Unit III Assignment Org Ther BH

 chapter5

Foundations of Employee Motivation

learning objectives

After studying this chapter, you should be able to:

5-1 Define employee engagement.

5-2 Explain how drives and emotions influence employee motivation.

5-3 Summarize Maslow’s needs hierarchy, and discuss the employee motivation implications of intrinsic versus extrinsic motivation, learned needs theory, and four-drive theory.

5-4 Discuss the expectancy theory model, including its practical implications.

5-5 Outline organizational behavior modification (OB Mod) and social cognitive theory, and explain their relevance to employee motivation.

5-6 Describe the characteristics of effective goal setting and feedback.

5-7 Summarize equity theory and describe ways to improve procedural justice.

Frucor Beverages is the market leader of energy drinks in New Zealand and Australia. It is also one of the most energized companies in the region. “Our people are highly engaged, but they are also hungry for more success, and to be better,” says Mark Callaghan, CEO of the company’s New Zealand operations where most production occurs.

Frucor’s 1,000 employees say the company provides plenty of learning and autonomy, which motivates them to develop their potential. “The environment is great to develop skills you would normally obtain by working at a number of different companies,” says Ted Audain, a Frucor plant maintenance engineer and parts purchaser. “We are committed to providing our people with the freedom to create, push the boundaries, and ‘to go for it’” says Callaghan. “From a business perspective, factors such as improved productivity, low consumer complaints, low absenteeism, and return on investment to our shareholders are by-products of an everyday fun and self-actualizing environment.”

Job-relevant, challenging goals linked to the company’s overall objectives is another source of employee motivation at Frucor. “It’s about having a clear strategy, objectives and goals with each person’s objectives related to the company’s goals, which are clearly articulated,” says Callaghan. Frucor balances thosePage 121 challenges by ensuring that employees are valued and appreciated for their contribution. “When you value your staff as people, they value you,” Callaghan explains. “Everyone takes responsibility for valuing each other—we get higher engagement from staff.”

Overall, Frucor sets a high bar for employee performance, but also offers plenty of training, recognition, and support to achieve those goals. “We back people to take a risk in a highly supportive environment,” Callaghan explains. “I like to think we’re like a Viking but with a mother’s heart.” 1

Frucor Beverages has a highly engaged workforce through goal setting, meaningful work, enriched jobs, and recognition of their value to the organization. These practices generate high levels of employee motivation.  Motivation  refers to the forces within a person that affect the direction, intensity, and persistence of voluntary behavior. 2  Motivated employees are willing to exert a particular level of effort (intensity), for a certain amount of time (persistence), toward a particular goal (direction). Motivation is one of the four essential drivers of individual behavior and performance (see Chapter 2).

The theme of this chapter is employee motivation. We begin by discussing employee engagement, an increasingly popular concept associated with motivation. Next, we explain how drives and emotions are the prime movers of employee motivation, and review associated needs-based theories. Our attention then turns to expectancy theory, a popular cognitive decision model of employee motivation. Organizational behavior modification and social cognitive theory are then introduced and linked to expectancy theory. The latter sections of this chapter outline the key components of goal setting and feedback, and organizational justice.

© Frucor

Frucor beverages has a highly engaged workforce through goal setting, meaningful work, enriched jobs, and recognition of their value to the organization.

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global connections 5.1

DHL Express Employees Get Engaged

Employee engagement is a key driver of business success at DHL Express, the global courier division of Germany’s Deutsche Post. “We definitely see the value in having emotionally engaged and motivated employees,” says Hennie Heymans, managing director of DHL Express Sub-Saharan Africa. “Engaged employees mean better revenue, profit, customer engagement, and safety.”

As one of Africa’s top-rated employers, DHL Express builds an engaged workforce through continuous development, such as online learning available to all staff and the Made in Africa initiative to train and mentor future leaders. “Employees should be encouraged to grow—both personally and professionally—and should be continuously motivated to broaden their horizons and fulfill their potential,” says Lebo Tseladimitlwa, vice president of human resources at DHL Express Sub-Saharan Africa. The company also has employee recognition awards, competitive pay, and a Certified International Specialist (CIS) program, in which all DHL employees learn how the company operates and the importance of everyone’s role in the business. “CIS is not a traditional training platform,” says DHL Express Global CEO Ken Allen. “It was designed first and foremost as an engagement tool.” 3

Peter Gudella/Shutterstock

Employee Engagement

5-1

When executives at Frucor Beverages and other companies discuss employee motivation these days, they are just as likely to use the phrase  employee engagement .  Although its definition is still being debated,4 we define employee engagement as an individual’s emotional and cognitive (logical) motivation, particularly a focused, intense, persistent, and purposive effort toward work-related goals. It is an emotional involvement in, commitment to, and satisfaction with the work. Employee engagement also includes a high level of absorption in the work—the experience of focusing intensely on the task with limited awareness of events beyond that work. Finally, employee engagement is often described in terms of self-efficacy—the belief that you have the ability, role clarity, and resources to get the job done (see Chapter 3).

Employee engagement is on the minds of many business leaders because of evidence that it predicts employee and work unit performance. For example, Standard Chartered Bank found that branches with higher employee engagement provide significantly higher-quality customer service, have 46 percent lower employee turnover, and produce 16 percent higher profit margin growth than branches with lower employee engagement. Another company recently reported that highly engaged teams have much more loyal customers (35 percent above average) compared to moderately engaged teams (6 percent above average loyalty). It isn’t always clear from these studies whether employee engagement makes companies more successful, or whether the company’s success makes employees more engaged. However, longitudinal evidence suggests that employee engagement causes the company outcomes more than vice versa. 5

The challenge facing organizational leaders is that most employees aren’t very engaged. 6  The numbers vary across studies, but recent results from a widely recognized survey estimate that only 32 percent of employees in the United States are engaged, 51 percent are not engaged, and 17 percent are actively disengaged. Actively disengaged employees tend to be disruptive at work, not just disconnected from work. 7  These numbers are better than in most countries; only 13 percent of employees globally are engaged. Employees in several Asian countries (notably Japan, China, and South Korea) and a few European countries (notably Italy, Netherlands, and France) have the lowest levels of employee engagement, whereas the highest scores are usually found in the United States, Brazil, and India.

This leads to the question: What are the drivers of employee engagement? Goal setting, employee involvement, organizational justice, organizational comprehension (knowing what’s going on in the company), employee development opportunities, sufficient resources, and an appealing company vision are some of the more commonly mentioned influences. 8  In other words, building an engaged workforce calls on most topics in this book, such as the MARS model (Chapter 2), building affective commitment (Chapter 4), motivation practices (Chapter 5), organizational-level communication (Chapter 9), and leadership (Chapter 12).

Employee Drives and Needs

5-2

To build a more engaged and motivated workforce, we first need to understand where motivation begins, that is, the motivational “forces” or “prime movers” of employee behavior. 9  Our starting point is  drives  (also called primary needs), which we define as hardwired characteristics of the brain that attempt to keep us in balance by correcting deficiencies. Recent neuroscience (brain) research has highlighted the central role of emotions in this process. Specifically, drives produce emotions that energize us to act on our environment. 10  There is no agreed-upon list of human drives, but research has consistently identified several, such as the drive for social interaction, for competence, to comprehend our surroundings, and to defend ourselves against physiological and psychological harm. 11

Drives are innate and universal, which means that everyone has them and they exist from birth. Drives are the starting point of motivation because they generate emotions, which put people in a state of readiness to act on their environment. Cognition (logical thinking) plays an important role in motivation, but emotions are the real sources of energy in human behavior. 12  In fact, both words (emotion and motivation) originate from the same Latin word, movere, which means “to move.”

Exhibit 5.1  illustrates how drives and emotions translate into felt needs and behavior. Drives, and the emotions generated by these drives, form human needs. We define  needs  as goal-directed forces that people experience. They are the motivational forces of emotions channeled toward particular goals to correct deficiencies or imbalances. As one leading neuroscientist explains: “drives express themselves directly in background emotions and we eventually become aware of their existence by means of background feelings.” 13  In other words, needs are the emotions we eventually become consciously aware of.

EXHIBIT 5.1 Drives, Needs, and Behavior

Consider the following example: You arrive at work to discover a stranger sitting at your desk. Seeing this situation produces emotions (worry, curiosity) that motivate you to act. These emotions are generatedPage 124 from drives, such as the drive to defend and drive to comprehend. When strong enough, these emotions motivate you to do something about this situation, such as finding out who that person is and possibly seeking reassurance from coworkers that your job is still safe. In this case, you have a need to make sense of what is going on, to feel secure, and possibly to correct a sense of personal violation. Notice that your emotional reactions to seeing the stranger sitting at your desk represent the forces that move you, and that your logical thinking plays an active role in channeling those emotions toward specific goals.

INDIVIDUAL DIFFERENCES IN NEEDS

Everyone has the same drives; they are hardwired in us through evolution. However, people develop different intensities of needs in a particular situation.  Exhibit 5.1  explains why this difference occurs. The left side of the model shows that the individual’s self-concept (as well as personality and values), social norms, and past experience amplify or suppress emotions, thereby resulting in stronger or weaker needs. 14  People who define themselves as very sociable typically experience a stronger need for social interaction if alone for a while, whereas people who view themselves as less sociable would experience a less intense need to be with others over that time. These individual differences also explain why needs can be “learned” to some extent. Socialization and reinforcement may increase or decrease a person’s need for social interaction, achievement, and so on. We will discuss learned needs later in this section of the chapter.

Individual differences—including self-concept, social norms, and past experience—influence the motivation process in a second way. They regulate a person’s motivated decisions and behavior, as the right side of  Exhibit 5.1  illustrates. Consider the earlier example of the stranger sitting at your desk. You probably wouldn’t walk up to the person and demand that he or she leave; such blunt behavior is contrary to social norms in most cultures. Employees who view themselves as forthright might approach the stranger directly, whereas those who have a different personality and self-view are more likely to first gather information from coworkers before approaching the intruder. In short, your drives (drive to comprehend, to defend, to socialize with others, etc.) and resulting emotions energize you to act, and your self-concept, social norms, and past experience direct that energy toward goal-directed behavior.

Exhibit 5.1  provides a useful template for understanding how drives and emotions are the prime sources of employee motivation and how individual characteristics (self-concept, experience, values) influence goal-directed behavior. You will see pieces of this theory when we discuss four-drive theory, expectancy theory, equity theory, and other concepts in this chapter. The remainder of this section describes theories that try to explain the dynamics of drives and needs.

MASLOW’S NEEDS HIERARCHY THEORY

5-3

The most widely known theory of human motivation is  Maslow’s needs hierarchy theory , which was developed by psychologist Abraham Maslow in the 1940s (see  Exhibit 5.2 ). This model condenses the long list of previously studied drives into five basic categories (which Maslow called primary needs). Maslow organized these categories into a hierarchy that, from lowest to highest, are 15  physiological (need for food, air, water, shelter, etc.), safety (need for security and stability), belongingness/love (need for interaction with and affection from others), esteem (need for self-esteem and social esteem/status), and self-actualization (need for self-fulfillment, realization of one’s potential). Along with these five categories, Maslow identified the desire to know and the desire for aesthetic beauty as two innate drives that do not fit within the hierarchy.

EXHIBIT 5.2 Maslow’s Needs Hierarchy Source: Based on information in A.H. Maslow, “A Theory of Human Motivation,” Psychological Review 50 (1943): 370–96.

Maslow proposed that human beings are motivated by several primary needs (drives) at the same time, but the strongest source of motivation is the lowest unsatisfied need. As the person satisfies a lower-level need, the next higher need in the hierarchy becomes the strongest motivator and remainsPage 125 so even if never satisfied. The exception to this need fulfillment process is self-actualization. People have an ongoing need for self-actualization; it is never really fulfilled. Thus, while the bottom four groups are deficiency needs because they become activated when unfulfilled, self-actualization is known as a growth need because it continues to develop even when temporarily satiated.

In spite of its popularity, Maslow’s needs hierarchy theory has been dismissed by most motivation experts. 16  Other needs hierarchy models have also failed to adequately depict human motivation. Maslow assumed that need fulfillment occurs in the order of the hierarchy, yet some people fulfill their esteem needs before their safety needs, for example. He also assumed that a person’s needs are fulfilled for a long time, whereas need fulfillment actually seems to last for a briefer period of time.

The main problem with needs hierarchy models is that people have different needs hierarchies. Some people place social status at the top of their personal hierarchy; others view personal development and growth above social relations or status. Employee needs are strongly influenced by self-concept, personal values, and personality. 17  People have different hierarchies of values (their values system—see Chapter 2), so they also have parallel differences in their needs hierarchies. If your most important values lean toward stimulation and self-direction, you probably pay more attention to self-actualization needs. 18

Although needs hierarchy theory has failed the reality test, Maslow transformed how we think about human motivation. 19  First, Maslow emphasized that needs should be studied together (holistically) because human behavior is typically initiated by more than one need at the same time. Previously, motivation experts had studied separately each of the dozens of needs and their underlying drives. 20  Second, Maslow recognized that motivation can be shaped by human thoughts (including self-concept, social norms, past experience), whereas earlier motivation experts focused mainly on how instincts motivated behavior. 21  Third, Maslow popularized the concept of self-actualization, suggesting that people are naturally motivated to reach their potential. 22  This positive view of motivation contrasted with previous motivation theories, which focused on need deficiencies such as hunger. By emphasizing motivation through growth and personal development rather than deficiencies, Maslow is considered a pioneer in positive organizational behavior (see Chapter 3).

SELF-ASSESSMENT 5.1: How Strong Are Your Growth Needs?

Many human needs are called “deficiency” needs because they become active only when unfilled. However, Abraham Maslow popularized the idea that people also have “growth needs,” which continue to motivate even when temporarily satiated. Growth needs are associated with self-actualization and intrinsic motivation. People vary in their growth need strength, which is evident from the type of work they prefer. You can discover your growth need strength by locating this self-assessment in Connect if it is assigned by your instructor.

INTRINSIC AND EXTRINSIC MOTIVATION

By extolling the importance of self-actualization, Maslow launched an entirely new way of thinking about human motivation. People experience self-actualization by applying their skills and knowledge, observing how their talents achieve meaningful results, and experiencing personal growth through learning. These are the conditions for intrinsic motivation, which refers to motivation controlled by the individual and experienced from the activity itself. 23  Intrinsic motivation occurs when people seek need fulfillment from doing the activity itself, not as a means to some other outcome. They enjoy applying their talents toward a meaningful task and experiencing progress or success in that task.

Behavior is intrinsically motivated when it is anchored in the innate drives for competence and autonomy. 24  People feel competent when applying their skills and observing positive, meaningful outcomes from those talents. People feel autonomous when their motivation is self-initiated rather than controlled from an external source. The effect of intrinsic motivation and, in particular, the drives for competence and autonomy are apparent at Frucor Beverages. As the opening case study to this chapter described, the New Zealand drinks company encourages staff to try out new ideas and to further develop their potential through new work assignments and other forms of learning.

Intrinsic motivation contrasts with extrinsic motivation, which occurs when people are motivated to receive something that is beyond their personal control for instrumental reasons. In other words, they direct their effort toward a reward controlled by others that indirectly fulfills a need. ExtrinsicPage 127 sources of motivation exist throughout organizations, such as performance bonuses, recognition awards, and frequent reminders from the boss about work deadlines. These are extrinsic motivators because the outcomes (bonus, award, happy boss) are controlled by others and are not need fulfillment in themselves. The recognition award is a means to satisfy status needs, for example.

At Airbnb, the San Francisco–based online vacation accommodation company, employees say they feel intrinsically motivated through autonomy and personal growth. “I feel realized, motivated, welcomed every single day,” exudes an Airbnb employee in Sao Paulo, Brazil. “Lot of autonomy and a great company to work for,” says an employee in the Netherlands. “Fundamentally we believe that engineers having more control over what they work on is more motivating and leads to higher-quality results,” explains Mike Curtis (right in photo), Airbnb’s vice president of engineering. 25 © ReadWrite

Bonuses, awards, and micromanaging bosses are clearly “external” sources, but extrinsic motivation also occurs when employees create their own internal pressure to act in association with external factors. For instance, we often experience an extrinsic motivation to complete our part of a team project because we worry how team members will react if we complete the work poorly or behind schedule. Extrinsic motivation even occurs when employees internalize the value of the external control source. As an example, you might be motivated to provide exemplary customer service because you believe in the company’s customer-friendly values. This motivation is extrinsic because it is controlled by the company’s values, not from the experience of satisfying customers.

Does Extrinsic Motivation Undermine Intrinsic Motivation? There are two contrasting hypotheses about how extrinsic and intrinsic motivation work together. 26  The additive view suggests that someone performing an intrinsically motivating job becomes even more motivated by also receiving an extrinsic source of motivation for that work. The extrinsic motivator energizes the employee more than the intrinsic motivator alone. The contrasting hypothesis is that introducing extrinsic sources of motivation will reduce intrinsic motivation. For example, employees who were energized from the work itself will experience less of that intrinsic motivation when they receive extrinsic rewards such as a performance bonus. The explanation is that introducing extrinsic motivators diminishes the employee’s feeling of autonomy, which is a key source of intrinsic motivation.

Which hypothesis is correct? So far, the research evidence is mixed. 27  Extrinsic motivators may reduce existing intrinsic motivation to some extent and under some conditions, but the effect is often minimal. Extrinsic rewards do not undermine intrinsic motivation when they are unexpected, such as a surprise bonus, when they have low value relative to the intrinsic motivator, and when they are not contingent on specific behavior (such as receiving a fixed salary). But when employees are engaged in intrinsically motivating work, employers should be careful about the potential unintended effect of undermining that motivation with performance bonuses and other sources of extrinsic motivation. 28

LEARNED NEEDS THEORY

Earlier in this chapter, we noted that needs are shaped, amplified, or suppressed through self-concept, social norms, and past experience. Maslow observed that individual characteristics influence the strength of higher-order needs, such as the need to belong. Psychologist David McClelland further investigated the idea that need strength can be altered through social influences. In particular, he recognized that a person’s needs can be strengthened or weakened through reinforcement, learning, and social conditions. McClelland examined three “learned” needs: achievement, affiliation, and power. 29

Need for Achievement People with a strong  need for achievement (nAch)  want to accomplish reasonably challenging goals through their own effort. They prefer working alone rather than in teams, and they choose moderately challenging tasks (i.e., neither too easy nor impossible to complete). People with high nAch desire unambiguous feedback and recognition for their success. Money is a weak motivator, except when it provides feedback and recognition. 30  In contrast, employees with low nAch perform better when money is used as an incentive. Successful entrepreneurs tend to have high nAch, possibly because they establish challenging goals for themselves and thrive on competition. 31

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Need for Affiliation  Need for affiliation (nAff)  refers to a desire to seek approval from others, conform to their wishes and expectations, and avoid conflict and confrontation. People with strong nAff try to project a favorable image of themselves. They tend to actively support others and try to smooth out workplace conflicts. High-nAff employees generally work well in coordinating roles to mediate conflicts and in sales positions where the main task is cultivating long-term relations. However, they tend to be less effective at allocating scarce resources and making other decisions that potentially generate conflict. Leaders and others in decision-making positions require a relatively low need for affiliation so their choices and actions are not biased by a personal need for approval. 33

Need for Power People with a high  need for power (nPow)  want to exercise control over others and are concerned about maintaining their leadership position. They frequently rely on persuasive communication, make more suggestions in meetings, and tend to publicly evaluate situations more frequently. McClelland pointed out that there are two types of nPow. Individuals who enjoy their power for its own sake, use it to advance personal interests, and wear their power as a status symbol have personalized power. Others mainly have a high need for socialized power because they desire power as a means to help others. 34  McClelland argues that effective leaders should have a high need for socialized rather than personalized power. They must have a high degree of altruism and social responsibility and be concerned about the consequences of their own actions on others.

Soon after his arrival as CEO, Dolf van den Brink (in photo) discovered one reason why Heineken USA had been losing market share: Heineken’s staff had low achievement motivation. In response, van den Brink developed a new set of risk-oriented, entrepreneurial values and introduced them at an all-employee pirate-themed event. “We need to be a nimble, humble, agile and an entrepreneurial company again,” explained van den Brink, who is now CEO of Heineken in Mexico. Van den Brink is also a role model for high achievement motivation. He had spent the previous four years doubling Heineken’s market share in the Democratic Republic of the Congo, in spite of militant uprisings. Heineken USA’s market share has since increased and employees say they are much more risk-oriented. 32 © Ivan Stephens/Newscom

SELF-ASSESSMENT 5.2: How Strong Are Your Learned Needs?

Everyone has the same innate drives, but these drives produce different need strengths due to each person’s socialization and personality. David McClelland particularly examined three learned needs, two of which are measured in this self-assessment. You can discover the strength of these learned needs in you by locating this self-assessment in Connect if it is assigned by your instructor.

Changing (Learning) Need Strength Individual needs can be strengthened or weakened (learned), and McClelland developed training programs to change need strength. One program increased achievement motivation by having participants write achievement-oriented stories, practice achievement-oriented behaviors in business games, and meet frequently with a reference group with other trainees to maintain their newfound achievement motivation. 35  These training programs increased achievement motivation by altering participants’ self-concept and reinforcing their achievement experiences. When writing an achievement plan, for example, participants were encouraged (and supported by other participants) to experience the anticipated thrill of succeeding.

FOUR-DRIVE THEORY

One of the central messages of this chapter is that drives generate emotions, which represent the prime movers or sources of motivation for individual behavior. Most organizational behavior theories focus on the cognitive aspects of human motivation. In contrast,  four-drive theory  states that emotions are the source of human motivation and that these emotions are generated through four innate and universal drives. 36  These drives are hardwired in our brains and exist in all human beings. They are also independent of one another; there is no hierarchy of drives. Three drives are proactive—they are regularly activated by our perceptions to seek fulfillment. Only one drive (defend) is reactive—it is triggered by threat.

Four-drive theory includes four fundamental drives identified from earlier psychological, sociological, and anthropological research. These drives are:

· Drive to acquire. This is the drive to seek out, take, control, and retain objects and personal experiences. It is a variation of the need for achievement, competence, status and self-esteem, and to some extent self-actualization. 37  The drive to acquire also motivates competition.

· Drive to bond. This drive is a variation of the need for belonging and affiliation described by Maslow and McClelland. It explains why our self-concept is partly defined by associations with social groups (see Chapter 3). It may also explain why people who lack social contact are more prone to serious health problems. 38  The drive to bond motivates people to cooperate and, consequently, is essential for organizations and societies.

· Drive to comprehend. This is similar to Maslow’s primary need to know. People are inherently curious and need to make sense of their environment and themselves. 39  They are motivated to discover answers to unknown as well as conflicting ideas. To some degree, the drive to comprehend is related to self-actualization.

· Drive to defend. This is the drive to protect ourselves physically, psychologically, and socially. Probably the first drive to develop, it creates a fight-or-flight response in the face of threat to our physical safety, our possessions, our self-concept, our values, and the well-being of others.

How Drives Influence Motivation and Behavior Recall from Chapter 3 that the stimuli received through our senses are quickly and nonconsciously tagged with emotional markers. 40  According to four-drive theory, the four drives determine which emotions are tagged to incoming stimuli. Most of the time, we aren’t aware of our emotional experiences because they are subtle and fleeting. However, emotions do become conscious experiences when they are sufficiently strong or when they significantly conflict with one another.

Four-drive theory applies the model described at the beginning of this section. It states that our social norms, past experience, and personal values direct the motivational force of our emotions to decisions and behavior that potentially reduce that tension (see  Exhibit 5.3 ). In other words, this “mental skill set” develops behavioral intentions that are acceptable to society, consistent with our own moral compass, and have a high probability of achieving the goal of fulfilling those felt needs. 41

EXHIBIT 5.3 Four-Drive Theory of MotivationSource: Based on information in P.R. Lawrence and N. Nohria, Driven: How Human Nature Shapes Our Choices (San Francisco: Jossey-Bass, 2002).

Practical Implications of Four-Drive Theory The main recommendation from four-drive theory is that jobs and workplaces should provide a balanced opportunity to fulfill the four drives. 42  There are really two recommendations here. The first is that the best workplaces help employees fulfill all four drives. Employees continually seek fulfillment of their innate drives, so successful companies provide sufficient rewards, learning opportunities, social interaction, and so forth for all employees.

The second recommendation is that fulfillment of the four drives must be kept in balance; that is, organizations should avoid too much or too little opportunity to fulfill each drive. The reason for this advice is that the four drives counterbalance each other. The drive to bond, which motivates mutual support and cohesion, counterbalances the drive to acquire, which motivatesPage 130 competitiveness. Therefore, an organization that fuels the drive to acquire without the drive to bond may eventually suffer from organizational politics and dysfunctional conflict. The drive to defend, which motivates withdrawal from the unknown, counterbalances the drive to comprehend, which motivates investigation of the unknown. Change and novelty in the workplace will aid the drive to comprehend, but too much of it will trigger the drive to defend to such an extent that employees become territorial and resistant to change. Thus, the workplace should offer enough opportunity to keep all four drives in balance.

Four-drive theory is based on a deep foundation of neuroscientific, psychological, sociological, and anthropological research. The theory explains why needs vary from one person to the next, but avoids the assumption that everyone has the same needs hierarchy. It is holistic (it relates to all drives, not just one or two) and humanistic (it acknowledges the role of human thought and social influences, not just instinct). Even so, the theory is far from complete. Most experts would argue that one or two other drives exist that should be included. Furthermore, social norms, personal values, and past experience probably don’t represent the full set of individual characteristics that translate emotions into goal-directed effort. For example, personality and self-concept probably also moderate the effect of drives and needs on decisions and behavior.

Expectancy Theory of Motivation

5-4

The theories described so far mainly explain what motivates us—the prime movers of employee motivation—but they don’t tell us what we are motivated to do. Four-drive theory recognizes that social norms, personal values, and past experience direct our effort, but it doesn’t offer any detail about what goals we choose or where our effort is directed under various circumstances.

Expectancy theory  offers more detail by predicting the goal-directed behavior where employees are most likely to direct their effort. Essentially, the theory states that work effort is directed toward performance that people believe has the overall highest probability of achieving the desired outcomes. This is the fundamental economic model of deciding which choice offers the highest expected payoff (see Chapter 7). 43  Expectancy theory is aligned more with extrinsic than intrinsic motivation because performance is usually describedPage 131 as instrumental to other outcomes beyond the employee’s control. As illustrated in  Exhibit 5.4 , an individual’s effort level depends on three factors: effort-to-performance (E-to-P) expectancy, performance-to-outcome (P-to-O) expectancy, and outcome valences. Employee motivation is influenced by all three components of the expectancy theory model. If any component weakens, motivation weakens.

EXHIBIT 5.4 Expectancy Theory of Motivation

· E-to-P expectancy. This is the individual’s perception that his or her effort will result in a particular level of performance. In some situations, employees may believe that they can unquestionably accomplish the task (a probability of 1.0). In other situations, they expect that even their highest level of effort will not result in the desired performance level (a probability of 0.0). In most cases, the E-to-P expectancy falls somewhere between these two extremes.

· P-to-O expectancy. This is the perceived probability that a specific behavior or performance level will lead to a particular outcome. In extreme cases, employees may believe that accomplishing a particular task (performance) will definitely result in a particular outcome (a probability of 1.0), or they may believe that successful performance will have no effect on this outcome (a probability of 0.0). More often, the P-to-O expectancy falls somewhere between these two extremes.

· Outcome valences. A valence is the anticipated satisfaction or dissatisfaction that an individual feels toward an outcome. 44  It ranges from negative to positive. (The actual range doesn’t matter; it may be from −1 to +1 or from −100 to +100.) Outcomes have a positive valence when they are consistent with our values and satisfy our needs; they have a negative valence when they oppose our values and inhibit need fulfillment.

EXPECTANCY THEORY IN PRACTICE

One of the appealing characteristics of expectancy theory is that it provides clear guidelines for increasing employee motivation, at least extrinsic motivation. 46  Several practical applications of expectancy theory are listed in  Exhibit 5.5  and described below.

EXHIBIT 5.5 Practical Applications of Expectancy Theory

Increasing E-to-P Expectancies E-to-P expectancies are influenced by the individual’s belief that he or she can successfully complete the task. Some companies increase this can-do attitude by assuring employees that they have the necessary skills and knowledge, clear role perceptions, and necessary resources to reach the desired levels of performance. An important part of this process involves matching employee abilities to job requirements and clearly communicating the tasks required for the job. Similarly, E-to-P expectancies are learned, so behavior modeling and supportive feedback typically strengthen the individual’s belief that he or she is able to perform the task.

Increasing P-to-O Expectancies The most obvious ways to improve P-to-O expectancies are to measure employee performance accurately and distribute more valued rewards to those with higher job performance. P-to-O expectancies are perceptions, so employees also need to believe that higher performance will result in higher rewards. Furthermore, they need to know how that connection occurs, so leaders should use examples, anecdotes, and public ceremonies to illustrate when behavior has been rewarded.

Increasing Outcome Valences One size does not fit all when motivating and rewarding people. The valence of a reward varies from one person to the next because they have different needs. One solution is to individualize rewards by allowing employees to choose the rewards of greatest value to them. When this isn’t possible, companies should ensure that everyone values the reward (i.e., positive valence). Consider the following story: Top-performing employees in one organization were rewarded with a one-week Caribbean cruise with the company’s executive team. Many were likely delighted, but at least one top performer was aghast at the thought of going on a cruise with senior management. “I don’t like schmoozing, I don’t like feeling trapped. Why couldn’t they just give me the money?,” she complained. The employee went on the cruise, but spent most of the time working in her stateroom. 47  Finally, we need to watch out for countervalent outcomes.Page 133 For example, if a company offers individual performance bonuses, it should beware of team norms that discourage employees from working above a minimum standard. These norms and associated peer pressure are countervalent outcomes to the bonus.

Overall, expectancy theory is a useful model that explains how people rationally figure out the best direction, intensity, and persistence of effort. Early studies had difficulty studying expectancy theory, but both logically and empirically the theory seems to predict employee motivation in a variety of situations and cultures. 48  One limitation with expectancy theory, however, is that it mainly explains extrinsic motivation; the model’s features do not fit easily with intrinsic motivation. Another concern is that the theory ignores emotions as a source of motivation. The valence element of expectancy theory captures some of this emotional process, but only peripherally. 49  A third issue is that expectancy theory outlines how expectancies (probability of outcomes) affect motivation, but it doesn’t explain how employees develop these expectancies. Two theories that provide this explanation are organizational behavior modification and social cognitive theory, which we describe next.

Performance-to-Outcome Expectancy: The Missing Link 47

Photo: © alxpin/iStock/Getty Images RF

Organizational Behavior Modification and Social Cognitive Theory

5-5

Expectancy theory states that motivation is determined by employee beliefs about expected performance and outcomes. But how do employees learn these expectancy beliefs? For example, how do they form the impression that a particular work activity is more likely to produce a pay increase or promotion whereas other activities have little effect on pay? Two theories—organizational behavior modification (OB Mod) and social cognitive theory—answer this question by explaining how people learn what to expect from their actions. As such, OB Mod and social cognitive theory supplement expectancy theory by explaining how people learn the expectancies that motivate people.

ORGANIZATIONAL BEHAVIOR MODIFICATION

For most of the first half of the 1900s, the dominant paradigm about managing individual behavior was behaviorism, which argues that a good theory should rely exclusively on behavior and the environment and ignore nonobservable cognitions and emotions. 50  Although behaviorists don’t deny the existence of human thoughts and attitudes, they are unobservable and, therefore, irrelevant to scientific study. A variation of this paradigm, called  organizational behavior modification (OB Mod) , eventually entered organizational studies of motivation and learning. 51

A-B-Cs of OB Mod The core elements ofPage 134 OB Mod are depicted in the A-B-C model shown in  Exhibit 5.6 . Essentially, OB Mod attempts to change behavior (B) by managing its antecedents (A) and consequences (C). 52  Consequences are events following a particular behavior that influence its future occurrence. Consequences include receiving words of thanks from coworkers after assisting them, preferred work schedules after being with the company longer than the average employee, and useful information on your smartphone after checking for new messages. Consequences also include no outcome at all, such as when your boss never says anything to you about how well you have been serving customers.

EXHIBIT 5.6 A-B-Cs of Organizational Behavior ModificationSources: Adapted from T.K. Connellan, How to Improve Human Performance (New York: Harper & Row, 1978), 50; F. Luthans and R. Kreitner, Organizational Behavior Modification and Beyond (Glenview, IL: Scott, Foresman, 1985), 85–88.

Antecedents are events preceding the behavior, informing employees that a particular action will produce specific consequences. An antecedent could be a sound from your smartphone signaling that a text message has arrived. Or it could be your supervisor’s request to complete a specific task by tomorrow. Notice that antecedents do not cause behavior. The sound from your smartphone doesn’t cause you to open the text message. Rather, the sound (antecedent) is a cue signaling that if you look at your phone messages (behavior), you will find a new message with potentially useful information (consequence).

Contingencies and Schedules of Reinforcement OB Mod identifies four types of consequences, called the contingencies of reinforcement. 53  Positive reinforcement occurs when the introduction of a consequence increases or maintains the frequency or future probability of a specific behavior. Receiving praise from coworkers is an example of positive reinforcement because the praise usually maintains or increases your likelihood of helping them in future. Punishment occurs when a consequence decreases the frequency or future probability of a specific behavior occurring. Most of us would consider being demoted or criticized by our coworkers as forms of punishment. A third type of consequence is extinction. Extinction consequence occurs when the target behavior decreases because no consequence follows it. For instance, research suggests that performance tends to decline when managers stop congratulating employees for their good work. 54

The fourth consequence in OB Mod, called negative reinforcement, is often confused with punishment. It’s actually the opposite; negative reinforcement occurs when the removal or avoidance of a consequence increases or maintains the frequency or future probability of a specific behavior. It is usually the removal of punishment. For example, managers apply negative reinforcement when they stop criticizing employees whose substandard performance has improved.

global connections 5.2

AirBaltic Motivates Employee Involvement and Learning with Gamification

AirBaltic recently experimented with gamification using an online platform that motivated employees to learn about current operational activities and provide opinions on those business decisions. The platform, called Forecaster, operated as a type of stock market whereby employees at the Latvian-based airline used virtual money to buy and sell virtual shares in specific “projects.”

Most projects were near-term forecasts or plans posted by the department responsible for those activities. For example, one project was the company’s estimated customer demand for the airline’s bus service next month. Another project tested employee opinions about the commercial success of a new flight destination. Players won virtual money by owning shares in projects that were accurate or otherwise successful. The top four winners each month received prizes. Stock markets reinforce and motivate behavior using organizational behavior modification principles.

Almost 30 percent (300 people) of AirBaltic’s staff voted (bought and sold virtual shares) and commented on more than 50 projects. The airline also launched an online game to recruit cabin crew and one that motivates customers to do physical exercise within 24 hours after a flight. “The most engaging setting is a game environment,” observes Daiga Ergle (shown in photo), the AirBaltic executive who is in charge of employee experiences at the airline. “People are the most engaged when feeling playful.” 55

© AirBaltic Corporation

Which of these four consequences works best? In most situations, positive reinforcement should follow desired behaviors, and extinction (do nothing) should follow undesirable behaviors. Positive reinforcement is preferred because it leverages the power of positive organizational behavior; focusing on the positive rather than negative aspects of life will improve organizational success and individual well-being (see Chapter 3). In contrast, punishment and negative reinforcement generate negative emotions and attitudes toward the punisher (e.g., supervisor) and organization. However, punishment (dismissal, suspension, demotion, etc.) may be necessary for extreme behaviors, such as deliberately hurting a coworker or stealing inventory. Indeed, research suggests that, under some conditions, punishment maintains a sense of fairness among those affected by or are aware of the employee’s indiscretion. 56

Along with the four consequences, OB Mod considers the frequency and timing of these reinforcers (called the schedules of reinforcement). 57  The most effective reinforcement schedule for learning new tasks is continuous reinforcement—providing positive reinforcement after every occurrence of the desired behavior. Aside from learning, the best schedule for motivating people is a variable ratio schedule in which employee behavior is reinforced after a variable number of times. Salespeople experience variable ratio reinforcement because they make a successful sale (the reinforcer) after a varying number of client calls. The variable ratio schedule makes behavior highly resistant to extinction because the reinforcer is never expected at a particular time or after a fixed number of accomplishments.

Evaluating OB Mod Everyone uses organizational behavior modification principles in one form or another to motivate others. We thank people for a job well done, are silent when displeased, and sometimes try to punish those who go against our wishes. OB Mod also occurs in various formal programs to reduce absenteeism, improve task performance, encourage safe work behaviors, and have a healthier lifestyle. An innovative and increasingly popularPage 136 behavior modification strategy relies on “gamification”—reinforcing behavior through online games in which employees earn “badges” and compete for top positions on leader boards. 58

In spite of its widespread use, organizational behavior modification has a number of limitations. One limitation is “reward inflation,” in which the reinforcer is eventually considered an entitlement. For this reason, most OB Mod programs must run infrequently and for a short duration. Another concern is that the variable ratio schedule of reinforcement tends to create a lottery-style reward system, which might be viewed as too erratic for formal rewards and is unpopular to people who dislike gambling. Probably the most significant problem is OB Mod’s radical view that behavior is learned only through personal interaction with the environment. 59  This view is no longer accepted; instead, experts recognize that people also learn and are motivated by observing others and inferring possible consequences of their actions. This learning process is explained by social cognitive theory.

SOCIAL COGNITIVE THEORY

Social cognitive theory  states that much learning occurs by observing and modeling others as well as by anticipating the consequences of our behavior. 60  There are several pieces to social cognitive theory, but the three most relevant to employee motivation are learning behavior consequences, behavior modeling, and self-regulation.

Learning Behavior Consequences People learn the consequences of behavior by observing or hearing about what happened to other people, not just by directly experiencing the consequences. 61  Hearing that a coworker was fired for being rude to a client increases your belief that rude behavior will result in being fired. In the language of expectancy theory, learning behavior consequences changes a person’s perceived P-to-O probability. Furthermore, people logically anticipate consequences in related situations. For instance, the story about the fired employee might also strengthen your P-to-O expectancy that being rude toward coworkers and suppliers (not just clients) will get you fired.

Behavior Modeling Along with observing others, people learn by imitating and practicing their behaviors. 62  Direct sensory experience helps us acquire tacit knowledge and skills, such as the subtle person–machine interaction while driving a vehicle. Behavior modeling also increases self-efficacy (see Chapter 3) because people gain more self-confidence after observing others and performing the task successfully themselves. Self-efficacy particularly improves when observers are similar to the model in age, experience, gender, and related features.

Self-Regulation An important feature of social cognitive theory is that human beings set goals and engage in other forms of intentional, purposive action. They establish their own short- and long-term objectives, choose their own standards of achievement, work out a plan of action, consider backup alternatives, and have the forethought to anticipate the consequences of their goal-directed behavior. Furthermore, people self-regulate by engaging in  self-reinforcement ; they reward and punish themselves for exceeding or falling short of their self-set standards of excellence. 63  For example, you might have a goal of completing the rest of this chapter, after which you reward yourself by having a snack. Raiding the refrigerator is a form of self-induced positive reinforcement for completing this reading assignment.

OB Mod and social cognitive theory explain how people learn probabilities of successful performance (E-to-P expectancies) as well as probabilities of various outcomes from that performancePage 137 (P-to-O expectancies). As such, these theories explain motivation through their relationship with expectancy theory of motivation, described earlier. Elements of these theories also help us understand other motivation processes. For instance, self-regulation is the cornerstone of motivation through goal setting and feedback, which we discuss next.

Goal Setting and Feedback

5-6

CalPERS—the California Public Employees’ Retirement System—has challenging goals for staff at its customer contact center in Sacramento. 64  The organization aims to have 95 percent of client calls answered within 2.5 minutes. It also wants customers put on hold for less than 2.5 minutes. Another goal is that less than 5 percent of CalPERS clients hang up before the call is handled by someone at the contact center (called the abandonment rate). Along with these specific goals, the organization keeps track of how many calls are received (about 650,000 per year), how many callers are waiting, and how long each call takes (between 6 and 7 minutes, on average). CalPERS employees not only know these goals, they probably have some form of visual feedback. Many contact centers in other organizations have large electronic screens showing statistics for these key performance indicators.

Customer contact centers partly motivate employees through  goal setting , which is the process of motivating employees and clarifying their role perceptions by establishing performance objectives. Goal setting potentially improves employee performance in two ways: (1) by amplifying the intensity and persistence of effort and (2) by giving employees clearer role perceptions so their effort is channeled toward behaviors that will improve work performance. Goal setting is more complex than simply telling someone to “do your best.” Effective goals have several specific characteristics. 65  One popular acronym—SMARTER—captures these characteristics fairly well:66

· Specific. Goals lead to better performance when they are specific. Specific goals state what needs to be accomplished, how it should be accomplished, and where, when, and with whom it should be accomplished. Specific goals clarify performance expectations, so employees can direct their effort more efficiently and reliably.

· Measurable. Goals need to be measurable because motivation occurs when people have some indication of their progress and achievement of those goals. This measurement ideally includes how much (quantity), how well (quality), and at what cost the goal was achieved. Be aware, however, that some types of employee performance are difficult to measure, and they risk being neglected in companies preoccupied with quantifiable outcomes. 67

· Achievable. One of the trickiest aspects of goal setting is developing goals that are sufficiently but not overly challenging. 68  Easy goals result in performance that is well below the employee’s potential. Yet, goals that are too challenging may also lead to reduced effort if employees believe there is a low probability of accomplishing them (i.e., low E-to-P expectancy). Recent studies have also found that very difficult goals increase the probability that employees will engage in unethical behavior to achieve them. 69

· Relevant. Goals need to be relevant to the individual’s job and within his or her control. For example, a goal to reduce waste materials would have little value if employees don’t have much control over waste in the production process.

· Time-framed. Goals need a due date. They should specify when the objective should be completed or when it will be assessed for comparison against a standard.

· Exciting. Goals tend to be more effective when employees are committed to them, not just compliant. Challenging goals tend to be more exciting for most (but not all) employees because they are more likely to fulfill a person’s growth needs when the goal is achieved. Goal commitment also increases when employees are involved in goal setting. 70

· Reviewed. The motivational value of goal setting depends on employees receiving feedback about reaching those goals. 71  Effective feedback requires measurement, which we discussed earlier in this list, but it also includes reflecting or discussing with others your goal progress and accomplishment. Reviewing goal progress and achievement helps employees redirect their effort. It is also a potential source of recognition that fulfills growth needs.

SELF-ASSESSMENT 5.3: What Is Your Goal Orientation?

Everyone sets goals for themselves, but people differ in the nature of those goals. Some view goals as challenges that assist learning. Others see goals as demonstrations of one’s competence. Still others view goals as threatening one’s image if they are not achieved. You can discover your dominant goal orientation by locating this self-assessment in Connect if it is assigned by your instructor.

CHARACTERISTICS OF EFFECTIVE FEEDBACK

Feedback—information that lets us know whether we have achieved the goal or are properly directing our effort toward it—is a critical partner with goal setting. Feedback contributes to motivation and performance by clarifying role perceptions, improving employee skills and knowledge, and strengthening self-efficacy. 72  Effective feedback has many of the same characteristics as effective goal setting. It should be specific and relevant, that is, the information should refer to specific metrics (e.g., sales increased by 5 percent last month) and to the individual’s behavior or outcomes within his or her control. Feedback should also be timely; the information should be available soon after the behavior or results occur so that employees see a clear association between their actions and the consequences. Feedback should also be credible. Employees are more likely to accept this information from trustworthy and believable sources.

One other important characteristic of effective feedback is that it should be sufficiently frequent. How frequent is “sufficiently”? The answer depends on at least two things. One consideration is the employee’s knowledge and experience with the task. Employees working on new tasks should receive more frequent feedback because they require more behavior guidance and reinforcement. Employees who perform familiar tasks can receive less frequent feedback. The second factor is how long it takes to complete the task (i.e., its cycle time). Less frequent feedback usually occurs in jobs with a long cycle time (e.g., executives and scientists) because indicators of goal progress and accomplishment in these jobs are less frequent than in jobs with a short cycle time (e.g., grocery store cashiers).

Adobe Systems Incorporated realized that annual performance reviews didn’t offer meaningful feedback, so the San Jose, California, software company replaced them with “Check-Ins.” With agreed performance expectations, the manager and employee have timely, constructive, and sufficiently frequent check-in sessions. “We want people to be getting feedback on their performance against those expectations in real time (not just once a year),” says Donna Morris, Adobe’s senior vice president of People & Places. Check-ins are constructive future-focused discussions about the employee’s personal development, but they sometimes include difficult conversations about poor performance. “Because you’re in the moment and you’re talking about things that are appropriate right then and there, [a check-in] gives you an opportunity to have a much more honest, more candid conversation,” observes Eric Cox, Adobe’s senior director of Global Strategy and Operations. 73 © Eric Audras/PhotoAlto/Getty Images RF

Feedback through Strengths-Based Coaching Forty years ago, PeterPage 139 Drucker observed that leaders are more effective when they focus on strengths rather than weaknesses. “The effective executive builds on strengths—their own strengths, the strengths of superiors, colleagues, subordinates; and on the strength of the situation,” wrote the late management guru. 74  Rox Ltd. is one of many organizations to apply this strengths-based perspective to employee feedback. “It’s important to reward and encourage strengths. Instead of looking at weakness, look at areas for development,” says Kyron Keogh, cofounder of the award-winning luxury retail jewelry chain headquartered in Glasgow, Scotland. “It’s vital to ensure that staff stay motivated and upbeat in a sales environment.” 75

This positive approach to feedback is the essence of  strengths-based coaching  (also known as appreciative coaching)—maximizing employees’ potential by focusing on their strengths rather than weaknesses. 76  In strengths-based coaching, employees describe areas of work where they excel or demonstrate potential. The coach guides this discussion by asking exploratory questions that help employees discover ways to build on these strengths. Situational barriers, as well as strategies to overcome those barriers, are identified to further support the employee’s potential.

Strengths-based coaching is more motivating than traditional performance reviews because employees seek out feedback about their strengths, whereas they either become defensive about negative feedback or allow that information to weaken their self-efficacy. Thus, strengths-based feedback is consistent with the process of self-enhancement (see Chapter 3). Strengths-based coaching also recognizes that poor performance on some tasks is due more to motivation than ability. People can learn new skills throughout their working lives, but their weaker performance on some tasks is often due to lower motivation associated with their personality, interests, and preferences. These individual differences become quite stable fairly early in a person’s career. 77

In spite of these research observations, most bosses focus their attention on tasks that employees are performing poorly. After the initial polite compliments, many coaching or performance feedback sessions analyze the employee’s weaknesses, including determining what went wrong and what the employee needs to do to improve. These inquisitions sometimes strain relations between employees and their bosses or the overall organization. As mentioned, negative feedback can also undermine self-efficacy, thereby making the employee’s performance worse rather than better. By focusing on weaknesses, companies fail to realize the full potential of the employee’s strengths. 78

SOURCES OF FEEDBACK

Feedback can originate from nonsocial or social sources. Nonsocial sources provide feedback without someone communicating that information. Corporate intranets allow many executives to receive feedback instantaneously on their computer, usually in the form of graphic output on an executive dashboard. Employees at contact centers view electronic displays showing how many callers are waiting and the average time they have been waiting.

Some companies set up multisource (360-degree) feedback that, as the name implies, is information about an employee’s performance collected from a full circle of people, including subordinates, peers, supervisors, and customers. Multisource feedback tends to provide more complete and accurate information than feedback from a supervisor alone. It is particularly useful when the supervisor is unable to observe the employee’s behavior or performance throughout the year. Lower-level employees also feel a greater sense of fairness and open communication when they are able to provide upward feedback about their boss’s performance. 79  However, multisource feedback can be expensive and time-consuming. It also tends to produce ambiguous and conflicting feedback because feedback from different sources is often inconsistent. A third concern is that peers may provide inflated rather than accurate feedback to minimize interpersonal conflict. A fourth issue is that employees experience a stronger emotional reaction when they receivePage 140 critical feedback from many people rather than from just one person (such as the boss).

With so many sources of feedback—multisource feedback, executive dashboards, customer surveys, equipment gauges, nonverbal communication from your boss—which one works best under which conditions? The preferred feedback source depends on the purpose of the information. Feedback from nonsocial sources, such as computer printouts or feedback directly from the job, is better when employees need to learn about goal progress and accomplishment. This is because information from nonsocial sources is considered more accurate than information from social sources. Negative feedback from nonsocial sources is also less damaging to self-esteem. In contrast, social sources tend to delay negative information, leave some of it out, and distort the bad news in a positive way. 80  Employees should receive some positive feedback from social sources. It feels better to have coworkers say that you are performing the job well than to discover this from data on an impersonal computer screen.

EVALUATING GOAL SETTING AND FEEDBACK

Goal setting represents one of the “tried-and-true” theories in organizational behavior, so much so that it is rated by experts as one of the top OB theories in terms of validity and usefulness. 81  In partnership with goal setting, feedback also has an excellent reputation for improving employee motivation and performance. Putting goal setting into practice can be challenging, however. 82  As mentioned earlier, goal setting tends to focus employees on a narrow subset of measurable performance indicators while ignoring aspects of job performance that are difficult to measure. The saying “What gets measured, gets done” applies here. Another concern is that very difficult goals may motivate some people to engage in unethical behavior to achieve those goals. Difficult goals are also stressful, which can undermine overall job performance.

Yet another problem is that goal setting tends to interfere with the learning process in new, complex jobs. Therefore, setting performance goals is effective in established jobs but should be avoided where an intense learning process is occurring. A final issue is that when goal achievement is tied to financial rewards, many employees are motivated to set easy goals (while making the boss think they are difficult) so that they have a higher probability of receiving the bonus or pay increase. As a former Ford Motor Company CEO once quipped: “At Ford, we hire very smart people. They quickly learn how to make relatively easy goals look difficult!” 83

Organizational Justice

5-7

Treating employees fairly is both morally correct and good for employee motivation, loyalty, and well-being. Yet feelings of injustice are regular occurrences in the workplace. To minimize these incidents, we need to first understand that there are two forms of organizational justice: distributive justice and procedural justice. 84   Distributive justice  refers to perceived fairness in the outcomes we receive compared to our contributions and the outcomes and contributions of others.  Procedural justice  refers to fairness of the procedures used to decide the distribution of resources.

EQUITY THEORY

At its most basic level, the employment relationship is about employees exchanging their time, skills, and behavior for pay, fulfilling work, skill development opportunities, and so forth. What is considered “fair” in this exchange relationship varies with each person and situation. 86  An equality principle operates when we believe that everyone in the group should receive the same outcomes, such as when everyone gets subsidized meals in the company cafeteria. The need principle is applied when we believe that those with the greatest need should receive more outcomes than others with less need. This occurs, for instance, when employees get paid time off to recover from illness. The equity principle infers that people should be paid in proportion to their contribution. The equity principle is the most common distributive justice rule in organizational settings, so let’s look at it in more detail.

· debating point

· DOES EQUITY MOTIVATE MORE THAN EQUALITY? 85

· It seems obvious that employees with higher performance, skills, or other contributions to the organization should receive more generous pay and other rewards. Increasing the pay differential (wage dispersion) between high and low contributors should boost employee motivation to achieve a higher standard of performance. It should also increase company performance by motivating the top performers to stay and the bottom performers to leave. A large wage dispersion is also consistent with justice and fairness. Differentiating rewards based on employee performance, skills, and other forms of contribution is consistent with the principle of meritocracy. It is also consistent with the principle of justice, which states that those who contribute more should receive more in return (Chapter 2). Furthermore, performance-based pay is one of the pillars of high-performance work practices (see Chapter 1).

· But workplaces that have large wage dispersions might not be receiving the performance dividends they expect. Several (but not all) studies have found that sports teams with relatively small pay differences among team members perform better than sport teams with relatively high pay differences. Teams that pay huge salaries or bonuses to stars do not score more points or win more games. Also, turnover among players and managers tends to increase with the size of the wage dispersion. One recent study extended these observations to all industries. Companies that have a higher dispersion of wage increases (larger increases to higher-paid staff) perform worse than companies with an equal dispersion of wage increases. Another study reported that information technology companies with larger salary differences among top management teams had worse shareholder returns and market-to-book value compared to IT companies with less pay inequality.

· Why would larger pay ranges undermine rather than enhance employee and organizational performance? One reason is that pay differences produce status differences, which can undermine cooperation among employees. A second reason is that large pay differences might increase (rather than decrease) feelings of injustice. Most people think they are above average, so large pay differences clearly place many employees below their self-evaluations. Also, employees tend to underestimate the contribution of higher-paid coworkers and assume those higher-paid coworkers also receive other rewards (such as preferential treatment). In short, lower-paid employees often believe higher-paid employees are overpaid, which reduces the lower-paid workers’ motivation and performance.

· Feelings of equity are explained by  equity theory , which says that employees determine feelings of equity by comparing their own outcome–input ratio to the outcome–input ratio of some other person. 87  As  Exhibit 5.7  illustrates, the outcome–input ratio is the value of the outcomes you receive divided by the value of the inputs you provide in the exchange relationship. Inputs include things such as skill, effort, reputation, performance, experience, and hours worked. Outcomes are what employees receive from the organization such as pay, promotions, recognition, interesting jobs, and opportunities to improve one’s skills and knowledge.

·

·

· EXHIBIT 5.7 Equity Theory Model

· Equity theory states that we compare our outcome–input ratio with that of a comparison other. 88  The comparison other might be another person or group of people in other jobs (e.g., comparing your pay with the CEO’s pay) or another organization. Some research suggests that employees frequently collect information on several referents to form a “generalized” comparison other. 89  For the most part, however, the comparison other varies from one person to the next and is not easily identifiable.

· The comparison of our own outcome–input ratio with the ratio of someone else results in perceptions of equity, underreward inequity, or overreward inequity. In the equity condition, people believe thatPage 142 their outcome–input ratio is similar to the ratio of the comparison other. In the underreward inequity situation, people believe their outcome–input ratio is lower than the comparison other’s ratio. In the overreward inequity condition, people believe their ratio of outcomes–inputs is higher than the comparison other’s ratio.

· Inequity and Employee Motivation How do perceptions of equity or inequity affect employee motivation? The answer is illustrated in  Exhibit 5.8 . When people believe they are under- or overrewarded, they experience negative emotions (called inequity tension). 90  As we have pointed out throughout this chapter, emotions are the engines of motivation. In the case of inequity, people are motivated to reduce the emotional tension. Most people have a strong emotional response when they believe a situation is unfair, and this emotion nags at them until they take steps to correct the perceived inequity.

· EXHIBIT 5.8 Motivational Effects of Inequity Perceptions

· There are several ways to try to reduce the inequity tension. 91  Let’s consider each of these in the context of underreward inequity. One action is to reduce our inputs so the outcome–input ratio is similar to the higher-paid coworker. Some employees do this by working more slowly, offering fewer suggestions, and engaging in less organizational citizenship behavior. A secondPage 143 action is to increase our outcomes. Some people who think they are underpaid ask for a pay raise. Others make unauthorized use of company resources. A third behavioral response is to increase the comparison other’s inputs. We might subtly ask the better-paid coworker to do a larger share of the work, for instance. A fourth action is to reduce the comparison other’s outcomes. This might occur by ensuring that the coworker gets less desirable jobs or working conditions. Another action, although uncommon, is to ask the company to reduce the coworker’s pay so it is the same as yours.

· Barbara Smaller/The New Yorker Collection/The Cartoon Bank

· A fifth action is perceptual rather than behavioral. It involves changing our beliefs about the situation. For example, we might believe that the coworker really is doing more (e.g., working longer hours) for that higher pay. Alternatively, we might change our perceptions of the value of some outcomes. We might initially believe it is unfair that a coworker gets more work-related travel than we do, but later we conclude that this travel is more inconvenient than desirable. A sixth action to reduce the inequity tension is to change the comparison other. Rather than compare ourself with the higher-paid coworker, we might increasingly compare ourself with a friend or neighbor who works in a similar job. Finally, if the inequity tension is strong enough and can’t be reduced through other actions, we might leave the field. This occurs by moving to another department, joining another company, or keeping away from the work site where the overpaid coworker is located.

· People who feel overreward inequity would reverse these actions. Some overrewarded employees reduce their feelings of inequity by working harder; others encourage the underrewarded coworker to work at a more leisurely pace. A common reaction, however, is that the overrewarded employee changes his or her perceptions to justify the more favorable outcomes, such as believing the assigned work is more difficult or his or her skills are more valuable than the lower-paid coworker’s skills. As Pierre Burton, the late journalist and popular history author, once said: “I was underpaid for the first half of my life. I don’t mind being overpaid for the second half.” 92

· Evaluating Equity Theory Equity theory is widely studied and quite successful at predicting various situations involving feelings of workplace injustice. 93  However, it isn’t so easy to put into practice because the equity theory model doesn’t identify the comparison other and doesn’t indicate which inputs or outcomes are most valuable to each employee. The best solution here is for leaders to know their employees well enough to minimize the risk of inequity feelings. Open communication is also key, enabling employees to let decision makers know when they believe decisions are unfair. A second problem is that equity theory accounts for only some of our feelings of fairness or justice in the workplace. Procedural justice is at least as important as distributive justice.

·

· SELF-ASSESSMENT 5.4: How Sensitive Are You to Inequities?

· Correcting feelings of inequity is one of the most powerful motivating forces in the workplace. But people react differently to equitable and inequitable situations based on their equity sensitivity. Equity sensitivity refers to a person’s outcome–input preferences and reaction to various outcome–input ratios when compared to other people. You can discover your level of equity sensitivity by locating this self-assessment in Connect if it is assigned by your instructor.

· PROCEDURAL JUSTICE

· At the beginning of this section we defined two main forms of organizational justice: distributive and procedural. Procedural justice refers to fairness of the procedures used to decide the distribution of resources.94 In other words, people evaluate fairness of the distribution of resources (distributive justice) as well as fairness of the conditions determining that distribution and its possible alteration (procedural justice).

·

· There are several ways to improve procedural justice.95 A good way to start is by giving employees “voice” in the process; encourage them to present their facts and perspectives on the issue. Voice also provides a “value-expressive” function; employees tend to feel better after having an opportunity to speak their mind. Procedural justice is also higher when the decision maker is perceived as unbiased, relies on complete and accurate information, applies existing policies consistently, and has listened to all sides of the dispute. If employees still feel unfairness in the allocation of resources, these feelings may dissipate if the company has an appeal process in which the decision is reviewed by a higher level of management.

·

· Finally, people usually feel less injustice when they are given a full explanation of the decision and they are treated with respect throughout the complaint process. If employees believe a decision is unfair, refusing to explain how the decision was made could fuel their feelings of inequity. For instance, one study found that nonwhite nurses who experienced racism tended to file grievances only after experiencing disrespectful treatment in their attempt to resolve the racist situation. Another study reported that employees with repetitive strain injuries were more likely to file workers’ compensation claims after experiencing disrespectful behavior from management. A third study noted that employees have stronger feelings of injustice when the manager has a reputation of treating people unfairly most of the time.96

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· Consequences of Procedural Injustice Procedural justice has a strong influence on a person’s emotions and motivation. Employees tend to experience anger toward the source of the injustice, which generates various response behaviors that scholars categorize as either withdrawal or aggression.97 Notice how these actions are similar to the fight-or-flight responses described earlier in the chapter regarding situations that activate our drive to defend. Research suggests that being treated unfairly threatens our self-esteem and social status, particularly when others see that we have been unjustly treated. Employees retaliate to restore their self-esteem and reinstate their status and power in the relationship with the perpetrator of the injustice. Employees also engage in these counterproductive behaviors to educate the decision maker, thereby trying to minimize the likelihood of future injustices.98

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· chapter summary

· 5-1 Define employee engagement.

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· Employee engagement is defined as an individual’s emotional and cognitive (rational) motivation, particularly a focused, intense, persistent, and purposive effort toward work-related goals. It is emotional involvement in, commitment to, and satisfaction with the work, as well as a high level of absorption in the work and sense of self-efficacy about performing the work.

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· 5-2 Explain how drives and emotions influence employee motivation.

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· Motivation consists of the forces within a person that affect his or her direction, intensity, and persistence of voluntary behavior in the workplace. Drives (also called primary needs) are neural states that energize individuals to correct deficiencies or maintain an internal equilibrium. They generate emotions, which put us in a state of readiness to act. Needs—goal-directed forces that people experience—are shaped by the individual’s self-concept (including personality and values), social norms, and past experience.

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· 5-3 Summarize Maslow’s needs hierarchy, and discuss the employee motivation implications of intrinsic versus extrinsic motivation, learned needs theory, and four-drive theory.

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· Maslow’s needs hierarchy groups needs into a hierarchy of five levels and states that the lowest needs are initially most important but higher needs becomePage 145 more important as the lower ones are satisfied. Although very popular, the theory lacks research support, mainly because it wrongly assumes that everyone has the same hierarchy. The emerging evidence suggests that needs hierarchies vary from one person to the next, according to their personal values.

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· Intrinsic motivation refers to motivation controlled by the individual and experienced from the activity itself, whereas extrinsic motivation occurs when people are motivated to receive something that is beyond their personal control for instrumental reasons. Intrinsic motivation is anchored in the innate drives for competence and autonomy. Some research suggests that extrinsic motivators may reduce existing intrinsic motivation to some extent and under some conditions, but the effect is often minimal.

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· McClelland’s learned needs theory argues that needs can be strengthened through learning. The three needs studied in this respect have been need for achievement, need for power, and need for affiliation. Four-drive theory states that everyone has four innate drives—acquire, bond, comprehend, and defend. These drives activate emotions that people regulate through social norms, past experience, and personal values. The main recommendation from four-drive theory is to ensure that individual jobs and workplaces provide a balanced opportunity to fulfill the four drives.

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· 5-4 Discuss the expectancy theory model, including its practical implications.

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· Expectancy theory states that work effort is determined by the perception that effort will result in a particular level of performance (E-to-P expectancy), the perception that a specific behavior or performance level will lead to specific outcomes (P-to-O expectancy), and the valences that the person feels for those outcomes. The E-to-P expectancy increases by improving the employee’s ability and confidence to perform the job. The P-to-O expectancy increases by measuring performance accurately, distributing higher rewards to better performers, and showing employees that rewards are performance-based. Outcome valences increase by finding out what employees want and using these resources as rewards.

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· 5-5 Outline organizational behavior modification (OB Mod) and social cognitive theory, and explain their relevance to employee motivation.

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· Organizational behavior modification takes the behaviorist view that the environment teaches people to alter their behavior so that they maximize positive consequences and minimize adverse consequences. Antecedents are environmental stimuli that provoke (not necessarily cause) behavior. Consequences are events following behavior that influence its future occurrence. Consequences include positive reinforcement, punishment, negative reinforcement, and extinction. The schedules of reinforcement also influence behavior.

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· Social cognitive theory states that much learning and motivation occurs by observing and modeling others, as well as by anticipating the consequences of our behavior. It suggests that people typically infer (rather than only directly experience) cause-and-effect relationships, anticipate the consequences of their actions, develop self-efficacy in performing behavior, exercise personal control over their behavior, and reflect on their direct experiences. The theory emphasizes self-regulation of individual behavior, including self-reinforcement, which is the tendency of people to reward and punish themselves as a consequence of their actions.

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· 5-6 Describe the characteristics of effective goal setting and feedback.

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· Goal setting is the process of motivating employees and clarifying their role perceptions by establishing performance objectives. Goals are more effective when they are SMARTER (specific, measurable, achievable, relevant, time-framed, exciting, and reviewed). Effective feedback is specific, relevant, timely, credible, and sufficiently frequent. Strengths-based coaching (also known as appreciative coaching) maximizes employee potential by focusing on their strengths rather than weaknesses. Employees usually prefer nonsocial feedback sources to learn about their progress toward goal accomplishment.

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· 5-7 Summarize equity theory and describe ways to improve procedural justice.

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· Organizational justice consists of distributive justice (perceived fairness in the outcomes we receive relative to our contributions and the outcomes and contributions of others) and procedural justice (fairness of the procedures used to decide the distribution of resources). Equity theory has four elements: outcome–input ratio, comparison other, equity evaluation, and consequences of inequity. The theory also explains what people are motivated to do when they feel inequitably treated. Companies need to consider not only equity in the distribution of resources but also fairness in the process of making resource allocation decisions.

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· key terms

· distributive justice, p. 140

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· drives, p. 123

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· employee engagement, p. 122

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· equity theory, p. 141

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· expectancy theory, p. 130

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· four-drive theory, p. 129

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· goal setting, p. 137

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· Maslow’s needs hierarchy theory, p. 124

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· motivation, p. 121

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· need for achievement (nAch), p. 127

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· need for affiliation (nAff), p. 128

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· need for power (nPow), p. 128

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· needs, p. 123

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· organizational behavior modification (OB Mod), p. 133

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· procedural justice, p. 140

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· self-reinforcement, p. 136

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· social cognitive theory, p. 136

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· strengths-based coaching, p. 139

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· Page 146

· critical thinking questions

· Four-drive theory is conceptually different from Maslow’s needs hierarchy in several ways. Describe these differences. At the same time, needs are based on drives, so the four drives should parallel the seven needs that Maslow identified (five in the hierarchy and two additional needs). Map Maslow’s needs onto the four drives in four-drive theory.

· Learned needs theory states that needs can be strengthened or weakened. How might a company strengthen the achievement needs of its management team?

· Everyone who works as an electronic game developer has extrinsic sources of motivation, and most also experience some degree of intrinsic motivation. Considering the dynamics of extrinsic and intrinsic motivation, what should companies in this industry do to ensure that their game developers are highly motivated at work?

· You just closed a deal with an organizational client, and this helps you achieve the target that was set for you by the unit. Use expectancy theory to discuss how the events that will follow may increase your motivation and engagement.

· Describe a situation in which you used organizational behavior modification to motivate someone’s behavior. What specifically did you do? What was the result?

· Using your knowledge of the characteristics of effective goals, establish two meaningful goals related to your performance in this class.

· Most people think they are “worth more” than they are paid. Furthermore, most employees seem to feel that they exhibit better leadership skills and interpersonal skills than others. Please comment on this human tendency.

· A large organization has hired you as a consultant to identify day-to-day activities for middle managers to minimize distributive and procedural injustice. The company explains that employees have complained about distributive injustice because they have different opinions about what is fair (equity, equality, need) and what outcomes and inputs have the greatest value. They also experience procedural injustice due to misperceptions and differing expectations. Given these ambiguities, what would you recommend to middle managers?

· CASE STUDY: PREDICTING HARRY’S WORK EFFORT

· By Robert J. Oppenheimer, Concordia University

·

· PURPOSE This exercise is designed to help you understand expectancy theory and how its elements affect a person’s level of effort toward job performance.

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· INSTRUCTIONS This exercise may be completed either individually or in small teams of four or five people. When the individuals (or teams) have completed the exercise, the results will be discussed and compared with others in the class.

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· Read the following interview case. Then, calculate whether Harry will engage in high or “just acceptable” performance effort under the conditions described. Valence scores range from −1.0 to +1.0. All expectancies are probabilities ranging from 0 (no chance) to 1.0 (definitely will occur). The effort level scores are calculated by multiplying each valence by the appropriate P-to-O expectancy, summing these results, then multiplying the sum by the E-to-P expectancy.

· INTERVIEW WITH HARRY

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· Interviewer: Hi, Harry. I have been asked to talk to you about your job. Do you mind if I ask you a few questions?

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· Harry: No, not at all.

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· Interviewer: Thanks, Harry. What are the things that you would anticipate getting satisfaction from as a result of your job?

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· Harry: What do you mean?

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· Interviewer: Well, what is important to you with regard to your job here?

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· Harry: I guess most important is job security. As a matter of fact, I can’t think of anything that is more important to me. I think getting a raise would be nice, and a promotion would be even better.

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· Interviewer: Anything else that you think would be nice to get, or for that matter, that you would want to avoid?

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· Harry: I certainly would not want my buddies to make fun of me. We’re pretty friendly, and this is really important to me.

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· Interviewer: Anything else?

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· Harry: No, not really. That seems to be it.

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· Interviewer: How satisfied do you think you would be with each of these?

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· Harry: What do you mean?

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Interviewer: Well, assume that something  that you would really like has a value of +1.0 and something you would really not like, that is, you would want to avoid, has a value of –1.0, and something you are indifferent about has a value of 0.

Harry: OK. Getting a raise would have a value of .5; a promotion is more important, so I’d say .7; and having my buddies make fun of me, .9.

Interviewer: But, I thought you didn’t want your buddies to make fun of you.

Harry: I don’t.

Interviewer: But you gave it a value of .9.

Harry: Oh, I guess it should be –.9.

Interviewer: OK, I just want to be sure I understand what you’re saying. Harry, what do you think the chances are of these things happening?

Harry: That depends.

Interviewer: On what?

Harry: On whether my performance is high or just acceptable.

Interviewer: What if it is high?

Harry: I figure I stand about a 50–50 chance of getting a raise and/or a promotion, but I also think that there is a 90 percent chance that my buddies will make fun of me.

Interviewer: What about job security?

Harry: I am certain my job is secure here, whether my performance is high or just acceptable. I can’t remember the last guy who was doing his job and got fired. But if my performance is just acceptable, my chances of a raise or promotion are about 10 percent. However, then the guys will not make fun of me. That I am certain about.

Interviewer: What is the likelihood of your performance level being high?

Harry: That depends. If I work very hard and put out a high degree of effort, I’d say that my chance of my performance being high is about 90 percent. But if I put out a low level of effort—you know, if I just take it easy—then I figure that the chances of my doing an acceptable job is about 80 percent.

Interviewer: Well, which would you do: put out a low level or a high level of effort?

Harry: With all the questions you asked me, you should be able to tell me.

Interviewer: You may be right!

Harry: Yeah? That’s nice. Hey, if you don’t have any other questions, I’d like to join the guys for coffee.

Interviewer: OK, thanks for your time.

Harry: You’re welcome.

Discussion Question

1. Use the expectancy theory model to predict Harry’s motivation to achieve high or “just acceptable” performance in his job. Identify and discuss the factors that influence this motivation.

Used with permission of the author, Robert J. Oppenheimer, Concordia University.

CASE STUDY: CINCINNATI SUPER SUBS

Cincinnati Super Subs is one of the larger Super Subs outlets, a chain of 300 take-away restaurants in Indiana, Ohio, and Michigan. This outlet has a restaurant manager, an assistant manager, and several part-time team leaders. The restaurant manager rarely has time to serve customers, and frontline work by managers is discouraged by the head office. The assistant manager serves customers for a couple of hours during the busy lunchtime but otherwise assists the restaurant manager with purchasing, accounts, hiring, and other operations. Most team leaders are college students and serve customers alongside other employees, particularly from late afternoon to night closing. Most employees are also students who work part-time; a few are in high school. All regular staff earn minimum pay rates.

Cincinnati Super Subs has experienced below-average profitability over the past 18 months, which has reduced the monthly bonus paid to the restaurant manager and assistant manager. This bonus is calculated by percentage of “wastage” (unsold, damaged, or unaccounted for food and drinks) relative to sales; the lower the percentage of wastage, the higher the bonus. Wastage occurs when employees drop or spill food, cut up more toppings than are sold, burn heated subs, prepare an order incorrectly, and eat or give away food without permission. When employees make mistakes, the expense is supposed to come out of their paycheck. Unauthorized eating and giving away food are grounds for immediate dismissal. However, team leaders are reluctant to report any accidental or deliberate wastage, even when confronted by the restaurant manager about the store’s high wastage over the previousPage 148 week and month. One team leader who reported several accidental wastage incidents eventually quit after being snubbed by coworkers who attended the same college classes.

Cincinnati Super Subs gives employees a food allowance if they work continuously for at least four and one-half hours. Staff complain that the allowance is meager and that they are often ineligible for the food allowance because many shifts are only three or four hours. Employees who work these shorter shifts sometimes help themselves to food and drinks when the managers aren’t around, claiming that their hard work justifies the free meal. Some also claim the food is a low company expense and makes up for their small paycheck, relative to what many of their friends earn elsewhere. Several (but not most) employees give some of their friends generous helpings as well as occasional free soft drinks and chips. Employees say handing out free food to friends makes them more popular with their peers.

Five months ago, the Cincinnati restaurant’s wastage (mainly deliberate wastage) had risen to the point where the two managers no longer received a bonus. The restaurant manager reacted by giving the food allowance only to those who work for six or more hours in a single shift. This action excluded even more staff from receiving the food allowance, but it did not discourage employees from eating or giving away food. However, almost 20 percent of the experienced college staff left for other jobs over the following two months. Many of those who stayed discouraged friends from considering jobs at Super Subs. Morale declined, which dampened the fun atmosphere that had been experienced to some extent in past times. Relations between employees and managers soured further.

With relatively low unemployment, the restaurant manager found it difficult to hire replacements, particularly people with previous work experience of any kind. Temporary staff shortages required the two managers to spend more time working in food preparation and training the new staff. Their increased presence in the restaurant significantly reduced deliberate wastage, but accidental wastage increased somewhat as the greater number of inexperienced staff made more mistakes.

After three months, Cincinnati Super Subs’ manager and assistant manager were confident that the situation had improved, so they spent less time training staff and serving customers. Indeed, they received a moderate bonus after the third month in the store. However, wastage increased again soon after the managers withdrew from daily operations. The experienced employees started eating more food, and the new staff soon joined this practice. Exasperated, the restaurant manager took bolder steps. He completely removed the food allowance and threatened to fire any employee caught consuming or giving away food.

Wastage dropped somewhat over the next month but is now creeping upward again.

Discussion Questions

1. What symptoms in this case suggest that something has gone wrong?

2. What are the main causes of these symptoms?

3. What actions should Cincinnati Super Subs’ managers take to correct these problems?

© 2011 Steven L. McShane. Inspired by an early case written by J.E. Dittrich and R.A. Zawacki.

CLASS EXERCISE: NEEDS PRIORITY EXERCISE

PURPOSE This class exercise is designed to help you understand employee needs in the workplace.

INSTRUCTIONS (SMALL CLASS)

Step 1: The table below lists in alphabetical order 16 characteristics of the job or work environment. Working alone, use the far-left column to rank-order the importance of these characteristics to you personally. Write in “1” beside the most important characteristic, “2” for the second most important, and so on, through to “16” for the least important characteristic on this list.

Step 2: Identify any three (3) of these work attributes that you believe have the largest score differences between Generation Y (Millennial) male and female college students in your country (i.e., those born in 1980 or after). Indicate which gender you think identifies that attribute as more important.

Step 3: Students are assigned to teams, where they compare each other’s rank-order results as well as perceived gender differences in needs. Note reasons for the largest variations in rankings and be prepared to discuss these reasons with the entire class. Students should pay close attention to different needs, self-concepts, and various forms of diversity (ethnicity, profession, age, etc.) within your class to identify possible explanations for any variation of results across students.

Step 4: The instructor will provide results of a recent large-scale survey of Generation-Y/Millennial postsecondary students (i.e., born in 1980 or after). When these results are presented, identify the reasons for any noticeable differences in the class. Relate the differences to your understanding of the emerging view of employee needs and drives in work settings. For gender differences, discuss reasons why men and women might differ on these work-related attributes.

Page 149

INSTRUCTIONS (LARGE CLASS)

Step 1 and Step 2: Same as the small class instructions.

Step 3: The instructor will ask students, by a show of hands (or use of classroom technology), to identify their top-ranked attributes as well as the attributes believed to have the greatest gender differences among Gen-Yers.

Step 4: Same as above.

Personal Ranking of Work-Related Attributes

CLASS EXERCISE: THE LEARNING EXERCISE

PURPOSE This exercise is designed to help you understand how learning and motivation are influenced by the contingencies of reinforcement in organizational behavior modification.

MATERIALS Any objects normally available in a classroom will be acceptable for this activity.

INSTRUCTIONS (FOR SMALL OR LARGE CLASSES) The instructor will ask for three volunteers, who are then briefed outside the classroom. The instructor will spend a few minutes describing the exercise to students in the class about their duties. Then, one of the three volunteers will enter the room to participate in the exercise. When completed, the second volunteer enters the room and participates in the exercise. When completed, the third volunteer enters the class and participates in the exercise.

For students to gain the full benefit of this exercise, no other information will be provided here. However, the instructor will have more details at the beginning of this fun activity.

TEAM EXERCISE: BONUS DECISION EXERCISE

By Steven L. McShane, Graduate School of Business, Curtin University (Australia) and the Peter B. Gustavson School of Business, University of Victoria (Canada)

PURPOSE This exercise is designed to help you understand the elements of equity theory and how people differ in their equity perceptions.

INSTRUCTIONS Four managers in a large national insurance company are described below. The national sales director of the company has given your consulting team (first individually, then together) the task of allocating $100,000 in bonus money to four managers. It is entirely up to your team to decide how to divide the money among these people. The only requirements are that all of the money must be distributed and that no two branch managers can receive the same amount. The names and information are presented in no particular order. You should assume that economic conditions, client demographics, and other external factors are very similar for these managers.

Step 1: Working alone, read information about the four managers. Then, fill in the amount you would allocate to each manager in the “Individual Decision” column.

Step 2: Still working alone, fill in the “Equity Inputs Form.” First, in the “Input Factor” column, list in order of importance the factors you considered when allocating these bonus amounts (e.g., seniority, performance, age). The most important factor should be listed first and the least important last. Next, in the “Input Weight” column estimate the percentage weight that you assigned to this factor. The total of this column must add up to 100 percent.

Step 3: Form teams (typically 4 to 6 people). Each team will compare their results and note any differences. Then, for each job, team members will reach a consensus on the bonus amount that each manager should receive. These amounts will be written in the “Team Decision” column.

Step 4: The instructor will call the class together to compare team results and note differences in inputs and input weights used by individual students. The class will then discuss these results using equity theory.

INSTRUCTIONS (LARGE CLASS)

Step 1 and Step 2: Same as in the preceding “Instructions” section.

Step 3: The instructor will ask students, by a show of hands (or use of classroom technology), to identify which manager would receive the highest bonus, then how much should be allocated to that manager. Repeat with the manager receiving the lowest bonus. (Some classroom technology allows students to directly indicate their bonus amount for that manager.) The class will then discuss these results using equity theory.

Bonus Decision-Making Manager Profiles

Bob B. Bob has been in the insurance business for over 27 years and has spent the past 21 years with this company. A few years ago, Bob’s branch typically made the largest contribution to regional profits. More recently, however, it has brought in few new accounts and is now well below average in terms of its contribution to the company. Turnover in the branch has been high and Bob doesn’t have the same enthusiasm for the job as he once did. Bob is 56 years old and is married with five children. Three children are still living at home. Bob has a high school diploma as well as a certificate from a special course in insurance management.

Edward E. In the two years that Edward has been a branch manager, his unit has brought in several major accounts and now stands as one of the top units in the country. Edward is well respected by his employees. At 29, he is the youngest manager in the region and one of the youngest in the country. The regional director initially doubted the wisdom of giving Edward the position of branch manager because of his relatively young age and lack of experience in the insurance industry. Edward received an undergraduate business degree from a regional college and worked for five years as a sales representative before joining this company. Edward is single and has no children.

Lee L. Lee has been with thisPage 151 organization for seven years. The first two years were spent as a sales representative in the office that she now manages. According to the regional director, Lee rates about average as a branch manager. She earned an undergraduate degree in geography from a major university and worked as a sales representative for four years with another insurance company before joining this organization. Lee is 40 years old, divorced, and has no children. She is a very ambitious person but sometimes has problems working with her staff and other branch managers.

Sandy S. Sandy is 47 years old and has been a branch manager with this company for 17 years. Seven years ago, her branch made the lowest contribution to the region’s profits, but this has steadily improved and is now slightly above average. Sandy seems to have a mediocre attitude toward her job but is well liked by her staff and other branch managers. Her experience in the insurance industry has been entirely with this organization. She previously worked in nonsales positions, and it is not clear how she became a branch manager without previous sales experience. Sandy is married and has three school-aged children. Several years ago, Sandy earned a diploma in business from a nearby community college by taking evening courses.

Bonus Allocation Form

Equity Inputs Form

· *List factors in order of importance, with most important factor listed first.**The weight of each factor is a percentage ranging from 1 to 100. All factor weights together must add up to 100 percent.Copyright © 2000, 1983 Steven L. McShane.