commitment, trust in his or her boss, and intention to quit.

62. Equity theory is not without problems.

a) The theory leaves some key issues still unclear.

1) How do employees define inputs and outcomes?

2) How do they combine and weigh their inputs and outcomes to arrive at totals?

3) When and how do the factors change over time?

63. Equity theory has an impressive amount of research support and offers important insights into employee motivation.

|Right or Wrong? |

|The 14-member investment and operations staff of the Missouri State Employees’ Retirement System (MOSERS) received almost $300,000 in bonuses |

|in 2008, even though the pension fund lost almost $1.8 billion.39 One person, the organization’s chief investment officer, received over a |

|third of that amount. |

|What do you think? |

|What ethical issues do you see in this situation? |

|What would you do? |

6 How Does Expectancy Theory Explain Motivation?

64. The most comprehensive explanation of motivation is Victor Vroom’s expectancy theory.

65. It states that an individual tends to act on the basis of the expectation that the act will be followed by a given outcome and the attractiveness of that outcome to the individual.

66. It includes three variables or relationships.

a) Expectancy - effort-performance linkage—the probability perceived by the individual that exerting a given amount of effort will lead to performance.

b) Instrumentality - performance-reward linkage—the degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome.

c) Valence - attractiveness—the importance that the individual places on the potential outcome or reward that can be achieved on the job.

67. It can be summed up in the following questions:

a) How hard do I have to work to achieve a certain level of performance, and can I actually achieve that level?

b) What reward will performing at that level get me?

c) How attractive is this reward to me, and does it help achieve my goals?

68. How does expectancy theory work?

a) Exhibit 10-8 shows a very simple version of expectancy theory.

b) The strength of a person’s motivation to perform (expectancy/effort) depends on how strongly that individual believes that he or she can achieve what is being attempted.

c) If this goal is achieved (instrumentality/performance), will he or she be adequately rewarded by the organization?

d) If so, will the reward satisfy his or her individual goals? (valence/attractiveness)

1) First, what perceived outcomes does the job offer the employee?

a) The critical issue is what the individual employee perceives the outcome to be, regardless of whether his or her perceptions are accurate.

2) Second, how attractive do employees consider these outcomes to be?

a) This is an internal issue and considers the individual’s personal attitudes, personality, and needs.

3) Third, what kind of behavior must the employee exhibit to achieve these outcomes?

a) What criteria will be used to judge the employee’s performance?

4) Fourth, how does the employee view his or her chances of doing what is asked?

a) What probability does he or she place on successful attainment?

7 How Can We Integrate Current Motivation Theories?

69. There is a tendency to view the motivation theories independently even though many of the ideas underlying the theories are complementary.

70. Exhibit 10-9 presents a model that integrates much of what we know about motivation.

a) Its basic foundation is the simplified expectancy model.

71. The individual effort box has an arrow leading into it that flows out of the individual’s goals.

72. The goals-effort loop is meant to remind us that goals direct behavior.

a) Expectancy theory predicts that an employee will exert a high level of effort if he or she perceives a strong relationship between effort and performance, performance and rewards, and rewards and satisfaction of personal goals.

b) Need theories tell us that motivation would be high to the degree that the rewards an individual received for his or her high performance satisfied the dominant needs consistent with his or her individual goals.

73. The model considers the need for achievement, equity, and the job characteristics model.

74. Finally, we can see the JCM in this integrative exhibit. Task characteristics (job design) influence job motivation at two places.

a) First, jobs that score high in motivating potential are likely to lead to higher actual job performance since the employee’s motivation is stimulated by the job itself.

b) Second, jobs that score high in motivating potential also increase an employee’s control over key elements in his or her work.

75. Jobs that offer autonomy, feedback, and similar task characteristics help to satisfy the individual goals of employees who desire greater control over their work.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

WHAT CURRENT ISSUES DO MANAGERS FACE?

1 How Does Country Culture Affect Motivation Efforts?

76. Current studies of employee motivation are influenced by some significant workplace issues—cross-cultural challenges, motivating unique groups of workers, and designing appropriate rewards.

77. Employees have different personal needs and goals they’re hoping to satisfy through their jobs.

78. Motivating a diverse work force also means that managers must be flexible enough to accommodate cultural differences.

a) The theories of motivation we have been studying were developed largely by U.S. psychologists and were validated in studies of American workers.

b) Therefore, these theories need to be modified for different cultures.

1) The self-interest concept is consistent with capitalism and the extremely high value placed on individualism in countries such as the United States.

2) These motivation theories should be applicable to employees in such countries as Great Britain and Australia.

3) In more collectivist nations—such as Japan, Greece, and Mexico—security needs would be on top of the needs hierarchy—not self-actualization.

79. The need-for-achievement concept also has a U.S. bias.

a) It presupposes the existence of two cultural characteristics: a willingness to accept a moderate degree of risk and a concern with performance.

b) These characteristics would exclude countries with high uncertainty avoidance scores and high quality-of-life ratings.

80. Several recent studies among employees in other countries indicate that some aspects of motivation theory are transferable.

a) Motivational techniques were shown to be effective in changing performance-related behaviors of Russian textile mill workers.

b) A recent study examining workplace motivation trends in Japan seems to indicate that Herzberg’s model is applicable to Japanese employees.

81. Managers must change their motivational techniques to fit the culture.

2 How Can Managers Motivate Unique Groups of Workers?

82. Motivating employees has never been easy. Employees come into organizations with different needs, personalities, skills, abilities, interests, and aptitudes.

a) Flexibility is key to maximizing motivation among today’s diversified work force.

b) Studies show that men place considerably more importance on autonomy in their jobs than do women.

c) The opportunity to learn, convenient work hours, and good interpersonal relations are more important to women than to men.

d) What motivates a single mother with two dependent children working full time may be very different from the needs of a young, single, part-time worker, or the older employee.

e) Employees have different personal needs and goals they’re hoping to satisfy through their jobs.

|Developing Your Motivating Employees Skill |

|About the Skill |

|Because a simple, all-encompassing set of motivational guidelines is not available, the following suggestions draw on the essence of what we |

|know about motivating employees. |

|Steps in Practicing the Skill |

|1 Recognize individual differences. Employees have different needs, attitudes, personality, and other important individual variables. |

|2 Match people to jobs. People who lack the necessary skills will be at a disadvantage. |

|3 Use goals. Employees should have hard, specific goals and feedback on performance and the goals should be participatively set. |

|4 Ensure that goals are perceived as attainable. Employees who see goals as unattainable will reduce their effort. |

|5 Individualize rewards. Use employee differences to individualize the rewards. |

|6 Link rewards to performance. Rewards such as pay increases and promotions should be given for the attainment of employees’ specific goals. |

|7 Check the system for equity. Employees should perceive that rewards or outcomes are equal to the inputs and effort. |

|8 Don’t ignore money. Various pay incentives are important in determining employee motivation. |

83. Flextime - Example—Susan Talbot is the classic “morning person.”

a) Susan’s work schedule as a claims adjuster at State Farm Insurance is flexible.

b) It allows him some degree of freedom as to when she comes to work and when she leaves.

84. Many employees continue to work an eight-hour day, five days a week.

85. A number of scheduling options have been introduced to give management and employees more flexibility. A compressed workweek is a workweek where employees work longer hours per day but fewer days per week.

86. How does flextime work?

a) Flextime is a scheduling option that allows employees, within specific parameters, to decide when to go to work.

b) Flextime is short for flexible work hours.

1) Employees have to work a specific number of hours a week, but they are free to vary the hours of work within certain limits.

2) Each day consists of a common core, usually six hours, with a flexibility band surrounding the core.

3) Some flextime programs allow extra hours to be accumulated and turned into a free day off each month.

4) Flextime has become an extremely popular scheduling option; about 60 percent of firms in a recent study offered employees some form of flextime.

5) The potential benefits from flextime are numerous.

a) Improved employee motivation and morale, reduced absenteeism as a result of enabling employees to better balance work and family responsibilities, increased wages due to productivity gains, and the ability of the organization to recruit higher-quality and more-diverse employees.

6) Flextime’s major drawbacks:

a) It is not applicable to every job.

b) It works well with job tasks for which an employee’s interaction with people outside his or her department is limited.

c) It is not a viable option when key people must be available during standard hours.

1 Can employees share jobs?

c) Job sharing is a special type of part-time work.

1) It allows two or more individuals to split a traditional forty-hour-a-week job.

d) Job sharing is growing in popularity, with 57 percent of large organizations offering it.

e) Job sharing allows the organization to draw upon the talents of more than one individual for a given job.

1) Opportunity to acquire skilled workers who might not be available on a full-time basis.

2) An option for managers to use to minimize layoffs.

f) Major drawback—finding compatible pairs of employees who can successfully coordinate the intricacies of one job.

87. What is telecommuting?

a) Telecommuting capabilities that exist today have made it possible for employees to be located anywhere on the globe and do their jobs.

b) Companies no longer have to consider locating near their work force.

c) It refers to employees who do their work at home on a computer that is linked to their office.

d) More than 27 million people work at home in the United States—and the number is expected to continue to rise.

e) Telecommuting offers an opportunity for a business in a high-labor-cost area to have its work done in an area where lower wages prevail.

f) Challenge for employers revolves around training managers in how to establish and ensure appropriate work quality and on-time completion.

1) Emphasis will be on the final product, not the means by which it is accomplished.

g) Work at home may also require managers to rethink their compensation policy.

1) Will the company pay workers by the hour, on a salary basis, or by the job performed?

2) Employees who work more than 40 hours during the work week will be entitled to overtime pay.

h) Because telecommuting employees are often full time, it will be the organization’s responsibility to ensure the health and safety of the off-premise work site.

1) Equipment provided by the company that leads to an employee injury or illness is the responsibility of the organization.

i) For employees, there are two big advantages of telecommuting.

1) The decrease in time and stress of commuting.

2) The increase in flexibility in coping with family demands.

j) Some potential drawbacks.

1) Telecommuting employees miss the regular social contact.

2) They may be less likely to be considered for salary increases and promotions.

3) Will non-work-related distractions significantly reduce productivity for those without superior willpower and discipline?

|MANAGING DIVERSITY | Developing Employee Potential: The Bottom Line of Diversity |

|One of a manager’s more important goals is helping employees develop their potential. The managers at Bell Labs have worked hard to develop an|

|environment in which the ideas of diverse employees are encouraged openly. One thing they can do is make sure that diverse role models are in|

|leadership positions so that others see the opportunities to grow and advance. |

|Another way for managers to develop the potential of their diverse employees is to offer developmental work assignments that provide a variety|

|of learning experiences in different organizational areas. Employees who are provided the opportunity to learn new processes and new |

|technology are more likely to excel at their work and to stay with the company. |

|What can managers do to ensure that their diverse employees have the opportunity to develop their potential? |

|What would be an example of developmental work? |

3 Motivating Professionals

88. Professionals are typically different from nonprofessionals.

a) They have a strong and long-term commitment to their field of expertise.

b) Their loyalty is more often to their profession than to their employer.

c) Their commitment to their profession means they rarely define their workweek in terms of nine-to-five or five days a week.

89. Money and promotions into management typically are low on their priority list.

90. Job challenge tends to be ranked high.

a) They like to tackle problems and find solutions.

b) Their chief reward in their job is the work itself.

c) They value support.

d) They want others to think that what they are working on is important.

91. Managers should provide them with new assignments and challenging projects.

a) Give them autonomy to follow their interests and allow them to structure their work in ways they find productive.

b) Reward them with educational opportunities.

c) Reward them with recognition.

d) And managers should demonstrate that they’re sincerely interested in what they’re doing.

4 Motivating Contingent Employees

92. Contingent workers are part-time, contract, and other forms of temporary workers, due to organizations eliminating workers, downsizing and restructuring.

93. They can be motivated:

a) with the opportunity of permanent employment

b) training opportunities

5 How Can Managers Design Appropriate Rewards Programs?

94. Employee rewards programs play a powerful role in motivating appropriate employee behavior.

95. Open Book Management - is a motivational approach in which an organization’s financial statements (the “books”) are shared with all employees.

96. Organizations share information so that employees will be motivated to make better decisions about their work and better able to understand the implications of what they do, how they do it, and the ultimate impact on the bottom line.

6 How Can Managers Use Employee Recognition?

97. Employee recognition programs consist of personal attention and expressions of interest, approval, and appreciation for a job well done.

98. 84 percent of organizations had some type of program to recognize worker achievements.

99. Consistent with reinforcement theory, rewarding a behavior with recognition immediately following that behavior is likely to encourage its repetition.

7 How Can Managers Use Pay-For-Performance to Motivate Employees?

100. Forty percent of employees see no clear link between performance and pay.

101. Pay for-performance programs pay employees on the basis of some performance measure.

a) Piece-rate plans, gainsharing, wage incentive plans, profit sharing, and lump-sum bonuses.

102. These forms of pay reflect pay adjustments based on performance measures.

103. Performance-based compensation is probably most compatible with expectancy theory.

104. Pay-for-performance programs are gaining in popularity in organizations. Some 80 percent of large U.S. companies have some form of variable pay plan.

105. The growing popularity can be explained in terms of both motivation and cost control.

106. Making some or all of a worker’s pay conditional on performance measures focuses his or her attention and effort on that measure, then reinforces the continuation of that effort with rewards.

a) However, if the employee, team, or the organization’s performance declines, so too does the reward.

107. A recent extension of this concept is called competency-based compensation.

a) It pays and rewards employees on the basis of the skills, knowledge, or behaviors employees possess.

b) Pre-set pay levels (broadbanding) are established on the basis of the degree to which these competencies exist.

c) Pay increases in a competency-based system are awarded for growth in personal competencies as well as for the contributions one makes to the overall organization.

8 Final Note on Employee Rewards.

108. During times of economic and financial uncertainty, managers’ abilities to recognize and reward employees are often severely constrained.

109. Managers can maintain and even increase employee motivation by:

a) clarifying each person's role in the organization

b) keeping open lines of communication and two-way exchanges between top-level managers and employees

c) valuing the employees.

Teaching Notes _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

REVIEW AND APPLICATIONS

CHAPTER SUMMARY

1. Define and explain motivation. Motivation is the process by which a person’s efforts are energized, directed, and sustained toward attaining a goal. The energy element is a measure of intensity or drive. The high level of effort needs to be directed in ways that help the organization achieve its goals. Employees must persist in putting forth effort to achieve those goals.

2. 10-2. Compare and contrast early theories of motivation. Individuals move up the hierarchy of five needs (physiological, safety, social, esteem, and self-actualization) as needs are substantially satisfied. A need that’s substantially satisfied no longer motivates. A Theory X manager believes that people don’t like to work or won’t seek out responsibility so they have to be threatened and coerced to work. A Theory Y manager assumes that people like to work and seek out responsibility, so they will exercise self-motivation and self-direction. Herzberg’s theory proposed that intrinsic factors associated with job satisfaction were what motivated people. Extrinsic factors associated with job dissatisfaction simply kept people from being dissatisfied. Three-needs theory proposed three acquired needs that are major motives in work: need for achievement, need for affiliation, and need for power.

3. Compare and contrast contemporary theories of motivation. Goal-setting theory says that specific goals increase performance and difficult goals, when accepted, result in higher performance than do easy goals. Important points in goal-setting theory include: intention to work toward a goal is a major source of job motivation; specific hard goals produce higher levels of output than generalized goals; participation in setting goals is probably preferable to assigning goals, but not always; feedback guides and motivates behavior, especially self-generated feedback; and contingencies that affect goal setting include goal commitment, self-efficacy, and national culture.

The job characteristics model says there are five core job dimensions (skill variety, task identity, task significance, autonomy, and feedback) that are used to design motivating jobs. Equity theory focuses on how employees compare their inputs-outcomes ratios to relevant others’ ratios. A perception of inequity will cause an employee to do something about it. Procedural justice has a greater influence on employee satisfaction than does distributive justice. Expectancy theory says that an individual tends to act in a certain way based on the expectation that the act will be followed by a desired outcome. Expectancy is the effort-performance linkage (how much effort do I need to exert to achieve a certain level of performance); instrumentality is the performance- reward linkage (achieving at a certain level of performance will get me what reward); and valence is the attractiveness of the reward (is the reward what I want).

4. Discuss current issues in motivating employees. Most motivational theories were developed in the United States and have a North American bias. Some theories (Maslow’s need hierarchy, achievement need, and equity theory) don’t work well for other cultures. However, the desire for interesting work seems important to all workers and Herzberg’s motivator (intrinsic) factors may be universal. Managers face challenges in motivating unique groups of workers. A diverse workforce is looking for flexibility. Professionals want job challenge and support, and are motivated by the work itself. Contingent workers want the opportunity to become permanent or to receive skills training. Open-book management is when financial statements (the books) are shared with employees who have been taught what they mean. Employee recognition programs consist of personal attention, approval, and appreciation for a job well done. Pay-for-performance programs are variable compensation plans that pay employees on the basis of some performance measure.

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To check your understanding of outcomes 10.1—10.4, go to and try the chapter questions.

UNDERSTANDING THE CHAPTER

1. Most of us have to work for a living, and a job is a central part of our lives. So why do managers have to worry so much about employee motivation issues?

Answer: Managers need to worry about employee motivation due to the competitive nature of the workplace and productivity . Organizations need engaged employees for successful and profitable results.

2. Contrast lower-order and higher-order needs in Maslow’s needs hierarchy.

Answer: Within every human being, there exists a hierarchy of five needs. Lower-order needs are physiological needs and safety needs. Higher-order needs are social needs, esteem needs, and self-actualization needs. See Exhibit 10-1.

3. What role would money play in (a) the hierarchy of needs theory, (b) two-factor theory, (c) equity theory, (d) expectancy theory, and (e) motivating employees with a high nAch? How do needs affect motivation?

Answer: A need, in our terminology, means some internal state that makes certain outcomes appear attractive. (a) Money would satisfy the lower needs in Maslow's theory and work toward the higher needs. Money might be a security need, providing shelter, food, and clothing, or it could be a self-esteem need in giving the individual a sense of self-worth. (b) Money is a hygiene theory. (c) Money becomes a measure of fairness—Is my raise, salary appropriate to my position? (d) Money is relevant only to the degree the individual perceives that the monetary reward is appropriate for the amount of effort put forth. (e) Money could be seen as a way to measure success.

4. What are some of the possible consequences of employees perceiving an inequity between their inputs and outcomes and those of others?

Answer: There is considerable evidence that employees make comparisons of their job inputs and outcomes relative to others and that inequities influence the degree of effort that employees exert.

If the ratios are unequal, inequity exists; that is, they view themselves as under-rewarded or over-rewarded. When inequities occur, employees attempt to correct them. On the basis of equity theory, when employees perceive an inequity, they might (1) distort either their own or others’ inputs or outcomes, (2) behave in some way to induce others to change their inputs or outcomes, (3) behave in some way to change their own inputs or outcomes, (4) choose a different comparison referent, and/or (5) quit their job. The theory establishes the four propositions relating to inequitable pay.

5. What are some advantages of using pay-for-performance to motivate employee performance? Are there drawbacks? Explain.

Answer: People do what they do to satisfy some need. They look for a payoff or reward. Pay is an important variable in motivation; managers need to look at how pay is used to motivate high levels of employee performance. Pay-for-performance programs are compensation plans that pay employees on the basis of some performance measure and are probably most compatible with expectancy theory. Pay-for-performance programs are gaining popularity in organizations. Making some or all of a worker’s pay conditional on performance measures focuses his or her attention and effort on that measure, then reinforces the continuation of that effort with rewards. However, if the employee, team, or the organization’s performance declines, so too does the reward. Failure to reach the performance measures can result in the forfeiture of a percentage of salary placed at risk.

6. Many job design experts who have studied the changing nature of work say that people do their best work when they’re motivated by a sense of purpose rather than by the pursuit of money. Do you agree? Explain your position. What are the implications for managers?

Answer: Student answers may vary. People are motivated by intrinsic and extrinsic rewards. When individuals feel that they are making a difference, the money ceases to be the main motivator. The implications for managers is that they need to uncover what motivates each employee in order to understand them and offer the appropriate response such as job re-design, praise, rewards, etc.

7. Could managers use any of the motivation theories or approaches to encourage and support workforce diversity efforts? Explain.

Answer: Most employees are motivated by one of David McClelland's theories. Need for achievement (nAch). The drive to excel, to achieve in relation to a set of standards, to strive to succeed. Striving for personal achievement rather than for the rewards of success per se (nAch). The desire to do something better or more efficiently than it has been done before. They seek situations in which they can attain personal responsibility for finding solutions to problems, in which they can receive rapid and unambiguous feedback, and in which they can set moderately challenging goals.

Need for power (nPow). The need to make others behave in a way that they would not have behaved otherwise. The need for power (nPow) is the desire to have impact and to be influential. Individuals high in nPow enjoy being “in charge,” strive for influence over others, and prefer to be in competitive and status-oriented situations.

Need for affiliation (nAff). The desire for friendly and close interpersonal relationships. Striving for friendships, prefer cooperative situations rather than competitive ones, and desire relationships involving a high degree of mutual understanding.

Other theories like Equity theory would ensure that employees were treated fairly. Equity theory is heavily dependant on employee perception. Perceptions will vary based on cultural backgrounds. So managers need to be sensitive to cultural differences Expectancy theory would also meet people's expectations through communication.

8. Can an individual be too motivated? Discuss.

Answer: Probably not as long as the motivation can be channeled into productive behavior. Employees, particularly professionals should be given autonomy to follow their interests and allow them to structure their work in ways they find productive. Reward them with educational opportunities—training, workshops, attending conferences—that allow them to keep current in their field and to network with their peers. Also reward them with recognition. They seek situations in which they can attain personal responsibility for finding solutions to problems, in which they can receive rapid and unambiguous feedback, and in which they can set moderately challenging goals.

9. Do some additional research on ROWE discussed in the chapter opener. Write up your findings in a report. Be sure to cite your information.

Answer: answers will vary by student.

UNDERSTANDING YOURSELF

What are My Dominant Needs?

This instrument was designed to deal with flaws in previous attempts to measure four individual needs: achievement, affiliation, autonomy, and power. These are defined as follows:

Achievement—The desire to excel and to improve on past performance.

Affiliation—The desire to interact socially and to be accepted by others.

Autonomy—The desire to be self-directed.

Power—The desire to influence and direct others.

INSTRUMENT This test contains 20 statements that may describe you and the types of things you may like to do. For each statement, indicate your agreement or disagreement using the following scale:

1 = Strongly disagree

2 = Disagree

3 = Neither agree nor disagree

4 = Agree

5 = Strongly agree

|1. I try to perform my best at work. |1 2 3 4 5 |

|2. I spent a lot of time talking to other people. |1 2 3 4 5 |

|3. I would like a career where I have very little supervision. |1 2 3 4 5 |

|4. I would enjoy being in charge of a project. |1 2 3 4 5 |

|5. I am a hard worker. |1 2 3 4 5 |

|6. I am a “people” person. |1 2 3 4 5 |

|7. I would like a job where I can plan my work schedule myself. |1 2 3 4 5 |

|8. I would rather receive orders than give them. |1 2 3 4 5 |

|9. It is important to me to do the best job possible. |1 2 3 4 5 |

|10. When I have a choice, I try to work in a group instead of by myself. |1 2 3 4 5 |

|11. I would like to be my own boss. |1 2 3 4 5 |

|12. I seek an active role in the leadership of a group. |1 2 3 4 5 |

|13. I push myself to be “all that I can be.” |1 2 3 4 5 |

|14. I prefer to do my work and let others do theirs. |1 2 3 4 5 |

|15. I like to work at my own pace on job tasks. |1 2 3 4 5 |

|16. I find myself organizing and directing the activities of others. |1 2 3 4 5 |

|17. I try very hard to improve on my past performance at work. |1 2 3 4 5 |

|18. I try my best to work alone on a work assignment. |1 2 3 4 5 |

|19. In my work projects, I try to be my own boss. |1 2 3 4 5 |

|20. I strive to be “in command” when I am working in a group. |1 2 3 4 5 |

SCORING KEY Add up items 1, 5, 9, 13, and 17. These represent your achievement score. The affiliation score is made up of items 2, 6, 10, 14, and 18 (reverse score 14 and 18). The autonomy score is items 3, 7, 11, 15, and 19. The power score is items 4 (reverse score), 8, 12, 16, and 20. Scores for each will range from 5 to 25.

ANALYSIS AND INTERPRETATION

The higher a score, the more dominant that need is for you. For comparative purposes, the researchers used this test with approximately 350 college graduates who averaged 28 years of age. Their average scores were 22.6 for achievement; 16.1 for affiliation; 20.0 for autonomy; and 17.7 for power.

Overview

Some people have a compelling drive to succeed, but they are striving for personal achievement rather than the rewards of success. They have a desire to do something better or more efficiently than it has been done before. This drive is the need for achievement. From research into the need for achievement, McClelland found that high achievers differentiate themselves from others by their desire to do things better. They seek situations in which they can attain personal responsibility for finding solutions to problems, receive rapid and unambiguous feedback on their performance, and set moderately challenging goals. They prefer working at a challenging problem and accepting the personal responsibility for success or failure rather than leaving the outcome to chance or the actions of others.

High achievers perform best when they perceive their probability of success as being 0.5, that is, when they estimate that they have a 50–50 chance of success. They dislike gambling with high odds (high probability of failure) because success in such a situation would be more a matter of luck than of ability, and they get no achievement satisfaction from happenstance success. Similarly, they dislike low odds (high probability of success) because then there is no challenge to their skills. They like to set realistic but difficult goals that require stretching themselves a little. When there is an approximately equal chance of success or failure, there is the optimum opportunity to experience feelings of accomplishment and satisfaction from their efforts.

The need for power is the desire to have an impact, to be influential, and to control others. Individuals high in nPow enjoy being in charge, strive for influence over others, prefer competitive and status-oriented situations, and tend to be more concerned with gaining prestige and influence over others than with effective performance.

The third need isolated by McClelland is affiliation. This need has received the least attention of researchers. Individuals with a high nAff strive for friendship, prefer cooperative situations rather than competitive ones, and desire relationships involving a high degree of mutual understanding.

Teaching Notes

An extensive amount of research indicates that some reasonably well supported predictions can be made based on the relationship between achievement need and job performance. Though less research has been done on power and affiliation needs, there are consistent findings in those areas too. First, individuals with a high need to achieve prefer job situations with personal responsibility, feedback, and an intermediate degree of risk. When these characteristics are prevalent, high achievers will be strongly motivated. The evidence consistently demonstrates, for instance, that high achievers are successful in entrepreneurial activities such as running their own business, managing a self-contained unit within a large organization, and many sales positions. Second, a high need to achieve does not necessarily lead to being a good manager, especially in large organizations. High nAch salespeople do not necessarily make good sales managers, and the good manager in a large organization does not typically have a high need to achieve. Third, the needs for affiliation and power tend to be closely related to managerial success. The best managers are high in the need for power and low in their need for affiliation. Last, employees have been successfully trained to stimulate their achievement need. If the job calls for a high achiever, management can select a person with a high nAch or develop its own candidate through achievement training.

Exercises

1. What’s Need Gotta Do With It? Break the class into groups based upon their scores on this assessment. Have them discuss how they would react to a scenario in which they received a promotion, but had to move far away from home if they were to accept. How would they react?

Learning Objective(s): To show how individuals with different needs react to similar situations.

Preparation/Time Allotment: This should be about a 15-minute class discussion. Allow another 10 minutes to discuss the results with the entire class.

Advantages/Disadvantages/Potential Problems: This exercise works best if you have individuals that scored dramatically different on the survey. For example, a high need for affiliation person may not want the promotion. Their first reaction might be “what about my co-workers and family?” A high need for power person is going to wonder whom they will be managing, and a high need for achievement person, while probably happy to receive the promotion, may ask, “What is next?” Discuss these differences with the class and ask them how they would manage these differences.

2. See For Yourself. Have the students administer the survey to a group of their co-workers. After scoring the survey, have them observe these co-workers at work, looking for examples that fit the profile. For example, does the high affiliation person prefer meetings, group work, and social activities? Are the high achievement people the first ones in and the last to leave?

Learning Objective(s): To illustrate through real-workplace examples how needs translate into observable behavior.

Preparation/Time Allotment: Give the students at least two weeks to observe behaviors. It may take that long for them to see actual items that relate to the survey. Have them present their findings to class, or turn in their report as a project.

Advantages/Disadvantages/Potential Problems: Make sure that the people that they are observing understand the scope of the project so that the students are not intrusive. Also, make sure the students ensure confidentiality of the survey results. Participants should have access to their own score. Ensure that any school-based requirements for experimentation have been satisfied and that students get organizational consent prior to starting this activity.

|FYIA (For Your Immediate Action) |

|La Mexican Kitchen |

|To: Linda Bustamante, Operations Manager |

|From: Matt Perkins, Shift Supervisor |

|Re: Staff Turnover |

|HELP! We’ve been having a difficult time keeping our food servers for any length of time. It seems like I just get them trained and they |

|leave. Although these positions pay minimum wage, you and I both know a motivated server can make additional money from tips. |

|This fictionalized company and message were created for educational purposes only. It is not meant to reflect positively or negatively on |

|management practices by any company that may share this name. |

|What are your ideas to better motivate our food servers? |

|CASE APPLICATION |

|Searching For? |

|Summary: Google has been in the top 10 list of “Best Companies to Work For” by Fortune magazine for three years running and was number one on |

|the list for two of those three years. But make no mistake. Google’s executives decided to offer all these fabulous perks for several reasons:|

|to attract the best knowledge workers it can in an intensely competitive, cutthroat market; to help employees work long hours and not have to |

|deal with time-consuming personal chores; to show employees they’re valued; and to have employees remain Googlers (the name used for |

|employees) for many years. But a number of Googlers have jumped ship and given up these fantastic benefits to go out on their own. |

|Discussion Questions |

|What’s it like to work at Google? (Hint: Go to Google’s Web site and click on “About Google.” Find the section on Jobs at Google and go from |

|there.) What’s your assessment of the company’s work environment? |

|Answer: student answers will vary based on the web site. |

|Google is doing a lot for its employees, but obviously not enough to retain several of its talented employees. Using what you’ve learned from|

|studying the various motivation theories, what does this situation tell you about employee motivation? |

|Answer: It is very difficult to help motivate employees and to keep them motivated. The workplace is very competitive especially for the star|

|performers. Even utilizing the various theories, individuals still make their own choices, particularly to become entrepreneurs and start |

|their own companies. |

|What do you think is Google’s biggest challenge in keeping employees motivated? |

|Answer: They have some of the best and brightest minds working for them, so it is a challenge to keep them motivated. The American dream of |

|owning your own company provides stiff competition. |

|If you were managing a team of Google employees, how would you keep them motivated? |

|Answer: There are a variety of answers for this, but management must be very creative and the motivation can't just be extrinsic. Managers |

|would need to be in continuous dialogue with the employees to keep them engaged and to understand their desires and future plans. |

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