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Goal setting and motivation

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  • 1. Two purposes of goal: 1. They provide a useful framework for managing motivation. Managers and employees can set goals for themselves and then work toward them. 2. Goals are an effective control device (control meaning the monitoring by management of how well the organization is performing).
  • 2. A person who achieves a goal will be proud of having done so whereas a person who fails to achieve a goal will feel personal disappointment, and perhaps even shame. People’s degree of pride or disappointment is affected by their self- efficacy, the extent to which they feel that they can still meet their goals even if they failed to do so in the past.
  • 3. Social learning theory provides insights into why and how goals can motivate behavior. By setting goals for people in the organization, a manager should be able to influence their behavior. In the original version of goal-setting theory, two specific goal characteristics – goal difficulty and goal specificity – were expected to shape performance.
  • 4. Goal Difficulty – is the extent to which a goal is challenging and requires effort. If people work to achieve goals, it is reasonable to assume that they will work harder to achieve more difficulty goals. A more realistic but still difficulty goal – perhaps a 20 percent increase in sale s- would probably be a better incentive.
  • 5. Goal Specificity – is the clarity and precision of the goal. A goal of “increasing productivity” is not very specific, whereas a goal of “increasing productivity by 3 percent int eh enxt six months” is quite specific. Some goals, such as those involving cots, output, profitability, and growth, can easily be stated in clear and precise terms.
  • 6. Goal Difficulty Goal Acceptance Organizational Support Intrinsic Rewards Goal-Directed Effort Performance Goal Specialty Goal Commitment Individual Abilities and Traits Extrinsic Rewards Satisfaction FIG. THE GOAL-SETTING THEORYOF MOTIVATION
  • 7. The expanded theory argues that goal-directed effort is a function of four goal attributes: difficulty and specificity (previously discussed), and acceptance and commitment.  Goal acceptance is the extent to which a person accepts a goal as his or her own.  Goal commitment is the extent to which her or she is personally interested in reaching the goal.
  • 8. MBO (Management by Objectives) – is essentially a collaborative goal-setting process through which organizational goals systematically cascade down through the organization
  • 9.  First, The overall goals are communicated to everyone. Then each manager meets with each subordinate. During the meetings the manager explains the unit goals to the subordinate, and the two together determine how the subordinate can contribute to the goals mots effectively.  Finally, manager and subordinate ensure that the subordinate has the resources needed to reach his over her goals. The enter process flows downward as each subordinate manager meets with his or her own subordinates to develop their goals.
  • 10.  Goal – setting theory has been widely tested in a variety of settings. Research has demonstrated fairly consistently that goal difficulty and specificity are closely associated with performance. Other elements of the theory, such as acceptance and commitment, have been studied less frequently. Some managers do not really let subordinates participate in goal setting but, instead, merely assign goals and order subordinates to accept them.
  • 11. The core of performance management is the actual measurement of the performance of an individual or group. 1. Evaluates an employees work behaviors by measurement and comparison with previously established standard, 2. Documents the results, and 3. Communicates the results to the employe
  • 12. ORGANIZATIONAL PROCESSES AND ACTIVITIES Total Quality Management Timing and Frequency of Evaluations Determination of Who Appraises Whom Measurement Procedures Storage and Distribution of Information Recording Methods PERFORMANCE MEASUREMENT Manager Employee THE PERFORMANCE MANAGEMENT SYSTEM (PMS)
  • 13. PURPOSES OF PERFORMANCE MEASUREMENT - The ability to provide valuable feedback is one critical purpose. Feedback, in turn, tells the employee where she or he stands in the eyes of the organization.  Providing job performance feedback is the primary use of appraisal information. Performance appraisal information can indicate that an employee is ready for promotions or that he or she needs additional training to gain experience in another area of company operations.
  • 14. Basic Purpose of Performance Measurement: Provide Information About Work Performance Judgment of Past Performance Development of Future Performance Provide a basis for reward allocation Provide a basis for promotions, transfers, layoffs, and so on Identify high –potential employees Validates selection procedures Evaluate previous training programs Foster work improvement Identify training and development opportunities Develop ways to overcome obstacles and performance barriers Establish supervisor-employee agreement on exceptions Purposes of Performance Management
  • 15. Employee appraisals are common in every type of organization, but how they are performed may vary. Many issues must be considered in determining how to conduct an appraisal. Three of the most important issues are who does the appraisals, how often they are done, and how performance is measured.
  • 16. The Appraiser - the employee’s primary evaluator is the supervisor. This stems from the obvious fact that the supervisor is presumably in the best position to be aware of the employee’s day –to-day performance. Frequency of the Appraisal – the type of tasks being performed, or the employee’s need for information on performance, the organization usually conducts performance appraisals on a regular basis, typically once a year.
  • 17.  Measuring Performance – the measurement method provides the information managers us to make decisions about salary adjustment, promotion, transfer, training, and discipline. Some of the most popular methods for evaluating individual performance are graphic rating scales, checklists, essays or diaries, behaviorally anchored rating scales, and forced-choice systems. Two major problems 1. A tendency to rate most individuals at about the same level 2. The inability to discriminate among variable levels of performance.
  • 18. Reward system consists of all organizational components – including people, processes, rules and procedures, and decision – making activities – involved in allocating compensation and benefits to employees in exchange for their contributions to the organization.
  • 19. The purpose of the reward system in most organizations is to attract, retain, and motivate qualified employees. The organizations’ compensation structure must be equitable and consistent to ensure equality of treatment and compliance with the law.
  • 20.  The organization needs to decide what type of behaviors or performance it wants to encourage with a reward system because what is rewarded tends to recur. Possible behaviors include performance, longevity, attendance, loyalty, contributions to the “bottom line”, responsibility, and conformity.  A reward system must also take into account volatile economic issues such as inflation, market conditions, technology, labor union activities, and so fort.
  • 21. 1. Base Pay – the most important reward for work is the pay they receive. Money is important because of the thing it can buy, but as we just noted, it can also symbolize an employee’s worth. Pay is very important to an organization for a variety of reason.
  • 22.  Example: • Piecework programs – which tie a worker’s earnings to the number of units produced • Gain-sharing programs, which grant additional earnings to employee or work groups for cost-reduction ideas • Bonus systems, which provide managers with lump-sum payments from a special fund based on the financial performance of the organization or a unit. • Long term compensation, which gives managers additional income based on stock price performance, earning per share, or return on equity • Merit pay plans, which base pay raises on the employees performance. • Profit – sharing plans, which distribute a portion of the firm’s profits to all employees at a predetermined rate • Employee stock option plus, which set aside stock in the company for employees to purchase at a reduced rate
  • 23. Typical benefits Payment for time not worked Social Security contributions Unemployment compensation Disability and workers compensation benefits Life and health insurance programs Pension or retirement plans
  • 24.  Perquisites - special privileges awarded to selected members of an organization, usually top managers. This decision has substantially change the nature of these benefits, but they have into entirely disappeared, nor are they like to.  Awards - employees receive awards for everything form seniority to perfect attendance, from zero defects (quality work) to cost reduction suggestions. Award programs can be costly in the time required to run them and in money if cash awards are given.
  • 25. The organization must consider its ability to pays employees at certain levels, economic and labor market conditions, and eh impact of the pay system on organizational financial performance.
  • 26. ISSUE IMPORTANT EXAMPLES Pay Secrecy Open, closed, partial Link with performance appraisal Equity perceptions Employee Participation By human resource department By joint employee / management committee Flexible system Cafeteria – style benefits Annual lump sum or monthly bonus Salary versus benefits Economic and Labor Inflation rate Market Factors Industry pay standards Unemployment rate Impact on Organizational Increase in costs Performance Impact on performance Expatriate Compensation Cast-of-living differentials Managing related equity issue
  • 27. END