for all work solver
13-1. Basics of Motivation
What makes people happiest and most productive at work? Is it money, benefits, opportunities for growth, interesting work, or something else altogether? And if people desire different things, how can a company keep everyone motivated? It takes insight and hard work to motivate workers to join the company, perform well, and then stay with the company. In a 2016 study, Gallup found that only 33 percent of U.S. employees are “engaged” or motivated at work, whereas 63 percent are “not engaged,” meaning they are unmotivated, not interested in organizational goals or outcomes, or, as Gallup reports, “they’re just there.” Even worse, 16 percent of employees are “actively disengaged.”
Says Gallup, “They are miserable in the workplace and destroy what the most engaged employees build.” * Gallup examined the results of 1.9 million people across 49 countries employed in 82,000 work units for 230 companies to see how engagement, or motivation, matters. “Business/work units scoring in the top half on employee engagement nearly double their odds of success compared with those in the bottom half. Those at the 99th percentile have four times the success rate of those at the first percentile. Median differences between top-quartile and bottom-quartile units were 10 percent in customer ratings, 21 percent in profitability, 20 percent in sales production, 17 percent in production records, 24 percent in turnover (high-turnover organizations), 59 percent in turnover (low-turnover organizations), 70 percent in safety incidents, 28 percent in shrinkage, 41 percent in absenteeism, 58 percent in patient safety incidents, and 40 percent in quality (defects).” *
So what is motivation? Motivation is the set of forces that initiates, directs, and makes people persist in their efforts to accomplish a goal. * Initiation of effort is concerned with the choices that people make about how much effort to put forth in their jobs. (“Do I really knock myself out or just do a decent job?”) Direction of effort is concerned with the choices that people make in deciding where to put forth effort in their jobs. (“I should be spending time with my high-dollar accounts instead of learning this new computer system!”) Persistence of effort is concerned with the choices that people make about how long they will put forth effort in their jobs before reducing or eliminating those efforts. (“I’m only halfway through the project, and I’m exhausted. Do I plow through to the end, or just call it quits?”) Initiation, direction, and persistence are at the heart of motivation.
Bruce Arians coaches the National Football League’s Arizona Cardinals, while Pete Carroll coaches the NFL’s Seattle Seahawks. Arians, a screamer and a hugger, took the Cardinals to the NFC championship, one game short of the Super Bowl. Cardinals’ defensive back Tyrann Mathieu said, “I’ll mess up on the practice field and he’ll scream and curse at me. Then he’ll find me before meetings start—he’ll give me a hug, tell me it’s all good and ask how my family is.” * Pete Carroll, by contrast, coaches the Seattle Seahawks. Under Carroll, who never yells, the Seahawks have won one Super Bowl and just barely lost another. When All-Pro tight-end Jimmy Graham dropped a pass in practice, Carroll told him to focus more on what he was doing and not to worry about it. Regarding how Carroll motivates Seahawks players, Graham says, “It’s literally all positive reinforcement.” *
Under which coach, the Cardinals’ Arians or the Seahawks’ Carroll, would you be more motivated? Or, in Gallup’s terms, are you engaged at work? Are your coworkers? If you and your coworkers are “disengaged” or “actively disengaged,” why? Are there parts of the job that interest and energize you? If so, what are they and why? Answering questions like these is at the heart of figuring out how best to motivate people at work.
Let’s learn more about motivation by building a basic model of motivation out of 13-1a effort and performance, 13-1b need satisfaction, and 13-1c extrinsic and intrinsic rewards and then discussing 13-1d how to motivate people with this basic model of motivation.
13-1a. Effort and Performance
When most people think of work motivation, they think that working hard (effort) should lead to a good job (performance). Exhibit 13.1 shows a basic model of work motivation and performance, displaying this process. The first thing to notice about Exhibit 13.1 is that this is a basic model of work motivation and performance. In practice, it’s almost impossible to talk about one without mentioning the other. Not surprisingly, managers often assume motivation is the only determinant of performance, saying things such as “Your performance was really terrible last quarter. What’s the matter? Aren’t you as motivated as you used to be?” In fact, motivation is just one of three primary determinants of job performance.
In this formula, job performance is how well someone performs the requirements of the
job. Motivation, as defined previously, is effort, the degree to which someone works hard to
do the job well. Ability is the degree to which workers possess the knowledge, skills, and
talent needed to do a job well. And situational constraints are factors beyond the control of
individual employees, such as tools, policies, and resources that have an effect on job performance.
Because job performance is a multiplicative function of motivation times ability times situational constraints, job performance will suffer if any one of these components is weak. This doesn’t mean that motivation doesn’t matter. It just means that all the motivation in the world won’t translate into high performance when an employee has little ability and high situational constraints. So, even though we will spend this chapter developing a model of work motivation, it is important to remember that ability and situational constraints affect job performance as well.
13-1b. Need Satisfaction
In Exhibit 13.1, we started with a very basic model of motivation in which effort leads to job performance. But managers want to know, “What leads to effort?” Determining employee needs is the first step to answering that question.
Needs are the physical or psychological requirements that must be met to ensure survival and well-being. * As shown on the left side of Exhibit 13.2, a person’s unmet need creates an uncomfortable, internal state of tension that must be resolved. For example, if you normally skip breakfast but then have to work through lunch, chances are you’ll be so hungry by late afternoon that the only thing you’ll be motivated to do is find something to eat. So, according to needs theories, people are motivated by unmet needs. But a need no longer motivates once it is met. For example, when the author of the Mr. Everyday Dollar financial strategies website (now ChrisReining.com ) learned that he had become a millionaire at 35, he described it as a “huge letdown,” saying, “You might think when your account rolls over to seven digits that fireworks light up the sky, confetti falls, and champagne starts flowing. I can tell you that doesn’t happen, in fact, it’s pretty anticlimactic; I was like, ‘Oh, cool,’ and then went back to work.” In other words, once obtained, his need for financial independence, no longer motivated him as much.
Because people are motivated by unmet needs, managers must learn what those unmet needs are and address them. This is not always a straightforward task, however, because different needs theories suggest different needs categories. Consider three well-known needs theories. Maslow’s Hierarchy of Needs suggests that people are motivated by physiological (food and water), safety (physical and economic), belongingness (friendship, love, social interaction), esteem (achievement and recognition), and self-actualization (realizing your full potential) needs. * Alderfer’s ERG Theory collapses Maslow’s five needs into three: existence (safety and physiological needs), relatedness (belongingness), and growth (esteem and self-actualization). * McClelland’s Learned Needs Theory suggests that people are motivated by the need for affiliation (to be liked and accepted), the need for achievement (to accomplish challenging goals), or the need for power (to influence others). *
Things become even more complicated when we consider the different predictions made by these theories. According to Maslow, needs are arranged in a hierarchy from low (physiological) to high (self-actualization). Within this hierarchy, people are motivated by their lowest unsatisfied need. As each need is met, they work their way up the hierarchy from physiological to self-actualization needs. By contrast, Alderfer says that people can be motivated by more than one need at a time. Furthermore, he suggests that people are just as likely to move down the needs hierarchy as up, particularly when they are unable to achieve satisfaction at the next higher need level. McClelland argues that the degree to which particular needs motivate varies tremendously from person to person, with some people being motivated primarily by achievement and others by power or affiliation. Moreover, McClelland says that needs are learned, not innate. For instance, studies show that children whose parents own a small business or hold a managerial position are much more likely to have a high need for achievement. *
So, with three different sets of needs and three very different ideas about how needs motivate, how do we provide a practical answer to managers who just want to know what leads to effort? Fortunately, the research evidence simplifies things a bit. To start, studies indicate that there are two basic kinds of needs categories. * Lower-order needs are concerned with safety and with physiological and existence requirements, whereas higher-order needs are concerned with relationships (belongingness, relatedness, and affiliation), challenges and accomplishments (esteem, self-actualization, growth, and achievement), and influence (power). Studies generally show that higher-order needs will not motivate people as long as lower-order needs remain unsatisfied. *
For example, imagine that you graduated from college six months ago and are still looking for your first job. With money running short (you’re probably living on your credit cards), and the possibility of having to move back in with your parents looming (if this doesn’t motivate you, what will?), your basic needs for food, shelter, and security drive your thoughts, behavior, and choices at this point. But after you land that job, find a great place (of your own!) to live, and put some money in the bank, these basic needs should decrease in importance as you begin to think about making new friends and taking on challenging work assignments. In fact, after lower-order needs are satisfied, it’s difficult for managers to predict which higher-order needs will motivate behavior. * Some people will be motivated by affiliation, while others will be motivated by growth or esteem. Also, the relative importance of the various needs may change over time but not necessarily in any predictable pattern. So, what leads to effort? In part, needs do. After we discuss rewards in Subsection 13-1c, in Subsection 13-1d, we discuss how managers can use what we know from need-satisfaction theories to motivate workers.
13-1c. Extrinsic and Intrinsic Rewards
No discussion of motivation would be complete without considering rewards. Let’s add two kinds of rewards, extrinsic and intrinsic
Extrinsic rewards are tangible and visible to others and are given to employees contingent on the performance of specific tasks or behaviors. * External agents (managers, for example) determine and control the distribution, frequency, and amount of extrinsic rewards, such as pay, company stock, benefits, and promotions. For example, 91 percent of large- and medium-sized U.S. companies surveyed by Hewitt Associates, a consulting company based in Lincolnshire, Illinois, offer incentives or bonuses to reward employees. *
Lincoln Electric, a manufacturer of arc welding tools and technology, has paid annual profit sharing bonuses to its factory workers for 83 straight years. In 2016, Lincoln paid out 32 percent of its pretax profits, $68 million, to employees who received bonuses of $24,111 each, worth 33 percent of total wages. In the 83 years in which Lincoln has paid profit-sharing bonuses, the percentage has never dropped below 25 percent of total wages and has been as high as 120 percent. Over the past decade, bonuses have averaged 40 percent of total salary.
*
Why do companies need to offer extrinsic rewards? To get people to do things they wouldn’t otherwise do. Companies use extrinsic rewards to motivate people to perform four basic behaviors: join the organization, regularly attend their jobs, perform their jobs well, and stay with the organization. * Think about it. Would you show up at work every day to do the best possible job that you could just out of the goodness of your heart? Very few people would.
Intrinsic rewards are the natural rewards associated with performing a task or activity for its own sake. For example, aside from the external rewards management offers for doing something well, employees often find the activities or tasks they perform interesting and enjoyable. Examples of intrinsic rewards include a sense of accomplishment or achievement, a feeling of responsibility, the chance to learn something new or interact with others, or simply the fun that comes from performing an interesting, challenging, and engaging task.
Across five studies with 449 people, Professors Kaitlin Woolley and Ayelet Fishbach found that the immediate rewards from performing a task (that is, intrinsic rewards) predicted long-term task persistence. * For example, people who work out do so to get subsequent rewards, such as losing weight, getting fit, or better health. Woolley and Fishbach found that gym goers kept going to the gym only if they enjoyed their workouts. In other words, people only kept working toward their long-term goals when the tasks or steps to accomplish those goals were intrinsically rewarding. They concluded, “Gymgoers who cared more about having a fun workout exercised longer than those who cared less about having fun.” *
Which types of rewards are most important to workers in general? A number of surveys suggest that both extrinsic and intrinsic rewards are important and that employee preferences for either intrinsic or extrinsic rewards are relatively stable. * A 2016 Society for Human Resource Management national survey found that three extrinsic factors—pay, benefits, and job security/organizational financial stability—and four intrinsic factors—respectful treatment of employees, trust in senior management, relationships with immediate supervisors, and the chance to use one’s skills and abilities in your work—were among the top factors rated as “very important” by employees. *
13-1d. Motivating with the Basics
So, given the basic model of work motivation in Exhibit 13.3, what practical steps can managers take to motivate employees to increase their effort?
The first step is to start by asking people what their needs are. Jonathan Robinson, CEO of Freetextbooks.com , an online college textbook seller (sorry, the textbooks aren’t really free), says the key to motivating employees is finding out what they like and then giving them the rewards they want. To do that, Robinson gives each new hire a brief survey asking them about their favorite candy, restaurant, hobby, or music. Says Robinson, “You just have to know your team. We’re pretty small so I have to stay in tune with the preferences and pulse of our employees. The perks are in the details.” As a result, he recently gave one employee a free round of golf, another $100 to be used at a great restaurant, and another IMAX theater tickets. Because he asked, all got what they WANTED. * So, if you want to meet employees’ needs, just ask.
Next, satisfy lower-order needs first. Because higher-order needs will not motivate people as long as lower-order needs remain unsatisfied, companies should satisfy lower-order needs first. In practice, this means providing the equipment, training, and knowledge to create a safe workplace free of physical risks; paying employees well enough to provide financial security; and offering a benefits package that will protect employees and their families through good medical coverage and health and disability insurance. Indeed, the Society for Human Resource Management study mentioned previously found that three of the most important factors in 2016—compensation/pay (63%), job security (58%), and benefits (60%)—were all lower-order needs. * Consistent with the idea of satisfying lower-order needs first, a survey of 12,000 employees found that inadequate compensation is the number-one reason employees leave organizations. This is why The Container Store CEO Kip Tindell pays his employees an average salary of $48,000 per year, twice the average retail salary. As a result, says Tindell, “My employees advance on Maslow’s hierarchy [from lower- to higher-order needs].” He says, “I didn’t think about this when we started out. But it’s the most powerful thing you can do.” *
Third, managers should expect people’s needs to change. As needs are satisfied or situations change, what motivated people before may not motivate them now. Likewise, what motivates people to accept a job may not necessarily motivate them after they have the job. For instance, David Stum, president of the Loyalty Institute, says, “The [attractive] power of pay and benefits is only [strong] during the recruitment stage. After employees take the job, pay and benefits become entitlements to them. They think: ‘Now that I work here, you owe me that.’” * Managers should also expect needs to change as people mature. For older employees, benefits are as important as pay, which is always ranked as more important by younger employees. Older employees also rank job security as more important than personal and family time, which is more important to younger employees. *
Finally, as needs change and lower-order needs are satisfied, create opportunities for employees to satisfy higher-order needs. Recall that intrinsic rewards such as accomplishment, achievement, learning something new, and interacting with others are the natural rewards associated with performing a task or activity for its own sake. And, with the exception of influence (power), intrinsic rewards correspond very closely to higher-order needs that are concerned with relationships (belongingness, relatedness, and affiliation) and challenges and accomplishments (esteem, self-actualization, growth, and achievement). Therefore, one way for managers to meet employees’ higher-order needs is to create opportunities for employees to experience intrinsic rewards by providing challenging work, encouraging employees to take greater responsibility for their work, and giving employees the freedom to pursue tasks and projects they find naturally interesting.
13-2. Equity Theory
We’ve seen that people are motivated to achieve intrinsic and extrinsic rewards. However, if employees don’t believe that rewards are awarded fairly or don’t believe that they can achieve the performance goals the company has set for them, they won’t be very motivated.
Fairness, or what people perceive to be fair, is also a critical issue in organizations. Equity theory says that people will be motivated at work when they perceive that they are being treated fairly. In particular, equity theory stresses the importance of perceptions. So, regardless of the actual level of rewards people receive, they must also perceive that, relative to others, they are being treated fairly. For example, you learned in Chapter 11 that the CEOs of the largest U.S. firms now make $15.6 million per year, which is 271 times their average employee salary. * The 10 highest-paid CEOs averaged earnings of $43.2 million per year, led by Thomas Rutledge, the CEO of Charter Communications, who made $98 million. * By contrast, in 2016, CEOs of companies with less than $1 billion a year in revenues averaged $230,090 in earnings, or 5.42 times what the average worker makes. *
Many people believe that CEO pay is obscenely high and unfair. Others believe that CEO pay is fair because the supply and demand for executive talent largely determine what CEOs are paid. They argue that if it were easier to find good CEOs, then CEOs would be paid much less. Equity theory doesn’t focus on objective equity (that is, that CEOs make 271 times or 5.42 times more than average workers). Instead, equity theory says that equity, like beauty, is in the eye of the beholder.
Let’s learn more about equity theory by examining 13-2a the components of equity theory, 13-2b how people react to perceived inequity, and 13-2c how to motivate people using equity theory.
13-2a. Components of Equity Theory
The basic components of equity theory are inputs, outcomes, and referents. Inputs are the contributions employees make to the organization. They include education and training, intelligence, experience, effort, number of hours worked, and ability. Outcomes are what employees receive in exchange for their contributions to the organization. They include pay, fringe benefits, status symbols, and job titles and assignments. And, because perceptions of equity depend on comparisons, referents are other people with whom people compare themselves to determine if they have been treated fairly. The referent can be a single person (comparing yourself with a coworker), a generalized other (comparing yourself with “accountants in general,” for example), or even yourself over time (“I was better off last year than I am this year”). Usually, people choose to compare themselves with referents who hold the same or similar jobs or who are otherwise similar in gender, race, age, tenure, or other characteristics. *
Copywriter Lucy Bayly says, “You think you’re satisfied [with your pay] and then all of a sudden, you find out someone is paid a little more, and it ruins your day.” * That’s what happened to Olivia Wainhouse, an account executive at New York social media analytics firm SumAll. When Wainhouse learned that a new hire was earning $10,000 more than she was, she felt betrayed: “My competitive drive kicked in. I thought, ‘What’s going on here?’” * To see how SumAll dealt with unsanctioned salary disclosures—and the hurt feelings that followed—see the box on “Transparent Pay—Not a Big Deal.”
According to equity theory, employees compare their outcomes (the rewards they receive from the organization) with their inputs (their contributions to the organization). This comparison of outcomes with inputs is called the outcome/input (O/I) ratio. After an internal comparison in which they compare their outcomes with their inputs, employees then make an external comparison in which they compare their O/I ratio with the O/I ratio of a referent. * With “pay secrecy” a standard organizational policy, how are employees finding the information they need to make these comparisons? Kevin Hallock, dean of Cornell University’s School of Industrial and Labor Relations, says, “People are much more willing to talk about pay than they were even 10 years ago.” * Elle Kaplan, founder of LexION Capital explains that, “Comparing pay stubs by the water cooler isn’t the only way to find out your fair market value.” Indeed Glassdoor.com , a recruiting website, has extensive salary information. Says Kaplan, “Even if you can’t find the exact salaries of your coworkers, you can see the average pay for your skills and position by geography and industry.” *
When people perceive that their O/I ratio is equal to the referent’s O/I ratio, they conclude that they are being treated fairly. But when people perceive that their O/I ratio is different from their referent’s O/I ratio, they conclude that they have been treated inequitably or unfairly.
Inequity can take two forms, underreward and overreward. Underreward occurs when a referent’s O/I ratio is better than your O/I ratio. In other words, you are getting fewer outcomes relative to your inputs than the referent you compare yourself with is getting. When people perceive that they have been underrewarded, they tend to experience anger or frustration. And that tends to happen a lot. A PayScale survey of 71,000 employees found that among people who actually had higher than average salaries (above market), 35 percent thought they were underpaid, 45 percent thought they were paid fairly, and 21 percent thought they were overpaid. Among those who actually had average salaries (at market), 64 percent thought they were underpaid, 30 percent thought they were paid fairly, and just 6 percent thought they were overpaid. *
By contrast, overreward occurs when a referent’s O/I ratio is worse than your O/I ratio. In this case, you are getting more outcomes relative to your inputs than your referent is. In theory, when people perceive that they have been overrewarded, they experience guilt. But, not surprisingly, people have a very high tolerance for overreward. It takes a tremendous amount of overpayment before people decide that their pay or benefits are more than they deserve.
13-2b. How People React to Perceived Inequity
So what happens when people perceive that they have been treated inequitably at work? Exhibit 13.4 shows that perceived inequity affects satisfaction. In the case of underreward, this usually translates into frustration or anger; with overreward, the reaction is guilt. These reactions lead to tension and a strong need to take action to restore equity in some way. At first, a slight inequity may not be strong enough to motivate an employee to take immediate action. If the inequity continues, or there are multiple inequities, however, tension may build over time until a point of intolerance is reached and the person is energized to take action to restore equity by reducing inputs, increasing outcomes, rationalizing inputs or outcomes, changing the referent, or simply leaving. We will discuss these possible responses in terms of the inequity associated with underreward, which is much more common than the inequity associated with overreward.
People who perceive that they have been underrewarded may try to restore equity by decreasing or withholding their inputs (that is, effort). In response to impending budget cuts and layoffs and stalled contract negotiations, all of the teachers at East Baltimore School in Baltimore, Maryland, engaged in a sick-out that canceled a full day of classes. Alan Rebar, a teacher at nearby Sinclair Lane Elementary School said, “You go in, day-in, day-out, doing your job, and you get told, ‘We don’t respect you. We don’t care about you. We don’t care about your future. It’s a problem other people caused, and we’re going to solve it on you.’ It’s enough—people have had it. Teachers have had it. It’s amazing that there aren’t way more people sicking out.” *
Increasing outcomes is another way people try to restore equity. This might include asking for a raise or pointing out the inequity to the boss and hoping that he or she takes care of it. Sometimes, however, employees may go to external organizations such as labor unions, federal agencies, or the courts for help in increasing outcomes to restore equity. For instance, the U.S. Department of Labor estimates that 10 percent of workers are not getting the extra overtime pay they deserve when they work more than forty hours a week. These are known as Fair Labor Standards Act (FLSA) violations. * After a U.S. Department of Labor ruling, Halliburton, a global oil field services company, agreed to pay $18.2 million in back wages to 1,106 oil and gas employees who were at first denied overtime pay after incorrectly being classified as exempt employees (who are ineligible for overtime). * In 2016, 10,884 FLSA cases resulted in companies paying $172 million in back wages to 210,000 employees. *
Another method of restoring equity is to rationalize or distort inputs or outcomes. Instead of decreasing inputs or increasing outcomes, employees restore equity by making mental or emotional adjustments in their O/I ratios or the O/I ratios of their referents. For example, suppose that a company downsizes 10 percent of its workforce. It’s likely that the people who still have jobs will be angry or frustrated with company management because of the layoffs. If alternative jobs are difficult to find, however, these survivors may rationalize or distort their O/I ratios and conclude, “Well, things could be worse. At least I still have my job.” Rationalizing or distorting outcomes may be used when other ways to restore equity aren’t available.
Changing the referent is another way of restoring equity. In this case, people compare themselves with someone other than the referent they had been using for previous O/I ratio comparisons. Because people usually choose to compare themselves with others who hold the same or similar jobs or who are otherwise similar (that is, friends, family members, neighbors who work at other companies), they may change referents to restore equity when their personal situations change, such as a decrease in job status or pay. *
13-2c. Motivating with Equity Theory
What practical steps can managers take to use equity theory to motivate employees? They can start by looking for and correcting major inequities. Among other things, equity theory makes us aware that an employee’s sense of fairness is based on subjective perceptions. What one employee considers grossly unfair may not affect another employee’s perceptions of equity at all. Although these different perceptions make it difficult for managers to create conditions that satisfy all employees, it’s critical that they do their best to take care of major inequities that can energize employees to take disruptive, costly, or harmful actions such as decreasing inputs or leaving. So, whenever possible, managers should look for and correct major inequities.
Dane Atkison has run almost a dozen companies during his career, often paying different employees vastly different salaries for the same skill set, only because some negotiated better than others. Tired of employee outrage when significant differences are discovered, he adopted a transparent salary system when he took the lead at social media analytics company SumAll. During the hiring process, Atkinson lets candidates know what the job pays—no negotiating allowed—and that everyone knows everyone else’s salary. Sometimes seasoned job candidates balk. Atkison remembers one candidate who told him, “This is unfair because I can’t actually negotiate.” And although tensions sometimes surface, Atkison says talking to employees about their perceptions of inequity gives him the chance to explain why some people make more money than others.
When American Airlines and US Airways merged in December 2013, becoming the world’s largest airline, CEO Doug Parker promised the pilot, flight crew, and mechanics unions that when contracts were renegotiated, American would pay 3 percent more than competitors. But when Delta, United, and Southwest Airlines increased their pay in 2015, American’s employees fell further behind. * American eventually corrected the pay inequities prior to contract renegotiations, starting with a 22 percent raise for mechanics, bag handlers and ground workers in November 2016, and pay raises of 4.2 to 6.5 percent for flight attendants and 7 to 8.7 percent for pilots in May 2017. * CEO Parker said, “Today’s news is about doing the right thing and doing so not because we are contractually required to or because we are locked in a contentious contractual battle. We must continue moving past the days of discontent as we build a new American where team members trust each other and work together with our customers’ care in mind.” *
Second, managers can reduce employees’ inputs. Increasing outcomes is often the first and only strategy that companies use to restore equity, yet reducing employee inputs is just as viable a strategy. In fact, with dual-career couples working 50-hour weeks, more and more employees are looking for ways to reduce stress and restore a balance between work and family. Consequently, it may make sense to ask employees to do less, not more; to have them identify and eliminate the 20 percent of their jobs that doesn’t increase productivity or add value for customers; and to eliminate company-imposed requirements that really aren’t critical to the performance of managers, employees, or the company (for example, unnecessary meetings and reports). Another way to reduce employee inputs is by committing to 40-hour work weeks. Mortgage lender United Shore Financial Services calls this the “firm 40.” The deal, says chief people officer Laura Lawson, is that “You give us 40. Everything else is yours.” * That means no online shopping at work, and no checking Facebook or Twitter. CEO Mat Isbia tells employees that they need to work as hard at 5:55 p.m. on Friday as they do on Tuesday at 10:55 a.m. But then, at 6 p.m. sharp, the office empties. Ahmed Haider, who works in client relations at USFS, says that “the parking lot is pretty much empty” by 6:05 p.m. * At first, Haider doubted whether the commitment to “firm 40” was real. But now, he always leaves at 6 p.m. and rarely sends emails or phones colleagues after work hours. “There’s nobody to call. Everyone’s at home,” he says. *
Finally, managers should make sure decision-making processes are fair. Equity theory focuses on distributive justice, the perceived degree to which outcomes and rewards are fairly distributed or allocated. However, procedural justice, the perceived fairness of the procedures used to make reward allocation decisions, is just as important. * Procedural justice matters because even when employees are unhappy with their outcomes (that is, low pay), they’re much less likely to be unhappy with company management if they believe that the procedures used to allocate outcomes were fair. For example, employees who are laid off tend to be hostile toward their employer when they perceive that the procedures leading to the layoffs were unfair. When Air France announced a plan to reduce costs by $2 billion over two years—partly by cutting 2,900 jobs—angry employees interrupted a work council meeting attended by key members of management and leaders representing the workers. Five irate employees stormed into the meeting, knocking a security guard unconscious as they attempted to assault two top managers by ripping the shirts and jackets off their backs. Ultimately, the executives were forced to climb a fence to avoid further harm. * By contrast, employees who perceive layoff procedures to be fair tend to continue to support and trust their employers. * Also, if employees perceive that their outcomes are unfair (that is, distributive injustice) but that the decisions and procedures leading to those outcomes were fair (that is, procedural justice), they are much more likely to seek constructive ways of restoring equity, such as discussing these matters with their manager. By contrast, if employees perceive both distributive and procedural injustice, they may resort to more destructive tactics, such as withholding effort, absenteeism, tardiness, or even sabotage and theft. *
13-3. Expectancy Theory
One of the hardest things about motivating people is that not everyone is attracted to the same rewards. Expectancy theory says that people will be motivated to the extent to which they believe that their efforts will lead to good performance, that good performance will be rewarded, and that they will be offered attractive rewards. *
Let’s learn more about expectancy theory by examining 13-3a the components of expectancy theory and 13-3b how to use expectancy theory as a motivational tool.
13-3a. Components of Expectancy Theory
Expectancy theory holds that people make conscious choices about their motivation. The three factors that affect those choices are valence, expectancy, and instrumentality.
Valence is simply the attractiveness or desirability of various rewards or outcomes. Expectancy theory recognizes that the same reward or outcome—say, a promotion—will be highly attractive to some people, will be highly disliked by others, and will not make much difference one way or the other to still others. Accordingly, when people are deciding how much effort to put forth, expectancy theory says that they will consider the valence of all possible rewards and outcomes that they can receive from their jobs. The greater the sum of those valences, each of which can be positive, negative, or neutral, the more effort people will choose to put forth on the job. Imagine you drive for Uber. It’s busy. You have one pickup after another and higher peak fares have kicked in because there aren’t enough drivers to meet demand. Do you keep driving to make “more” money than usual, or do you stop when you’ve met your income goal for the day? New drivers stop when they’ve met their daily goal, knocking off work early. Experienced drivers, however, put in a full day and pocket the extra pay. * But Major League Baseball’s Nick Franklin, who made $507,500 in 2016, drives for Uber in the off-season because “I wanted to do something on the weekends because I never really do anything.” * Just as expectancy theory predicts, the same rewards have different valences (or attractiveness) for different people.
Expectancy is the perceived relationship between effort and performance. When expectancies are strong, employees believe that their hard work and efforts will result in good performance, so they work harder. By contrast, when expectancies are weak, employees figure that no matter what they do or how hard they work, they won’t be able to perform their jobs successfully, so they don’t work as hard.
Instrumentality is the perceived relationship between performance and rewards. When instrumentality is strong, employees believe that improved performance will lead to better and more rewards, so they choose to work harder. When instrumentality is weak, employees don’t believe that better performance will result in more or better rewards, so they choose not to work as hard.
Expectancy theory holds that for people to be highly motivated, all three variables—valence, expectancy, and instrumentality—must be high. Thus, expectancy theory can be represented by the following simple equation:
Cut CEO Pay to Raise Worker Pay: Early Results
In 2015, CEO Dan Price of Gravity Payments, a creditcard processing company, cut his salary from $1 million to $70,000 so he could increase employee salaries from $48,000 to $70,000. Although viewed positively by labor activists, others were skeptical. So, 15 months later, what’s happened? Early on, two of his best employees quit, believing that paying everyone the same was unfair. But now surveys indicate employees are happier, turnover is at a six-year low, profits have doubled, client retention is up, and new accounts are up 60 percent. Thirty thousand people applied for jobs and 50 new employees were hired. Price’s pay cut, however, is temporary. “When I made the announcement, I said I would just put my salary back where it was once the company’s profits had gone back to where they were.” While business is good and employee salaries will not change, he has yet to increase his salary to $1 million a year. When he does, how will his business and employees be affected?
If any one of these variables (valence, expectancy, or instrumentality) declines, overall motivation will decline, too.
Exhibit 13.5 incorporates the expectancy theory variables into our motivation model. Valence and instrumentality combine to affect employees’ willingness to put forth effort (that is, the degree to which they are energized to take action), while expectancy transforms intended effort (“I’m really going to work hard in this job”) into actual effort. If you’re offered rewards that you desire and you believe that you will in fact receive these rewards for good performance, you’re highly likely to be energized to take action. However, you’re not likely to actually exert effort unless you also believe that you can do the job (that is, that your efforts will lead to successful performance).
13-3b. Motivating with Expectancy Theory
What practical steps can managers take to use expectancy theory to motivate employees? First, they can systematically gather information to find out what employees want from their jobs. In addition to individual managers directly asking employees what they want from their jobs (see Subsection 13-1d, “Motivating with the Basics”), companies need to survey their employees regularly to determine their wants, needs, and dissatisfactions. Because people consider the valence of all the possible rewards and outcomes that they can receive from their jobs, regular identification of wants, needs, and dissatisfactions gives companies the chance to turn negatively valent rewards and outcomes into positively valent rewards and outcomes, thus raising overall motivation and effort. Mark Peterman, vice president of client solutions at Maritz Incentives, says that individual employees are motivated in vastly different ways: “For some, being honored in front of one’s peers is a great award, but for others, the thought of being put on display in front of peers embarrasses them.” And companies have a long way to go to ensure that their employees feel valued, Peterman says. A Maritz survey found that only 27 percent of employees who want to be recognized by non-monetary incentives are recognized that way. * Such findings suggest that employers should routinely survey employees to identify not only the range of rewards that are valued by most employees but also to understand the preferences of specific employees.
Second, managers can take specific steps to link rewards to individual performance in a way that is clear and understandable to employees. Unfortunately, most employees are extremely dissatisfied with the link between pay and performance in their organizations, and their companies are, too. A survey by compensation consulting firm Willis Towers Watson found that 80 percent of companies report that merit pay, which links pay to performance, does not increase employee performance. Not surprisingly, 68 percent report that pay is not clearly tied to performance difference, either. *
One way to establish a clear connection between pay and performance (see Chapter 11 for a discussion of compensation strategies) is for managers to publicize the way in which pay decisions are made. This is especially important given that only 52 percent of employees know how their pay increases are determined. * Inspired by fantasy sports leagues, Clayton Homes director of inside sales, David Schwall, had his sales managers become team “owners” who drafted sales representatives onto their sales teams, which competed against each other in a rotating schedule, with the best four teams moving on to the “championships.” Sales reps (players) scored points by making more calls to sales leads, by increasing the percentage of leads who made appointments at Clayton Homes retail stores, and upping the percentage of leads whose phone calls were successfully transferred to a local store. Scores were tallied in real time, and the best scores were posted on TVs for everyone to see (poor scores were only visible within teams). Each sales rep’s theme music played when they reached sales milestones. The connection between efforts and results was clear, prompting one sales rep to say, “When I saw one of my colleagues leaving, I thought—‘Yes, now I can catch up and climb above him in the ranks.’” Calls rose by 18 percent, appointments jumped by 200 percent, as did visits to stores. And, after the “season” was over, employees were eager for the next season to begin, saying they missed the immediate feedback, recognition, and energy. *
Finally, managers should empower employees to make decisions if management really wants them to believe that their hard work and effort will lead to good performance. If valent rewards are linked to good performance, people should be energized to take action. However, this works only if they also believe that their efforts will lead to good performance. One of the ways that managers destroy the expectancy that hard work and effort will lead to good performance is by restricting what employees can do or by ignoring employees’ ideas. In Chapter 9, you learned that empowerment is a feeling of intrinsic motivation in which workers perceive their work to have meaning and perceive themselves to be competent, to have an impact, and to be capable of self-determination. * So, if managers want workers to have strong expectancies, they should empower them to make decisions. Doing so will motivate employees to take active rather than passive roles in their work.
13-4. Reinforcement Theory
When used properly, rewards motivate and energize employees. But when used incorrectly, they can demotivate, baffle, and even anger them. Goals are supposed to motivate employees. But leaders who focus blindly on meeting goals at all costs often find that they destroy motivation.
Reinforcement theory says that behavior is a function of its consequences, that behaviors followed by positive consequences (that is, reinforced) will occur more frequently, and that behaviors either followed by negative consequences or not followed by positive consequences will occur less frequently. * Every holiday season, thousands of Christmas trees are cut down and stolen from private and public property. The city of Lincoln, Nebraska, is fighting back by spraying evergreen trees with fox urine. This urine produces no smell in cold weather, but emits a strong, skunk-like smell once the tree is brought into a warm home. Thanks to the noxious smell, along with prominently posted signs warning that the trees have been sprayed, thieves are no long cutting down Lincoln’s evergreen trees. * More specifically, reinforcement is the process of changing behavior by changing the consequences that follow behavior. *
Reinforcement has two parts: reinforcement contingencies and schedules of reinforcement. Reinforcement contingencies are the cause-and-effect relationships between the performance of specific behaviors and specific consequences. For example, if you get docked an hour’s pay for being late to work, then a reinforcement contingency exists between a behavior (being late to work) and a consequence (losing an hour’s pay). A schedule of reinforcement is the set of rules regarding reinforcement contingencies such as which behaviors will be reinforced, which consequences will follow those behaviors, and the schedule by which those consequences will be delivered. *
Exhibit 13.6 incorporates reinforcement contingencies and reinforcement schedules into our motivation model. First, notice that extrinsic rewards and the schedules of reinforcement used to deliver them are the primary methods for creating reinforcement contingencies in organizations. In turn, those reinforcement contingencies directly affect valences (the attractiveness of rewards), instrumentality (the perceived link between rewards and performance), and effort (how hard employees will work).
Let’s learn more about reinforcement theory by examining 13-4a the components of reinforcement theory, 13-4b the different schedules for delivering reinforcement, and 13-4c how to motivate with reinforcement theory.
13-4a. Components of Reinforcement Theory
As just described, reinforcement contingencies are the cause-and-effect relationships between the performance of specific behaviors and specific consequences. There are four kinds of reinforcement contingencies: positive reinforcement, negative reinforcement, punishment, and extinction.
Positive reinforcement strengthens behavior (that is, increases its frequency) by following behaviors with desirable consequences. Only 25 percent of U.S. employees use all of their paid time off each year. And even when on vacation, one-third work because they fear “getting behind,” or because “no one else at my company can do my job.” The Latin root of vacation is vacare, which means to “be unoccupied.” That’s impossible if you’re working and responding to email while ostensibly on vacation. To prevent employees from working on vacation, Denver software company Full Contact pays a $7,500 time-off bonus—but only if employees resist making contact electronically, by phone, or by working in any other way during vacation. *
Negative reinforcement strengthens behavior by withholding an unpleasant consequence when employees perform a specific behavior. Negative reinforcement is also called avoidance learning because workers perform a behavior to avoida negative consequence. A study at the University of Pennsylvania shows how well negative reinforcement works. Over three months, 281 employees were given a daily walking goal of 7,000 steps. Thirty percent of those who were not rewarded for walking (the control group) met the daily goal. Thirty-five percent of those who were positively reinforced with a $1.40 per day for walking 7,000 steps met the goal. Finally, the negative reinforcement group was given $42 at the start of the study and was told they’d lose $1.40 each day they didn’t walk 7,000 steps. Achieving the goal avoided the unpleasant consequence of losing money. Fifty-five percent who were negatively reinforced met the daily goal. Professor Mitesh Patel said, “It was surprising how dramatically effective loss aversion [negative reinforcement] was.” *
By contrast, punishment weakens behavior (that is, decreases its frequency) by following behaviors with undesirable consequences. For example, the standard disciplinary or punishment process in most companies is an oral warning (“Don’t ever do that again”), followed by a written warning (“This letter is to discuss the serious problem you’re having with…”), followed by three days off without pay (“While you’re at home not being paid, we want you to think hard about…”), followed by being fired (“That was your last chance”). Though punishment can weaken behavior, managers must be careful to avoid the backlash that sometimes occurs when employees are punished at work. In an undoubtedly unique approach, a furniture store in China punishes employees who don’t meet daily sale goals by making them eat meal worms. At the end of each day, in public, employees who didn’t meet their sales goals are given a cup of liquor containing worms to drink. An employee said, “Today’s punishment is eating worms they bought from a pet market. Four worms for losing one customer.” * A manager explained, “We set sales targets for the next day and everyone signs a guarantee. If anyone fails to achieve the target, he or she will accept the punishment voluntarily. The targets are set by employees, with the purpose of self-motivation.” * Even though the sales targets are reportedly self-set, the punishment may be short-lived since local officials view it as “a type of physical punishment,” which employees can report, “to safeguard their rights and interests.” *
Extinction is a reinforcement strategy in which a positive consequence is no longer allowed to follow a previously reinforced behavior. By removing the positive consequence, extinction weakens the behavior, making it less likely to occur. Based on the idea of positive reinforcement, most companies give company leaders and managers substantial financial rewards when the company performs well. Based on the idea of extinction, you would then expect that leaders and managers would not be rewarded (that is, the positive consequence would be removed) when companies perform poorly. That’s what happened at Burberry Group, the London-based fashion house at which CEO Christopher Bailey saw his pay cut by 75 percent after the company’s revenue and profits dropped by 1 percent and 10 percent, respectively, and the value of its company stock plummeted by 35 percent in 2016. * If companies really want pay to reinforce the right kinds of behaviors rewards have to be removed, like at Burberry, when company management doesn’t produce successful performance.
13-4b. Schedules for Delivering Reinforcement
As mentioned earlier, a schedule of reinforcement is the set of rules regarding reinforcement contingencies, such as which behaviors will be reinforced, which consequences will follow those behaviors, and the schedule by which those consequences will be delivered. There are two categories of reinforcement schedules: continuous and intermittent.
With continuous reinforcement schedules, a consequence follows every instance of a behavior. For example, employees working on a piece-rate pay system earn money (consequence) for every part they manufacture (behavior). The more they produce, the more they earn. By contrast, with intermittent reinforcement schedules, consequences are delivered after a specified or average time has elapsed or after a specified or average number of behaviors has occurred. As Exhibit 13.7 shows, there are four types of intermittent reinforcement schedules. Two of these are based on time and are called interval reinforcement schedules; the other two, known as ratio schedules, are based on behaviors.
With fixed interval reinforcement schedules, consequences follow a behavior only after a fixed time has elapsed. For example, most people receive their paychecks on a fixed interval schedule (for example, once or twice per month). As long as they work (behavior) during a specified pay period (interval), they get a paycheck (consequence). With variable interval reinforcement schedules, consequences follow a behavior after different times, some shorter and some longer, that vary around a specified average time. On a 90-day variable interval reinforcement schedule, you might receive a bonus after 80 days or perhaps after 100 days, but the average interval between performing your job well (behavior) and receiving your bonus (consequence) would be 90 days.
With fixed ratio reinforcement schedules, consequences are delivered following a specific number of behaviors. For example, a car salesperson might receive a $1,000 bonus after every 10 sales. Therefore, a salesperson with only nine sales would not receive the bonus until finally selling that tenth car.
With variable ratio reinforcement schedules, consequences are delivered following a different number of behaviors, sometimes more and sometimes less, that vary around a specified average number of behaviors. With a 10-car variable ratio reinforcement schedule, a salesperson might receive the bonus after seven car sales, or after 12, 11, or 9 sales, but the average number of cars sold before receiving the bonus would be 10 cars.
Which reinforcement schedules work best? In the past, the standard advice was to use continuous reinforcement when employees were learning new behaviors because reinforcement after each success leads to faster learning. Likewise, the standard advice was to use intermittent reinforcement schedules to maintain behavior after it is learned because intermittent rewards are supposed to make behavior much less subject to extinction. * Research shows, however, that except for interval-based systems, which usually produce weak results, the effectiveness of continuous reinforcement, fixed ratio, and variable ratio schedules differs very little. * In organizational settings, all three consistently produce large increases over noncontingent reward schedules. So managers should choose whichever of these three is easiest to use in their companies.
13-4c. Motivating with Reinforcement Theory
What practical steps can managers take to use reinforcement theory to motivate employees? University of Nebraska business professor Fred Luthans, who has been studying the effects of reinforcement theory in organizations for more than a quarter of a century, says that there are five steps to motivating workers with reinforcement theory: identify, measure, analyze, intervene, and evaluate critical performance-related behaviors. *
Identify means singling out critical, observable, performance-related behaviors. These are the behaviors that are most important to successful job performance. In addition, they must also be easily observed so that they can be accurately measured. Measure means determining the baseline frequencies of these behaviors. In other words, find out how often workers perform them. Analyze means studying the causes and consequences of these behaviors. Analyzing the causes helps managers create the conditions that produce these critical behaviors, and analyzing the consequences helps them determine if these behaviors produce the results that they want. Intervene means changing the organization by using positive and negative reinforcement to increase the frequency of these critical behaviors. Evaluate means assessing the extent to which the intervention actually changed workers’ behavior. This is done by comparing behavior after the intervention to the original baseline of behavior before the intervention.
In addition to these five steps, managers should remember three other key things when motivating with reinforcement theory. First, Don’t reinforce the wrong behaviors. Although reinforcement theory sounds simple, it’s actually very difficult to put into practice. One of the most common mistakes is accidentally reinforcing the wrong behaviors. Sometimes organizations reinforce behaviors that they don’t want! To encourage green driving in Norway, the national government exempted electric cars from fees for toll roads, tunnels, ferries, and parking. With one of the highest costs of living (30% higher than the United States), not having to pay those fees has resulted in a surge of electric car usage in Norway. For example, Arne Nordbo avoids a $20 one-way fee every time he drives through the 3.5 mile undersea tunnel leading in and out of Finnoy, an island-locked Norwegian town. Finnoy borrowed $70 million to dig the tunnel, expecting drivers like Nordbo to pay off the loan via their $40-a-day tunnel fees. But with electric cars now making up 25 percent of all tunnel traffic, “We won’t be able to pay down the tunnel,” says Gro Skartveit, head of the company that operates the tunnel. * The Norwegian government now loses half a billion dollars a year in forgone tax revenue, and tunnel/ferry fees. Likewise, road operator revenues are down $40 million. Be careful what you reward!
Can Punishment Get Dog Owners to Pick up after Fido?
Dog owners are doing a terrible job of cleaning up after their pets. Cities have tried dispensing free dog poop baggies and posting signs asking dog owners to “Keep [insert city name here] Clean for All.” Since asking nicely didn’t work, many cities are becoming more vigilant about punishing dog owners who don’t pick up after their dogs. The city of Colmenar Viejo, Spain, began issuing fines after hiring private detectives to video record dogs and their offending owners. Brunete, Spain, used volunteers to identify lazy dog owners who surreptitiously collected dogs’ names (“My, what a cute dog! What’s her name?”). After dog names were matched to city registration records, offenders were mailed their dogs’ droppings. Said Mayor Borja Gutierrez, “It’s your dog, it’s your dog poop. We are just returning it to you.” Incidents of unscooped dog poop are now down by 70 percent.
Managers should also correctly administer punishment at the appropriate time. Many managers believe that punishment can change workers’ behavior and help them improve their job performance. Furthermore, managers believe that fairly punishing workers also lets other workers know what is or isn’t acceptable. * A danger of using punishment is that it can produce a backlash against managers and companies. But, if administered properly, punishment can weaken the frequency of undesirable behaviors without creating a backlash. * To be effective, the punishment must be strong enough to stop the undesired behavior and must be administered objectively (same rules applied to everyone), impersonally (without emotion or anger), consistently and contingently (each time improper behavior occurs), and quickly (as soon as possible following the undesirable behavior). In addition, managers should clearly explain what the appropriate behavior is and why the employee is being punished. Employees typically respond well when punishment is administered this way. *
Finally, managers should choose the simplest and most effective schedule of reinforcement. When choosing a schedule of reinforcement, managers need to balance effectiveness against simplicity. In fact, the more complex the schedule of reinforcement, the more likely it is to be misunderstood and resisted by managers and employees. For example, a forestry and logging company experimented with a unique variable ratio schedule. When tree-planters finished planting a bag of seedlings (about 1,000 seedlings per bag), they got to flip a coin. If they called the coin flip correctly (heads or tails), they were paid $4, double the regular rate of $2 per bag. If they called the coin flip incorrectly, they got nothing. The company began having problems when several workers and a manager, who was a part-time minister, claimed that the coin flip was a form of gambling. Then another worker found that the company was taking out too much money for taxes from workers’ paychecks. Because the workers didn’t really understand the reinforcement schedule, they blamed the payment plan associated with it and accused the company of trying to cheat them out of their money. After all of these problems, the researchers who implemented the variable ratio schedule concluded that “the results of this study may not be so much an indication of the relative effectiveness of different schedules of reinforcement as they are an indication of the types of problems that one encounters when applying these concepts in an industrial setting.” * In short, choose the simplest, most effective schedule of reinforcement. Because continuous reinforcement, fixed ratio, and variable ratio schedules are about equally effective, continuous reinforcement schedules may be the best choice in many instances by virtue of their simplicity.
13-5. Goal-Setting Theory
The basic model of motivation with which we began this chapter showed that individuals feel tension after becoming aware of an unfulfilled need. When they experience tension, they search for and select courses of action that they believe will eliminate this tension. In other words, they direct their behavior toward something. This something is a goal. A goal is a target, objective, or result that someone tries to accomplish. Goal-setting theory says that people will be motivated to the extent to which they accept specific, challenging goals and receive feedback that indicates their progress toward goal achievement.
Let’s learn more about goal setting by examining 13-5a the components of goal-setting theory and 13-5b how to motivate with goal-setting theory.
13-5a. Components of Goal-Setting Theory
The basic components of goal-setting theory are goal specificity, goal difficulty, goal acceptance, and performance feedback. * Goal specificity is the extent to which goals are detailed, exact, and unambiguous. Specific goals, such as “I’m going to have a 3.0 average this semester,” are more motivating than general goals, such as “I’m going to get better grades this semester.”
Goal difficulty is the extent to which a goal is hard or challenging to accomplish. Difficult goals, such as “I’m going to have a 3.5 average and make the dean’s list this semester,” are more motivating than easy goals, such as “I’m going to have a 2.0 average this semester.”
Goal acceptance, which is similar to the idea of goal commitment discussed in Chapter 5, is the extent to which people consciously understand and agree to goals. Accepted goals, such as “I really want to get a 3.5 average this semester to show my parents how much I’ve improved,” are more motivating than unaccepted goals, such as “My parents really want me to get a 3.5 average this semester, but there’s so much more I’d rather do on campus than study!”
Performance feedback is information about the quality or quantity of past performance and indicates whether progress is being made toward the accomplishment of a goal. General Electric (GE) managers now use a smartphone app to give employees immediate performance feedback. The app prompts managers to provide detailed feedback using categories such as Insights (for current challenges), Consider (for changes to make), and Continue (for actions to keep doing). Leonardo Baldassarre and Brien Finken, of GE’s Oil & Gas Turbomachinery Solutions explain, “For example, an engineer was asked to ‘consider’ being more open to supplier recommendations and to visit the supplier for a day. He did, and in GE’s Real-Time Performance Development the following weeks the change was apparent. He championed a new approach that doubled our overall savings rate on budgeted project costs. Similarly, a procurement specialist was told to ‘continue’ encouraging volume pricing and other such practices among vendors to increase savings.” *
How does goal setting work? To start, challenging goals focus employees’ attention (that is, direction of effort) on the critical aspects of their jobs and away from unimportant areas. Goals also energize behavior. When faced with unaccomplished goals, employees typically develop plans and strategies to reach those goals. Goals also create tension between the goal, which is the desired future state of affairs, and where the employee or company is now, meaning the current state of affairs. This tension can be satisfied only by achieving or abandoning the goal. Finally, goals influence persistence. Because goals only go away when they are accomplished, employees are more likely to persist in their efforts in the presence of goals, especially with performance feedback. Exhibit 13.8 incorporates goals into the motivation model by showing how goals directly affect tension, effort, and the extent to which employees are energized to take action.
13-5b. Motivating with Goal-Setting Theory
What practical steps can managers take to use goal-setting theory to motivate employees? Managers can do three things, beginning with assigning specific, challenging goals. One of the simplest, most effective ways to motivate workers is to give them specific, challenging goals. When the chief of staff of a CEO received feedback that he micromanaged and didn’t listen, he and his executive coach set specific, challenging goals to track his progress. Because changing work habits is difficult, he started with just three long-term goals, each accompanied by one short-term goal. For his “listen better” goal, the short-term goal was “attending one meeting a day without devices (smart phone, tablet, or laptop).” The short-term goal then increased to “two meetings a day,” and so on, until, after four months, he no longer took devices to meetings. *
Second, managers should make sure workers truly accept organizational goals. Specific, challenging goals won’t motivate workers unless they really accept, understand, and agree to the organization’s goals. For this to occur, people must see the goals as fair and reasonable. Employees must also trust management and believe that managers are using goals to clarify what is expected from them rather than to exploit or threaten them (“If you don’t achieve these goals…”). Participative goal setting, in which managers and employees generate goals together, can help increase trust and understanding and thus acceptance of goals. Furthermore, providing workers with training can help increase goal acceptance, particularly when workers don’t believe they are capable of reaching the organization’s goals. *
Finally, managers should provide frequent, specific, performance-related feedback. After employees have accepted specific, challenging goals, they should receive frequent performance-related feedback so that they can track their progress toward goal completion. Feedback leads to stronger motivation and effort in three ways. * Receiving specific feedback about the quality of their performance can encourage employees who don’t have specific, challenging goals to set goals to improve their performance. After people meet goals, performance feedback often encourages them to set higher, more difficult goals. And feedback lets people know whether they need to increase their efforts or change strategies in order to accomplish their goals.
13-6. Motivating with the Integrated Model
We began this chapter by defining motivation as the set of forces that initiates, directs, and makes people persist in their efforts to accomplish a goal. We also asked the basic question that managers ask when they try to figure out how to motivate their workers: What leads to effort? The answer to that question is likely to be somewhat different for each employee. So, if you’re having difficulty figuring out why people aren’t motivated where you work, check your Review Card for a useful, theory-based starting point.