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CHAPTER 8
MOTIVATING AND
REWARDING
EMPLOYEES
THE NATURE OF MOTIVATION
Motivation is the set of forces that
cause people to behave in certain
ways. On any given day, an employee
may choose to work as hard as
possible at a job, work just hard
enough to avoid a reprimand, or do as
little as possible.
Individual performance is
generally determined by three
things:
1. motivation (the desire to do the
job)
 2. ability (the capability to do the
job)
 3. the work environment (the
resources needed to do the job)
CONTENT PERSPECTIVES ON
MOTIVATION
It deals with the first part of the
motivation process— needs and need
deficiencies. More specifically, content
perspectives address the question
“What factors in the workplace motivate
people?” Labor leaders often argue that
workers can be motivated by more pay,
shorter working hours, and improved
HIERARCHY AND THE TWO-
FACTOR THEORY
1. The Needs Hierarchy Approach
● Needs hierarchies assume that people have
different needs that can be arranged in a
hierarchy of importance.
● The best known is Maslow’s hierarchy of
needs.
● Abraham Maslow, a human relationist, argued
that people are motivated to satisfy five need
A. Physiological needs
— things such as food, sex, and air,
which represent basic issues of
survival and biological function. In
organizations, survival needs are
generally satisfied by adequate
wages and the work environment
itself, which provides restrooms,
adequate lighting, comfortable
temperatures, and ventilation.
B. Secure physical and
emotional environment needs
Examples include the desire for housing and
clothing and the need to be free from worry about
money and job security. These needs can be
satisfied in the workplace by assured job
continuity (no layoffs), an effective grievance
system (to protect against arbitrary supervisory
actions), and an adequate insurance and
retirement benefit package (for security against
illness and provision of income in later life).
C. Belongingness needs
 They include the need for love and
companionship and the need to be
accepted by one’s peers.
 A manager can help satisfy these
needs by allowing social interaction
and by making employees feel like
part of a team or work group.
D. Esteem needs
● Comprise two different sets of needs:
: the need for a positive self image and
self-respect and the need for recognition
and respect from others.
● A manager can help address these needs
by providing a variety of extrinsic symbols
of accomplishment, such as job titles, nice
offices, and similar rewards as appropriate.
E. Self-actualization needs
These involve realizing one’s
potential for continued growth and
individual development.
● A manager can help by promoting
a culture wherein self-actualization is
possible.
The Two-Factor Theory
 Frederick Herzberg developed his
theory by interviewing a group of
accountants and engineers.
 He found that different sets of factors
were associated with satisfaction and
with dissatisfaction— that is, a person
might identify “low pay” as causing
dissatisfaction but would not
necessarily mention “high pay” as a
Motivation Factors
● Achievement
● Recognition
● The work itself
● Responsibility
● Advancement and
growth
Hygiene Factors
● Supervisor
● Working conditions
● Interpersonal
relations
● Pay and security
● Company policies and
administration
Dissatisfaction No dissatisfaction
Satisfaction No satisfaction
Individual Human Needs
The three most important
individual needs, sometimes
referred to as manifest needs, are
achievement, affiliation, and
power.
A. The need for
achievement
The best known of the
three.
● The desire to
accomplish a goal or task
more effectively than in
the past.
B. The need for affiliation
● Like Maslow’s belongingness
need, the need for affiliation is a
desire for human companionship and
acceptance.
● People with a strong need for
affiliation are likely to prefer (and
perform better in) a job that entails
a lot of social interaction and offers
C. The need for power
● The desire to be influential in a
group and to control one’s
environment.
● Research has shown that people
with a strong need for power are
likely to be superior performers,
have good attendance records, and
occupy supervisor positions.
PROCESS PERSPECTIVES ON
MOTIVATION
● This concerned with how
motivation occurs.
● Three useful process
perspectives on motivation are
the expectancy, equity, and goal-
setting theories.
1. Expectancy Theory
 This theory suggests that motivation
depends on two things— how much
we want something and how likely we
think we are to get it.
Expectancy theory rests on four basic
assumptions.
a. First, it assumes that behavior is
determined by a combination of forces in
the individual and in the environment.
b. Second, it assumes that people make
decisions about their own behavior in
organizations.
c. Third, it assumes that different people
have different types of needs, desires,
and goals.
d. Fourth, it assumes that people make
choices from among alternative plans of
behavior, based on their perceptions of
A. Effort-to-Performance
Expectancy
The individual’s perception of the
probability that effort will lead to high
performance.
B. Performance-to-Outcome
Expectancy
The individual’s perception that
C. Outcomes and Valences
Expectancy
This theory recognizes that an
individual’s behavior results in a
variety of outcomes, or
consequences, in an
organizational setting.
2. Equity Theory
This theory contends that 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 is
receiving is fair relative to the
treatment received by others.
3. Goal-Setting Theory
This theory assumes that behavior is a
result of conscious goals and
intentions.
By setting goals for people in the
organization, a manager should be able
to influence their behavior.
Two specific goal characteristics:
● goal difficulty
● goal specificity
Goal Difficulty
 is the extent to which a
goal is challenging and
requires effort.
Goal Specificity
A goal of “increasing
productivity” is not very
specific; a goal of
“increasing productivity by 3
percent in the next six
months” is quite specific.
REINFORCEMENT
PERSPECTIVES ON
MOTIVATION
 A third element of the
motivational process addresses
why some behaviors are
maintained over time and why
other behaviors change.
 Reinforcement perspectives
explain the role of those rewards
as they cause behavior to change
The “ Leading the Way ” feature
highlights an interesting
perspective on reinforcement.
Kinds of Reinforcement in
Organizations
 Four basic kinds of
reinforcement can result from
behavior—positive reinforcement,
avoidance, punishment, and
extinction.
Two kinds of reinforcement
strengthen or maintain behavior,
whereas the other two weaken or
1. Positive reinforcement
one method of strengthening
behavior, is a reward or a positive
outcome after a desired behavior is
performed.
Avoidance
● employee is motivated to perform
behavior of punctuality to avoid an
unpleasant consequences that is likely
2. Punishment
used by some managers to
weaken undesired behaviors.
When an employee is loafing,
coming to work late, doing poor
work, or interfering with the
work of others, the manager
might resort to reprimands,
discipline, or fines.
Extinction can also be used to
weaken behavior, especially
behavior that has previously been
rewarded.
POPULAR MOTIVATIONAL
STRATEGIES
1. Empowerment and
Participation.
This represent important methods that
managers can use to enhance employee
motivation.
Empowerment is the process of
enabling workers to set their own work
goals, make decisions, and solve
Participation is the process of
giving employees a voice in making
decisions about their own work.
Empowerment is a somewhat
broader concept that promotes
participation in a wide variety of
areas, including but not limited to
work itself, work context, and work
environment.
2. Alternative Forms of Work
Arrangements.
These alternative arrangements are
generally intended to enhance employee
motivation and performance by providing
employees with greater flexibility in how
and when they work.
Popular alternative work arrangements
are variable work schedules, flexible
work schedules, job sharing, and
Variable Work Schedules
The traditional work schedule starts
at 8:00 or 9:00 in the morning and
ends at 5:00 in the evening, five days
a week (of course, many managers
work additional hours outside these
times).
Flexible Work Schedules
● sometimes called flextime
The workday is broken down into
two categories:
flexible time and core time.
All employees must be at their
workstation during core time, but
they can choose their own
schedules during flexible time.
Job Sharing
● In job sharing, two part-time
employees share one full-time
job.
● One person may perform the
job from 8:00 a.m. to noon, and
the other from 1:00 p.m. to 5:00
p.m.
Telecommuting
● allowing employees to spend
part of their time working
offsite, usually at home.
USING REWARD SYSTEMS TO
MOTIVATE PERFORMANCE
Aside from these types of
motivational strategies, an
organization’s reward system is its
most basic tool for managing
employee motivation.
An organizational reward system is
the formal and informal mechanisms
by which employee performance is
defined, evaluated, and rewarded.
1. Merit Reward Systems
● The one of the most
fundamental forms of
performance-based rewards.
● Merit pay generally refers to pay
awarded to employees on the
basis of the relative value of their
contributions to the organization.
2. Incentive Reward
Systems
The oldest forms of performance-based
rewards.
3. Incentive Pay Plans
Reward individual performance on a
real-time basis.
Rather than increasing a person’s base
salary at the end of the year, an individual
instead receives some level of salary
increase or financial reward in
conjunction with demonstrated
outstanding performance.
4. Other Forms of Incentive
● Organizations may also use
other forms of incentives to
motivate people.
● For example, a nonmonetary
incentive, such as additional time
off or a special perk, might be a
useful incentive.

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Chapter-7-MOTIVATING-AND-REWARDING-EMPLOYEE (1).pptx

  • 2. THE NATURE OF MOTIVATION Motivation is the set of forces that cause people to behave in certain ways. On any given day, an employee may choose to work as hard as possible at a job, work just hard enough to avoid a reprimand, or do as little as possible.
  • 3. Individual performance is generally determined by three things: 1. motivation (the desire to do the job)  2. ability (the capability to do the job)  3. the work environment (the resources needed to do the job)
  • 4. CONTENT PERSPECTIVES ON MOTIVATION It deals with the first part of the motivation process— needs and need deficiencies. More specifically, content perspectives address the question “What factors in the workplace motivate people?” Labor leaders often argue that workers can be motivated by more pay, shorter working hours, and improved
  • 5. HIERARCHY AND THE TWO- FACTOR THEORY 1. The Needs Hierarchy Approach ● Needs hierarchies assume that people have different needs that can be arranged in a hierarchy of importance. ● The best known is Maslow’s hierarchy of needs. ● Abraham Maslow, a human relationist, argued that people are motivated to satisfy five need
  • 6. A. Physiological needs — things such as food, sex, and air, which represent basic issues of survival and biological function. In organizations, survival needs are generally satisfied by adequate wages and the work environment itself, which provides restrooms, adequate lighting, comfortable temperatures, and ventilation.
  • 7. B. Secure physical and emotional environment needs Examples include the desire for housing and clothing and the need to be free from worry about money and job security. These needs can be satisfied in the workplace by assured job continuity (no layoffs), an effective grievance system (to protect against arbitrary supervisory actions), and an adequate insurance and retirement benefit package (for security against illness and provision of income in later life).
  • 8. C. Belongingness needs  They include the need for love and companionship and the need to be accepted by one’s peers.  A manager can help satisfy these needs by allowing social interaction and by making employees feel like part of a team or work group.
  • 9. D. Esteem needs ● Comprise two different sets of needs: : the need for a positive self image and self-respect and the need for recognition and respect from others. ● A manager can help address these needs by providing a variety of extrinsic symbols of accomplishment, such as job titles, nice offices, and similar rewards as appropriate.
  • 10. E. Self-actualization needs These involve realizing one’s potential for continued growth and individual development. ● A manager can help by promoting a culture wherein self-actualization is possible.
  • 11.
  • 12. The Two-Factor Theory  Frederick Herzberg developed his theory by interviewing a group of accountants and engineers.  He found that different sets of factors were associated with satisfaction and with dissatisfaction— that is, a person might identify “low pay” as causing dissatisfaction but would not necessarily mention “high pay” as a
  • 13. Motivation Factors ● Achievement ● Recognition ● The work itself ● Responsibility ● Advancement and growth Hygiene Factors ● Supervisor ● Working conditions ● Interpersonal relations ● Pay and security ● Company policies and administration Dissatisfaction No dissatisfaction Satisfaction No satisfaction
  • 14. Individual Human Needs The three most important individual needs, sometimes referred to as manifest needs, are achievement, affiliation, and power.
  • 15. A. The need for achievement The best known of the three. ● The desire to accomplish a goal or task more effectively than in the past.
  • 16. B. The need for affiliation ● Like Maslow’s belongingness need, the need for affiliation is a desire for human companionship and acceptance. ● People with a strong need for affiliation are likely to prefer (and perform better in) a job that entails a lot of social interaction and offers
  • 17. C. The need for power ● The desire to be influential in a group and to control one’s environment. ● Research has shown that people with a strong need for power are likely to be superior performers, have good attendance records, and occupy supervisor positions.
  • 18. PROCESS PERSPECTIVES ON MOTIVATION ● This concerned with how motivation occurs. ● Three useful process perspectives on motivation are the expectancy, equity, and goal- setting theories.
  • 19. 1. Expectancy Theory  This theory suggests that motivation depends on two things— how much we want something and how likely we think we are to get it. Expectancy theory rests on four basic assumptions.
  • 20. a. First, it assumes that behavior is determined by a combination of forces in the individual and in the environment. b. Second, it assumes that people make decisions about their own behavior in organizations. c. Third, it assumes that different people have different types of needs, desires, and goals. d. Fourth, it assumes that people make choices from among alternative plans of behavior, based on their perceptions of
  • 21. A. Effort-to-Performance Expectancy The individual’s perception of the probability that effort will lead to high performance. B. Performance-to-Outcome Expectancy The individual’s perception that
  • 22. C. Outcomes and Valences Expectancy This theory recognizes that an individual’s behavior results in a variety of outcomes, or consequences, in an organizational setting.
  • 23. 2. Equity Theory This theory contends that 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 is receiving is fair relative to the treatment received by others.
  • 24. 3. Goal-Setting Theory This theory assumes that behavior is a result of conscious goals and intentions. By setting goals for people in the organization, a manager should be able to influence their behavior. Two specific goal characteristics: ● goal difficulty ● goal specificity
  • 25. Goal Difficulty  is the extent to which a goal is challenging and requires effort.
  • 26. Goal Specificity A goal of “increasing productivity” is not very specific; a goal of “increasing productivity by 3 percent in the next six months” is quite specific.
  • 27. REINFORCEMENT PERSPECTIVES ON MOTIVATION  A third element of the motivational process addresses why some behaviors are maintained over time and why other behaviors change.  Reinforcement perspectives explain the role of those rewards as they cause behavior to change
  • 28. The “ Leading the Way ” feature highlights an interesting perspective on reinforcement.
  • 29. Kinds of Reinforcement in Organizations  Four basic kinds of reinforcement can result from behavior—positive reinforcement, avoidance, punishment, and extinction. Two kinds of reinforcement strengthen or maintain behavior, whereas the other two weaken or
  • 30. 1. Positive reinforcement one method of strengthening behavior, is a reward or a positive outcome after a desired behavior is performed. Avoidance ● employee is motivated to perform behavior of punctuality to avoid an unpleasant consequences that is likely
  • 31. 2. Punishment used by some managers to weaken undesired behaviors. When an employee is loafing, coming to work late, doing poor work, or interfering with the work of others, the manager might resort to reprimands, discipline, or fines.
  • 32. Extinction can also be used to weaken behavior, especially behavior that has previously been rewarded.
  • 33. POPULAR MOTIVATIONAL STRATEGIES 1. Empowerment and Participation. This represent important methods that managers can use to enhance employee motivation. Empowerment is the process of enabling workers to set their own work goals, make decisions, and solve
  • 34. Participation is the process of giving employees a voice in making decisions about their own work. Empowerment is a somewhat broader concept that promotes participation in a wide variety of areas, including but not limited to work itself, work context, and work environment.
  • 35. 2. Alternative Forms of Work Arrangements. These alternative arrangements are generally intended to enhance employee motivation and performance by providing employees with greater flexibility in how and when they work. Popular alternative work arrangements are variable work schedules, flexible work schedules, job sharing, and
  • 36. Variable Work Schedules The traditional work schedule starts at 8:00 or 9:00 in the morning and ends at 5:00 in the evening, five days a week (of course, many managers work additional hours outside these times).
  • 37. Flexible Work Schedules ● sometimes called flextime The workday is broken down into two categories: flexible time and core time. All employees must be at their workstation during core time, but they can choose their own schedules during flexible time.
  • 38. Job Sharing ● In job sharing, two part-time employees share one full-time job. ● One person may perform the job from 8:00 a.m. to noon, and the other from 1:00 p.m. to 5:00 p.m.
  • 39. Telecommuting ● allowing employees to spend part of their time working offsite, usually at home.
  • 40. USING REWARD SYSTEMS TO MOTIVATE PERFORMANCE Aside from these types of motivational strategies, an organization’s reward system is its most basic tool for managing employee motivation. An organizational reward system is the formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded.
  • 41. 1. Merit Reward Systems ● The one of the most fundamental forms of performance-based rewards. ● Merit pay generally refers to pay awarded to employees on the basis of the relative value of their contributions to the organization.
  • 42. 2. Incentive Reward Systems The oldest forms of performance-based rewards. 3. Incentive Pay Plans Reward individual performance on a real-time basis. Rather than increasing a person’s base salary at the end of the year, an individual instead receives some level of salary increase or financial reward in conjunction with demonstrated outstanding performance.
  • 43. 4. Other Forms of Incentive ● Organizations may also use other forms of incentives to motivate people. ● For example, a nonmonetary incentive, such as additional time off or a special perk, might be a useful incentive.