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Principles of Management Managing Employee Motivation and Performance Lecture 10
The Nature of Motivation <ul><li>Motivation </li></ul><ul><ul><li>The set of forces that cause people to behave in certain...
Figure 16.1: The Motivation Framework  16–
Content Perspectives on Motivation <ul><li>Content Perspectives </li></ul><ul><ul><li>Approaches to motivation that try to...
Content Perspectives on Motivation (cont’d) <ul><li>The Need Hierarchy Approach </li></ul><ul><ul><li>Maslow’s Hierarchy o...
Figure 16.2: Maslow’s Hierarchy of Needs  16–
Content Perspectives on Motivation (cont’d) <ul><li>The ERG Theory </li></ul><ul><ul><li>Needs are grouped into three over...
Content Perspectives on Motivation (cont’d) <ul><li>The Two-Factor Theory (Herzberg) </li></ul><ul><ul><li>Satisfaction an...
Content Perspectives on Motivation (cont’d) <ul><li>The Two-Factor Theory (cont’d) </li></ul><ul><ul><li>Theory posits tha...
Figure 16.3: The Two-Factor Theory of Motivation  16–
Content Perspectives on Motivation (cont’d) <ul><li>Individual Human Needs (McClelland) </li></ul><ul><ul><li>The need for...
Process Perspectives on Motivation <ul><li>Process Perspectives </li></ul><ul><ul><li>Approaches to motivation that focus ...
Process Perspectives on Motivation (cont’d) <ul><li>Expectancy Theory </li></ul><ul><ul><li>Motivation depends on how much...
Process Perspectives on Motivation (cont’d) <ul><li>Elements of Expectancy Theory </li></ul><ul><ul><li>Effort-to-Performa...
Process Perspectives on Motivation (cont’d) <ul><li>Elements of Expectancy Theory (cont’d) </li></ul><ul><ul><li>Valence <...
Figure 16.4: The Expectancy Model of Motivation 16–
Process Perspectives on Motivation (cont’d) <ul><li>The Porter-Lawler Extension of Expectancy Theory </li></ul><ul><ul><li...
Figure 16.5: The Porter-Lawler Extension of Expectancy Theory  16–
Process Perspectives on Motivation (cont’d) <ul><li>Equity Theory </li></ul><ul><ul><li>People are motivated to seek socia...
Process Perspectives on Motivation (cont’d) <ul><li>Equity Theory (cont’d) </li></ul><ul><ul><li>Conditions of and reactio...
Process Perspectives on Motivation (cont’d) <ul><li>Goal-Setting Theory  </li></ul><ul><ul><li>Assumptions </li></ul></ul>...
Process Perspectives on Motivation (cont’d) <ul><li>Characteristics of Goals (cont’d) </li></ul><ul><ul><li>Goal acceptanc...
Figure 16.6: The Expanded Goal-setting Theory of Motivation  16–
Reinforcement Perspectives on Motivation <ul><li>Reinforcement Theory </li></ul><ul><ul><li>The role of rewards as they ca...
Reinforcement Perspectives on Motivation (cont’d) <ul><li>Kinds of Reinforcement in Organizations </li></ul><ul><ul><li>Po...
Reinforcement Perspectives on Motivation (cont’d) <ul><li>Providing Reinforcement in Organizations </li></ul><ul><ul><li>R...
Table 16.1: Elements of Reinforcement Theory 16–
Reinforcement Perspectives on Motivation (cont’d) <ul><li>Providing Reinforcement in Organizations (cont’d) </li></ul><ul>...
Popular Motivational Strategies <ul><li>Empowerment and Participation </li></ul><ul><ul><li>Empowerment </li></ul></ul><ul...
Popular Motivational Strategies (cont’d) <ul><li>Techniques and Issues in Empowerment </li></ul><ul><ul><li>Using work tea...
Using Reward Systems to Motivate Performance (cont’d) <ul><li>Reward System </li></ul><ul><ul><li>The formal and informal ...
Using Reward Systems to Motivate Performance (cont’d) <ul><li>Merit Reward Systems </li></ul><ul><ul><li>Base a meaningful...
Using Reward Systems to Motivate Performance (cont’d) <ul><li>Incentive Reward Systems (cont’d) </li></ul><ul><ul><li>Ince...
Using Reward Systems to Motivate Performance (cont’d) <ul><li>Executive Compensation </li></ul><ul><ul><li>Standard forms ...
Using Reward Systems to Motivate Performance (cont’d) <ul><li>New Approaches to Performance-Based Rewards </li></ul><ul><u...
Key Terms <ul><li>motivation </li></ul><ul><li>content perspectives </li></ul><ul><li>Maslow’s hierarchy of needs </li></u...
Key Terms <ul><li>behavior modification (OB Mod) </li></ul><ul><li>compressed work schedule  </li></ul><ul><li>job sharing...
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  1. 1. Principles of Management Managing Employee Motivation and Performance Lecture 10
  2. 2. The Nature of Motivation <ul><li>Motivation </li></ul><ul><ul><li>The set of forces that cause people to behave in certain ways. </li></ul></ul><ul><ul><li>The goal of managers is to maximize desired behaviors and minimize undesirable behaviors. </li></ul></ul><ul><li>The Importance of Motivation in the Workplace </li></ul><ul><ul><li>Determinants of Individual Performance </li></ul></ul><ul><ul><ul><li>Motivation—the desire to do the job. </li></ul></ul></ul><ul><ul><ul><li>Ability—the capability to do the job. </li></ul></ul></ul><ul><ul><ul><li>Work environment—the resources to do the job. </li></ul></ul></ul>16–
  3. 3. Figure 16.1: The Motivation Framework 16–
  4. 4. Content Perspectives on Motivation <ul><li>Content Perspectives </li></ul><ul><ul><li>Approaches to motivation that try to answer the question, “What factors in the workplace motivate people?” </li></ul></ul><ul><li>Content Perspectives of Motivation </li></ul><ul><ul><li>Maslow’s Hierarchy of Needs </li></ul></ul><ul><ul><li>Aldefer’s ERG Theory </li></ul></ul><ul><ul><li>Herzberg’s Two-Factor Theory </li></ul></ul><ul><ul><li>McClelland’s Achievement, Power, and Affiliation Needs </li></ul></ul>16–
  5. 5. Content Perspectives on Motivation (cont’d) <ul><li>The Need Hierarchy Approach </li></ul><ul><ul><li>Maslow’s Hierarchy of Needs </li></ul></ul><ul><ul><ul><li>Physiological—basic survival and biological function. </li></ul></ul></ul><ul><ul><ul><li>Security—a safe physical and emotional environment. </li></ul></ul></ul><ul><ul><ul><li>Belongingness—love and affection. </li></ul></ul></ul><ul><ul><ul><li>Esteem—positive self-image/self-respect and recognition and respect from others. </li></ul></ul></ul><ul><ul><ul><li>Self-actualization—realizing one’s potential for personal growth and development. </li></ul></ul></ul><ul><ul><li>Weakness of Maslow’s theory </li></ul></ul><ul><ul><ul><li>Five levels of need are not always present. </li></ul></ul></ul><ul><ul><ul><li>Ordering or importance of needs is not always the same. </li></ul></ul></ul><ul><ul><ul><li>Cultural differences. </li></ul></ul></ul>16–
  6. 6. Figure 16.2: Maslow’s Hierarchy of Needs 16–
  7. 7. Content Perspectives on Motivation (cont’d) <ul><li>The ERG Theory </li></ul><ul><ul><li>Needs are grouped into three overlapping categories: </li></ul></ul><ul><ul><ul><li>Existence needs—physiological and security needs. </li></ul></ul></ul><ul><ul><ul><li>Relatedness needs—belongingness and esteem by others. </li></ul></ul></ul><ul><ul><ul><li>Growth needs—self-esteem and self-actualization. </li></ul></ul></ul><ul><ul><li>ERG theory assumes that: </li></ul></ul><ul><ul><ul><li>Multiple needs can be operative at one time (there is no absolute hierarchy of needs). </li></ul></ul></ul><ul><ul><ul><li>If a need is unsatisfied, a person will regress to a lower-level need and pursue that need (frustration-regression). </li></ul></ul></ul>16–
  8. 8. Content Perspectives on Motivation (cont’d) <ul><li>The Two-Factor Theory (Herzberg) </li></ul><ul><ul><li>Satisfaction and dissatisfaction are influenced by two independent sets of factors. </li></ul></ul><ul><ul><li>Theory assumes that job satisfaction and job dissatisfaction are on two distinct continuums: </li></ul></ul><ul><ul><ul><li>Motivational factors (work content) are on a continuum that ranges from satisfaction to no satisfaction. </li></ul></ul></ul><ul><ul><ul><li>Hygiene factors (work environment) are on a separate continuum that ranges from dissatisfaction to no dissatisfaction. </li></ul></ul></ul>16–
  9. 9. Content Perspectives on Motivation (cont’d) <ul><li>The Two-Factor Theory (cont’d) </li></ul><ul><ul><li>Theory posits that motivation is a two-step process: </li></ul></ul><ul><ul><ul><li>Ensuring that the hygiene factors are not deficient and not blocking motivation. </li></ul></ul></ul><ul><ul><ul><li>Giving employees the opportunity to experience motivational factors through job enrichment. </li></ul></ul></ul>16–
  10. 10. Figure 16.3: The Two-Factor Theory of Motivation 16–
  11. 11. Content Perspectives on Motivation (cont’d) <ul><li>Individual Human Needs (McClelland) </li></ul><ul><ul><li>The need for achievement </li></ul></ul><ul><ul><ul><li>The desire to accomplish a goal or task more effectively than in the past. </li></ul></ul></ul><ul><ul><li>The need for affiliation </li></ul></ul><ul><ul><ul><li>The desire for human companionship and acceptance. </li></ul></ul></ul><ul><ul><li>The need for power </li></ul></ul><ul><ul><ul><li>The desire to be influential in a group and to be in control of one’s environment. </li></ul></ul></ul><ul><li>Implications of the Content Perspectives </li></ul><ul><ul><li>Content (what causes motivation) -> Process (how motivation occurs) </li></ul></ul>16–
  12. 12. Process Perspectives on Motivation <ul><li>Process Perspectives </li></ul><ul><ul><li>Approaches to motivation that focus on: </li></ul></ul><ul><ul><ul><li>Why people choose certain behavioral options to satisfy their needs </li></ul></ul></ul><ul><ul><ul><li>How they evaluate their satisfaction after they have attained their goals. </li></ul></ul></ul><ul><li>Process Perspectives of Motivation </li></ul><ul><ul><li>Expectancy Theory </li></ul></ul><ul><ul><li>Porter-Lawler Extension of Expectancy Theory </li></ul></ul><ul><ul><li>Equity Theory </li></ul></ul><ul><ul><li>Goal-Setting Theory </li></ul></ul>16–
  13. 13. Process Perspectives on Motivation (cont’d) <ul><li>Expectancy Theory </li></ul><ul><ul><li>Motivation depends on how much we want something and how likely we are to get it. </li></ul></ul><ul><ul><li>Assumes that: </li></ul></ul><ul><ul><ul><li>Behavior is determined by personal and environmental forces. </li></ul></ul></ul><ul><ul><ul><li>People make decisions about their behavior in organizations. </li></ul></ul></ul><ul><ul><ul><li>People have different types of needs, desires, and goals. </li></ul></ul></ul><ul><ul><ul><li>People choose among alternatives of behaviors in selecting one that that leads to a desired outcome. </li></ul></ul></ul><ul><ul><ul><li>Motivation leads to effort that, when combined with ability and environmental factors, results in performance which leads to various outcomes that have value ( valence ) to employees. </li></ul></ul></ul>16–
  14. 14. Process Perspectives on Motivation (cont’d) <ul><li>Elements of Expectancy Theory </li></ul><ul><ul><li>Effort-to-Performance Expectancy </li></ul></ul><ul><ul><ul><li>The employee’s perception of the probability that effort will lead to a high level of performance. </li></ul></ul></ul><ul><ul><li>Performance-to-Outcome Expectancy </li></ul></ul><ul><ul><ul><li>The employee’s perception of the probability that performance will lead to a specific outcome—the consequence or reward for behaviors in an organizational setting. </li></ul></ul></ul>16–
  15. 15. Process Perspectives on Motivation (cont’d) <ul><li>Elements of Expectancy Theory (cont’d) </li></ul><ul><ul><li>Valence </li></ul></ul><ul><ul><ul><li>An index of how much an individual values a particular outcome. </li></ul></ul></ul><ul><ul><ul><li>It is the attractiveness of the outcome to the individual. </li></ul></ul></ul><ul><ul><ul><ul><li>Attractive outcomes have positive valences and unattractive outcomes have negative valences. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Outcomes to which an individual is indifferent have zero valences. </li></ul></ul></ul></ul><ul><ul><li>For motivated behavior to occur: </li></ul></ul><ul><ul><ul><li>Both effort-to-performance expectancy and performance-to-outcome expectancy probabilities must be greater than zero. </li></ul></ul></ul><ul><ul><ul><li>The sum of the valences must be greater than zero. </li></ul></ul></ul>16–
  16. 16. Figure 16.4: The Expectancy Model of Motivation 16–
  17. 17. Process Perspectives on Motivation (cont’d) <ul><li>The Porter-Lawler Extension of Expectancy Theory </li></ul><ul><ul><li>Assumptions: </li></ul></ul><ul><ul><ul><li>If performance results in equitable and fair rewards, people will be more satisfied. </li></ul></ul></ul><ul><ul><ul><li>High performance can lead to rewards and high satisfaction. </li></ul></ul></ul><ul><ul><li>Types of rewards: </li></ul></ul><ul><ul><ul><li>Extrinsic rewards are outcomes set and awarded by external parties (e.g., pay and promotions). </li></ul></ul></ul><ul><ul><ul><li>Intrinsic rewards are outcomes internal to the individual (e.g., self-esteem and feelings of accomplishment). </li></ul></ul></ul>16–
  18. 18. Figure 16.5: The Porter-Lawler Extension of Expectancy Theory 16–
  19. 19. Process Perspectives on Motivation (cont’d) <ul><li>Equity Theory </li></ul><ul><ul><li>People are motivated to seek social equity in the rewards they receive for performance. </li></ul></ul><ul><ul><ul><li>Equity is an individual’s belief that the treatment he or she receives is fair relative to the treatment received by others. </li></ul></ul></ul><ul><ul><li>Individuals view the value of rewards (outcomes) and inputs of effort as ratios and make subjective comparisons of themselves to other people. </li></ul></ul>16– outcomes (self) inputs (self) = outcomes (other) inputs (other)
  20. 20. Process Perspectives on Motivation (cont’d) <ul><li>Equity Theory (cont’d) </li></ul><ul><ul><li>Conditions of and reactions to equity comparisons: </li></ul></ul><ul><ul><ul><li>Feeling equitably rewarded. </li></ul></ul></ul><ul><ul><ul><ul><li>Maintain performance and accept comparison as fair estimate. </li></ul></ul></ul></ul><ul><ul><ul><li>Feeling under-rewarded—try to reduce inequity. </li></ul></ul></ul><ul><ul><ul><ul><li>Change inputs by trying harder or slacking off. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Change outcomes by demanding a raise. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Distort the ratios by altering perceptions of self or of others. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Leave situation by quitting the job. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Change comparisons by choosing another object person. </li></ul></ul></ul></ul><ul><ul><ul><li>Feeling over-rewarded. </li></ul></ul></ul><ul><ul><ul><ul><li>Increase or decrease inputs. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Distort ratios by rationalizing. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Help the object person gain more outcomes. </li></ul></ul></ul></ul>16–
  21. 21. Process Perspectives on Motivation (cont’d) <ul><li>Goal-Setting Theory </li></ul><ul><ul><li>Assumptions </li></ul></ul><ul><ul><ul><li>Behavior is a result of conscious goals and intentions. </li></ul></ul></ul><ul><ul><ul><li>Setting goals influence the behavior of people in organizations. </li></ul></ul></ul><ul><li>Characteristics of Goals </li></ul><ul><ul><li>Goal difficulty </li></ul></ul><ul><ul><ul><li>Extent to which a goal is challenging and requires effort. </li></ul></ul></ul><ul><ul><ul><li>People work harder to achieve more difficult goals. </li></ul></ul></ul><ul><ul><ul><li>Goals should be difficult but attainable. </li></ul></ul></ul><ul><ul><li>Goal specificity </li></ul></ul><ul><ul><ul><li>Clarity and precision of the goal. </li></ul></ul></ul><ul><ul><ul><li>Goals vary in their ability to be stated specifically </li></ul></ul></ul>16–
  22. 22. Process Perspectives on Motivation (cont’d) <ul><li>Characteristics of Goals (cont’d) </li></ul><ul><ul><li>Goal acceptance </li></ul></ul><ul><ul><ul><li>The extent to which persons accept a goal as their own. </li></ul></ul></ul><ul><ul><li>Goal commitment </li></ul></ul><ul><ul><ul><li>The extent to which an individual is personally interested in reaching a goal. </li></ul></ul></ul><ul><li>Implications of the Process Perspectives </li></ul><ul><ul><li>If rewards are to motivate employees, they must be perceived as being valued, attainable, fair and equitable. </li></ul></ul>16–
  23. 23. Figure 16.6: The Expanded Goal-setting Theory of Motivation 16–
  24. 24. Reinforcement Perspectives on Motivation <ul><li>Reinforcement Theory </li></ul><ul><ul><li>The role of rewards as they cause behavior to change or remain the same over time. </li></ul></ul><ul><ul><li>Assumes that: </li></ul></ul><ul><ul><ul><li>Behavior that results in rewarding consequences is likely to be repeated, whereas behavior that results in punishing consequences is less likely to be repeated. </li></ul></ul></ul>16–
  25. 25. Reinforcement Perspectives on Motivation (cont’d) <ul><li>Kinds of Reinforcement in Organizations </li></ul><ul><ul><li>Positive reinforcement </li></ul></ul><ul><ul><ul><li>Strengthens behavior with rewards or positive outcomes after a desired behavior is performed. </li></ul></ul></ul><ul><ul><li>Avoidance </li></ul></ul><ul><ul><ul><li>Strengthens behavior by avoiding unpleasant consequences that would result if the behavior is not performed. </li></ul></ul></ul><ul><ul><li>Punishment </li></ul></ul><ul><ul><ul><li>Weakens undesired behavior by using negative outcomes or unpleasant consequences when the behavior is performed. </li></ul></ul></ul><ul><ul><li>Extinction </li></ul></ul><ul><ul><ul><li>Weakens undesired behavior by simply ignoring or not reinforcing that behavior. </li></ul></ul></ul>16–
  26. 26. Reinforcement Perspectives on Motivation (cont’d) <ul><li>Providing Reinforcement in Organizations </li></ul><ul><ul><li>Reinforcement schedules </li></ul></ul><ul><ul><ul><li>Fixed interval schedule —reinforcement applied at fixed time intervals, regardless of behavior. </li></ul></ul></ul><ul><ul><ul><li>Variable interval —reinforcement applied at variable time intervals. </li></ul></ul></ul><ul><ul><ul><li>Fixed ratio —reinforcement applied after a fixed number of behaviors, regardless of time. </li></ul></ul></ul><ul><ul><ul><li>Variable Ratio —reinforcement applied after a variable number of behaviors, regardless of time. </li></ul></ul></ul>16–
  27. 27. Table 16.1: Elements of Reinforcement Theory 16–
  28. 28. Reinforcement Perspectives on Motivation (cont’d) <ul><li>Providing Reinforcement in Organizations (cont’d) </li></ul><ul><ul><li>Behavior modification (OB mod) </li></ul></ul><ul><ul><ul><li>A method for applying the basic elements of reinforcement theory in an organizational setting. </li></ul></ul></ul><ul><ul><ul><li>Specific behaviors are tied to specific forms of reinforcement. </li></ul></ul></ul><ul><li>Implications of the Reinforcement Perspectives </li></ul><ul><ul><li>Consistently applied reinforcement helps maintain employee motivation by: </li></ul></ul><ul><ul><ul><li>encouraging (rewarding) positive behaviors </li></ul></ul></ul><ul><ul><ul><li>discouraging (punishing) dysfunctional behaviors in an organization. </li></ul></ul></ul>16–
  29. 29. Popular Motivational Strategies <ul><li>Empowerment and Participation </li></ul><ul><ul><li>Empowerment </li></ul></ul><ul><ul><ul><li>Enabling workers to set their own work goals, make decisions, and solve problems within their sphere of influence. </li></ul></ul></ul><ul><ul><li>Participation </li></ul></ul><ul><ul><ul><li>Giving employees a voice in making decisions about their work. </li></ul></ul></ul><ul><ul><li>Areas of participation for employees: </li></ul></ul><ul><ul><ul><li>Making decisions about their jobs. </li></ul></ul></ul><ul><ul><ul><li>Decisions about administrative matters (e.g., work schedules). </li></ul></ul></ul><ul><ul><ul><li>Participating in decision making about broader issues of product quality. </li></ul></ul></ul>16–
  30. 30. Popular Motivational Strategies (cont’d) <ul><li>Techniques and Issues in Empowerment </li></ul><ul><ul><li>Using work teams </li></ul></ul><ul><ul><ul><li>Collections of employees empowered to plan, organize, direct, and control their work. </li></ul></ul></ul><ul><ul><li>Decentralization </li></ul></ul><ul><ul><ul><li>Changing the overall method of organizing the firm </li></ul></ul></ul><ul><ul><li>Conditions necessary for empowerment: </li></ul></ul><ul><ul><ul><li>Power spread to lower organizational levels </li></ul></ul></ul><ul><ul><ul><li>Commitment to empowering workers </li></ul></ul></ul><ul><ul><ul><li>Systematic and patient efforts to empower workers. </li></ul></ul></ul><ul><ul><ul><li>Increased commitment to training. </li></ul></ul></ul>16–
  31. 31. Using Reward Systems to Motivate Performance (cont’d) <ul><li>Reward System </li></ul><ul><ul><li>The formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded. </li></ul></ul><ul><li>Effects of Organizational Rewards </li></ul><ul><ul><li>Higher-level performance-based rewards motivate employees to work harder. </li></ul></ul><ul><ul><li>Rewards help align employee self-interest with organizational goals. </li></ul></ul><ul><ul><li>Rewards foster increased retention and citizenship </li></ul></ul>16–
  32. 32. Using Reward Systems to Motivate Performance (cont’d) <ul><li>Merit Reward Systems </li></ul><ul><ul><li>Base a meaningful portion of individual compensation on merit —th e relative value of an individual’s contributions to the organization. </li></ul></ul><ul><ul><ul><li>Employees who make greater contributions are given higher pay than those who make lesser contributions. </li></ul></ul></ul><ul><li>Incentive Reward Systems </li></ul><ul><ul><li>Concept: employee pay is based on employee output. </li></ul></ul><ul><ul><li>Assume that: </li></ul></ul><ul><ul><ul><li>Performance is under the control of the individual worker. </li></ul></ul></ul><ul><ul><ul><li>The employee work at a single task continuously. </li></ul></ul></ul><ul><ul><ul><li>Pay is tightly tied to performance (i.e., pay varies with output). </li></ul></ul></ul>16–
  33. 33. Using Reward Systems to Motivate Performance (cont’d) <ul><li>Incentive Reward Systems (cont’d) </li></ul><ul><ul><li>Incentive pay plans </li></ul></ul><ul><ul><ul><li>Piece-rate systems </li></ul></ul></ul><ul><ul><ul><li>Sales commissions </li></ul></ul></ul><ul><ul><li>Other forms of incentives </li></ul></ul><ul><ul><ul><li>Non-monetary incentives (perks) </li></ul></ul></ul><ul><li>Team and Group Incentive Reward Systems </li></ul><ul><ul><li>Gainsharing programs </li></ul></ul><ul><ul><li>Scanlon Plan </li></ul></ul><ul><ul><li>Employee stock ownership plans (ESOPs) </li></ul></ul>16–
  34. 34. Using Reward Systems to Motivate Performance (cont’d) <ul><li>Executive Compensation </li></ul><ul><ul><li>Standard forms of executive compensation </li></ul></ul><ul><ul><ul><li>Base salary </li></ul></ul></ul><ul><ul><ul><li>Incentive pay (bonuses) </li></ul></ul></ul><ul><ul><li>Special forms of executive compensation </li></ul></ul><ul><ul><ul><li>Stock option plans </li></ul></ul></ul><ul><ul><ul><li>Executive perks </li></ul></ul></ul><ul><ul><li>Criticism of executive compensation </li></ul></ul><ul><ul><ul><li>Excessively large compensation amounts </li></ul></ul></ul><ul><ul><ul><li>Compensation not tied to overall performance of the organization </li></ul></ul></ul><ul><ul><ul><li>Earnings gap between executive pay and typical employee pay </li></ul></ul></ul>16–
  35. 35. Using Reward Systems to Motivate Performance (cont’d) <ul><li>New Approaches to Performance-Based Rewards </li></ul><ul><ul><li>Leveraging the value of incentives </li></ul></ul><ul><ul><ul><li>Allowing individuals and groups in the organization to have a say in how rewards are distributed. </li></ul></ul></ul><ul><ul><li>Getting increasingly innovative in incentive programs: </li></ul></ul><ul><ul><ul><li>Offering stock options to all employees </li></ul></ul></ul><ul><ul><ul><li>Individualizing the rewards available to individuals in reward systems </li></ul></ul></ul>16–
  36. 36. Key Terms <ul><li>motivation </li></ul><ul><li>content perspectives </li></ul><ul><li>Maslow’s hierarchy of needs </li></ul><ul><li>ERG theory of motivation </li></ul><ul><li>two-factor theory of motivation </li></ul><ul><li>need for affiliation </li></ul><ul><li>need for achievement </li></ul><ul><li>need for power </li></ul><ul><li>process perspectives </li></ul><ul><li>expectancy theory </li></ul><ul><li>effort-to-performance expectancy </li></ul><ul><li>outcomes </li></ul><ul><li>valence </li></ul><ul><li>equity theory </li></ul><ul><li>avoidance </li></ul><ul><li>positive reinforcement </li></ul><ul><li>extinction </li></ul><ul><li>variable-ratio schedule </li></ul><ul><li>variable-interval schedule </li></ul><ul><li>participation </li></ul>16–
  37. 37. Key Terms <ul><li>behavior modification (OB Mod) </li></ul><ul><li>compressed work schedule </li></ul><ul><li>job sharing </li></ul><ul><li>telecommuting </li></ul><ul><li>merit pay plan </li></ul><ul><li>reward system </li></ul><ul><li>piece-rate incentive plan </li></ul><ul><li>gainsharing programs </li></ul><ul><li>Scanlon plan </li></ul><ul><li>stock option plan </li></ul>16–
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