Motivating Self and Others: Theories and Practices

1. Chapter 4 Motivating Self and Others

2. Chapter Outline • What is Motivation? • Needs Theories of Motivation • Process Theories of Motivation • Motivating for Specific Organizational Goals • Motivating to Accommodate Individual Differences • Responses to the Reward System • Beware the Signals That Are Sent by Rewards • Caveat Emptor: Motivation Theories Are Culture-Bound • Motivation in Practice: Perhaps Rewards are Overrated

3. Motivating Self and Others • What do theories tell us about motivating ourselves and others? • How do we motivate for specific organizational circumstances and/or individual differences? • Are rewards always necessary? Questions for Consideration

4. What is Motivation? • Motivation • The processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal • Intensity: how hard a person tries • Direction: where effort is channeled • Persistence: how long effort is maintained

5. Theory Xand Theory Y • Theory X • The assumption that employees dislike work, are lazy, dislike responsibility, and must be coerced to perform. • Theory Y • The assumption that employees like work, are creative, seek responsibility, and can exercise self-direction.

6. Motivators • Intrinsic • A person’s internal desire to do something, due to such things as interest, challenge, and personal satisfaction. • Extrinsic • Motivation that comes from outside the person, such as pay, bonuses, and other tangible rewards.

7. Needs Theories of Motivation • Maslow’s hierarchy of needs • Herzberg’s two factor theory (motivation-hygiene theory) • Alderfer’s ERG theory • McClelland’s theory of needs • Basic idea: • Individuals have needs that, when unsatisfied, will result in motivation

8. Maslow’s Hierarchy of Needs • Physiological • includes hunger, thirst, shelter, sex and other bodily needs • Safety • includes security and protection from physical and emotional harm • Social • includes affection, belongingness, acceptance, and friendship • Esteem • includes internal esteem factors such as self-respect, autonomy, and achievement; and external esteem factors such as status, recognition, and attention • Self-actualization • the drive to become what one is capable of becoming; includes growth, achieving one’s potential, and self-fulfilment

9. Herzberg’s Motivation-Hygiene Theory • Hygiene factors - necessary, but not sufficient, for healthy adjustment • extrinsic factors; context of work • company policy and administration • unhappy relationship with employee's supervisor • poor interpersonal relations with one's peers • poor working conditions • Motivators - the sources of satisfaction • intrinsic factors; content of work • achievement • recognition • challenging, varied or interesting work • responsibility • advancement

10. Alderfer’s ERG Theory • Existence • concerned with providing basic material existence requirements • Relatedness • desire for maintaining important interpersonal relationships • Growth • intrinsic desire for personal development

11. McClelland’s Theory of Needs • Need for Achievement • The drive to excel, to achieve in relation to a set of standards, to strive to succeed • Need for Power • The need to make others behave in a way that they would not have behaved otherwise • Need for Affiliation • The desire for friendly and close interpersonal relationships

12. Exhibit 4-1 Summarizing the Various Needs Theories

13. Exhibit 4-1 Summarizing the Various Needs Theories

14. Process Theories of Motivation • Looks at the actual process of motivation • Expectancy theory • Goal-setting theory

15. Expectancy Theory • The strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. The theory focuses on three relationships: • Effort-performance relationship or the probability perceived by the individual that exerting a given amount of effort will lead to performance. • Performance-reward relationship or the degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome. • Rewards-personal goals relationship or the degree to which organizational rewards satisfy an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual.

16. Exhibit 4-2Expectancy Theory Individual Effort Individual Performance Organizational Rewards Personal Goals 1 2 3 1. Effort -performance relationship (expectancy) 2. Performance -reward relationship (instrumentality) 3. Rewards - personal goals relationship (valence)

17. Exhibit 4-3 Steps to Increasing Motivation, Using Expectancy Theory

18. Goal-SettingTheory • The theory that specific and difficult goals lead to higher performance. • Goals tell an employee what needs to be done and how much effort will need to be expended. • Specific goals increase performance; difficult goals, when accepted, result in higher performance than do easy goals; and feedback leads to higher performance than does nonfeedback. • Specific hard goals produce a higher level of output than does the generalized goal of “do your best.” • The specificity of the goal itself acts as an internal stimulus.

19. Management by Objectives • A program that encompasses • specific goals • participatively set • for an explicit time period • with feedback on goal progress • MBO operationalizes the concept of objectives by devising a process by which objectives cascade down through the organization. • The result is a hierarchy of objectives that links objectives at one level to those at the next level. • For the individual employee, MBO provides specific personal performance objectives.

20. XYZ Company Overall Organizational Objectives Divisional Objectives Consumer Products Division Industrial Products Division Departmental Objectives Sales Production Marketing Develop Customer Service Research Individual Objectives Exhibit 4-4Cascading of Objectives

21. Linking MBO and Goal-Setting Theory • Goal Setting Theory Demonstrates that: • hard goals result in a higher level of individual performance, • specific hard goals result in higher levels of performance than do no goals or generalized goals, and • feedback on one’s performance leads to higher performance • MBO directly advocates specific goals and feedback.

22. Motivating for Specific Organizational Goals • Motivating to Show People Matter • employee recognition plans • linking recognition and reinforcement • Motivating for Improved Productivity • individual-based incentives: piece rate • group-based incentives: gainsharing • organizational-based incentives: profit-sharing, ESOPs • Motivating to Encourage Learning • skill-based pay • programs to encourage new learning • Motivating for Organizational Change • stretch targets • Motivating To Accommodate Individual Differences • flexible benefits

23. Motivating to Show People Matter • Employee Recognition Programs • Programs that use multiple sources and recognizes both individual and group accomplishments. • Linking Programs and Reinforcement Theory • Consistent with reinforcement theory, rewarding a behaviour with recognition immediately following that behaviour is likely to encourage its repetition. • Employee Recognition Programs in Practice • In contrast to most other motivators, recognizing an employee’s superior performance often costs little or no money, making them highly attractive to industry.

24. Motivating for Improved Productivity • A portion of an employee’s pay is based on some individual and/or organizational measure(s) of performance. • piece-rate pay plans • profit-sharing plans • gainsharing plans • Linking variable-pay plans and expectancy theory • evidence supports the importance of this linkage, especially for operative employees working under piece-rate systems. • group and organization wide incentives reinforce and encourage employees to sublimate personal goals for the best interests of their department or organization.

25. Variable Pay Programs • Piece-rate pay plans • Workers are paid a fixed sum for each unit of production completed. • Gainsharing • An incentive plan where improvements in group productivity determine the total amount of money that is allocated. • Profit-sharing plans • Organization wide programs that distribute compensation based on some established formula designed around a company’s profitability. • Employee stock ownership plans (ESOPs) • Company-established benefit plans in which employees acquire stock as part of their benefits.

26. Exhibit 4-5 Comparing Various Pay Programs

27. Skill-Based Pay Plans • Pay levels based on how many skills employees have or how many jobs they can do. • What’s the appeal of skill-based pay? • Management’s perspective • flexibility • facilitates communication • lessens “protective territory” behaviour • Is there a downside? • People can “top out” • Employee frustration can increase • Skills become obsolete • Paying people for acquired skills not used

28. Motivating For Organizational Change • Stretch Targets • Relatively new technique: A virtually unachievable goal that forces an organization to significantly alter its processes. • Team Based • Autonomy • Empowered • Structural Accommodation • Bureaucratic Immunity

29. Individual Differences and Flexible Benefits • Allowing employees to tailor their benefit program to meet their personal needs by picking and choosing from a menu of benefit options. • Specially designed work schedules • flexible compensation plans • flexible benefits plans • physical work settings • child care • elderly care • flexible work hours • job sharing • flexible leave • work teams • Link to expectancy theory: increases motivation by increasing the valence of the reward

30. Motivating Professionals • How are “professionals” different? • Receive a great deal of “intrinsic” satisfaction from their work. • Strong and long-term commitment to their field of expertise • Well paid/ Chief reward is work itself. • Value support • More focused on work as central life interest. • How do we motivate professionals? • Provide challenging projects • Give them autonomy in follow interests and structure work. • Reward with educational opportunities. • Recognize their contributions.

31. Motivating Contingent Workers • No simple solutions to motivating contingent workers. • Contingent or temporary workers have little or no job security/stability, therefore they don’t identify with the organization or display the commitment of permanent employees. • Contingent or temporary workers are typically provided with little or no health care, pensions, or similar benefits. • Greatest motivating factor is the opportunity to gain permanent employment. • Motivation is also increased if the employee sees that the job he or she is doing for the firm can develop salable skills.

32. Motivating Low-Skilled Service Workers • Many 15- to 24-year-olds have “McJobs” with pay levels near minimum wage • To motivate • employees want more respect • make jobs more appealing • raise pay levels • find unusual ways to motivate: • flexible work schedules • broader responsibility for inventory, scheduling, and hiring • creation of a “family” atmosphere among employees

33. Responses to the Reward System • Equity Theory • Fair Process

34. Equity Theory • Individuals compare their job inputs and outcomes with those of others and then respond so as to eliminate any inequities. • Equity theory recognizes that individuals are concerned not only with the absolute amount of rewards for their efforts, but also with the relationship of this amount to what others receive. • Historically, equity theory focused on: • distributive justice or the perceived fairness of the amount and allocation of rewards among individuals. • however, equity should also consider procedural justice or the perceived fairness of the process used to determine the distribution of rewards.

35. Exhibit 4-6Equity Theory Perception due to being underrewarded O/IA < O/IB O/IA = O/IB Equity Inequity due to being overrewarded O/IA > O/IB

36. Responses to Inequity • Change Inputs • Change Outcomes • Adjust Perceptions of Self • Adjust Perceptions of Others • Choose a Different Referent • Leave the Field

37. Fair Process • Distributive Justice • Perceived fairness of the amount and allocation of rewards among individuals • Procedural Justice • Perceived fairness of the process used to determine the distribution of rewards • Interactional Justice • The quality of the interpersonal treatment received from another

38. But we reward: The best individual team members Proven methods and no mistakes Technical achievements and accomplishments Tight control over operations, resources Another year’s efforts Quarterly earnings Shipment on schedule, even with defects Reporting good news Exhibit 4-7Management Reward Follies We hope for: Teamwork and collaboration Innovative thinking and risk taking Development of people skills Employee involvement and empowerment High achievement Long-term growth Commitment to total quality Candor

39. Abolishing Rewards • Alfie Kohn suggests that organizations should focus less on rewards, more on creating motivating environments • Abolish incentives • Re-evaluate evaluation • Create conditions for authentic motivation • Collaboration • Content • Choice

40. Summary • Need Theories • Be aware that individuals differ in their levels and types of needs • Goal Setting Theory • Clear and difficult goals lead to higher levels of employee productivity. • Expectancy Theory • Offers a relatively powerful explanation of employee productivity, absenteeism, and turnover. • Equity Theory • Strongest when predicting absence and turnover behaviours. • Weakest when predicting differences in employee productivity.

41. Implications • Recognize Individual Differences • Employees have different needs. • Don’t treat them all alike. • Spend the time necessary to understand what’s important to each employee. • Use Goals and Feedback • Allow Employees to Participate in Decisions That Affect Them • Link Rewards to Performance • Employees must perceive a clear linkage. • Check the System for Equity

42. Exhibit 4-8 Compensation of Canada’s Five Best-Paid CEOs (1998)