Motivation

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motivation

The intention of achieving a goal, leading to goal-directed behavior.

ability

The characteristic of having the skills and knowledge required to perform the job.

C H A P T E R 1 3 Motivating Employees F I G U R E 1 3 . 1 Should managers use the carrot or the stick? Research has found that rewards are more effective than punishments in altering individual behavior.

C H A P T E R L E A R N I N G O B J E C T I V E S

Reading this chapter will help you accomplish the following:

1. Understand need-based theories of motivation. 2. Understand process-based theories of motivation. 3. Describe how fairness perceptions are determined and their consequences. 4. Learn to use performance appraisals in a motivational way. 5. Learn to apply organizational rewards in a motivational way. 6. Develop your personal motivation skills.

Motivation is defined as “the intention of achieving a goal, leading to goal-directed behavior.”[1] When we refer to

someone as being motivated, we mean that the person is trying hard to accomplish a certain task. Motivation is

clearly important for someone to perform well. However, motivation alone is not sufficient. Ability—having the

skills and knowledge required to perform the job—is also important and is sometimes the key determinant of

effectiveness. Finally, environmental factors—having the resources, information, and support one needs to perform

well—are also critical to determine performance.

F I G U R E 1 3 . 2 The P-O-L-C Framework

What makes employees willing to “go the extra mile” to provide excellent service, market a company’s products

effectively, or achieve the goals set personally or by management? Answering questions like these is of utmost

importance to understand and manage the work behavior of our peers, subordinates, and even supervisors. As with

many questions involving individuals, the answers are complex and there are several theories explaining the

concept of motivation. We review each of the key theories of motivation in this chapter.

F I G U R E 1 3 . 3 Motivation, ability, and environment are the major influences over employee performance

Source: Mitchell, T. R. (1982). Motivation: New directions for theory, research, and practice. Academy of Management Review, 7, 80–88; Porter, L. W.,

& Lawler, E. E. (1968). Managerial attitudes and performance. Homewood, IL: Irwin.

1. NEED-BASED THEORIES OF MOTIVATION

L E A R N I N G O B J E C T I V E S

1. Explain how employees are motivated according to Maslow’s hierarchy of needs. 2. Explain how ERG theory addresses the limitations of Maslow’s hierarchy. 3. Describe the difference between factors contributing to employee motivation and factors con-

tributing to dissatisfaction. 4. Describe the needs for achievement, power, and affiliation, and how these needs affect work

behavior.

The earliest answer to motivation involved understanding individual needs. Specifically, early research- ers thought that employees are motivated to satisfy their needs. For example, an employee who spends a considerable amount of time wandering around the office talking to people may have a social need and this behavior may be a way of satisfying that need. There are four major theories in the need-based category: Maslow’s hierarchy of needs, ERG theory, Herzberg’s two-factor theory, and McClelland’s ac- quired needs theory.

352 PRINCIPLES OF MANAGEMENT VERSION 3.0

physiological needs

The need for air, food, and water.

safety

The need to be safe from danger, pain, or an uncertain future.

social needs

The need to bond with other human beings, to be loved, and to form lasting attachments with them.

esteem needs

The desire to be respected by one’s peers, feeling important, and being appreciated.

self-actualization

The quality of “becoming all you are capable of becoming.”

1.1 Maslow’s Hierarchy of Needs Abraham Maslow is among the most prominent psychologists of the 20th century. Maslow’s theory is based on a simple premise: Human beings have needs that are hierarchically ranked.[2] There are some needs that are basic to all human beings, and in their absence, other needs are not considered. As we satisfy these basic needs, we start looking to satisfy higher-order needs. Once a lower-level need is sat- isfied, it no longer serves as a motivator.

The most basic of Maslow’s needs are physiological needs. Physiological needs refer to the need for air, food, and water. Individuals who are hungry direct their behavior toward finding food. Once fed, the search for sustenance ceases and food no longer serves as a motivator. Once physiological needs are satisfied, people tend to become concerned about safety. Are they safe from danger, pain, or an uncertain future? One level up, social needs refer to the need to bond with other human beings, to be loved, and to form lasting attachments. Indeed, research shows that having no attachments can neg- atively affect health and well-being.[3] The satisfaction of social needs makes esteem needs more sali- ent. Esteem needs refer to the desire to be respected by one’s peers, feeling important, and being appre- ciated. Finally, at the highest level of the hierarchy, the need for self-actualization refers to “becoming all you are capable of becoming.” This need manifests itself by acquiring new skills, taking on new challenges, and behaving in a way that will lead to the satisfaction of one’s life goals.

So, how can organizations satisfy their employees’ various needs? In the long run, physiological needs may be satisfied by a paycheck, but it is important to remember that pay may satisfy other needs such as safety and esteem as well. Providing generous benefits, including health insurance and company-sponsored retirement plans, as well as offering a measure of job security, will help satisfy safety needs. Social needs may be satisfied by having a friendly environment, providing a workplace conducive to collaboration and communication with others. Company picnics and other social oppor- tunities may also be helpful if other employees are motivated by social needs but they may cause re- sentment if they are not and if they have to sacrifice a Sunday afternoon for a company picnic that is not truly viewed as optional. Providing promotion opportunities at work, recognizing a person’s ac- complishments verbally or through more formal reward systems, and job titles that communicate to the employee that one has achieved high status within the organization are among the ways of satisfy- ing esteem needs. Finally, self-actualization needs may be satisfied by providing development and growth opportunities on or off the job, as well as by assigning interesting and challenging work. By making the effort to satisfy the different needs each employee may have at a given time, organizations may ensure a more highly motivated workforce.

Maslow’s hierarchy is a systematic way of thinking about the different needs employees may have at any given point and explains different reactions they may have to similar treatment. An employee who is trying to satisfy her esteem needs may feel gratified when her supervisor praises her. However, another employee who is trying to satisfy his social needs may resent being praised by upper manage- ment in front of peers if the praise sets him apart from the rest of the group. Thus, while Maslow’s the- ory provides a basis for understanding the importance of needs - his work is incomplete in understand- ing all the nuanced elements surrounding work motivation.

CHAPTER 13 MOTIVATING EMPLOYEES 353

F I G U R E 1 3 . 4 Maslow’s Hierarchy of Needs

354 PRINCIPLES OF MANAGEMENT VERSION 3.0

existence

This need corresponds to Maslow’s physiological and safety needs.

relatedness

This need corresponds to social needs.

growth

This need refers to Maslow’s esteem and self-actualization.

Hygiene factors

The factors that include company policies, supervision, working conditions, salary, safety, and security on the job.

1.2 ERG Theory ERG theory of Clayton Alderfer is a modification of Maslow’s hierarchy of needs.[4] Instead of the five needs that are hierarchically organized, Alderfer proposed that basic human needs may be grouped un- der three categories, namely, Existence, Relatedness, and Growth. Existence need corresponds to Maslow’s physiological and safety needs, relatedness corresponds to social needs, and growth need refers to Maslow’s esteem and self-actualization.

F I G U R E 1 3 . 5 ERG Theory

Source: Based on Alderfer, C. P. (1969). An empirical test of a new theory of human needs. Organizational Behavior and Human Performance, 4,

142–175.

ERG theory’s main contribution to the literature is its relaxation of Maslow’s assumptions. For ex- ample, ERG theory does not rank needs in any particular order and explicitly recognizes that more than one need may operate at a given time. Moreover, the theory has a “frustration-regression” hypo- thesis, suggesting that individuals who are frustrated in their attempts to satisfy one need may regress to another one. For example, someone who is frustrated by the lack of growth opportunities in his job and slow progress toward career goals may regress to relatedness needs and start spending more time socializing with one’s coworkers. The implication of this theory is that we need to recognize the mul- tiple needs that may be driving an individual at a given point to understand his behavior and to motiv- ate him.

1.3 Two-Factor Theory Maslow’s hierarchy and ERG theory suggest that all needs can serve as motivators. Frederick Herzberg approached the question of motivation from a slightly different perspective by asking individuals what satisfies them on the job and what dissatisfies them. Herzberg came to the conclusion that aspects of the work environment that satisfy employees are very different from aspects that dissatisfy them.[5] Herzberg labeled factors causing dissatisfaction of workers as “hygiene” factors because these factors were part of the context in which the job was performed, as opposed to the job itself. Hygiene factors included company policies, supervision, working conditions, salary, safety, and security on the job. For example, if you are working in an unpleasant work environment where your office is too hot in the summer and too cold in the winter, or if you are being harassed and mistreated, you would likely be miserable. However, if these problems were solved (your office temperature is just right and you are not harassed at all), would you be motivated? Most likely, you would take the situation for granted. In fact, many factors in our work environment are things that we miss when they are absent, but take for granted if they are present.

CHAPTER 13 MOTIVATING EMPLOYEES 355

motivators

The factors that are intrinsic to the job, such as achievement, recognition, interesting work, increased responsibilities, advancement, and growth opportunities.

F I G U R E 1 3 . 7

At Hewlett-Packard, one of the most prestigious awards an employee can receive is the Golden Banana Award for technological innovation. This award began when an engineer came to his manager to report that he’d solved a challenging problem. The manager wanted to show his appreciation, looked around his desk, and found the banana he planned to eat for lunch. He handed the banana to the engineer while saying, “Well done! Congratulations!”

need for achievement

Having a strong need to be successful.

high need for affiliation

The need to be liked and accepted by others.

In contrast, motivators are factors that are intrinsic to the job, such as achievement, recognition, interesting work, increased responsibilities, advancement, and growth opportunities. According to Herzberg’s research, motivators, and not hygiene factors, are the conditions that truly motivate employees.

F I G U R E 1 3 . 6 Two-Factor Theory of Motivation

Source: Based on Herzberg, F., Mausner, B., & Snyderman, B. (1959). The motivation to work. New York: Wiley; Herzberg, F. (1965). The motivation

to work among Finnish supervisors. Personnel Psychology, 18, 393–402.

Herzberg’s research, despite its intuitive appeal, has received its share of criticism.[6] One criticism relates to the classification of the factors as hygiene or motivator. For example, pay is viewed as a hy- giene factor. However, pay is not necessarily a contextual factor and may have symbolic value by show- ing employees that they are being recognized for their contributions as well as communicating to them that they are advancing within the company. And, very few individuals would show up to work consist- ently if they were not paid. Similarly, quality of supervision or relationships employees form with their supervisors may determine whether they are assigned interesting work, whether they are recognized for their potential, and whether they take on more responsibilities. Despite its limitations, the two-factor theory can be a valuable aid to managers because it points out that improving the environment in which the job is performed goes only so far in motivating employees.

1.4 Acquired Needs Theory Among the need-based approaches to motivation, Douglas McClelland’s acquired needs theory is the one that has received the greatest amount of support. According to this theory, individuals acquire three types of needs as a result of their life experiences. These needs are need for achievement, need for affiliation, and need for power. All individuals possess a combination of these needs.

Those who have a high need for achievement have a strong need to be successful. A worker who derives great satisfaction from meeting deadlines, coming up with brilliant ideas, and planning his or her next career move may be high in need for achievement. Individuals high on need for achievement are well suited to positions such as sales where there are explicit goals, feedback is immediately avail- able, and their effort often leads to success.[7] Because of their success in lower-level jobs, those with a high need for achievement are often promoted to higher-level positions.[8] However, a high need for achievement has important disadvantages in management. Management involves getting work done by motivating others. When a salesperson is promoted to be a sales manager, the job description changes from actively selling to recruiting, motivating, and training salespeople. Those who are high in need for achievement may view managerial activities such as coaching, communicating, and meeting with sub- ordinates as a waste of time. Moreover, they enjoy doing things themselves and may find it difficult to delegate authority. They may become overbearing or micromanaging bosses, expecting everyone to be as dedicated to work as they are, and expecting subordinates to do things exactly the way they would perform a task.[9]

Individuals who have a high need for affiliation want to be liked and accepted by others. When given a choice, they prefer to interact with others and be with friends.[10] Their emphasis on harmoni- ous interpersonal relationships may be an advantage in jobs and occupations requiring frequent inter- personal interaction, such as a social worker or teacher. In managerial positions, a high need for affili- ation may again serve as a disadvantage because these individuals tend to be overly concerned about how they are perceived by others. Thus, they may find it difficult to perform some aspects of a man- ager’s job such as giving employees critical feedback or disciplining poor performers.

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need for power

The desire to influence others and control their environment.

Finally, those with a high need for power want to influence others and control their environ- ment. Need for power may be destructive of one’s relationships if it takes the form of seeking and using power for one’s own good and prestige. However, when it manifests itself in more altruistic forms, such as changing the way things are done so that the work environment is more positive or negotiating more resources for one’s department, it tends to lead to positive outcomes. In fact, need for power is viewed as important for effectiveness in managerial and leadership positions.[11]

McClelland’s theory of acquired needs has important implications for motivating employees. While someone who has a high need for achievement may respond to goals, those with a high need for affiliation may be motivated to gain the approval of their peers and supervisors, whereas those who have a high need for power may value gaining influence over the supervisor or acquiring a position that has decision-making authority. And, when it comes to succeeding in managerial positions, individuals who are aware of the drawbacks of their need orientation can take steps to overcome these drawbacks.

K E Y T A K E A W A Y

Need-based theories describe motivated behavior as individual efforts to meet needs. According to this per- spective, the manager’s job is to identify what individuals need and then to make sure that the work environ- ment becomes a means of satisfying these needs. Maslow’s hierarchy categorizes human needs into physiolo- gical, safety, social, esteem, and self-actualization needs. ERG theory is a modification of Maslow’s hierarchy, where the five needs are collapsed into three categories (existence, relatedness, and growth). The two-factor theory differentiates between factors that make people dissatisfied on the job (hygiene factors) and factors that truly motivate employees. Finally, acquired-needs theory argues that individuals possess stable and dom- inant motives to achieve, acquire power, or affiliate with others.

D I S C U S S I O N Q U E S T I O N S

1. Many managers assume that if an employee is not performing well, the reason must be lack of motivation. What is the problem with this assumption?

2. Review Maslow’s hierarchy of needs. Do you agree with the particular ranking of employee needs?

3. Review the hygiene factors and motivators in the two-factor theory. Are there any hygiene factors that you would consider to be motivators and vice versa?

4. A friend of yours is competitive, requires frequent and immediate feedback, and enjoys accomplishing things. She has recently been promoted to a managerial position and seeks your advice. What would you tell her?

5. Which theory of motivation have you found to be most useful in explaining your behavior? Why?

2. PROCESS-BASED THEORIES

L E A R N I N G O B J E C T I V E S

1. Explain how employees evaluate the fairness of reward distributions. 2. List the three questions individuals consider when deciding whether to put forth effort at work. 3. Describe how managers can use learning and reinforcement principles to motivate employees. 4. Learn the role that job design plays in motivating employees. 5. Describe why goal setting motivates employees.

In contrast to need-based theories, process-based theories view motivation as a cognitive (and poten- tially rational) process. Individuals analyze their environment, develop reactions and feelings, and react in certain ways. Under this category, we will review equity theory, expectancy theory, and reinforce- ment theory. We will also discuss the concepts of job design and goal setting as motivational strategies.

2.1 Equity Theory Imagine you are paid $10 an hour working as an office assistant and you have held this job for six months. You are very good at what you do, coming up with creative ways to make things easier in the

CHAPTER 13 MOTIVATING EMPLOYEES 357

referent

A person we compare ourselves to in equity theory.

workplace, and you are a good colleague, willing to help others. You stay late when necessary and are flexible if asked to rearrange priorities or work hours. Now imagine that you find out your manager is hiring another employee who is going to work with you, hold the same job title, and perform the same types of tasks. This employee has more advanced computer skills, but it is unclear whether these will be used on the job. The starting pay for the new hire will be $14 an hour. How would you feel? Would you be as motivated as before, going above and beyond your duties?

If your reaction to this scenario was along the lines of “I would think it’s unfair,” your feelings may be explained using equity theory.[12] According to this theory, individuals are motivated by a sense of fairness in their interactions. Moreover, our sense of fairness is a result of the social comparisons we make. Specifically, we compare our inputs and outputs with someone else’s inputs and outputs. We perceive fairness if we believe that the input-to-output ratio we are bringing into the situation is similar to the input/output ratio of a comparison person, or a referent. Perceptions of inequity create tension within us and drive us to action that will reduce perceived inequity. This process is illustrated in Figure 13.8.

What Are Inputs and Outputs?

Inputs are the contributions the person feels he or she is making to the environment. In the previous example, hard work, loyalty to the organization, number of months worked, level of education, train- ing, and skills may have been relevant inputs. Outputs are the rewards the person feels he or she is re- ceiving from the situation. The $10 an hour was a salient output. There may be other outputs, such as the benefits received or the treatment one gets from the boss.

F I G U R E 1 3 . 8 The Equity Formula

Source: Based on Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 2, pp.

267–299). New York: Academic Press.

Because equity perceptions develop as a result of a subjective process, different people may look at ex- actly the same situation and perceive different levels of equity. For example, another person may look at the same scenario and decide that the situation is fair because the new hire has computer skills and the company is paying extra for these skills.

Who Is the Referent?

The referent other may be a specific person or an entire category of people. For example, some might look at want ads for entry-level clerical workers and see whether the pay offered is in the $10 per hour range; in this case, the referent other is the category of entry-level clerical workers, including office as- sistants, in the local area. Referents should be comparable to us—otherwise the comparison is not meaningful. It would be illogical for entry-level employees to compare themselves to the CEO of the company given the differences in the nature of inputs and outcomes. Instead, individuals logically compare themselves to those performing similar tasks within the same organization or a different organization.

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F I G U R E 1 3 . 9

The concept of equity helps explain aggressive negotiations in professional sports, such as Cristiano Ronaldo’s salary that pays more than $50 million annually.

Source: https://en.wikipedia.org/wiki/

Cristiano_Ronaldo#/media/

File:RealM-Shahter15_(4).jpg

Reactions to Unfairness

The theory outlines several potential reactions to perceived inequity, which are summarized in Figure 13.10. Oftentimes, the situation may be dealt with perceptually, by distorting our perceptions of our own or referent’s inputs and outputs. For example, individuals may justify the situation by downplaying their own inputs (“I don’t really work very hard on this job”), valuing the outputs more highly (“I am gain- ing valuable work experience, so the situation is not that bad”), distorting the other person’s inputs (“He really is more competent than I am and deserves to be paid more”), or distorting the other per- son’s outputs (“He gets $14 but will have to work with a lousy manager, so the situation is not unfair”).

Another way of addressing perceived inequity is to reduce one’s own inputs or increase one’s own outputs. If individuals reduce their efforts, perceived inequity can be reduced. Indeed, research shows that people who perceive inequity tend to reduce their work performance or reduce the quality of their inputs.[13] Increasing one’s outputs can be achieved through legitimate means such as negotiating a pay raise. At the same time, research shows that those feeling inequity sometimes resort to stealing to bal- ance the scales.[14] Other options include changing the comparison person (for example, you may learn that others doing similar work in different organizations are paid only minimum wage) and leaving the situation by quitting one’s job.[15] We might even consider taking legal action as a potential outcome of perceived inequity. For example, if you find out that the main reason behind a pay gap is gender, you may react to the situation by taking legal action because sex discrimination in pay is illegal in the Un- ited States.

F I G U R E 1 3 . 1 0 Potential Responses to Inequity

Source: Based on research findings reported in Carrell, M. R., & Dittrich, J. E. (1978). Equity theory: The recent literature, methodological

considerations, and new directions. Academy of Management Review, 3, 202–210; Goodman, P. S., & Friedman, A. (1971). An examination of

Adams’s theory of inequity. Administrative Science Quarterly, 16, 271–288; Greenberg, J. (1993). Stealing in the name of justice: Informational and

interpersonal moderators of theft reactions to underpayment inequity. Organizational Behavior and Human Decision Processes, 54, 81–103; Schmidt,

D. R., & Marwell, G. (1972). Withdrawal and reward reallocation as responses to inequity. Journal of Experimental Social Psychology, 8, 207–211.

Overpayment Inequity

What would you do if you felt you were overrewarded? Originally, equity theory proposed that overre- warded individuals would experience guilt and would increase their effort to restore perceptions of equity. However, research does not provide support for this argument. Instead, it seems that individu- als experience less distress as a result of being overrewarded.[16] It is not hard to imagine that individu- als find perceptual ways to deal with a situation like this, such as believing that they have more skills

CHAPTER 13 MOTIVATING EMPLOYEES 359

equity sensitivity

A personality trait that explains different reactions to inequity.

benevolents

Individuals who give without waiting to receive much in return.

entitleds

Individuals who expect to receive a lot without giving much in return.

Distributive justice

The degree to which the outcomes received from the organization are fair.

Procedural justice

The degree to which fair decision-making procedures are used to arrive at a decision.

F I G U R E 1 3 . 1 1

The idea that “justice is blind” refers to the notion that procedural justice is applied to all who enter the U.S. legal system.

and bring more to the situation compared with the referent person. Therefore, research does not sup- port equity theory’s predictions with respect to people who are overpaid.[17]

Individual Differences in Reactions to Inequity

Equity theory assumes that once people feel that a situation is inequitable they are motivated to react. However, does inequity disturb everyone equally? Researchers identified a personality trait that ex- plains different reactions to inequity and named this trait equity sensitivity.[18] Equity sensitive indi- viduals experience distress when they feel they are overrewarded or underrewarded and expect to maintain equitable relationships. At the same time, there are some individuals who are benevolents who give without waiting to receive much in return and entitleds who expect to receive a lot without giving much in return. Thus, the theory is more useful in explaining the behavior of equity sensitive in- dividuals, and organizations will need to pay particular attention to how these individuals view their relationships.

Fairness beyond Equity: Procedural and Interactional Justice

Equity theory looks at perceived fairness as a motivator. However, the way equity theory defines fair- ness is limited to fairness regarding rewards. Starting in the 1970s, researchers of workplace fairness began taking a broader view of justice. Equity theory deals with outcome fairness, and therefore, it is considered to be a distributive justice theory. Distributive justice refers to the degree to which the outputs received from the organization are fair. Two other types of fairness have also been identified: procedural justice and interactional justice.

Let’s assume that you found out you are getting a promotion that will include a pay raise, increased responsibilities, and prestige. If you feel you deserve to be promoted, you would perceive high dis- tributive justice (“getting the promotion is fair”). However, if you later found out that the department manager picked you because of your family connections, how would you feel? You might still like the outcome but feel that the decision-making process was unfair since it was not performance based. This response would involve feelings of procedural injustice. Procedural justice refers to the degree to which fair decision-making procedures are used. Research shows that employees care about procedural justice for many organizational decisions, including layoffs, employee selection, surveillance of employ- ees, performance appraisals, and pay decisions.[19] They tend to care about procedural justice particu- larly when they do not get the outcome they feel they deserve.[20] If you do not get the promotion and find out that management chose the candidate because of their connections, you may view this as adding insult to injury. When people do not get the rewards they want, they tend to hold management responsible if procedures are not fair.[21]

Research has identified many ways of achieving procedural justice. For example, giving employees advance notice before laying them off, firing them, or disciplining them is perceived as fairer.[22] Allow- ing employees’ voices into decision making is also important.[23] When designing a performance apprais- al system or implementing reorganization, asking employees for their input may be a good idea be- cause it increases perceptions of fairness. Even when it is not possible to have employees participate, providing explanations is helpful in fostering procedural justice.[24] Finally, people expect consistency in treatment.[25] If one person is given extra time when taking a test while another is not, individuals would perceive decision making as unfair.

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Interactional justice

The degree to which people are treated with respect, kindness, and dignity in interpersonal interactions.

expectancy

The extent to which a person believes that high levels of effort will lead to outcomes of interest such as performance or success.

instrumentality

The degree to which the person believes that performance is related to secondary outcomes such as rewards.

valence

The value of the rewards awaiting the person as a result of performance.

Now let’s imagine your boss telling you that you are getting a promotion. The manager uses these exact words: “Yes, we are giving you the promotion. The job is so simple that we thought even you can handle it.” Now what is your reaction? The unpleasant feelings you may now experience are explained by interactional justice. Interactional justice refers to the degree to which people are treated with re- spect, kindness, and dignity in interpersonal interactions. We expect to be treated with dignity by our peers, supervisors, and customers. When the opposite happens, we feel angry. Even when faced with negative outcomes such as a pay cut, being treated with dignity and respect serves as a buffer and can alleviate stress.[26]

Employers would benefit from paying attention to all three types of justice perceptions. In addition to being the right thing to do, justice perceptions lead to outcomes companies care about. Injustice is directly harmful to employee psychological health and well-being and contributes to stress.[27] High levels of justice create higher levels of employee commitment to organizations, are related to higher job performance, higher levels of organizational citizenship (behaviors that are not part of one’s job de- scription but help the organization in other ways such as speaking positively about the company and helping others), and higher levels of customer satisfaction, whereas low levels of justice lead to retali- ation and supporting union certification movements.[28]

2.2 Expectancy Theory Expectancy theory argues that individual motivation to put forth more or less effort is determined by a rational calculation.[29] According to this theory, individuals ask themselves three questions.

F I G U R E 1 3 . 1 2 Summary of Expectancy Theory

Source: Based on Porter, L. W., & Lawler, E. E. (1968). Managerial attitudes and performance. Homewood, IL: Irwin; Vroom, V. H. (1964). Work and

motivation. New York: Wiley.

The first question is whether the person believes that high levels of effort will lead to desired outcomes. This perception is labeled as expectancy. For example, do you believe that the effort you put forth in a class is related to learning worthwhile material and receiving a good grade? If you do, you are more likely to put forth effort.

The second question is the degree to which the person believes that performance is related to sec- ondary outcomes such as rewards. This perception is labeled as instrumentality. For example, do you believe that passing the class is related to rewards such as getting a better job, or gaining approval from your instructor, friends, or parents? If you do, you are more likely to put forth effort.

Finally, individuals are also concerned about the value of the rewards awaiting them as a result of performance. The anticipated satisfaction that will result from an outcome is labeled as valence. For example, do you value getting a better job or gaining approval from your instructor, friends, or par- ents? If these outcomes are desirable to you, you are more likely to put forth effort.

How can managers influence these perceptions to motivate employees? In fact, managers can in- fluence all three perceptions.[30] To influence their expectancy perceptions, managers may train their employees, or hire people who are qualified for the jobs in question. Low expectancy may also be due to employees feeling that something other than effort predicts performance, such as political behaviors on the part of employees. In this case, clearing the way to performance and creating an environment in which employees do not feel impeded will be helpful. The first step in influencing instrumentality is to connect pay and other rewards to performance using bonuses, award systems, and merit pay. Publiciz- ing any contests or award programs is helpful in bringing rewards to the awareness of employees. It is also important to highlight that performance and not something else is being rewarded. For example, if a company has an employee-of-the-month award that is rotated among employees, employees are un- likely to believe that performance is being rewarded. In the name of being egalitarian, such a reward system may actually hamper the motivation of highest performing employees by eroding instrumental- ity. Finally, to influence valence, managers will need to find out what their employees value. This can be done by talking to employees, or surveying them about what rewards they find valuable.

CHAPTER 13 MOTIVATING EMPLOYEES 361

2.3 Reinforcement Theory Reinforcement theory is based on the work Ivan Pavlov conducted on behavioral conditioning and the later work B. F. Skinner performed on operant conditioning.[31] According to reinforcement theory, behavior is a function of its consequences. Imagine that even though no one asked you to, you stayed late and drafted a report. When the manager found out, she was ecstatic and took you out to lunch and thanked you genuinely. The consequences following your good deed were favorable, and therefore you are more likely to do similar good deeds in the future. In contrast, if your manager had said nothing about it and ignored the sacrifice you made, you would be less likely to demonstrate similar behaviors in the future, or your behavior would likely become extinct.

Despite the simplicity of reinforcement theory, how many times have you seen positive behavior ignored or, worse, negative behavior rewarded? In many organizations, this is a familiar scenario. People go above and beyond the call of duty, and yet their behaviors are ignored or criticized. People with disruptive habits may receive no punishments because the manager is afraid of the reaction the person will give when confronted. They may even receive rewards such as promotions so that the per- son is transferred to a different location and becomes someone else’s problem. Moreover, it is common for people to be rewarded for the wrong kind of behavior. Steven Kerr labeled this phenomenon as “The folly of rewarding A while hoping for B.”[32] For example, a company may make public state- ments about the importance of quality. Yet, they choose to reward shipments on time regardless of the number of known defects contained in the shipments. As a result, employees are more likely to ignore quality and focus on hurrying the delivery process.

F I G U R E 1 3 . 1 3 Reinforcement Methods

Source: From FWK Atlas Black: The Complete Adventure graphic novel.

362 PRINCIPLES OF MANAGEMENT VERSION 3.0

positive reinforcement

Reinforcement that involves making sure that behavior is met with positive consequences.

negative reinforcement

Reinforcement that involves removal of unpleasant outcomes once desired behavior is demonstrated.

Extinction

The removal of rewards following negative behavior.

Punishment

The presentation of negative consequences following unwanted behaviors.

F I G U R E 1 3 . 1 4 Principles of Punishment

McGregor’s “hot stove rule” argues that punishment should be akin to touching a hot stove, where the result it severe, immediate, enforced with warning, and applied consistently and impartially.

Reinforcement Interventions

Reinforcement theory describes four interventions to modify employee behavior. Two of these are methods of increasing the frequency of desired behaviors while the remaining two are methods of re- ducing the frequency of undesired behaviors.

Positive reinforcement is a method of increasing the desired behavior.[33] Positive reinforce- ment involves making sure that behavior is met with positive consequences. Praising an employee for treating a customer respectfully is an example of positive reinforcement. If the praise immediately fol- lows the positive behavior, the employee will see a link between behavior and positive consequences and will be motivated to repeat similar behaviors.

Negative reinforcement is also used to increase the desired behavior. Negative reinforcement involves removal of unpleasant outcomes once desired behavior is demonstrated. Nagging an employee to complete a report is an example of negative reinforcement. The negative stimulus in the environ- ment will remain present until positive behavior is demonstrated. The problem with negative rein- forcement may be that the negative stimulus may lead to unexpected behaviors and may fail to stimu- late the desired behavior. For example, the person may start avoiding the manager to avoid being nagged.

Extinction occurs when a behavior ceases as a result of receiving no reinforcement. For example, suppose an employee has an annoying habit of forwarding e-mail jokes to everyone in the department, cluttering in-boxes and distracting people from their work. Commenting about the jokes, whether in favorable or unfavorable terms, may be encouraging the person to keep forwarding them. Completely ignoring the jokes may reduce their frequency.

Punishment is another method of reducing the frequency of undesirable behaviors. Punishment involves presenting negative consequences following unwanted behaviors. Giving an employee a verbal or written warning for consistently being late to work is an example of punishment.

F I G U R E 1 3 . 1 5

Properly designed sales commissions are widely used to motivate sales employees. The blend of straight salary and commissions should be carefully balanced to achieve optimum sales volume, profitability, and customer satisfaction.

CHAPTER 13 MOTIVATING EMPLOYEES 363

continuous schedule

A schedule in which reinforcers follow all instances of positive behavior.

Fixed ratio schedules

A schedule in which reinforcers reward every nth time the right behavior is demonstrated.

Fixed interval schedules

A schedule in which reinforcers reward after a specified period of time.

Variable ratio

A schedule that involves providing the reinforcement on a random pattern.

OB Mod

A systematic application of reinforcement theory to modify employee behaviors in the workplace.

Reinforcement Schedules

In addition to types of reinforcements, the timing or schedule on which reinforcement is delivered has a bearing on behavior.[34] Reinforcement is presented on a continuous schedule if reinforcers follow all instances of positive behavior. An example of a continuous schedule would be giving an employee a sales commission every time he or she makes a sale. Fixed ratio schedules involve providing rewards every nth time the right behavior is demonstrated, for example, giving the employee a bonus for every 10th sale he or she makes. Fixed interval schedules involve providing a reward after a specified peri- od of time, such as giving a sales bonus once a month regardless of how many sales have been made. Variable ratio involves a random pattern, such as when a slot machine pays out at a casino to ensure patrons believe there is a chance the machine might payout with any given play.

A systematic way in which reinforcement theory principles are applied is called Organizational Be- havior Modification (or OB Mod).[35] This is a systematic application of reinforcement theory to modify employee behaviors. The model consists of five stages. The process starts with identifying the behavior that will be modified. Let’s assume that we are interested in reducing absenteeism among em- ployees. In step 2, we measure the baseline level of absenteeism. In step 3, the behavior’s antecedents and consequences are determined. Why are employees absent? More important, what happens when an employee is absent? If the behavior is being unintentionally rewarded, we may expect these to rein- force absenteeism behavior. For example, suppose that absences peak each month on the days when a departmental monthly report is due, meaning that coworkers and supervisors must do extra work to prepare the report. To reduce the frequency of absenteeism, it will be necessary to think of financial or social incentives to follow positive behavior and negative consequences to follow negative behavior. In step 4, an intervention is implemented. Removing the positive consequences of negative behavior may be an effective way of dealing with the situation, for example, starting the monthly report preparation a few days earlier, or letting employees know that if they are absent when the monthly report is being prepared, their contribution to the report will be submitted as incomplete until they finish it. Punish- ments may be used in persistent cases. Finally, in step 5 the behavior is measured periodically and maintained. Studies examining the effectiveness of OB Mod have been supportive of the model in gen- eral. A review of the literature found that OB Mod interventions resulted in an average of 17% im- provement in performance.[36]

364 PRINCIPLES OF MANAGEMENT VERSION 3.0

F I G U R E 1 3 . 1 6 Timing Is Everything: Utilizing Reinforcement Schedules

CHAPTER 13 MOTIVATING EMPLOYEES 365

Music Rap-Up: Help! I'm Under Attack

Twinprov perform a rap on reinforcement theory.

Youtube

2.4 Job Design Many individuals believe that the most important motivator at work is pay. Yet, studies point to a different factor as the primary influence over worker motivation: job design. How a job is designed has a major impact on employee motivation, job satisfaction, commitment to organization, as well as ab- senteeism and turnover. Job design is just one of the many organizational design decisions managers must make when engaged in the organizing function.

The question of how to properly design jobs so that employees are more productive and more sat- isfied has received managerial and research attention since the beginning of the 20th century.

View the video online at: http://www.youtube.com/embed/6H9CvMiWYGk?rel=0

366 PRINCIPLES OF MANAGEMENT VERSION 3.0

job specialization

Breaking down tasks to their simplest components and assigning them to employees so that each person would perform few tasks in a repetitive manner.

F I G U R E 1 3 . 1 7

This Ford panel assembly line in Berlin, Germany, is an example of specialization. Each person on the line has a different job.

job rotation

Moving employees from job to job at regular intervals.

job enlargement

Expanding the tasks performed by employees to add more variety.

Job enrichment

A job redesign technique that allows workers more control over how they perform their own tasks.

Job crafting

Proactive changes employees make in their own job descriptions.

Scientific Management and Job Specialization

Perhaps the earliest attempt to design jobs was presented by Frederick Taylor in his 1911 book, Principles of Scientific Management. Scientific management proposed a number of ideas that have been influential in job design. One idea was to minimize waste by identifying the best method to per- form the job to ensure maximum efficiency. Another one of the major advances of scientific manage- ment was job specialization, which entails breaking down tasks to their simplest components and as- signing them to employees so that each person would perform few tasks in a repetitive manner. While this technique may be very efficient in terms of automation and standardization, from a motivational perspective, these jobs might be considered boring and repetitive and therefore associated with negat- ive outcomes such as absenteeism.[37] Job specialization is also an ineffective way of organizing jobs in rapidly changing environments where employees close to the problem should modify their approach based on the demands of the situation.[38]

Rotation, Job Enlargement, and Enrichment

One of the early alternatives to job specialization was job rotation, which involves moving employees from job to job at regular intervals, thereby relieving the monotony and boredom typical in repetitive jobs. For example, Maids International, a company that provides cleaning services to households and businesses, uses job rotation such that maids cleaning the kitchen in one house would clean the bed- room in another house.[39] Using this technique, among others, the company was able to reduce its turnover level. In a study conducted in a supermarket, cashiers were rotated to work in different de- partments. As a result of the rotation, employee stress level was reduced as measured by their blood pressure. Moreover, they reported fewer pain symptoms in their neck and shoulders.[40]

Job rotation has a number of advantages for organizations. It is an effective way for employees to acquire new skills, as the rotation involves cross-training to new tasks; this means that organizations increase the overall skill level of their employees.[41] In addition, job rotation is a means of knowledge transfer between departments. An interesting side effect of job rotation in some jobs is increased ac- countability and more ethical behavior. For example, loan officers tend to prepare more accurate and honest reports about their own performance when they anticipate rotation, presumably because they do not want their bad decisions to be exposed by their successor.[42] For employees, rotation is a benefit because they acquire new skills, which keeps them marketable in the long run.

Anecdotal evidence suggests that companies successfully rotate high-level employees to train their managers and increase innovativeness in the company. For example, Marriott International uses stra- tegic movement of management trainees within a property (e.g., from banquet to sales), as well as among its 3,000 lodging properties in 70 countries, to prepare them for future assignments.[43] India’s information technology giant Wipro, which employs about 168,000 employees, uses a three-year plan to groom future leaders of the company by rotating them through different jobs.[44]

Job enlargement refers to expanding the tasks performed by employees to add more variety. Like job rotation, job enlargement can reduce boredom and monotony as well as use human resources more effectively. When jobs are enlarged, employees view themselves as being capable of performing a broader set of tasks.[45] Job enlargement is positively related to employee satisfaction and higher-qual- ity customer services, and it increases the chances of catching mistakes.[46] At the same time, the effects of job enlargement may depend on the type of enlargement. For example, exclusively giving employees simpler tasks had negative consequences on employee satisfaction with the job of catching errors, whereas giving employees more tasks that require them to be knowledgeable in different areas seemed to have more positive effects.[47]

Job enrichment is a job redesign technique that allows workers more control over how they per- form their own tasks, giving them more responsibility over their jobs. As an alternative to job specializ- ation, companies using job enrichment may experience positive outcomes such as reduced turnover, increased productivity, and reduced absences.[48] This may be because employees who have the author- ity and responsibility over their own work can be more efficient, eliminate unnecessary tasks, take shortcuts, and overall increase their own performance. At the same time, there is some evidence that job enrichment may sometimes cause employees to be dissatisfied.[49] The reason may be that employ- ees who are given additional autonomy and responsibility may expect greater levels of pay or other types of compensation, and if this expectation is not met, they may feel frustrated. However, job en- richment may not be suitable for all employees.[50] Not all employees desire to have control over how they work, and if they do not have this desire, they may feel dissatisfied in an enriched job.

A recent approach to job enrichment is job crafting. Job crafting refers to the changes employees make to their own job description—expanding certain elements that are a better fit to their own per- sonality or reducing the scope of the job to achieve better work-life balance—all in the service of better meeting the employees’ career and life goals. The idea behind job crafting is that oftentimes employees

CHAPTER 13 MOTIVATING EMPLOYEES 367

job characteristics model

A model that describes five core job dimensions leading to three critical psychological states, which lead to work-related outcomes.

skill variety

The extent to which the job requires the person to use multiple high-level skills.

task identity

The degree to which the person is in charge of completing an identifiable piece of work from start to finish.

task significance

The degree to which the person’s job substantially affects other people’s work, health, or well-being.

autonomy

The degree to which the person has the freedom to decide how to perform one’s tasks.

feedback

The degree to which the person learns how effective he or she is being at work.

are not passive recipients of their roles and instead take an active role in shaping their own job roles and responsibilities to fit the realities of their interests, passions, and goals. Not all jobs allow job craft- ing, but some organizations are increasingly encouraging employees to take on an active role in the shaping of job descriptions. As an example, Deloitte employees may renegotiate their roles with man- agement to increase or decrease the scope and visibility of the projects they take on or to increase the flexibility of their work hours.[51]

Job Characteristics Model

The job characteristics model is one of the most influential attempts to design jobs to increase their motivational properties.[52] Proposed in the 1970s by Hackman and Oldham, the model describes five core job dimensions, leading to three critical psychological states, which lead to work-related out- comes. In this model, shown in Figure 13.18, there are five core job dimensions.

F I G U R E 1 3 . 1 8 Job Characteristics Model

Source: Adapted from Hackman, J. R., & Oldham, G. R. (1975). Development of the job diagnostic survey. Journal of Applied Psychology, 60, 159–170.

Skill variety refers to the extent to which the job requires the person to use multiple high-level skills. A car wash employee whose job consists of directing cars into the automated car wash demonstrates low levels of skill variety, whereas a car wash employee who acts as a cashier, maintains car wash equip- ment, and manages the inventory of chemicals demonstrates higher skill variety.

Task identity refers to the degree to which the person completes a piece of work from start to fin- ish. A Web designer who designs parts of a Web site will have low task identity because the work blends in with other Web designers’ work, and in the end, it will be hard for the person to claim re- sponsibility for the final output. The Webmaster who designs the entire Web site will have higher task identity.

Task significance refers to whether the person’s job substantially affects other people’s work, health, or well-being. A janitor who cleans the floor at an office building may find the job low in sig- nificance, thinking it is not an important job. However, janitors cleaning the floors at a hospital may see their role as essential in helping patients recover in a healthy environment. When they see their tasks as significant, employees tend to feel that they are making an impact on their environment and their feelings of self-worth are boosted.[53]

Autonomy is the degree to which the person has the freedom to decide how to perform tasks. As an example, a restaurant chef working in a small restaurant who has control over the menu, concept, and pricing will have greater autonomy compared to a chef who is working in a chain restaurant who oversees the cooking process without having control over the taste of food, how it is cooked, or where ingredients are acquired from. Autonomy increases motivation at work, but it also has other benefits. Autonomous workers are less likely to adopt a “this is not my job” attitude and instead be proactive and creative.[54] Giving employees autonomy is also a great way to train them on the job. For example, Gucci’s former CEO Robert Polet describes the autonomy he received while working at Unilever as the key to his development of leadership talents.[55]

Feedback refers to the degree to which the person learns how effective he or she is at work. Feed- back may come from other people such as supervisors, peers, subordinates, customers, or from the job. A salesperson who makes informational presentations to potential clients but is not informed whether they sign up has low feedback. If this salesperson receives a notification whenever someone who has heard his presentation becomes a client, feedback will be high.

The mere presence of feedback is not sufficient for employees to feel motivated to perform better, however. In fact, in about one-third of the cases, feedback was detrimental to performance.[56] In addi- tion to whether feedback is present, the character of the feedback (positive or negative), whether the person is ready to receive the feedback, and the manner in which feedback was given will all determine whether employees feel motivated or demotivated as a result of feedback.

368 PRINCIPLES OF MANAGEMENT VERSION 3.0

SMART

A goal that is specific, measurable, aggressive/ achievable, realistic, and timely.

F I G U R E 1 3 . 1 9

Source: Based on information contained in Latham, G. P.

(2004). The motivational benefits of goal setting. Academy of

Management Executive, 18, 126–129; Seĳts, G. H., &

Latham, G. P. (2005). Learning versus performance goals:

When should each be used? Academy of Management

Executive, 19, 124–131; Shaw, K. N. (2004). Changing the

goal-setting process at Microsoft. Academy of Management

Executive, 18, 139–142.

2.5 Goal Setting Theory Goal setting theory[57] is one of the most influential theories of motivation. It has been supported in over 1,000 studies with employees, ranging from blue-collar workers to research and development em- ployees, and there is strong evidence that setting goals is related to performance improvements.[58] In fact, according to one estimate, goal setting improves performance between 10% and 25% or more.[59] On the basis of evidence such as this, thousands of companies around the world are using goal setting in some form, including companies such as Coca-Cola, PricewaterhouseCoopers, Nike, Intel, and Mi- crosoft to name a few.

Setting SMART Goals

The mere presence of a goal does not motivate individuals. Think about New Year’s resolutions that many individuals fail to keep. Some decided they should lose some weight but then never put a con- crete plan in action. Others decided that they would read more but didn’t. Why did 97% of those who set New Year’s resolutions fail to meet their goals?

Accumulating research evidence indicates that effective goals are SMART. SMART goals are spe- cific, measurable, aggressive/achievable, realistic, and timely. Here is a sample SMART goal: Walmart recently set a goal to increase their supply of renewable energy by 600 percent by the end of 2020. This goal meets all the conditions of being SMART if we assume that it is an aggressive and achievable goal.[60] Even though it seems like a simple concept, in reality many goals that are set within organiza- tions may not be SMART. For example, Microsoft conducted an audit of its goal-setting and perform- ance review system and found that only about 40% of the goals were specific and measurable.[61]

Why Do SMART Goals Motivate?

There are at least four reasons why goals motivate.[62] First, goals give us direction; therefore, goals should be set carefully. Giving employees goals that are not aligned with company goals will be a problem because goals will direct employee’s energy to a certain end. Second, goals energize people and tell them not to stop until they reach that point. Third, having a goal provides a challenge. When people have goals and when they reach them, they feel a sense of accomplishment. Finally, SMART goals urge people to think outside the box and rethink how they are working. If a goal is substan- tially difficult, merely working harder will not lead to results. Instead, you will need to rethink the way you usually work and devise a creative way of working. It has been ar- gued that this is how designers and engineers in Japan came up with the bullet train. Having a goal that went way beyond the current speed of trains prevented engineers from making minor improvements and urged them to come up with a radically differ- ent concept.[63]

Are There Downsides to Goal Setting?

As with any management technique, there may be some downsides to goal setting.[64] First, setting goals for specific outcomes may hamper employee performance if employ- ees lack skills and abilities to reach the goals. In these situations, setting goals for beha- viors and for learning may be more effective than setting goals for outcomes. Second, goal setting may motivate employees to focus on a goal and ignore the need to respond to new challenges. For example, one study found that when teams had difficult goals and when employees within the team had high levels of performance orientation, teams had difficulty adapting to unforeseen circumstances.[65] Third, goals focus employee at- tention on the activities that are measured, which may lead to sacrificing other import- ant aspects of performance. When goals are set for production numbers, quality may suffer. As a result, it is important to set goals incorporating all critical aspects of per- formance. Finally, aggressive pursuit of goals may lead to unethical behaviors. Particu- larly when employees are rewarded for goal accomplishment but there are no rewards whatsoever for coming very close to reaching the goal, employees may be tempted to cheat.

No motivational theory is complete alone, but each theory provides us with a framework we can use to analyze, interpret, and manage employee behaviors in the workplace, which are important skills managers use when conducting their leading function. In fact, motivation is important throughout the entire P-O-L-C framework because most managerial functions involve accomplishing tasks and goals through others.

CHAPTER 13 MOTIVATING EMPLOYEES 369

K E Y T A K E A W A Y

Process-based theories use the mental processes of employees as the key to understanding employee motiva- tion. According to equity theory, employees are demotivated when they view reward distribution as unfair. In addition to distributive justice, research identified two other types of fairness (procedural and interactional), which also affect worker reactions and motivation. According to expectancy theory, employees are motivated when they believe that their effort will lead to high performance (expectancy), that their performance will lead to outcomes (instrumentality), and that the outcomes following performance are desirable (valence). Rein- forcement theory argues that behavior is a function of its consequences. By properly tying rewards to positive behaviors, eliminating rewards following negative behaviors, and punishing negative behaviors, leaders can increase the frequency of desired behaviors. In job design, there are five components that increase the motiv- ating potential of a job: skill variety, task identity, task significance, autonomy, and feedback. These theories are particularly useful in designing reward systems within a company. Goal-setting theory is one of the most in- fluential theories of motivation. To motivate employees, goals should be SMART (specific, measurable, ag- gressive/achievable, realistic, and timely). Setting goals and objectives is a task managers undertake when in- volved in the planning portion of the P-O-L-C function.

D I S C U S S I O N Q U E S T I O N S

1. Your manager tells you that the best way of ensuring fairness in reward distribution is to keep the pay a secret. How would you respond to this assertion?

2. What are the distinctions among procedural, interactional, and distributive justice? List ways in which you could increase each of these justice perceptions.

3. Using an example from your own experience in school or at work, explain the concepts of expectancy, instrumentality, and valence.

4. Some practitioners and researchers consider OB Mod as unethical because it may be viewed as employee manipulation. What would be your reaction to this criticism?

5. Consider a job you held in the past. Analyze the job using the framework of job characteristics model.

6. If a manager tells you to “sell as much as you can,” is this goal likely to be effective? Why or why not?

3. DEVELOPING YOUR PERSONAL MOTIVATION SKILLS

L E A R N I N G O B J E C T I V E S

1. Understand what you can do to give feedback through an effective performance appraisal. 2. Learn guidelines for proactively seeking feedback.

3.1 Guidelines for Giving Feedback in a Performance Appraisal Meeting Before the meeting, ask the person to complete a self-appraisal. This is a great way of making sure that employees become active participants in the process and are heard. Complete the performance apprais- al form and document your rating using several examples. Be sure that your review covers the entire time since the last review, not just recent events. Be sure that you devote sufficient time to each meet- ing. If you schedule too many meetings back to back, you may lose your energy in later meetings. Be sure that the physical location is conducive to a private conversation.

During the meeting, be sure to recognize effective performance through specific praise. Do not start the meeting with a criticism. Starting with positive instances of performance helps establish a better mood and shows that you recognize what the employee is doing right. Give employees opportunities to talk. Ask them about their greatest accomplishments, as well as opportunities for improvement. Show empathy and support. Remember, your job as a manager is to help the person solve performance prob- lems. Identify areas where you can help. Conclude by setting goals and creating an action plan for the future.

After the meeting, continue to give the employee periodic and frequent feedback. Follow through on the goals that were set.[66]

370 PRINCIPLES OF MANAGEMENT VERSION 3.0

3.2 Five Guidelines for Seeking Feedback Research shows that receiving feedback is a key to performing well. If you are not receiving enough feedback on the job, make a concerted effort to seek feedback using the following guidelines.

1. Consider seeking regular feedback from your boss. This also has the added benefit of signaling to the manager that you care about your performance and want to be successful.

2. Be genuine in your desire to learn. When seeking feedback, your aim should be improving yourself as opposed to creating the impression that you are a motivated employee. If your manager thinks that you are managing impressions rather than genuinely trying to improve your performance, feedback seeking may hurt you.

3. Develop a good relationship with your manager as well as the employees you manage. This would have the benefit of giving you more feedback in the first place. It also has the upside of making it easier to ask direct questions about your own performance.

4. Consider finding trustworthy peers who can share information with you regarding your performance. Your manager is not the only helpful source of feedback.

5. Be gracious when you receive unfavorable feedback. Even though it may not feel like it at times, feedback is a tool you can use to improve your performance by using feedback constructively. Consider that the negative feedback giver probably risked your goodwill by being honest. Unless there are factual mistakes in the feedback, do not try to convince the person that the feedback is inaccurate.[67]

K E Y T A K E A W A Y

Providing effective feedback is a key part of a manager’s job. To do so, plan the delivery of feedback before, during, and after the meeting. In addition, there are a number of ways to learn about your own performance. Take the time to seek feedback and act on it. With this information, you can maximize your success and the success of those you manage.

D I S C U S S I O N Q U E S T I O N S

1. Why can discussing performance feedback with employees be so hard?

2. What barriers do you perceive in asking for feedback?

3. How would you react if one of your employees came to you for feedback?

4. Imagine that your good friend is starting a new job next week. What recommendations would you give to help your friend do a great job seeking feedback?

CHAPTER 13 MOTIVATING EMPLOYEES 371

4. CASE IN POINT: ZAPPOS CREATES A MOTIVATING PLACE TO WORK

F I G U R E 1 3 . 2 0

Source: http://en.wikipedia.org/wiki/File:Tony_hsieh.jpg

It is unique to hear about a CEO who studies happiness and motivation and builds those principles into the company’s core values or about a company with a five-week training course and an offer of $3,000 to quit any- time during their training if they feel the company is not a good fit. Top that off with an on-site life coach who also happens to be a chiropractor, and we are really talking about something you don’t hear about every day. Zappos, an online shoe and clothing retailer, is known as much for its 365-day return policy and free shipping as it is for its innovative corporate culture. Although acquired in 2009 by Amazon, Zappos managed to remain on Fortune magazine’s “100 Best Companies to Work For” list.

Performance is a function of motivation, ability, and the environment in which you work. Zappos created an environment that encourages motivation and builds inclusiveness. The company delivers above and beyond basic workplace needs and addresses the self-actualization needs that most individuals desire from their work experience. CEO Tony Hsieh believes that the secret to customer loyalty is to make a corporate culture of caring a priority. This is reflected in the company’s 10 core values and its emphasis on building a team and a family. During the interview process, applicants are asked questions relating to the company’s values, such as gauging their own weirdness, open-mindedness, and sense of family. Although the offer to be paid to quit during the training process has increased from its original number of $400, only 2% of trainees take the offer of $3,000 to leave on their 90-day anniversary. Work is structured differently at Zappos as well. For example, there is no limit to the time customer service representatives spend on a phone call, and they are encouraged to make personal connections with the individuals on the other end rather than try to get rid of them.

Zappos has over 1,500 employees, yet the company has been able to maintain a relatively flat organizational structure and prides itself on its extreme transparency. Two of the top executives have no titles, and no one except two in-house lawyers have an office. In an exceptionally detailed and lengthy letter to employees, Hsieh spelled out what the new partnership with Amazon would mean for the company, what would change, and more important, what would remain the same. As a result of this type of company structure, individuals have more freedom, which can lead to greater satisfaction.

In 2010, Zappos had 55,000 applicants for 200 jobs. Although Zappos pays its employees well and offers at- tractive benefits such as full health-care coverage and a compressed workweek, the desire to work at Zappos seems to go beyond that. As Hsieh would say, happiness is the driving force behind almost any action an indi- vidual takes. Whether your goals are for achievement, affiliation, or simply to find an enjoyable environment in which to work, Zappos strives to address these needs. In fact, Zappos even has a consulting arm that teaches other companies, such as Google and Eli Lilly, how to build happy workplaces.

372 PRINCIPLES OF MANAGEMENT VERSION 3.0

The latest developments at the company may be indicative of a change in how motivating employees find Zappos. In 2015, the company switched to a new organizational structure, essentially eliminating job titles and managers, and distributing authority across the board. As befitting their culture of motivating via employee buy-in, Hsieh offered employees who felt that this structure was not for them three months’ severance to quit their jobs. Around 210 workers, or 14% of the workforce took him up on this offer.

Case written by Talya Bauer Berrin Erdogan, & Carlene Reynolds. Partially based on ideas and information con- tained in Robischon, N. (2009, July 22). Amazon buys Zappos for $847 million. FastCompany. Retrieved April 21, 2016, from http://www.fastcompany.com/blog/noah-robischon/editors-desk/amazon-buys-zappos-807-mil- lion; Snyder, B. (5/8/15). 14% of Zappos’ staff left after being offered exit pay. Fortune. Retrieved from http://fortune.com/2015/05/08/zappos-quit-employees/Walker, A. (2009, March 14). Zappos’ Tony Hsieh on Twitter, phone calls and the pursuit of happiness. FastCompany. Retrieved April 21, 2016, from ht- tp://www.fastcompany.com/blog/alissa-walker/member-blog/tony-hsiehs-zapposcom; Happy feet—Inside the online shoe utopia. (2009, September 14). New Yorker. Retrieved April 21, 2016, from ht- tp://about.zappos.com/press-center/media-coverage/happy-feet-inside-online-shoe-utopia; 100 best com- panies to work for. (2010, February 8). Fortune. Retrieved April 21, 2016, from http://money.cnn.com/ magazines/fortune/bestcompanies/2010/snapshots/15.html; Gallagher, L. (January 23, 2013). Tony Hsieh’s new $350 million startup. CNN Money. Retrieved April 21, 2016 from http://tech.fortune.cnn.com/2012/01/23/ tony-hsieh-las-vegas-zappos/

C A S E D I S C U S S I O N Q U E S T I O N S

1. Motivation is an essential element of the leading facet of the P-O-L-C framework. Besides those used by Zappos, what are other means that organizations use to motivate employees?

2. Why do you think Zappos’s approach is not utilized more often? In other words, what are the challenges of using these techniques?

3. Why do you think Zappos offers a $3,000 incentive to quit? What are your thoughts on a buy out of employees who disagree with organizational change?

4. Would you be motivated to work at Zappos? Why or why not?

5. Is happiness synonymous with motivation? When does happiness translate into motivated employees?

CHAPTER 13 MOTIVATING EMPLOYEES 373

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ENDNOTES

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376 PRINCIPLES OF MANAGEMENT VERSION 3.0

Chapter 13: Motivating Employees

Need-Based Theories of Motivation

Maslow’s Hierarchy of Needs
ERG Theory
Two-Factor Theory
Acquired Needs Theory

Process-Based Theories

Equity Theory

What Are Inputs and Outputs?
Who Is the Referent?
Reactions to Unfairness
Overpayment Inequity
Individual Differences in Reactions to Inequity
Fairness beyond Equity: Procedural and Interactional Justice

Expectancy Theory
Reinforcement Theory

Reinforcement Interventions
Reinforcement Schedules

Job Design

Scientific Management and Job Specialization
Rotation, Job Enlargement, and Enrichment
Job Characteristics Model

Goal Setting Theory

Setting SMART Goals
Why Do SMART Goals Motivate?
Are There Downsides to Goal Setting?

Developing Your Personal Motivation Skills

Guidelines for Giving Feedback in a Performance Appraisal Meeting
Five Guidelines for Seeking Feedback

Case in Point: Zappos Creates a Motivating Place to Work
Endnotes