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Organizational Behavior
Seventeenth Edition
Chapter 7
Motivation Concepts
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Rights Reserved.
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Combine rational analysis with intuition. These are not
conflicting approaches to decision making. By using both, you
can actually improve your decision making effectiveness.
Try to enhance your creativity. Actively look for novel
solutions to problems, attempt to see problems in new ways, use
analogies, and hire creative talent. Try to remove work and
organizational barriers that might impede your creativity.
Chapter 7: Motivation Concepts
1
Learning Objectives
7.1 Describe the three key elements of motivation.
7.2 Compare the early theories of motivation.
7.3 Contrast the elements of self-determination theory and goal-
setting theory.
7.4 Demonstrate the differences among self-efficacy theory,
reinforcement theory, equity theory, and expectancy theory.
7.5 Identify the implications of employee job engagement for
managers.
7.6 Describe how the contemporary theories of motivation
complement one another.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
Rights Reserved.
After studying this chapter, you should be able to:
Describe the three key elements of motivation.
Compare the early theories of motivation.
Contrast the elements of self-determination theory and goal-
setting theory.
Demonstrate the differences among self-efficacy theory,
reinforcement theory, equity theory, and expectancy theory.
Identify the implications of employee job engagement for
managers.
Describe how the contemporary theories of motivation
complement one another.
2
Describe the Three Key Elements of Motivation (1 of 2)
Motivation is the processes that account for an individual’s
intensity, direction, and persistence of effort toward attaining a
goal.
The level of motivation varies both between individuals and
within individuals at different times.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
Rights Reserved.
Motivation is the processes that account for an individual’s
intensity, direction, and persistence of effort toward attaining a
goal. We will narrow the focus to organizational goals in order
to reflect our singular interest in work-related behavior. Keep in
mind that the level of motivation varies both between
individuals and within individuals at different times.
3
Describe the Three Key Elements of Motivation (2 of 2)
The three key elements of motivation are:
Intensity: concerned with how hard a person tries.
Direction: the orientation that benefits the organization.
Persistence: a measure of how long a person can maintain
his/her effort.
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Rights Reserved.
The three key elements of our definition of motivation are
intensity, direction, and persistence. Intensity is concerned with
how hard a person tries to do anything. This is the element most
of us focus on when we talk about motivation. Direction is the
orientation that benefits the organization; it can be positive or
negative. Persistence is a measure of how long a person can
maintain his or her effort. Motivated individuals stay with a
task long enough to achieve their goal.
4
Compare the Early Theories of Motivation (1 of 7)
Exhibit 7-1 Maslow’s Hierarchy of Needs
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Abraham Maslow’s hierarchy of needs is the most well-known
theory of motivation. Maslow hypothesized that within every
human being there exists a hierarchy of five needs, beginning
with physiological needs that include hunger, thirst, shelter,
sex, and other bodily needs. The second level is safety needs
that include security and protection from physical and
emotional harm. The next level is social needs that include
affection, belongingness, acceptance, and friendship. Reaching
a higher level, we find esteem needs that include internal
esteem factors such as self-respect, autonomy, and achievement,
and external esteem factors such as status, recognition, and
attention. At the top of the hierarchy is self-actualization needs;
this is the drive to become what one is capable of becoming,
and includes growth, achieving one’s potential, and self-
fulfillment.
Maslow separated the five needs into higher and lower orders.
As a need becomes substantially satisfied, the next need
becomes dominant. No need is ever fully gratified; a
substantially satisfied need no longer motivates.
5
Compare the Early Theories of Motivation (2 of 7)
Maslow’s need theory has received wide recognition,
particularly among practicing managers.
It is intuitively logical and easy to understand and some
research has validated it.
However, most research does, especially when the theory is
applied to diverse cultures.
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Rights Reserved.
Maslow’s need theory has received wide recognition,
particularly among practicing managers. It is intuitively logical
and easy to understand and some research has validated it.
However, most research does, especially when the theory is
applied to diverse cultures.
6
Compare the Early Theories of Motivation (3 of 7)
Exhibit 7-2 Comparison of Satisfiers and Dissatisfiers
Source: Based on Harvard Business Review. “Comparison of
Satisfiers and Dissatisfiers.” An exhibit from One More Time:
How Do You Motivate Employees? by Frederick Herzberg,
January 2003. Copyright © 2003 by the Harvard Business
School Publishing Corporation. All rights reserved.
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Rights Reserved.
Proposed by psychologist Frederick Herzberg when he
investigated the question, “What do people want from their
jobs?” the two-factor theory is sometimes also called
motivation-hygiene theory. Herzberg asked people to describe
situations in which they felt exceptionally good or bad about
their jobs. These responses were then tabulated and categorized.
From the categorized responses, as shown here in Exhibit 7-2,
Herzberg concluded that intrinsic factors, such as advancement,
recognition, responsibility, and achievement seem to be related
to job satisfaction. Dissatisfied respondents tended to cite
extrinsic factors, such as supervision, pay, company policies,
and working conditions.
Moreover, the opposite of satisfaction is not dissatisfaction.
Removing dissatisfying characteristics from a job does not
necessarily make the job satisfying. Job satisfaction factors are
separate and distinct from job dissatisfaction factors.
7
Compare the Early Theories of Motivation (4 of 7)
Exhibit 7-3 Contrasting View of Satisfaction and Dissatisfaction
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Managers who eliminate job dissatisfaction factors may not
necessarily bring about motivation. Exhibit 7-3 reveals that
when hygiene factors are adequate, people will not be
dissatisfied. Neither will they be satisfied. To motivate people,
managers must emphasize intrinsically rewarding factors that
are associated with the work itself or to outcomes directly
derived from it.
8
Compare the Early Theories of Motivation (5 of 7)
Criticisms of Herzberg’s theory:
Limited because it relies on self-reports.
Reliability of methodology is questioned.
No overall measure of satisfaction was utilized.
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Recent reviews of Herzberg’s research have resulted in many
criticisms of the theory. The procedure that Herzberg used is
limited by its methodology, therefore, the reliability of
Herzberg’s methodology is questioned. For example, no overall
measure of satisfaction was utilized.
Regardless of criticisms, Herzberg’s theory has been widely
read, and few managers are unfamiliar with his
recommendations.
9
Compare the Early Theories of Motivation (6 of 7)
McClelland’s Theory of Needs
The theory focuses on three needs:
Need for achievement (nAch): drive to excel, to achieve in
relation to a set of standards, to strive to succeed.
Need for power (nPow): need to make others behave in a way
that they would not have behaved otherwise.
Need for affiliation (nAfl): desire for friendly and close
interpersonal relationships.
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Rights Reserved.
Another traditional theory is McClelland’s Theory of Needs.
This theory focuses on three needs: achievement, power, and
affiliation. Let’s look at each one in more detail.
The first of this theory’s variables is achievement need,
abbreviated as nAch, which is the drive to excel, to achieve in
relation to a set of standards, and to strive to succeed. High
achievers perform best when they perceive their probability of
success as 50/50. They like to set goals that require stretching
themselves a little.
Need for power, the second variable, is the need to make others
behave in a way that they would not have behaved otherwise.
The need for power, abbreviated as nPow, is the desire to have
impact, to be influential, and to control others. Individuals high
in nPow enjoy being “in charge.” They strive for influence over
others. They prefer to be placed into competitive and status-
oriented situations. They also tend to be more concerned with
prestige and gaining influence over others than with effective
performance.
Finally, the need for affiliation, abbreviated as nAfl, is the
desire for friendly and close personal relationships. This need
has received the least attention from researchers. In general,
individuals with high affiliation strive for friendship and prefer
cooperative situations over competitive ones. They typically
desire relationships involving a high degree of mutual
understanding.
10
Compare the Early Theories of Motivation (7 of 7)
McClelland’s theory has had the best support.
It has less practical effect than the others.
Because McClelland argued that the three needs are
subconscious—we may rank high on them but not know it—
measuring them is not easy.
It is more common to find situations in which managers aware
of these motivational drivers label employees based on
observations made over time.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
Rights Reserved.
Among the early theories of motivation, McClelland’s has had
the best research support. Unfortunately, it has less practical
effect than the others. McClelland argued that the three needs
are subconscious – we may rank high on them, but not know it.
Because of this, measuring them is not easy.
It is more common to find situations in which managers aware
of these motivational drivers label employees based on
observations made over time.
11
Self-Determination Theory vs. Goal-Setting Theory (1 of 9)
Self-Determination Theory
People prefer to feel they have control over their actions.
People paid for work feel less like they want to do it and more
like they have to it.
Proposes that in addition to being driven by a need for
autonomy, people seek ways to achieve competence and positive
connections to others.
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Rights Reserved.
Early theories of motivation have not been supported by
research or have fallen out favor. In contrast, contemporary
theories have generally been supported, but caution is still in
order.
We begin our discussion of contemporary motivation theories
with self-determination theory, which proposes that people
prefer to feel they have control over their actions, so anything
that makes a previously enjoyed task feel more like an
obligation than a freely chosen activity will undermine
motivation. Much research on self-determination theory in OB
has focused on cognitive evaluation theory, which hypothesizes
that extrinsic rewards will reduce intrinsic interest in a task. For
example, when people are paid for work, it feels less like
something they want to do and more like something they have to
do. Self-determination theory also proposes that in addition to
being driven by a need for autonomy, people seek ways to
achieve competence and positive connections to others. A large
number of studies support self-determination theory. Its major
implications relate to work rewards.
12
Self-Determination Theory vs. Goal-Setting Theory (2 of 9)
When extrinsic rewards are used as payoffs for performance,
employees feel they are doing a good job.
Eliminating extrinsic rewards can also shift an individual’s
perception of why he or she works on a task from an external to
an internal explanation.
Self-determination theory acknowledges that extrinsic rewards
can improve even intrinsic motivation under specific
circumstances.
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When organizations use extrinsic rewards as payoffs for
superior performance, employees feel they are doing a good job
less because of their own intrinsic desire to excel than because
that’s what the organization wants. Eliminating extrinsic
rewards can also shift an individual’s perception of why he or
she works on a task from an external to an internal explanation.
For example, if you’re reading a novel a week because your
English literature instructor requires you to, you can attribute
your reading behavior to an external source. However, if you
find yourself continuing to read a novel each week after the
course is over, your natural inclination is to say, “I must enjoy
reading novels because I’m still reading one each week.”
Studies examining how extrinsic rewards increased motivation
for some creative tasks suggest we might need to place
cognitive evaluation theory’s predictions in a broader context.
Goal setting is more effective in improving motivation, for
instance, when we provide rewards for achieving the goals. The
original authors of self-determination theory acknowledge that
extrinsic rewards, such as verbal praise and feedback about
competence, can improve even intrinsic motivation under
specific circumstances. Deadlines and specific work standards
do, too, if people believe they are in control of their behavior.
This is consistent with the central theme of self-determination
theory: rewards and deadlines diminish motivation if people see
them as coercive.
13
Self-Determination Theory vs. Goal-Setting Theory (3 of 9)
What does self-determination theory suggest for providing
rewards?
Self-concordance: considers how strongly people’s reasons for
pursuing goals are consistent with their interests and core
values.
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Self-determination theory creates suggestions for providing
rewards. For example, if a senior sales representative really
enjoys selling and making the deal, a commission indicates he’s
been doing a good job and increases his sense of competence by
providing feedback that could improve intrinsic motivation. If a
computer programmer values writing code because she likes to
solve problems, a reward for working toward an externally
imposed standard she does not accept, such as writing a certain
number of lines of code every day, could feel coercive, and her
intrinsic motivation could suffer. She could be less interested in
the task and might reduce her effort.
A recent outgrowth of self-determination theory is self-
concordance, which considers how strongly peoples’ reasons for
pursuing goals are consistent with their interests and core
values. If individuals pursue goals because of an intrinsic
interest, they are more likely to attain their goals and are happy
even if they do not. The process of striving toward them is fun.
In contrast, people who pursue goals for extrinsic reasons, like
money or status, are less likely to attain their goals and are less
happy even when they do because the goals are less meaningful
to them. OB research suggests that people who pursue work
goals for intrinsic reasons are more satisfied with their jobs,
feel they fit into their organizations better, and may perform
better.
14
Self-Determination Theory vs. Goal-Setting Theory (4 of 9)
What does all of this mean?
For individuals:
Choose your job for reasons other than extrinsic rewards.
For organizations:
Provide intrinsic as well as extrinsic incentives.
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What does all of this mean? For individuals, it means to choose
your job for reasons other than extrinsic rewards. For
organizations, it means managers should provide intrinsic as
well as extrinsic incentives. They need to make the work
interesting, provide recognition, and support employee growth
and development. Employees who feel what they do is within
their control and a result of free choice are likely to be more
motivated by their work and committed to their employers.
15
Self-Determination Theory vs. Goal-Setting Theory (5 of 9)
Goal-Setting Theory
Goals tell an employee what needs to be done and how much
effort is needed.
Evidence suggests:
Specific goals increase performance.
Difficult goals, when accepted, result in higher performance
than do easy goals.
Feedback leads to higher performance than does non-feedback.
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Edwin Locke’s goal-setting theory proposed that intentions to
work toward a goal are a major source of work motivation.
Goals tell an employee what needs to be done and how much
effort is needed. Evidence strongly suggests that specific goals
increase performance, and that difficult goals, when accepted,
result in higher performance than do easy goals. Also, people
will do better when they get feedback on how well they are
progressing toward their goals. Self-generated feedback is more
powerful a motivator than externally generated feedback.
16
Self-Determination Theory vs. Goal-Setting Theory (6 of 9)
Three other factors influencing the goals-performance
relationship:
Goal commitment
Task characteristics
National culture
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There are contingencies in goal-setting theory. In addition to
goal acceptance, difficulty level, and feedback, three other
factors influence the goals-performance relationship: goal
commitment, task characteristics, and national culture.
Goal-setting theory presupposes that an individual is committed
to the goal, believes it can be achieved, and wants to achieve it.
Goal commitment is most likely to occur when goals are made
public, when the individual has an internal locus of control, and
when the goals are self-set rather than assigned.
Goals themselves seem to affect performance more strongly
when task characteristics are: simple rather than complex; well-
learned rather than novel; and independent rather than
interdependent. On interdependent tasks, group goals are
preferable.
Setting specific, difficult individual goals may have different
effects in different cultures. Research has not shown that group-
based goals are more effective in collectivists than in
individualist cultures. In collectivist and high-power-distance
cultures, achievable moderate goals can be more highly
motivating than difficult ones. Finally, assigned goals appear to
generate greater goal commitment in high than in low power-
distance cultures. More research is needed to assess how goal
constructs might differ across cultures.
17
Self-Determination Theory vs. Goal-Setting Theory (7 of 9)
People differ in the way they regulate their thoughts and
behaviors.
Those with a promotion focus strive for advancement and
accomplishment and approach conditions that move them closer
toward desired goals.
Those with a prevention focus strive to fulfill duties and
obligations and avoid conditions that pull them away from
desired goals.
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Research has also found that people differ in the way they
regulate their thoughts and behaviors during goal pursuit.
Generally, people fall into one of two categories, though they
could belong to both. Those with a promotion focus strive for
advancement and accomplishment and approach conditions that
move them closer toward desired goals. Those with a prevention
focus strive to fulfill duties and obligations and avoid
conditions that pull them away from desired goals. Which is the
better strategy? Ideally, it’s probably best to be both promotion
and prevention oriented.
18
Self-Determination Theory vs. Goal-Setting Theory (8 of 9)
Exhibit 7-4 Cascading of Objectives
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How do you put goal-setting operations into practice?
Management by Objectives (MBO) allows employees to
participatively set goals that are tangible, verifiable, and
measurable. As shown in Exhibit 7-4, an organization’s overall
objectives are translated into specific objectives for each
succeeding level. Four ingredients common to MBO programs
are: goal specificity; participation in decision making; explicit
time period; and performance feedback. MBO programs are
common in many business, healthcare, educational, government,
and nonprofit organizations.
19
Self-Determination Theory vs. Goal-Setting Theory (9 of 9)
Goal Setting and Ethics
The relationship between goal setting and ethics is quite
complex: if we emphasize the attainment of goals, what is the
cost?
We may forgo mastering tasks and adopt avoidance techniques
so we don’t look bad, both of which can incline us toward
unethical choices.
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The relationship between goal setting and ethics is quite
complex: if we emphasize the attainment of goals, what is the
cost? The answer is probably found in the standards we set for
goal achievement. If we are put under time pressure and worry
about that, thoughts about time turn against us.
Time pressure often increases as we are nearing a goal, which
can tempt us to act unethically to achieve it. We may forgo
mastering tasks and adopt avoidance techniques so we don’t
look bad, both of which can incline us toward unethical choices.
20
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(1 of 11)
Self-efficacy theory is an individual’s belief that he or she is
capable of performing a task.
Enactive mastery
Vicarious modeling
Verbal persuasion
Arousal
Also known as social cognitive theory and social learning
theory.
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Rights Reserved.
Self-efficacy theory, also known as social cognitive theory and
social learning theory, is a new theory gaining much attention.
The theory defines four characteristics: enactive mastery, or
gaining relevant experience with the task or job; vicarious
modeling, or becoming more confident because you see
someone else doing the task; verbal persuasion, occurring when
a person is more confident because someone convinces him that
he has the skills; and arousal, which leads to an energized state,
driving a person to complete the task.
21
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(2 of 11)
Exhibit 7-5 Joint Effects of Goals and Self-Efficacy on
Performance
Source: Based on E. A. Locke and G. P. Latham, “Building a
Practically Useful Theory of Goal Setting and Task Motivation:
A 35-Year Odyssey,” American Psychologist (September 2002):
705–17.
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What role does equity play in motivation? Equity theory argues
that individuals make comparisons of their job inputs and
outcomes relative to those of others and then respond to any
inequities. If we perceive our ratio to be equal to that of the
relevant others with whom we compare ourselves, a state of
equity is said to exist. We perceive our situation as fair. When
we see the ratio as unequal, we experience equity tension.
22
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(3 of 11)
Implications of self-efficacy theory:
The best way for a manager to use verbal persuasion is through
the Pygmalion effect.
A form of self-fulfilling prophecy – believing in something can
make it true.
Training programs often make use of enactive mastery by
having people practice and build their skills.
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What are the implications of self-efficacy theory? First, training
programs often make use of enactive mastery by having people
practice and build their skills. In fact, one reason training works
is that it increases self-efficacy. Second, individuals with higher
levels of self-efficacy also appear to reap more benefits from
training programs and are more likely to use their training on
the job.
The best way for a manager to use verbal persuasion is through
the Pygmalion effect. A form of self-fulfilling prophecy –
believing in something can make it true.
23
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(4 of 11)
Reinforcement theory: behavior is a function of its
consequences.
Reinforcement conditions behavior.
Behavior is environmentally caused.
Goal setting is a cognitive approach: an individual’s purposes
direct his or her action.
Operant conditioning theory: people learn to behave to get
something they want or to avoid something they don’t want.
B.F. Skinner’s behaviorism.
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Let’s look at reinforcement theory. While goal setting is a
cognitive approach proposing that an individual’s purposes
direct his or her action, reinforcement theory, by contrast, takes
a behavioristic view, arguing that reinforcement conditions
behavior. The two theories are clearly at odds, philosophically.
Reinforcement theorists see behavior as environmentally
caused, ignoring the inner state of the individual and
concentrating solely on what happens when he or she takes
some action. Because it does not concern itself with what
initiates behavior, it is not, strictly speaking, a theory of
motivation. But it does provide a powerful means of analyzing
what controls behavior, and this is why we typically consider it
in discussions of motivation.
Operant conditioning theory argues that people learn to behave
to get something they want or to avoid something they don’t
want. Unlike reflexive or unlearned behavior, operant behavior
is influenced by the reinforcement or lack of reinforcement
brought about by its consequences. Reinforcement strengthens a
behavior and increases the likelihood it will be repeated. B. F.
Skinner, one of the most prominent advocates of operant
conditioning, argued that creating pleasing consequences to
follow specific forms of behavior would increase the frequency
of that behavior – a theory known as behaviorism. He
demonstrated that people will most likely engage in desired
behaviors if they are positively reinforced for doing so, that
rewards are most effective if they immediately follow the
desired response, and that behavior that is not rewarded or is
punished is less likely to be repeated.
24
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(5 of 11)
Social-learning theory: we can learn through both observation
and direct experience.
Models are central, and four processes determine their influence
on an individual:
Attentional processes
Retention processes
Motor reproduction processes
Reinforcement processes
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Social-learning theory argues that we can learn through both
observation and direct experience. Models are central to the
social-learning viewpoint. Four processes determine their
influence on an individual:
Attentional processes: people learn from a model only when
they recognize and pay attention to its critical features.
Retention processes: a model’s influence depends on how well
the individual remembers the model’s action after the model is
no longer readily available.
Motor reproduction processes: after a person has seen a new
behavior by observing the model, watching must be converted to
doing.
Reinforcement processes: individuals are motivated to exhibit
the modeled behavior if positive incentives or rewards are
provided.
25
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(6 of 11)
Exhibit 7-6 Equity Theory
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What role does equity play in motivation? Equity theory argues
that individuals make comparisons of their job inputs and
outcomes relative to those of others and then respond to any
inequities. If we perceive our ratio to be equal to that of the
relevant others with whom we compare ourselves, a state of
equity is said to exist. We perceive our situation as fair. When
we see the ratio as unequal, we experience equity tension.
26
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(7 of 11)
When employees perceive an inequity, they can be predicted to
make one of six choices:
Change their inputs.
Change their outcomes.
Distort perceptions of self.
Distort perceptions of others.
Choose a different referent.
Leave the field.
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When employees perceive an inequity, they can be predicted to
make one of six choices: they can change their inputs; change
their outcomes; distort perceptions of self; distort perceptions
of others; choose a different referent; or they can leave the
field.
27
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(8 of 11)
Exhibit 7-7 Model of Organizational Justice
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However, organizational justice draws a bigger picture.
Organizational justice is concerned with how employees feel
they are treated by authorities and decisions-makers at work.
For the most part, employees make their evaluations along four
dimensions, as shown in Exhibit 7-7.
Distributive justice is concerned with the fairness of the
outcomes, such as pay and recognition that employees receive.
Although employees care a lot about what outcomes are
distributed (distributive justice), they also care a lot about how
outcomes are distributed. While distributive justice looks at
what outcomes are allocated, procedural justice examines how
outcomes are allocated. Having direct influence over how
decisions or made, or at the very least being able to present
your opinion to decision-makers, creates a sense of control and
makes us feel empowered. Employees also perceive that
procedures are fairer when decision-makers follow several
“rules.” It turns out that procedural and distributive justice
combine to influence people’s perceptions of fairness. If
outcomes are favorable and individuals get what they want, they
care less about the process, so procedural justice doesn’t matter
as much when distributions are perceived to be fair.
Research has shown that employees care about two other types
of fairness that have to do with the way they are treated during
interactions with others.
The first type is informational justice, which reflects whether
managers provide employees with explanations for key
decisions and keep them informed of important organizational
matters. The second type of justice relevant to interactions
between managers and employees is interpersonal justice, which
reflects whether employees are treated with dignity and respect.
28
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(9 of 11)
Expectancy theory: a tendency to act in a certain way depends
on an expectation that the act will be followed by a given
outcome and on the attractiveness of that outcome to the
individual.
Three relationships:
Effort-performance relationship
Performance-reward relationship
Rewards-personal goals relationship
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Expectancy theory is one of the most widely accepted
explanations of motivation. Victor Vroom’s expectancy theory
has its critics, but most of the research is supported. Expectancy
theory argues that the strength of one’s tendency to act in a
certain way depends on the strength of the expectation that the
act will be followed by a given outcome and on the
attractiveness of that outcome to the individual. It says that an
employee will be motivated to exert a high level of effort when
he or she believes that effort will lead to a good performance
appraisal, that a good appraisal will lead to organizational
rewards, and that the rewards will satisfy his or her personal
goals.
29
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(10 of 11)
Exhibit 7-8 Expectancy Theory
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Exhibit 7-8 shows the three key relationships: the effort-
performance relationship, which is the probability perceived by
the individual that exerting a given amount of effort will lead to
performance; the performance-reward relationship, which is the
degree to which the individual believes that performing at a
particular level will lead to the attainment of a desired outcome;
and the rewards-personal goals relationship, which is the degree
to which organizational rewards satisfy an individual’s personal
goals or needs and the attractiveness of those potential rewards
for the individual.
30
Self-Efficacy, Reinforcement, Equity, and Expectancy Theory
(11 of 11)
Expectancy theory helps explain why a lot of workers aren’t
motivated and do only the minimum.
Three questions employees need to answer in the affirmative if
their motivation is to be maximized:
If I give maximum effort, will it be recognized in my
performance appraisal?
If I get a good performance appraisal, will it lead to
organizational rewards?
If I’m rewarded, are the rewards attractive to me?
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Expectancy theory helps explain why a lot of workers aren’t
motivated on their jobs and do only the minimum necessary to
get by. We can look at the theory’s three relationships by asking
three questions that employees would need to answer
affirmatively if they are to be motivated: First, if I give
maximum effort, will it be recognized in my performance
appraisal? Second, if I get a good performance appraisal, will it
lead to organizational rewards? Third, if I’m rewarded, are the
rewards attractive to me?
31
Implications of Job Engagement for Management (1 of 3)
Job engagement: the investment of an employee’s physical,
cognitive, and emotional energies into job performance.
Gallup organization: more engaged employees in successful
organizations than in average organizations.
Academic studies: job engagement is positively associated with
performance and citizenship behaviors.
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Job engagement is the investment of an employee’s physical,
cognitive, and emotional energies into job performance.
Practicing managers and scholars alike have lately become
interested in facilitating job engagement, believing something
deeper than liking a job or finding it interesting drives
performance. Many studies attempt to measure this deeper level
of commitment.
The Gallup organization has been using twelve questions to
assess the extent to which employee engagement is linked to
positive work outcomes for millions of employees over the past
30 years. There are far more engaged employees in highly
successful organizations than in average organizations, and
groups with more engaged employees have higher levels of
productivity, fewer safety incidents, and lower turnover.
Academic studies have also found positive outcomes. One study
found higher levels of engagement were associated with task
performance and citizenship behavior.
32
Implications of Job Engagement for Management (2 of 3)
What makes people more engaged in their job?
The degree to which an employee believes it is meaningful to
engage in work.
A match between the individual’s values and the organization’s.
Leadership behaviors that inspire workers to a greater sense of
mission.
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What makes people more likely to be engaged in their jobs? One
key is the degree to which an employee believes it is
meaningful to engage in work. This is partially determined by
job characteristics and access to sufficient resources to work
effectively. Another factor is a match between the individual’s
values and those of the organization. In addition, leadership
behaviors that inspire workers to a greater sense of mission also
increase employee engagement.
33
Implications of Job Engagement for Management (3 of 3)
Are highly engaged employees getting “too much of a good
thing?”
Construct is partially redundant with job attitudes.
It may have a “dark side.”
Positive relationships between engagement and work-family
conflict.
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One of the critiques of engagement is that the construct is
partially redundant with job attitudes like satisfaction or stress.
However, engagement questionnaires usually assess motivation
and absorption in a task, quite unlike job satisfaction
questionnaires. Engagement may also predict important work
outcomes better than traditional job attitudes. Others critics
note there may be a “dark side” to engagement, as evidenced by
positive relationships between engagement and work-family
conflict.
Individuals might grow so engaged in their work roles that
family responsibilities become an unwelcomed intrusion.
Further research exploring how engagement relates to these
negative outcomes may help clarify whether some highly
engaged employees might be getting “too much of a good
thing.”
34
Compare Contemporary Theories of Motivation
Exhibit 7-9 Integrating Contemporary Theories of Motivation
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Exhibit 7-9 integrates much of what we know about motivation.
Its basic foundation is the expectancy model. Expectancy theory
predicts that an employee will exert a high level of effort if he
or she perceives that there is a strong relationship between
effort and performance, performance and rewards, and rewards
and satisfaction of personal goals. Each of these relationships,
in turn, is influenced by certain factors. For effort to lead to
good performance, the individual must have the requisite ability
to perform, and the performance appraisal system must be
perceived as being fair and objective. The final link in
expectancy theory is the rewards-goals relationship.
The model also considers the achievement, need, reinforcement,
and equity/organizational justice theories. High achievers are
internally driven as long as the jobs they are doing provide them
with personal responsibility, feedback, and moderate risks.
Reinforcement theory recognizes that the organization’s rewards
reinforce the individual’s performance. Individuals will
compare the rewards they receive (outcomes) from the inputs
they make with the outcome-input ratio of relevant others, and
inequities may influence the effort expended.
35
Implications for Managers (1 of 2)
Make sure extrinsic rewards for employees are not viewed as
coercive, but instead provide information about competence and
relatedness.
Consider goal-setting theory, as clear and difficult goals often
lead to higher levels of employee productivity.
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The motivation theories in this chapter differ in their predictive
strength. Maslow’s hierarchy, McClelland’s needs, and the two-
factor theory focus on needs. None has found widespread
support, although McClelland’s is the strongest, particularly
regarding the relationship between achievement and
productivity. Self-determination theory and related theories
have merits to consider. Goal-setting theory can be helpful but
does not cover absenteeism, turnover, or job satisfaction. Self-
efficacy theory contributes to our understanding of personal
motivation. Reinforcement theory can be helpful, but not
regarding employee satisfaction or the decision to quit. Equity
theory’s strongest legacy is that it provided the spark for
research on organizational justice, which has more support in
the literature. Expectancy theory can be helpful, but assumes
employees have few constraints on decision making, such as
bias or incomplete information, and this limits its applicability.
Job engagement goes a long way toward explaining employee
commitment.
36
Implications for Managers (2 of 2)
Consider reinforcement theory regarding quality and quantity of
work, persistence of effort, absenteeism, tardiness, and accident
rates.
Consult equity theory to help understand productivity,
satisfaction, absence, and turnover variables.
Expectancy theory also offers a powerful explanation of
performance variables such as employee productivity,
absenteeism, and turnover.
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In addition, managers should consider reinforcement theory
regarding quality and quantity of work, persistence of effort,
absenteeism, tardiness, and accident rates. Managers should
also consult equity theory to help understand productivity,
satisfaction, absence, and turnover variables. Finally, managers
need to recognize that expectancy theory also offers a powerful
explanation of performance variables such as employee
productivity, absenteeism, and turnover.
37
Copyright
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Organizational Behavior
Seventeenth Edition
Chapter 8
Motivation: From Concepts to Applications
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Welcome to this Organizational Behavior course that uses the
17th edition of the textbook, Organizational Behavior by
Robbins and Judge. This is considered among the most widely
used OB textbooks in the world. Robbins and Judge are
recognized as definitive aggregators of OB concepts,
applications, and practices. The course and this book will
provide you with a resource that will benefit you throughout
your degree program and your professional life.
Chapter 8: Motivations: From Concepts to Applications
1
Learning Objectives
8.1 Describe how the job characteristics model motivates by
changing the work environment.
8.2 Compare the main ways jobs can be redesigned.
8.3 Explain how specific alternative work arrangements can
motivate employees.
8.4 Describe how employee involvement measures can motivate
employees.
8.5 Demonstrate how the different types of variable-pay
programs can increase employee motivation.
8.6 Show how flexible benefits turn benefits into motivators.
8.7 Identify the motivational benefits of intrinsic rewards.
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After studying this chapter, you should be able to:
Describe how the job characteristics model motivates by
changing the work environment.
Compare the main ways jobs can be redesigned.
Explain how specific alternative work arrangements can
motivate employees.
Describe how employee involvement measures can motivate
employees.
Demonstrate how the different types of variable-pay programs
can increase employee motivation.
Show how flexible benefits turn benefits into motivators.
Identify the motivational benefits of intrinsic rewards.
2
The Job Characteristics Model (1 of 2)
Exhibit 8-1 The Job Characteristics Model
Source: J. L. Pierce, I. Jussila, and A. Cummings,
“Psychological Ownership within the Job Design Context:
Revision of the Job Characteristics Model,” Journal of
Organizational Behavior 30, no. 4 (2009): 477–96.
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The Job Characteristics Model (JCM) as shown here in Exhibit
8-1, proposes that any job may be described by five core job
dimensions:
Skill variety is the degree to which the job requires a variety of
different activities, so the worker can use a number of different
skills and talent.
Task identity is the degree to which the job requires completion
of a whole and identifiable piece of work.
Task significance is the degree to which the job has a
substantial impact on the lives or work of other people.
Autonomy is the degree to which the job provides substantial
freedom, independence, and discretion to the individual in
scheduling the work and determining the procedures to be used
in carrying it out.
Feedback is the degree to which carrying out the work activities
required by the job results in the individual obtaining direct and
clear information about the effectiveness of his or her
performance.
The first three dimensions—skill variety, task identity, and task
significance—combine to create meaningful work the incumbent
will view as important, valuable, and worthwhile. From a
motivational standpoint, the JCM proposes that individuals
obtain internal rewards when they learn (knowledge of results)
that they personally (experienced responsibility) have
performed well on a task they care about (experienced
meaningfulness). Individuals with a high growth need are more
likely to experience the critical psychological states when their
jobs are enriched—and respond to them more positively—than
are their counterparts with low growth need.
3
The Job Characteristics Model (2 of 2)
The core dimensions of the job characteristics model (JCM) can
be combined into a single predictive index called the motivating
potential score (MPS).
Evidence supports the JCM concept that the presence of a set of
job characteristics does generate higher and more satisfying job
performance.
A few studies have tested the JCM in different cultures, but the
results aren’t very consistent.
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The core dimensions of the JCM can be combined into a single
predictive index called the motivating potential score (MPS). To
be high on motivating potential, jobs must be high on at least
one of the three factors that lead to experienced
meaningfulness, and high on both autonomy and feedback. If
jobs score high on motivating potential, the model predicts that
motivation, performance, and satisfaction will improve and
absence and turnover will be reduced.
Much evidence supports the JCM concept that the presence of a
set of job characteristics—variety, identity, significance,
autonomy, and feedback—does generate higher and more
satisfying job performance. But apparently we can better
calculate motivating potential by simply adding the
characteristics rather than using the formula.
A few studies have tested the job characteristics model in
different cultures, but the results aren’t very consistent. One
study suggested that when employees are “other oriented” (i.e.,
concerned with the welfare of others at work), the relationship
between intrinsic job characteristics and job satisfaction was
weaker. The fact that the job characteristics model is relatively
individualistic (i.e., considering the relationship between the
employee and his or her work) suggests job enrichment
strategies may not have the same effects in collectivistic
cultures as in individualistic cultures (such as the United
States). Another study suggested the degree to which jobs had
intrinsic job characteristics predicted job satisfaction and job
involvement equally well for American, Japanese, and
Hungarian employees.
4
Compare the Main Ways Jobs Can Be Redesigned (1 of 2)
Repetitive jobs provide little variety, autonomy, or motivation.
Job Rotation
Referred to as cross-training.
Periodic shifting from one task to another.
Strengths: reduces boredom, increases motivation, and helps
employees better understand their work contributions.
Weaknesses: creates disruptions, requires extra time for
supervisors addressing questions and training time, and reduced
efficiencies.
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People generally seek out jobs that are challenging and
stimulating, but repetitive jobs provide little variety, autonomy,
or motivation. One way to make repetitive jobs more interesting
is job rotation, which is also known as cross-training. It
involves periodic shifting of an employee from one task to
another. When an activity is no longer challenging, the
employee is shifted to a different task.
The strengths of job rotation are that it reduces boredom,
increases motivation, and helps employees better understand
their work contributions. Indirect benefits include employees
with wider ranges of skills that give management more
flexibility in scheduling, adapting to changes, and filling
vacancies. Some weaknesses of job rotation include disruptions,
a need for extra time for supervisors addressing questions and
training time, and reduced efficiencies.
5
Compare the Main Ways Jobs Can Be Redesigned (2 of 2)
Relational Job Design
To make jobs more prosocially motivating:
Connect employees with the beneficiaries of their work.
Meet beneficiaries firsthand.
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While redesigning jobs on the basis of job characteristics theory
is likely to make work more intrinsically motivating to people,
more contemporary research is focusing on how to make jobs
more prosocially motivating to people. One way to make jobs
more prosocially motivating is to better connect employees with
the beneficiaries of their work, for example, by relating stories
from customers who have found the company’s products or
services to be helpful. Beneficiaries of organizations might
include customers, clients, patients, and users of products or
services. Meeting beneficiaries firsthand allows employees to
see that their actions affect a real, live person, and that their
jobs have tangible consequences. In addition, connections with
beneficiaries make customers or clients more accessible in
memory and more emotionally vivid, which leads employees to
consider the effects of their actions more. Finally, connections
allow employees to easily take the perspective of beneficiaries,
which fosters higher levels of commitment.
6
How Specific Alternative Work Arrangements Motivate
Employees (1 of 6)
Exhibit 8-2 Possible Flextime Staff Schedules
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Alternative work arrangements are also used to boost
motivation. They include flextime, defined as flexible work
hours like those shown in Exhibit 8-2. This allows employees
some discretion over when they arrive at and leave work.
Benefits include reduced absenteeism, increased productivity,
reduced overtime expense, reduced hostility toward
management, and increased autonomy and responsibility for
employees. A major drawback is that it’s not applicable to all
jobs or all workers.
7
How Specific Alternative Work Arrangements Motivate
Employees (2 of 6)
Job Sharing
Two or more people split a 40-hour-a-week job.
Declining in use.
Can be difficult to find compatible pairs of employees who can
successfully coordinate the intricacies of one job.
Increases flexibility and can increase motivation and
satisfaction when a 40-hour-a-week job is just not practical.
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Job sharing allows two or more individuals to split a traditional
40-hour-a-week job. Only 18 percent of larger organizations
now offer job sharing, a 29 percent decrease since 2008.
Reasons it is not more widely adopted are likely the difficulty
of finding compatible partners to share a job and the historically
negative perceptions of individuals not completely committed to
their job and employer. The major drawback is finding
compatible pairs of employees who can successfully coordinate
the intricacies of one job.
However, job sharing allows an organization to draw on the
talents of more than one individual in a given job. From the
employee’s perspective, job sharing increases flexibility and
can increase motivation and satisfaction when a 40-hour-a-week
job is just not practical.
8
How Specific Alternative Work Arrangements Motivate
Employees (3 of 6)
Telecommuting
Employees who do their work at home at least two days a week
on a computer that is linked to their office.
Virtual office
Some well-known organizations actively discourage
telecommuting, but for most organizations it remains popular.
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Telecommuting refers to employees who do their work at home
at least two days a week on a computer that is linked to their
office.
Large organizations such as Yahoo! And Best Buy have
eliminated telecommuting believing it undermines corporate
culture, but for it remains popular for many organizations.
Well-known organizations that actively encourage
telecommuting include AT&T, IBM, American Express, Sun
Microsystems, and a number of U.S. government agencies.
9
How Specific Alternative Work Arrangements Motivate
Employees (4 of 6)
Telecommuting Advantages
Larger labor pool
Higher productivity
Improved morale
Reduced office-space costs
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There are reasons for and against telecommuting. The
advantages include a larger labor pool of workers, higher
productivity, improved morale, and reduced office-space costs.
10
How Specific Alternative Work Arrangements Motivate
Employees (5 of 6)
Telecommuting Disadvantages
Employer
Less direct supervision of employees.
Difficult to coordinate teamwork.
Difficult to evaluate non-quantitative performance.
Employee
May not be noticed for his or her efforts.
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Disadvantages of telecommuting for the employer include less
direct supervision of employees, difficulty coordinating
teamwork, and difficulty evaluating non-quantitative
performance. Disadvantages for the employee include that he or
she may not be as noticed for his or her efforts.
11
How Specific Alternative Work Arrangements Motivate
Employees (6 of 6)
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Telecommuting seems to mesh with the cultural transition to
knowledge work.
As the OB poll indicates, people with more education are more
apt to work from home.
12
Employee Involvement and Employee Motivation (1 of 3)
Employee Involvement: a participative process that uses
employees’ input to increase their commitment to the
organization’s success.
Examples of Employee Involvement Programs
Participative management
Representative participation
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Employee involvement refers to a participative process that uses
employees’ input to increase their commitment to the
organization’s success. Two examples of such programs are
participative management and representative participation.
13
Employee Involvement and Employee Motivation (2 of 3)
Participative management
Joint decision making.
Acts as a panacea for poor morale and low productivity.
Trust and confidence in leaders is essential.
Studies of the participation-performance have yielded mixed
results.
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Participative management is the first of the options for
employee involvement programs. Common to all participative
management programs is joint decision making, wherein
subordinates share a significant degree of decision making
power with their immediate superiors. Participative management
has, at times, been promoted as a panacea for poor morale and
low productivity. But for it to work, employees must be engaged
in issues relevant to their interests so they’ll be motivated, they
must have the competence and knowledge to make a useful
contribution, and trust and confidence must exist among all
parties.
Studies of the participation-performance relationship have
yielded mixed findings. Organizations that institute
participative management do have higher stock returns, lower
turnover rates, and higher estimated labor productivity,
although these effects are typically not large. A careful review
of research at the individual level shows participation typically
has only a modest influence on employee productivity,
motivation, and job satisfaction. Of course, this doesn’t mean
participative management can’t be beneficial under the right
conditions. But it is not a sure means for improving
performance.
14
Employee Involvement and Employee Motivation (3 of 3)
Representative participation
Workers are represented by a small group of employees who
actually participate in decision making.
Almost every country in Western Europe requires representative
participation.
The two most common forms:
Works councils
Board representatives
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Representative participation is spreading. Almost every country
in Western Europe has some type of legislation requiring it. It is
the most widely legislated form of employee involvement
around the world. The goal is to redistribute power within an
organization, putting labor on a more equal footing with the
interests of management and stockholders.
The two most common forms include works councils that link
employees with management. They are groups of nominated or
elected employees who must be consulted when management
makes decisions involving personnel. Second is board
representatives, who are employees who sit on a company’s
board of directors and represent the interests of the firm’s
employees. The overall influence of representative participation
seems to be minimal. The evidence suggests that works councils
are dominated by management and have little impact on
employees or the organization. If one were interested in
changing employee attitudes or in improving organizational
performance, representative participation would be a poor
choice.
15
Variable-Pay Programs and Employee Motivation (1 of 8)
What to Pay:
Complex process that entails balancing internal equity and
external equity.
Some organizations prefer to pay leaders by paying above
market.
Paying more may net better-qualified and more highly
motivated employees who may stay with the firm longer.
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Now, let’s talk about using rewards to motivate people, and
specifically, what to pay employees. As we saw in Chapter 3,
pay is not a primary factor driving job satisfaction. However, it
does motivate people, and companies often underestimate its
importance in keeping top talent. A 2006 study found that while
45% of employers thought pay was a key factor in losing top
talent, 71% of top performers called it a top reason.
So, what should an organization do? How should the pay
structure be established? The answer is not easy – it’s a
complex process that entails balancing internal equity and
external equity. Some organizations prefer to pay leaders by
paying above market. Keep in mind that paying more may net
better-qualified and more highly motivated employees who may
stay with the firm longer.
16
Variable-Pay Programs and Employee Motivation (2 of 8)
How to Pay:
Variable pay programs:
Piece-rate plans
Merit-based pay
Bonuses
Profit sharing
Employee stock ownership plans
Earnings therefore fluctuate up and down.
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Rewarding individual employees through variable-pay programs
is becoming more common in the workplace. A number of
organizations are moving away from paying solely on
credentials or length of service. Piece-rate plans, merit-based
pay, bonuses, profit sharing, and employee stock ownership
plans are all forms of a variable-pay program, which base a
portion of an employee’s pay on some individual and/or
organizational measure of performance. Individual earnings
therefore fluctuate up and down.
17
Variable-Pay Programs and Employee Motivation (3 of 8)
Piece-Rate Pay
A pure piece-rate plan provides no base salary and pays the
employee only for what he or she produces.
Limitation: not a feasible approach for many jobs.
The main concern for both individual and team piece-rate
workers is financial risk.
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The first of the variable pay programs is piece-rate pay plans.
Here, workers are paid a fixed sum for each unit of production
completed. A pure piece-rate plan provides no base salary and
pays the employee only for what he or she produces. The main
concern for both individual and team piece-rate workers is
financial risk.
The main limitation of the piece rate plan is that it doesn’t work
for all types of jobs. Although incentives are motivating and
relevant for some jobs, it is unrealistic to think they can
constitute the only piece of some employees’ pay.
18
Variable-Pay Programs and Employee Motivation (4 of 8)
Merit-Based Pay
Allows employers to differentiate pay based on performance.
Creates perceptions of relationships between performance and
rewards.
Limitations:
Based on annual performance appraisals.
Merit pool fluctuates.
Union resistance.
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The second variable pay method is the merit-based pay plan.
These plans are based on performance appraisal ratings. Their
main advantage is that they allow employers to differentiate pay
based on performance, and so create perceptions of
relationships between performance and rewards. Most large
organizations have merit pay plans, particularly for salaried
employees. Limitations to merit-based plans include that they
are based on annual performance appraisals, that the merit pool
fluctuates based on economic conditions, and that unions
typically resist merit-based pay plans.
19
Variable-Pay Programs and Employee Motivation (5 of 8)
Bonuses
An annual bonus is a significant component of total
compensation for many jobs.
Increasingly include lower-ranking employees.
Many companies now routinely reward production employees
with bonuses when profits improve.
Downside: employees’ pay is more vulnerable to cuts.
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The use of bonuses is becoming more common in many
organizations. An annual bonus is a significant component of
total compensation for many jobs.
Bonus plans increasingly include lower-ranking employees;
many companies now routinely reward production employees
with bonuses in the thousands of dollars when profits improve.
The incentive effects of performance bonuses should be higher
than those of merit pay because rather than paying for
performance years ago, which was rolled into base pay, bonuses
reward recent performance. When times are bad, firms can cut
bonuses to reduce compensation costs. The downside of bonuses
is that employees’ pay is more vulnerable to cuts.
20
Variable-Pay Programs and Employee Motivation (6 of 8)
Profit-Sharing Plans
Organization-wide programs that distribute compensation based
on some established formula centered around a company’s
profitability.
Appear to have positive effects on employee attitudes at the
organizational level.
Employees have a feeling of psychological ownership.
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Profit-sharing plans are organization-wide programs that
distribute compensation based on some established formula
centered around a company’s profitability. Compensation can be
direct cash outlays or, particularly for top managers, allocations
of stock options. Profit-sharing plans at the organizational level
appear to have positive impacts on employee attitudes;
employees report a greater feeling of psychological ownership.
21
Variable-Pay Programs and Employee Motivation (7 of 8)
Employee Stock Ownership Plan (ESOP)
A company-established benefit plan in which employees acquire
stock, often at below-market prices, as part of their benefits.
Increases employee satisfaction and innovation.
Employees need to psychologically experience ownership.
Can reduce unethical behavior.
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Another variable-pay option is the employee stock ownership
plan, or ESOP. An ESOP is a company-established benefit plan
in which employees acquire stock, often at below-market prices,
as part of their benefits.
Research on ESOPs indicates that they increase employee
satisfaction and innovation. ESOPs have the potential to
increase employee job satisfaction and work motivation, but
employees need to psychologically experience ownership.
ESOP plans for top management can reduce unethical behavior.
CEOs are more likely to manipulate firm earnings reports to
make themselves look good in the short run when they don’t
have an ownership share, even though this manipulation will
eventually lead to lower stock prices. However, when CEOs
own a large amount of stock, they report earnings accurately
because they don’t want the negative consequences of declining
stock prices.
22
Variable-Pay Programs and Employee Motivation (8 of 8)
Evaluation of Variable Pay
Do variable-pay programs increase motivation and productivity?
Generally, yes, but that doesn’t mean everyone is equally
motivated by them.
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Do variable-pay programs increase motivation and productivity?
Generally, yes, but that doesn’t mean everyone is equally
motivated by them.
Managers should monitor their employees’ performance-reward
expectancy, since a combination of elements that makes
employees feel that their greater performance will yield them
greater results will be the most motivating.
23
Show How Flexible Benefits Turn Benefits Into Motivators
Developing a Benefits Package
Flexible benefits individualize rewards.
Allow each employee to choose the compensation package that
best satisfies his or her current needs and situation.
Today, almost all major corporations in the United States offer
flexible benefits.
However, it may be surprising that their usage is not yet global.
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Flexible benefits individualize rewards by allowing each
employee to choose the compensation package that best satisfies
his or her current needs and situation.
Flexible benefits can accommodate differences in employee
needs based on age, marital status, spouses’ benefit status, and
number and age of dependents.
Today, almost all major corporations in the United States offer
flexible benefits.
However, it may be surprising that their usage is not yet global.
24
Identify the Motivational Benefits of Intrinsic Rewards
Employee Recognition Programs
Organizations are increasingly recognizing that important work
rewards can be both intrinsic and extrinsic.
Rewards are intrinsic in the form of employee recognition
programs and extrinsic in the form of compensation systems.
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Organizations are increasingly recognizing that important work
rewards can be both intrinsic and extrinsic. Rewards are
intrinsic in the form of employee recognition programs and
extrinsic in the form of compensation systems.
Employee recognition programs range from a spontaneous and
private thank-you to widely publicized formal programs in
which specific types of behavior are encouraged and the
procedures for attaining recognition are clearly identified.
An obvious advantage of recognition programs is that they are
inexpensive: praise is free! With or without financial rewards,
they can be highly motivating to employees.
25
Implications for Managers (1 of 3)
Recognize individual differences.
Spend the time necessary to understand what’s important to
each employee.
Design jobs to align with individual needs and maximize their
motivation potential.
Use goals and feedback.
You should give employees firm, specific goals, and they
should get feedback on how well they are faring in pursuit of
those goals.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
Rights Reserved.
The study of what motivates individuals is ultimately key to
organizational performance. Employees whose differences are
recognized, who feel valued, and who have the opportunity to
work in jobs that are tailored to their strengths and interests
will be motivated to perform at the highest levels. Employee
participation also can increase employee productivity,
commitment to work goals, motivation, and job satisfaction.
However, we cannot overlook the powerful role of
organizational rewards in influencing motivation. Pay, benefits,
and intrinsic rewards must be carefully and thoughtfully
designed in order to enhance employee motivation toward
positive organizational outcomes.
Managers should:
Recognize individual differences. Spend the time necessary to
understand what’s important to each employee. Design jobs to
align with individual needs and maximize their motivation
potential.
Use goals and feedback. You should give employees firm,
specific goals, and they should get feedback on how well they
are faring in pursuit of those goals.
26
Implications for Managers (2 of 3)
Allow employees to participate in decisions that affect them.
Employees can contribute to setting work goals, choosing their
own benefits packages, and solving productivity and quality
problems.
Link rewards to performance.
Rewards should be contingent on performance, and employees
must perceive the link between the two.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
Rights Reserved.
In addition, managers should:
Allow employees to participate in decisions that affect them.
Employees can contribute to setting work goals, choosing their
own benefits packages, and solving productivity and quality
problems.
Link rewards to performance. Rewards should be contingent on
performance, and employees must perceive the link between the
two.
27
Implications for Managers (3 of 3)
Check the system for equity.
Employees should perceive that experience, skills, abilities,
effort, and other obvious inputs explain differences in
performance and hence in pay, job assignments, and other
obvious rewards.
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
Rights Reserved.
Finally, managers should:
Check the system for equity. Employees should perceive that
experience, skills, abilities, effort, and other obvious inputs
explain differences in performance and hence in pay, job
assignments, and other obvious rewards.
28
Copyright
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
Rights Reserved.
29

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Organizational BehaviorSeventeenth EditionChapter 7Motivat.docx

  • 1. Organizational Behavior Seventeenth Edition Chapter 7 Motivation Concepts Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. If this PowerPoint presentation contains mathematical equations, you may need to check that your computer has the following installed: 1) MathType Plugin 2) Math Player (free versions available) 3) NVDA Reader (free versions available) Combine rational analysis with intuition. These are not conflicting approaches to decision making. By using both, you can actually improve your decision making effectiveness. Try to enhance your creativity. Actively look for novel solutions to problems, attempt to see problems in new ways, use analogies, and hire creative talent. Try to remove work and organizational barriers that might impede your creativity. Chapter 7: Motivation Concepts 1 Learning Objectives 7.1 Describe the three key elements of motivation. 7.2 Compare the early theories of motivation. 7.3 Contrast the elements of self-determination theory and goal- setting theory.
  • 2. 7.4 Demonstrate the differences among self-efficacy theory, reinforcement theory, equity theory, and expectancy theory. 7.5 Identify the implications of employee job engagement for managers. 7.6 Describe how the contemporary theories of motivation complement one another. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. After studying this chapter, you should be able to: Describe the three key elements of motivation. Compare the early theories of motivation. Contrast the elements of self-determination theory and goal- setting theory. Demonstrate the differences among self-efficacy theory, reinforcement theory, equity theory, and expectancy theory. Identify the implications of employee job engagement for managers. Describe how the contemporary theories of motivation complement one another. 2 Describe the Three Key Elements of Motivation (1 of 2) Motivation is the processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal. The level of motivation varies both between individuals and within individuals at different times. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Motivation is the processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal. We will narrow the focus to organizational goals in order
  • 3. to reflect our singular interest in work-related behavior. Keep in mind that the level of motivation varies both between individuals and within individuals at different times. 3 Describe the Three Key Elements of Motivation (2 of 2) The three key elements of motivation are: Intensity: concerned with how hard a person tries. Direction: the orientation that benefits the organization. Persistence: a measure of how long a person can maintain his/her effort. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The three key elements of our definition of motivation are intensity, direction, and persistence. Intensity is concerned with how hard a person tries to do anything. This is the element most of us focus on when we talk about motivation. Direction is the orientation that benefits the organization; it can be positive or negative. Persistence is a measure of how long a person can maintain his or her effort. Motivated individuals stay with a task long enough to achieve their goal. 4 Compare the Early Theories of Motivation (1 of 7) Exhibit 7-1 Maslow’s Hierarchy of Needs Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Abraham Maslow’s hierarchy of needs is the most well-known theory of motivation. Maslow hypothesized that within every human being there exists a hierarchy of five needs, beginning with physiological needs that include hunger, thirst, shelter,
  • 4. sex, and other bodily needs. The second level is safety needs that include security and protection from physical and emotional harm. The next level is social needs that include affection, belongingness, acceptance, and friendship. Reaching a higher level, we find esteem needs that include internal esteem factors such as self-respect, autonomy, and achievement, and external esteem factors such as status, recognition, and attention. At the top of the hierarchy is self-actualization needs; this is the drive to become what one is capable of becoming, and includes growth, achieving one’s potential, and self- fulfillment. Maslow separated the five needs into higher and lower orders. As a need becomes substantially satisfied, the next need becomes dominant. No need is ever fully gratified; a substantially satisfied need no longer motivates. 5 Compare the Early Theories of Motivation (2 of 7) Maslow’s need theory has received wide recognition, particularly among practicing managers. It is intuitively logical and easy to understand and some research has validated it. However, most research does, especially when the theory is applied to diverse cultures. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Maslow’s need theory has received wide recognition, particularly among practicing managers. It is intuitively logical and easy to understand and some research has validated it. However, most research does, especially when the theory is applied to diverse cultures. 6
  • 5. Compare the Early Theories of Motivation (3 of 7) Exhibit 7-2 Comparison of Satisfiers and Dissatisfiers Source: Based on Harvard Business Review. “Comparison of Satisfiers and Dissatisfiers.” An exhibit from One More Time: How Do You Motivate Employees? by Frederick Herzberg, January 2003. Copyright © 2003 by the Harvard Business School Publishing Corporation. All rights reserved. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Proposed by psychologist Frederick Herzberg when he investigated the question, “What do people want from their jobs?” the two-factor theory is sometimes also called motivation-hygiene theory. Herzberg asked people to describe situations in which they felt exceptionally good or bad about their jobs. These responses were then tabulated and categorized. From the categorized responses, as shown here in Exhibit 7-2, Herzberg concluded that intrinsic factors, such as advancement, recognition, responsibility, and achievement seem to be related to job satisfaction. Dissatisfied respondents tended to cite extrinsic factors, such as supervision, pay, company policies, and working conditions. Moreover, the opposite of satisfaction is not dissatisfaction. Removing dissatisfying characteristics from a job does not necessarily make the job satisfying. Job satisfaction factors are separate and distinct from job dissatisfaction factors. 7 Compare the Early Theories of Motivation (4 of 7) Exhibit 7-3 Contrasting View of Satisfaction and Dissatisfaction
  • 6. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Managers who eliminate job dissatisfaction factors may not necessarily bring about motivation. Exhibit 7-3 reveals that when hygiene factors are adequate, people will not be dissatisfied. Neither will they be satisfied. To motivate people, managers must emphasize intrinsically rewarding factors that are associated with the work itself or to outcomes directly derived from it. 8 Compare the Early Theories of Motivation (5 of 7) Criticisms of Herzberg’s theory: Limited because it relies on self-reports. Reliability of methodology is questioned. No overall measure of satisfaction was utilized. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Recent reviews of Herzberg’s research have resulted in many criticisms of the theory. The procedure that Herzberg used is limited by its methodology, therefore, the reliability of Herzberg’s methodology is questioned. For example, no overall measure of satisfaction was utilized. Regardless of criticisms, Herzberg’s theory has been widely read, and few managers are unfamiliar with his recommendations. 9 Compare the Early Theories of Motivation (6 of 7) McClelland’s Theory of Needs The theory focuses on three needs: Need for achievement (nAch): drive to excel, to achieve in relation to a set of standards, to strive to succeed.
  • 7. Need for power (nPow): need to make others behave in a way that they would not have behaved otherwise. Need for affiliation (nAfl): desire for friendly and close interpersonal relationships. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Another traditional theory is McClelland’s Theory of Needs. This theory focuses on three needs: achievement, power, and affiliation. Let’s look at each one in more detail. The first of this theory’s variables is achievement need, abbreviated as nAch, which is the drive to excel, to achieve in relation to a set of standards, and to strive to succeed. High achievers perform best when they perceive their probability of success as 50/50. They like to set goals that require stretching themselves a little. Need for power, the second variable, is the need to make others behave in a way that they would not have behaved otherwise. The need for power, abbreviated as nPow, is the desire to have impact, to be influential, and to control others. Individuals high in nPow enjoy being “in charge.” They strive for influence over others. They prefer to be placed into competitive and status- oriented situations. They also tend to be more concerned with prestige and gaining influence over others than with effective performance. Finally, the need for affiliation, abbreviated as nAfl, is the desire for friendly and close personal relationships. This need has received the least attention from researchers. In general, individuals with high affiliation strive for friendship and prefer cooperative situations over competitive ones. They typically desire relationships involving a high degree of mutual understanding.
  • 8. 10 Compare the Early Theories of Motivation (7 of 7) McClelland’s theory has had the best support. It has less practical effect than the others. Because McClelland argued that the three needs are subconscious—we may rank high on them but not know it— measuring them is not easy. It is more common to find situations in which managers aware of these motivational drivers label employees based on observations made over time. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Among the early theories of motivation, McClelland’s has had the best research support. Unfortunately, it has less practical effect than the others. McClelland argued that the three needs are subconscious – we may rank high on them, but not know it. Because of this, measuring them is not easy. It is more common to find situations in which managers aware of these motivational drivers label employees based on observations made over time. 11 Self-Determination Theory vs. Goal-Setting Theory (1 of 9) Self-Determination Theory People prefer to feel they have control over their actions. People paid for work feel less like they want to do it and more like they have to it. Proposes that in addition to being driven by a need for autonomy, people seek ways to achieve competence and positive connections to others. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
  • 9. Rights Reserved. Early theories of motivation have not been supported by research or have fallen out favor. In contrast, contemporary theories have generally been supported, but caution is still in order. We begin our discussion of contemporary motivation theories with self-determination theory, which proposes that people prefer to feel they have control over their actions, so anything that makes a previously enjoyed task feel more like an obligation than a freely chosen activity will undermine motivation. Much research on self-determination theory in OB has focused on cognitive evaluation theory, which hypothesizes that extrinsic rewards will reduce intrinsic interest in a task. For example, when people are paid for work, it feels less like something they want to do and more like something they have to do. Self-determination theory also proposes that in addition to being driven by a need for autonomy, people seek ways to achieve competence and positive connections to others. A large number of studies support self-determination theory. Its major implications relate to work rewards. 12 Self-Determination Theory vs. Goal-Setting Theory (2 of 9) When extrinsic rewards are used as payoffs for performance, employees feel they are doing a good job. Eliminating extrinsic rewards can also shift an individual’s perception of why he or she works on a task from an external to an internal explanation. Self-determination theory acknowledges that extrinsic rewards can improve even intrinsic motivation under specific circumstances. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved.
  • 10. When organizations use extrinsic rewards as payoffs for superior performance, employees feel they are doing a good job less because of their own intrinsic desire to excel than because that’s what the organization wants. Eliminating extrinsic rewards can also shift an individual’s perception of why he or she works on a task from an external to an internal explanation. For example, if you’re reading a novel a week because your English literature instructor requires you to, you can attribute your reading behavior to an external source. However, if you find yourself continuing to read a novel each week after the course is over, your natural inclination is to say, “I must enjoy reading novels because I’m still reading one each week.” Studies examining how extrinsic rewards increased motivation for some creative tasks suggest we might need to place cognitive evaluation theory’s predictions in a broader context. Goal setting is more effective in improving motivation, for instance, when we provide rewards for achieving the goals. The original authors of self-determination theory acknowledge that extrinsic rewards, such as verbal praise and feedback about competence, can improve even intrinsic motivation under specific circumstances. Deadlines and specific work standards do, too, if people believe they are in control of their behavior. This is consistent with the central theme of self-determination theory: rewards and deadlines diminish motivation if people see them as coercive. 13 Self-Determination Theory vs. Goal-Setting Theory (3 of 9) What does self-determination theory suggest for providing rewards? Self-concordance: considers how strongly people’s reasons for pursuing goals are consistent with their interests and core values.
  • 11. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Self-determination theory creates suggestions for providing rewards. For example, if a senior sales representative really enjoys selling and making the deal, a commission indicates he’s been doing a good job and increases his sense of competence by providing feedback that could improve intrinsic motivation. If a computer programmer values writing code because she likes to solve problems, a reward for working toward an externally imposed standard she does not accept, such as writing a certain number of lines of code every day, could feel coercive, and her intrinsic motivation could suffer. She could be less interested in the task and might reduce her effort. A recent outgrowth of self-determination theory is self- concordance, which considers how strongly peoples’ reasons for pursuing goals are consistent with their interests and core values. If individuals pursue goals because of an intrinsic interest, they are more likely to attain their goals and are happy even if they do not. The process of striving toward them is fun. In contrast, people who pursue goals for extrinsic reasons, like money or status, are less likely to attain their goals and are less happy even when they do because the goals are less meaningful to them. OB research suggests that people who pursue work goals for intrinsic reasons are more satisfied with their jobs, feel they fit into their organizations better, and may perform better. 14 Self-Determination Theory vs. Goal-Setting Theory (4 of 9) What does all of this mean? For individuals: Choose your job for reasons other than extrinsic rewards. For organizations: Provide intrinsic as well as extrinsic incentives.
  • 12. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. What does all of this mean? For individuals, it means to choose your job for reasons other than extrinsic rewards. For organizations, it means managers should provide intrinsic as well as extrinsic incentives. They need to make the work interesting, provide recognition, and support employee growth and development. Employees who feel what they do is within their control and a result of free choice are likely to be more motivated by their work and committed to their employers. 15 Self-Determination Theory vs. Goal-Setting Theory (5 of 9) Goal-Setting Theory Goals tell an employee what needs to be done and how much effort is needed. Evidence suggests: Specific goals increase performance. Difficult goals, when accepted, result in higher performance than do easy goals. Feedback leads to higher performance than does non-feedback. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Edwin Locke’s goal-setting theory proposed that intentions to work toward a goal are a major source of work motivation. Goals tell an employee what needs to be done and how much effort is needed. Evidence strongly suggests that specific goals increase performance, and that difficult goals, when accepted, result in higher performance than do easy goals. Also, people will do better when they get feedback on how well they are progressing toward their goals. Self-generated feedback is more powerful a motivator than externally generated feedback.
  • 13. 16 Self-Determination Theory vs. Goal-Setting Theory (6 of 9) Three other factors influencing the goals-performance relationship: Goal commitment Task characteristics National culture Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. There are contingencies in goal-setting theory. In addition to goal acceptance, difficulty level, and feedback, three other factors influence the goals-performance relationship: goal commitment, task characteristics, and national culture. Goal-setting theory presupposes that an individual is committed to the goal, believes it can be achieved, and wants to achieve it. Goal commitment is most likely to occur when goals are made public, when the individual has an internal locus of control, and when the goals are self-set rather than assigned. Goals themselves seem to affect performance more strongly when task characteristics are: simple rather than complex; well- learned rather than novel; and independent rather than interdependent. On interdependent tasks, group goals are preferable. Setting specific, difficult individual goals may have different effects in different cultures. Research has not shown that group- based goals are more effective in collectivists than in individualist cultures. In collectivist and high-power-distance cultures, achievable moderate goals can be more highly motivating than difficult ones. Finally, assigned goals appear to generate greater goal commitment in high than in low power-
  • 14. distance cultures. More research is needed to assess how goal constructs might differ across cultures. 17 Self-Determination Theory vs. Goal-Setting Theory (7 of 9) People differ in the way they regulate their thoughts and behaviors. Those with a promotion focus strive for advancement and accomplishment and approach conditions that move them closer toward desired goals. Those with a prevention focus strive to fulfill duties and obligations and avoid conditions that pull them away from desired goals. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Research has also found that people differ in the way they regulate their thoughts and behaviors during goal pursuit. Generally, people fall into one of two categories, though they could belong to both. Those with a promotion focus strive for advancement and accomplishment and approach conditions that move them closer toward desired goals. Those with a prevention focus strive to fulfill duties and obligations and avoid conditions that pull them away from desired goals. Which is the better strategy? Ideally, it’s probably best to be both promotion and prevention oriented. 18 Self-Determination Theory vs. Goal-Setting Theory (8 of 9) Exhibit 7-4 Cascading of Objectives Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved.
  • 15. How do you put goal-setting operations into practice? Management by Objectives (MBO) allows employees to participatively set goals that are tangible, verifiable, and measurable. As shown in Exhibit 7-4, an organization’s overall objectives are translated into specific objectives for each succeeding level. Four ingredients common to MBO programs are: goal specificity; participation in decision making; explicit time period; and performance feedback. MBO programs are common in many business, healthcare, educational, government, and nonprofit organizations. 19 Self-Determination Theory vs. Goal-Setting Theory (9 of 9) Goal Setting and Ethics The relationship between goal setting and ethics is quite complex: if we emphasize the attainment of goals, what is the cost? We may forgo mastering tasks and adopt avoidance techniques so we don’t look bad, both of which can incline us toward unethical choices. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The relationship between goal setting and ethics is quite complex: if we emphasize the attainment of goals, what is the cost? The answer is probably found in the standards we set for goal achievement. If we are put under time pressure and worry about that, thoughts about time turn against us. Time pressure often increases as we are nearing a goal, which can tempt us to act unethically to achieve it. We may forgo mastering tasks and adopt avoidance techniques so we don’t look bad, both of which can incline us toward unethical choices. 20
  • 16. Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (1 of 11) Self-efficacy theory is an individual’s belief that he or she is capable of performing a task. Enactive mastery Vicarious modeling Verbal persuasion Arousal Also known as social cognitive theory and social learning theory. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Self-efficacy theory, also known as social cognitive theory and social learning theory, is a new theory gaining much attention. The theory defines four characteristics: enactive mastery, or gaining relevant experience with the task or job; vicarious modeling, or becoming more confident because you see someone else doing the task; verbal persuasion, occurring when a person is more confident because someone convinces him that he has the skills; and arousal, which leads to an energized state, driving a person to complete the task. 21 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (2 of 11) Exhibit 7-5 Joint Effects of Goals and Self-Efficacy on Performance Source: Based on E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation: A 35-Year Odyssey,” American Psychologist (September 2002): 705–17. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All
  • 17. Rights Reserved. What role does equity play in motivation? Equity theory argues that individuals make comparisons of their job inputs and outcomes relative to those of others and then respond to any inequities. If we perceive our ratio to be equal to that of the relevant others with whom we compare ourselves, a state of equity is said to exist. We perceive our situation as fair. When we see the ratio as unequal, we experience equity tension. 22 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (3 of 11) Implications of self-efficacy theory: The best way for a manager to use verbal persuasion is through the Pygmalion effect. A form of self-fulfilling prophecy – believing in something can make it true. Training programs often make use of enactive mastery by having people practice and build their skills. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. What are the implications of self-efficacy theory? First, training programs often make use of enactive mastery by having people practice and build their skills. In fact, one reason training works is that it increases self-efficacy. Second, individuals with higher levels of self-efficacy also appear to reap more benefits from training programs and are more likely to use their training on the job. The best way for a manager to use verbal persuasion is through the Pygmalion effect. A form of self-fulfilling prophecy – believing in something can make it true. 23
  • 18. Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (4 of 11) Reinforcement theory: behavior is a function of its consequences. Reinforcement conditions behavior. Behavior is environmentally caused. Goal setting is a cognitive approach: an individual’s purposes direct his or her action. Operant conditioning theory: people learn to behave to get something they want or to avoid something they don’t want. B.F. Skinner’s behaviorism. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Let’s look at reinforcement theory. While goal setting is a cognitive approach proposing that an individual’s purposes direct his or her action, reinforcement theory, by contrast, takes a behavioristic view, arguing that reinforcement conditions behavior. The two theories are clearly at odds, philosophically. Reinforcement theorists see behavior as environmentally caused, ignoring the inner state of the individual and concentrating solely on what happens when he or she takes some action. Because it does not concern itself with what initiates behavior, it is not, strictly speaking, a theory of motivation. But it does provide a powerful means of analyzing what controls behavior, and this is why we typically consider it in discussions of motivation. Operant conditioning theory argues that people learn to behave to get something they want or to avoid something they don’t want. Unlike reflexive or unlearned behavior, operant behavior is influenced by the reinforcement or lack of reinforcement brought about by its consequences. Reinforcement strengthens a behavior and increases the likelihood it will be repeated. B. F. Skinner, one of the most prominent advocates of operant
  • 19. conditioning, argued that creating pleasing consequences to follow specific forms of behavior would increase the frequency of that behavior – a theory known as behaviorism. He demonstrated that people will most likely engage in desired behaviors if they are positively reinforced for doing so, that rewards are most effective if they immediately follow the desired response, and that behavior that is not rewarded or is punished is less likely to be repeated. 24 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (5 of 11) Social-learning theory: we can learn through both observation and direct experience. Models are central, and four processes determine their influence on an individual: Attentional processes Retention processes Motor reproduction processes Reinforcement processes Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Social-learning theory argues that we can learn through both observation and direct experience. Models are central to the social-learning viewpoint. Four processes determine their influence on an individual: Attentional processes: people learn from a model only when they recognize and pay attention to its critical features. Retention processes: a model’s influence depends on how well the individual remembers the model’s action after the model is no longer readily available. Motor reproduction processes: after a person has seen a new behavior by observing the model, watching must be converted to
  • 20. doing. Reinforcement processes: individuals are motivated to exhibit the modeled behavior if positive incentives or rewards are provided. 25 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (6 of 11) Exhibit 7-6 Equity Theory Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. What role does equity play in motivation? Equity theory argues that individuals make comparisons of their job inputs and outcomes relative to those of others and then respond to any inequities. If we perceive our ratio to be equal to that of the relevant others with whom we compare ourselves, a state of equity is said to exist. We perceive our situation as fair. When we see the ratio as unequal, we experience equity tension. 26 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (7 of 11) When employees perceive an inequity, they can be predicted to make one of six choices: Change their inputs. Change their outcomes. Distort perceptions of self. Distort perceptions of others. Choose a different referent. Leave the field. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved.
  • 21. When employees perceive an inequity, they can be predicted to make one of six choices: they can change their inputs; change their outcomes; distort perceptions of self; distort perceptions of others; choose a different referent; or they can leave the field. 27 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (8 of 11) Exhibit 7-7 Model of Organizational Justice Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. However, organizational justice draws a bigger picture. Organizational justice is concerned with how employees feel they are treated by authorities and decisions-makers at work. For the most part, employees make their evaluations along four dimensions, as shown in Exhibit 7-7. Distributive justice is concerned with the fairness of the outcomes, such as pay and recognition that employees receive. Although employees care a lot about what outcomes are distributed (distributive justice), they also care a lot about how outcomes are distributed. While distributive justice looks at what outcomes are allocated, procedural justice examines how outcomes are allocated. Having direct influence over how decisions or made, or at the very least being able to present your opinion to decision-makers, creates a sense of control and makes us feel empowered. Employees also perceive that procedures are fairer when decision-makers follow several “rules.” It turns out that procedural and distributive justice combine to influence people’s perceptions of fairness. If outcomes are favorable and individuals get what they want, they
  • 22. care less about the process, so procedural justice doesn’t matter as much when distributions are perceived to be fair. Research has shown that employees care about two other types of fairness that have to do with the way they are treated during interactions with others. The first type is informational justice, which reflects whether managers provide employees with explanations for key decisions and keep them informed of important organizational matters. The second type of justice relevant to interactions between managers and employees is interpersonal justice, which reflects whether employees are treated with dignity and respect. 28 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (9 of 11) Expectancy theory: a tendency to act in a certain way depends on an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. Three relationships: Effort-performance relationship Performance-reward relationship Rewards-personal goals relationship Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Expectancy theory is one of the most widely accepted explanations of motivation. Victor Vroom’s expectancy theory has its critics, but most of the research is supported. Expectancy theory argues that the strength of one’s tendency to act in a certain way depends on the strength of the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. It says that an employee will be motivated to exert a high level of effort when
  • 23. he or she believes that effort will lead to a good performance appraisal, that a good appraisal will lead to organizational rewards, and that the rewards will satisfy his or her personal goals. 29 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (10 of 11) Exhibit 7-8 Expectancy Theory Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Exhibit 7-8 shows the three key relationships: the effort- performance relationship, which is the probability perceived by the individual that exerting a given amount of effort will lead to performance; the performance-reward relationship, which is the degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome; and the rewards-personal goals relationship, which is the degree to which organizational rewards satisfy an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual. 30 Self-Efficacy, Reinforcement, Equity, and Expectancy Theory (11 of 11) Expectancy theory helps explain why a lot of workers aren’t motivated and do only the minimum. Three questions employees need to answer in the affirmative if their motivation is to be maximized: If I give maximum effort, will it be recognized in my performance appraisal? If I get a good performance appraisal, will it lead to organizational rewards?
  • 24. If I’m rewarded, are the rewards attractive to me? Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Expectancy theory helps explain why a lot of workers aren’t motivated on their jobs and do only the minimum necessary to get by. We can look at the theory’s three relationships by asking three questions that employees would need to answer affirmatively if they are to be motivated: First, if I give maximum effort, will it be recognized in my performance appraisal? Second, if I get a good performance appraisal, will it lead to organizational rewards? Third, if I’m rewarded, are the rewards attractive to me? 31 Implications of Job Engagement for Management (1 of 3) Job engagement: the investment of an employee’s physical, cognitive, and emotional energies into job performance. Gallup organization: more engaged employees in successful organizations than in average organizations. Academic studies: job engagement is positively associated with performance and citizenship behaviors. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Job engagement is the investment of an employee’s physical, cognitive, and emotional energies into job performance. Practicing managers and scholars alike have lately become interested in facilitating job engagement, believing something deeper than liking a job or finding it interesting drives performance. Many studies attempt to measure this deeper level of commitment. The Gallup organization has been using twelve questions to
  • 25. assess the extent to which employee engagement is linked to positive work outcomes for millions of employees over the past 30 years. There are far more engaged employees in highly successful organizations than in average organizations, and groups with more engaged employees have higher levels of productivity, fewer safety incidents, and lower turnover. Academic studies have also found positive outcomes. One study found higher levels of engagement were associated with task performance and citizenship behavior. 32 Implications of Job Engagement for Management (2 of 3) What makes people more engaged in their job? The degree to which an employee believes it is meaningful to engage in work. A match between the individual’s values and the organization’s. Leadership behaviors that inspire workers to a greater sense of mission. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. What makes people more likely to be engaged in their jobs? One key is the degree to which an employee believes it is meaningful to engage in work. This is partially determined by job characteristics and access to sufficient resources to work effectively. Another factor is a match between the individual’s values and those of the organization. In addition, leadership behaviors that inspire workers to a greater sense of mission also increase employee engagement. 33 Implications of Job Engagement for Management (3 of 3) Are highly engaged employees getting “too much of a good thing?”
  • 26. Construct is partially redundant with job attitudes. It may have a “dark side.” Positive relationships between engagement and work-family conflict. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. One of the critiques of engagement is that the construct is partially redundant with job attitudes like satisfaction or stress. However, engagement questionnaires usually assess motivation and absorption in a task, quite unlike job satisfaction questionnaires. Engagement may also predict important work outcomes better than traditional job attitudes. Others critics note there may be a “dark side” to engagement, as evidenced by positive relationships between engagement and work-family conflict. Individuals might grow so engaged in their work roles that family responsibilities become an unwelcomed intrusion. Further research exploring how engagement relates to these negative outcomes may help clarify whether some highly engaged employees might be getting “too much of a good thing.” 34 Compare Contemporary Theories of Motivation Exhibit 7-9 Integrating Contemporary Theories of Motivation Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Exhibit 7-9 integrates much of what we know about motivation. Its basic foundation is the expectancy model. Expectancy theory predicts that an employee will exert a high level of effort if he or she perceives that there is a strong relationship between
  • 27. effort and performance, performance and rewards, and rewards and satisfaction of personal goals. Each of these relationships, in turn, is influenced by certain factors. For effort to lead to good performance, the individual must have the requisite ability to perform, and the performance appraisal system must be perceived as being fair and objective. The final link in expectancy theory is the rewards-goals relationship. The model also considers the achievement, need, reinforcement, and equity/organizational justice theories. High achievers are internally driven as long as the jobs they are doing provide them with personal responsibility, feedback, and moderate risks. Reinforcement theory recognizes that the organization’s rewards reinforce the individual’s performance. Individuals will compare the rewards they receive (outcomes) from the inputs they make with the outcome-input ratio of relevant others, and inequities may influence the effort expended. 35 Implications for Managers (1 of 2) Make sure extrinsic rewards for employees are not viewed as coercive, but instead provide information about competence and relatedness. Consider goal-setting theory, as clear and difficult goals often lead to higher levels of employee productivity. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The motivation theories in this chapter differ in their predictive strength. Maslow’s hierarchy, McClelland’s needs, and the two- factor theory focus on needs. None has found widespread support, although McClelland’s is the strongest, particularly regarding the relationship between achievement and productivity. Self-determination theory and related theories have merits to consider. Goal-setting theory can be helpful but
  • 28. does not cover absenteeism, turnover, or job satisfaction. Self- efficacy theory contributes to our understanding of personal motivation. Reinforcement theory can be helpful, but not regarding employee satisfaction or the decision to quit. Equity theory’s strongest legacy is that it provided the spark for research on organizational justice, which has more support in the literature. Expectancy theory can be helpful, but assumes employees have few constraints on decision making, such as bias or incomplete information, and this limits its applicability. Job engagement goes a long way toward explaining employee commitment. 36 Implications for Managers (2 of 2) Consider reinforcement theory regarding quality and quantity of work, persistence of effort, absenteeism, tardiness, and accident rates. Consult equity theory to help understand productivity, satisfaction, absence, and turnover variables. Expectancy theory also offers a powerful explanation of performance variables such as employee productivity, absenteeism, and turnover. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. In addition, managers should consider reinforcement theory regarding quality and quantity of work, persistence of effort, absenteeism, tardiness, and accident rates. Managers should also consult equity theory to help understand productivity, satisfaction, absence, and turnover variables. Finally, managers need to recognize that expectancy theory also offers a powerful explanation of performance variables such as employee productivity, absenteeism, and turnover. 37
  • 29. Copyright Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Organizational Behavior Seventeenth Edition Chapter 8 Motivation: From Concepts to Applications Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. If this PowerPoint presentation contains mathematical equations, you may need to check that your computer has the following installed: 1) MathType Plugin 2) Math Player (free versions available) 3) NVDA Reader (free versions available) Welcome to this Organizational Behavior course that uses the 17th edition of the textbook, Organizational Behavior by Robbins and Judge. This is considered among the most widely used OB textbooks in the world. Robbins and Judge are recognized as definitive aggregators of OB concepts, applications, and practices. The course and this book will provide you with a resource that will benefit you throughout your degree program and your professional life. Chapter 8: Motivations: From Concepts to Applications 1
  • 30. Learning Objectives 8.1 Describe how the job characteristics model motivates by changing the work environment. 8.2 Compare the main ways jobs can be redesigned. 8.3 Explain how specific alternative work arrangements can motivate employees. 8.4 Describe how employee involvement measures can motivate employees. 8.5 Demonstrate how the different types of variable-pay programs can increase employee motivation. 8.6 Show how flexible benefits turn benefits into motivators. 8.7 Identify the motivational benefits of intrinsic rewards. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. After studying this chapter, you should be able to: Describe how the job characteristics model motivates by changing the work environment. Compare the main ways jobs can be redesigned. Explain how specific alternative work arrangements can motivate employees. Describe how employee involvement measures can motivate employees. Demonstrate how the different types of variable-pay programs can increase employee motivation. Show how flexible benefits turn benefits into motivators. Identify the motivational benefits of intrinsic rewards. 2 The Job Characteristics Model (1 of 2) Exhibit 8-1 The Job Characteristics Model Source: J. L. Pierce, I. Jussila, and A. Cummings, “Psychological Ownership within the Job Design Context: Revision of the Job Characteristics Model,” Journal of
  • 31. Organizational Behavior 30, no. 4 (2009): 477–96. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The Job Characteristics Model (JCM) as shown here in Exhibit 8-1, proposes that any job may be described by five core job dimensions: Skill variety is the degree to which the job requires a variety of different activities, so the worker can use a number of different skills and talent. Task identity is the degree to which the job requires completion of a whole and identifiable piece of work. Task significance is the degree to which the job has a substantial impact on the lives or work of other people. Autonomy is the degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and determining the procedures to be used in carrying it out. Feedback is the degree to which carrying out the work activities required by the job results in the individual obtaining direct and clear information about the effectiveness of his or her performance. The first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work the incumbent will view as important, valuable, and worthwhile. From a motivational standpoint, the JCM proposes that individuals obtain internal rewards when they learn (knowledge of results) that they personally (experienced responsibility) have performed well on a task they care about (experienced meaningfulness). Individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and respond to them more positively—than are their counterparts with low growth need. 3
  • 32. The Job Characteristics Model (2 of 2) The core dimensions of the job characteristics model (JCM) can be combined into a single predictive index called the motivating potential score (MPS). Evidence supports the JCM concept that the presence of a set of job characteristics does generate higher and more satisfying job performance. A few studies have tested the JCM in different cultures, but the results aren’t very consistent. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The core dimensions of the JCM can be combined into a single predictive index called the motivating potential score (MPS). To be high on motivating potential, jobs must be high on at least one of the three factors that lead to experienced meaningfulness, and high on both autonomy and feedback. If jobs score high on motivating potential, the model predicts that motivation, performance, and satisfaction will improve and absence and turnover will be reduced. Much evidence supports the JCM concept that the presence of a set of job characteristics—variety, identity, significance, autonomy, and feedback—does generate higher and more satisfying job performance. But apparently we can better calculate motivating potential by simply adding the characteristics rather than using the formula. A few studies have tested the job characteristics model in different cultures, but the results aren’t very consistent. One study suggested that when employees are “other oriented” (i.e., concerned with the welfare of others at work), the relationship between intrinsic job characteristics and job satisfaction was weaker. The fact that the job characteristics model is relatively
  • 33. individualistic (i.e., considering the relationship between the employee and his or her work) suggests job enrichment strategies may not have the same effects in collectivistic cultures as in individualistic cultures (such as the United States). Another study suggested the degree to which jobs had intrinsic job characteristics predicted job satisfaction and job involvement equally well for American, Japanese, and Hungarian employees. 4 Compare the Main Ways Jobs Can Be Redesigned (1 of 2) Repetitive jobs provide little variety, autonomy, or motivation. Job Rotation Referred to as cross-training. Periodic shifting from one task to another. Strengths: reduces boredom, increases motivation, and helps employees better understand their work contributions. Weaknesses: creates disruptions, requires extra time for supervisors addressing questions and training time, and reduced efficiencies. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. People generally seek out jobs that are challenging and stimulating, but repetitive jobs provide little variety, autonomy, or motivation. One way to make repetitive jobs more interesting is job rotation, which is also known as cross-training. It involves periodic shifting of an employee from one task to another. When an activity is no longer challenging, the employee is shifted to a different task. The strengths of job rotation are that it reduces boredom, increases motivation, and helps employees better understand their work contributions. Indirect benefits include employees with wider ranges of skills that give management more
  • 34. flexibility in scheduling, adapting to changes, and filling vacancies. Some weaknesses of job rotation include disruptions, a need for extra time for supervisors addressing questions and training time, and reduced efficiencies. 5 Compare the Main Ways Jobs Can Be Redesigned (2 of 2) Relational Job Design To make jobs more prosocially motivating: Connect employees with the beneficiaries of their work. Meet beneficiaries firsthand. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. While redesigning jobs on the basis of job characteristics theory is likely to make work more intrinsically motivating to people, more contemporary research is focusing on how to make jobs more prosocially motivating to people. One way to make jobs more prosocially motivating is to better connect employees with the beneficiaries of their work, for example, by relating stories from customers who have found the company’s products or services to be helpful. Beneficiaries of organizations might include customers, clients, patients, and users of products or services. Meeting beneficiaries firsthand allows employees to see that their actions affect a real, live person, and that their jobs have tangible consequences. In addition, connections with beneficiaries make customers or clients more accessible in memory and more emotionally vivid, which leads employees to consider the effects of their actions more. Finally, connections allow employees to easily take the perspective of beneficiaries, which fosters higher levels of commitment. 6 How Specific Alternative Work Arrangements Motivate Employees (1 of 6)
  • 35. Exhibit 8-2 Possible Flextime Staff Schedules Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Alternative work arrangements are also used to boost motivation. They include flextime, defined as flexible work hours like those shown in Exhibit 8-2. This allows employees some discretion over when they arrive at and leave work. Benefits include reduced absenteeism, increased productivity, reduced overtime expense, reduced hostility toward management, and increased autonomy and responsibility for employees. A major drawback is that it’s not applicable to all jobs or all workers. 7 How Specific Alternative Work Arrangements Motivate Employees (2 of 6) Job Sharing Two or more people split a 40-hour-a-week job. Declining in use. Can be difficult to find compatible pairs of employees who can successfully coordinate the intricacies of one job. Increases flexibility and can increase motivation and satisfaction when a 40-hour-a-week job is just not practical. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Job sharing allows two or more individuals to split a traditional 40-hour-a-week job. Only 18 percent of larger organizations now offer job sharing, a 29 percent decrease since 2008. Reasons it is not more widely adopted are likely the difficulty of finding compatible partners to share a job and the historically negative perceptions of individuals not completely committed to
  • 36. their job and employer. The major drawback is finding compatible pairs of employees who can successfully coordinate the intricacies of one job. However, job sharing allows an organization to draw on the talents of more than one individual in a given job. From the employee’s perspective, job sharing increases flexibility and can increase motivation and satisfaction when a 40-hour-a-week job is just not practical. 8 How Specific Alternative Work Arrangements Motivate Employees (3 of 6) Telecommuting Employees who do their work at home at least two days a week on a computer that is linked to their office. Virtual office Some well-known organizations actively discourage telecommuting, but for most organizations it remains popular. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Telecommuting refers to employees who do their work at home at least two days a week on a computer that is linked to their office. Large organizations such as Yahoo! And Best Buy have eliminated telecommuting believing it undermines corporate culture, but for it remains popular for many organizations. Well-known organizations that actively encourage telecommuting include AT&T, IBM, American Express, Sun Microsystems, and a number of U.S. government agencies. 9
  • 37. How Specific Alternative Work Arrangements Motivate Employees (4 of 6) Telecommuting Advantages Larger labor pool Higher productivity Improved morale Reduced office-space costs Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. There are reasons for and against telecommuting. The advantages include a larger labor pool of workers, higher productivity, improved morale, and reduced office-space costs. 10 How Specific Alternative Work Arrangements Motivate Employees (5 of 6) Telecommuting Disadvantages Employer Less direct supervision of employees. Difficult to coordinate teamwork. Difficult to evaluate non-quantitative performance. Employee May not be noticed for his or her efforts. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Disadvantages of telecommuting for the employer include less direct supervision of employees, difficulty coordinating teamwork, and difficulty evaluating non-quantitative performance. Disadvantages for the employee include that he or she may not be as noticed for his or her efforts. 11
  • 38. How Specific Alternative Work Arrangements Motivate Employees (6 of 6) Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Telecommuting seems to mesh with the cultural transition to knowledge work. As the OB poll indicates, people with more education are more apt to work from home. 12 Employee Involvement and Employee Motivation (1 of 3) Employee Involvement: a participative process that uses employees’ input to increase their commitment to the organization’s success. Examples of Employee Involvement Programs Participative management Representative participation Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Employee involvement refers to a participative process that uses employees’ input to increase their commitment to the organization’s success. Two examples of such programs are participative management and representative participation. 13 Employee Involvement and Employee Motivation (2 of 3) Participative management Joint decision making. Acts as a panacea for poor morale and low productivity. Trust and confidence in leaders is essential.
  • 39. Studies of the participation-performance have yielded mixed results. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Participative management is the first of the options for employee involvement programs. Common to all participative management programs is joint decision making, wherein subordinates share a significant degree of decision making power with their immediate superiors. Participative management has, at times, been promoted as a panacea for poor morale and low productivity. But for it to work, employees must be engaged in issues relevant to their interests so they’ll be motivated, they must have the competence and knowledge to make a useful contribution, and trust and confidence must exist among all parties. Studies of the participation-performance relationship have yielded mixed findings. Organizations that institute participative management do have higher stock returns, lower turnover rates, and higher estimated labor productivity, although these effects are typically not large. A careful review of research at the individual level shows participation typically has only a modest influence on employee productivity, motivation, and job satisfaction. Of course, this doesn’t mean participative management can’t be beneficial under the right conditions. But it is not a sure means for improving performance. 14 Employee Involvement and Employee Motivation (3 of 3) Representative participation Workers are represented by a small group of employees who actually participate in decision making. Almost every country in Western Europe requires representative
  • 40. participation. The two most common forms: Works councils Board representatives Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Representative participation is spreading. Almost every country in Western Europe has some type of legislation requiring it. It is the most widely legislated form of employee involvement around the world. The goal is to redistribute power within an organization, putting labor on a more equal footing with the interests of management and stockholders. The two most common forms include works councils that link employees with management. They are groups of nominated or elected employees who must be consulted when management makes decisions involving personnel. Second is board representatives, who are employees who sit on a company’s board of directors and represent the interests of the firm’s employees. The overall influence of representative participation seems to be minimal. The evidence suggests that works councils are dominated by management and have little impact on employees or the organization. If one were interested in changing employee attitudes or in improving organizational performance, representative participation would be a poor choice. 15 Variable-Pay Programs and Employee Motivation (1 of 8) What to Pay: Complex process that entails balancing internal equity and external equity. Some organizations prefer to pay leaders by paying above market.
  • 41. Paying more may net better-qualified and more highly motivated employees who may stay with the firm longer. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Now, let’s talk about using rewards to motivate people, and specifically, what to pay employees. As we saw in Chapter 3, pay is not a primary factor driving job satisfaction. However, it does motivate people, and companies often underestimate its importance in keeping top talent. A 2006 study found that while 45% of employers thought pay was a key factor in losing top talent, 71% of top performers called it a top reason. So, what should an organization do? How should the pay structure be established? The answer is not easy – it’s a complex process that entails balancing internal equity and external equity. Some organizations prefer to pay leaders by paying above market. Keep in mind that paying more may net better-qualified and more highly motivated employees who may stay with the firm longer. 16 Variable-Pay Programs and Employee Motivation (2 of 8) How to Pay: Variable pay programs: Piece-rate plans Merit-based pay Bonuses Profit sharing Employee stock ownership plans Earnings therefore fluctuate up and down. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved.
  • 42. Rewarding individual employees through variable-pay programs is becoming more common in the workplace. A number of organizations are moving away from paying solely on credentials or length of service. Piece-rate plans, merit-based pay, bonuses, profit sharing, and employee stock ownership plans are all forms of a variable-pay program, which base a portion of an employee’s pay on some individual and/or organizational measure of performance. Individual earnings therefore fluctuate up and down. 17 Variable-Pay Programs and Employee Motivation (3 of 8) Piece-Rate Pay A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces. Limitation: not a feasible approach for many jobs. The main concern for both individual and team piece-rate workers is financial risk. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The first of the variable pay programs is piece-rate pay plans. Here, workers are paid a fixed sum for each unit of production completed. A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces. The main concern for both individual and team piece-rate workers is financial risk. The main limitation of the piece rate plan is that it doesn’t work for all types of jobs. Although incentives are motivating and relevant for some jobs, it is unrealistic to think they can constitute the only piece of some employees’ pay. 18 Variable-Pay Programs and Employee Motivation (4 of 8)
  • 43. Merit-Based Pay Allows employers to differentiate pay based on performance. Creates perceptions of relationships between performance and rewards. Limitations: Based on annual performance appraisals. Merit pool fluctuates. Union resistance. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The second variable pay method is the merit-based pay plan. These plans are based on performance appraisal ratings. Their main advantage is that they allow employers to differentiate pay based on performance, and so create perceptions of relationships between performance and rewards. Most large organizations have merit pay plans, particularly for salaried employees. Limitations to merit-based plans include that they are based on annual performance appraisals, that the merit pool fluctuates based on economic conditions, and that unions typically resist merit-based pay plans. 19 Variable-Pay Programs and Employee Motivation (5 of 8) Bonuses An annual bonus is a significant component of total compensation for many jobs. Increasingly include lower-ranking employees. Many companies now routinely reward production employees with bonuses when profits improve. Downside: employees’ pay is more vulnerable to cuts. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved.
  • 44. The use of bonuses is becoming more common in many organizations. An annual bonus is a significant component of total compensation for many jobs. Bonus plans increasingly include lower-ranking employees; many companies now routinely reward production employees with bonuses in the thousands of dollars when profits improve. The incentive effects of performance bonuses should be higher than those of merit pay because rather than paying for performance years ago, which was rolled into base pay, bonuses reward recent performance. When times are bad, firms can cut bonuses to reduce compensation costs. The downside of bonuses is that employees’ pay is more vulnerable to cuts. 20 Variable-Pay Programs and Employee Motivation (6 of 8) Profit-Sharing Plans Organization-wide programs that distribute compensation based on some established formula centered around a company’s profitability. Appear to have positive effects on employee attitudes at the organizational level. Employees have a feeling of psychological ownership. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Profit-sharing plans are organization-wide programs that distribute compensation based on some established formula centered around a company’s profitability. Compensation can be direct cash outlays or, particularly for top managers, allocations of stock options. Profit-sharing plans at the organizational level appear to have positive impacts on employee attitudes; employees report a greater feeling of psychological ownership. 21
  • 45. Variable-Pay Programs and Employee Motivation (7 of 8) Employee Stock Ownership Plan (ESOP) A company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits. Increases employee satisfaction and innovation. Employees need to psychologically experience ownership. Can reduce unethical behavior. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Another variable-pay option is the employee stock ownership plan, or ESOP. An ESOP is a company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits. Research on ESOPs indicates that they increase employee satisfaction and innovation. ESOPs have the potential to increase employee job satisfaction and work motivation, but employees need to psychologically experience ownership. ESOP plans for top management can reduce unethical behavior. CEOs are more likely to manipulate firm earnings reports to make themselves look good in the short run when they don’t have an ownership share, even though this manipulation will eventually lead to lower stock prices. However, when CEOs own a large amount of stock, they report earnings accurately because they don’t want the negative consequences of declining stock prices. 22 Variable-Pay Programs and Employee Motivation (8 of 8) Evaluation of Variable Pay Do variable-pay programs increase motivation and productivity? Generally, yes, but that doesn’t mean everyone is equally motivated by them.
  • 46. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Do variable-pay programs increase motivation and productivity? Generally, yes, but that doesn’t mean everyone is equally motivated by them. Managers should monitor their employees’ performance-reward expectancy, since a combination of elements that makes employees feel that their greater performance will yield them greater results will be the most motivating. 23 Show How Flexible Benefits Turn Benefits Into Motivators Developing a Benefits Package Flexible benefits individualize rewards. Allow each employee to choose the compensation package that best satisfies his or her current needs and situation. Today, almost all major corporations in the United States offer flexible benefits. However, it may be surprising that their usage is not yet global. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Flexible benefits individualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation. Flexible benefits can accommodate differences in employee needs based on age, marital status, spouses’ benefit status, and number and age of dependents. Today, almost all major corporations in the United States offer flexible benefits. However, it may be surprising that their usage is not yet global.
  • 47. 24 Identify the Motivational Benefits of Intrinsic Rewards Employee Recognition Programs Organizations are increasingly recognizing that important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensation systems. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Organizations are increasingly recognizing that important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensation systems. Employee recognition programs range from a spontaneous and private thank-you to widely publicized formal programs in which specific types of behavior are encouraged and the procedures for attaining recognition are clearly identified. An obvious advantage of recognition programs is that they are inexpensive: praise is free! With or without financial rewards, they can be highly motivating to employees. 25 Implications for Managers (1 of 3) Recognize individual differences. Spend the time necessary to understand what’s important to each employee. Design jobs to align with individual needs and maximize their motivation potential. Use goals and feedback. You should give employees firm, specific goals, and they should get feedback on how well they are faring in pursuit of those goals.
  • 48. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. The study of what motivates individuals is ultimately key to organizational performance. Employees whose differences are recognized, who feel valued, and who have the opportunity to work in jobs that are tailored to their strengths and interests will be motivated to perform at the highest levels. Employee participation also can increase employee productivity, commitment to work goals, motivation, and job satisfaction. However, we cannot overlook the powerful role of organizational rewards in influencing motivation. Pay, benefits, and intrinsic rewards must be carefully and thoughtfully designed in order to enhance employee motivation toward positive organizational outcomes. Managers should: Recognize individual differences. Spend the time necessary to understand what’s important to each employee. Design jobs to align with individual needs and maximize their motivation potential. Use goals and feedback. You should give employees firm, specific goals, and they should get feedback on how well they are faring in pursuit of those goals. 26 Implications for Managers (2 of 3) Allow employees to participate in decisions that affect them. Employees can contribute to setting work goals, choosing their own benefits packages, and solving productivity and quality problems. Link rewards to performance. Rewards should be contingent on performance, and employees must perceive the link between the two.
  • 49. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. In addition, managers should: Allow employees to participate in decisions that affect them. Employees can contribute to setting work goals, choosing their own benefits packages, and solving productivity and quality problems. Link rewards to performance. Rewards should be contingent on performance, and employees must perceive the link between the two. 27 Implications for Managers (3 of 3) Check the system for equity. Employees should perceive that experience, skills, abilities, effort, and other obvious inputs explain differences in performance and hence in pay, job assignments, and other obvious rewards. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved. Finally, managers should: Check the system for equity. Employees should perceive that experience, skills, abilities, effort, and other obvious inputs explain differences in performance and hence in pay, job assignments, and other obvious rewards. 28 Copyright Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved.
  • 50. 29