Chapter 4

1. Chapter 4 Motivating Self and Others

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

3. Theory X and Theory Y • Theory X • The assumption that employees dislike work, will attempt to avoid it, and must be coerced, controlled, or threatened with punishment if they are to perform. • Theory Y • The assumption that employees like work, are creative, seek responsibility, and can exercise self-direction and self-control.

4. 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.

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

6. Self- actualization Esteem Social Safety Physiological Maslow’s Hierarchy of Needs

7. 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 These needs must be met so employee is not dissatisfied – but they do not necessarily lead to satisfaction

8. Herzberg’s Motivation-Hygiene Theory • Motivators - the sources of satisfaction • Intrinsic factors; content of work • Achievement • Recognition • Challenging, varied or interesting work • Responsibility • Advancement

9. Contrasting Views of Satisfaction and Dissatisfaction Traditional view Satisfaction Dissatisfaction Herzberg's view Motivators No Satisfaction Satisfaction Hygiene Factors No dissatisfaction Dissatisfaction

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. Alderfer Herzberg Maslow McClelland Self-Actualization Need for Achievement Growth Motivators Esteem Need for Power Relatedness Affiliation Need for Affiliation Factors Security Existence Physiological Summarizing the Various Needs Theories Hygiene

13. Summary: Hierarchy of Needs • Maslow: Argues that lower-order needs must be satisfied before one progresses to higher-order needs. • Herzberg: Hygiene factors must be met if person is not to be dissatisfied. They will not lead to satisfaction, however. Motivators lead to satisfaction.

14. Summary: Impact of Theory • Maslow: Enjoys wide recognition among practising managers. Most managers are familiar with it. • Herzberg: The popularity of giving workers greater responsibility for planning and controlling their work can be attributed to his findings. Shows that more than one need may operate at the same time

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

16. Expectancy Theory An employee will be motivated to exert a high level of effort when he/she believes: • That effort will lead to good performance • That performance will lead to organizational rewards • The rewards will satisfy the employee’s personal goals

17. Expectancy Relationships • The theory focuses on three relationships: • Effort-performance relationship • The perceived probability that exerting a given amount of effort will lead to performance. • Performance-reward relationship • The degree to which the individual believes that performing at a particular level will lead to a desired outcome. • Rewards-personal goals relationship • The degree to which organizational rewards satisfy an individual’s personal goals or needs and are attractive to the individual.

18. How Does Expectancy Theory Work? My professor offers me $1 million if I memorize the textbook by tomorrow morning. Expectancy Instrumentality Valence Effort Performance Link Performance Rewards Link Rewards Personal Goals Link No matter how much effort My professor does not look There are a lot of wonderful things I put in, probably not possible like someone who has $1 million I could do with $1 million to memorize the text in 24 hours E=0 I=0 V=1 Conclusion: Though I value the reward, I will not be motivated to do this task.

19. Steps to Increasing Motivation, Using Expectancy Theory Improving Instrumentality Improving Expectancy Improving Valence Improve the ability of the Make sure that the reward is ’ Increase the individual s belief that meaningful to the individual individual to perform performance will lead to reward

20. Improving Instrumentality Improving Expectancy Improving Valence Increase the individual ’ s belief that Improve the ability of the Make sure that the reward is performance will lead to reward individual to perform meaningful to the individual • Observe and recognize performance • Make sure employees have skills • Ask employees what rewards they • Deliver rewards as promised for the task value • Indicate to employees how previous • Provide training • Give rewards that are valued good performance led to greater • Assign reasonable tasks and goals rewards Steps to Increasing Motivation, Using Expectancy Theory

21. Goal-Setting Theory • 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 • 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.

22. Management by Objectives • A program that encompasses • Specific goals • Participative decision-making • Explicit time period • Performance feedback

23. Summary so far … • What is motivation? • Needs theory of motivation • Maslow’s Hierarchy • Motivation-Hygiene Theory • Process Theories of Motivation • Expectancy Theory • Goal-setting Theory • Management by Objectives

24. Responses to the Reward System Two more theories of motivation • Equity Theory • Fair Process

25. 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.

26. Ratio of Output to Input Person 1’s Perception Person 1 Inequity, underrewarded Person 2 Person 1 Equity Person 2 Person 1 Inequity, overrewarded Person 2 Exhibit 4-7 Equity Theory

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

28. Fair Process and Treatment • Historically, equity theory focused on: • Distributive justice • However, equity should also consider • Procedural justice

29. 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

30. Summary of motivation theories … • Needs theories of motivation • Maslow’s Hierarchy • Motivation-Hygiene Theory (Hertzberg) • Process Theories of Motivation • Expectancy Theory • Goal-setting Theory • Management by Objectives • Equity Theory • Fair Process Theory

31. Group Exercise on Motivation Theories • Jesse has been underperforming at work, coming in late, and causing some problems with the other workers. Previously Jesse has been one of your star employees. Using the theory assigned to your group, explain what steps you might take to motivate Jesse to perform better. • Describe the plan • Indicate how the plan relates to the theory

32. Theories to Apply • Herzberg Motivation-Hygiene (Two-Factor) Theory • Expectancy Theory • Goal-Setting Theory • Equity Theory • Fair Process Theory

33. 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.

34. Variable Pay Programs • A portion of an employee’s pay is based on some individual and/or organizational measure(s) of performance. • Individual-based • Piece-rate wages, bonuses • Workers are paid a fixed sum for each unit of production completed. • Group-based • Gainsharing: an incentive plan where improvements in group productivity determine the total amount of money that is allocated.

35. Variable Pay Programs • Organizational-based • Profit-sharing: 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.

36. Variable-Pay Programs • 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.

37. Rewards for Other Types of Performance • Commissions beyond sales • Customer satisfaction and/or sales team outcomes, such as meeting revenue or profit targets. • Leadership effectiveness • Employee satisfaction, or how the manager handles his or her employees. • New goals • All employees who contribute to specific organizational goals, such as customer satisfaction, cycle time, or quality measures.

38. Rewards for Other Types of Performance • Knowledge workers in teams • Performance of knowledge workers and/or professional employees who work on teams. • Competency and/or skills • Abstract knowledge or competencies—for example, knowledge of technology, the international business context, customer service, or social skills.

39. Management Reward Follies We hope for … But we reward …

40. Why Do Managers Engage in Reward Follies? • Stuck in old patterns of rewards and recognition • Stick to rewarding things that can be easily measured • Don’t look at the big picture • Subunits compete with each other • Focus on short-term results

41. Cross-Cultural Differences in Motivation • Canada and US rely on extrinsic rewards more than other countries • Japan and Germany rarely use individual incentives • Japan emphasizes group rewards • China more likely to give bonuses to everyone

42. Are Rewards Overrated? Cognitive Evaluation Theory Allocating extrinsic rewards for behaviour that had been previously intrinsically rewarded tends to decrease the overall level of motivation.

43. 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

44. 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.

45. Summary • Equity Theory • Strongest when predicting absence and turnover behaviours. • Weakest when predicting differences in employee productivity. • Cognitive Evaluation Theory • When you give extrinsic rewards for behaviour that had been previously intrinsically rewarded this can result in a decrease in the overall level of motivation.

46. 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

47. Implications • Link Rewards to Performance • Employees must perceive a clear linkage. • Check the System for Equity

48. Homework “Rewards for Workforce Diversity” – page 135 Chose 3 of the employees described in the case and design a benefits package for them Why would your benefit package be best for motivating them?