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