answer a questions

Page 396

12.1

Motivating for Performance

MAJOR QUESTION What’s the motivation for studying motivation?

THE BIG PICTURE

Motivation is defined as the psychological processes that arouse and direct people’s goal-directed behavior. The model of how it works is that people have certain needs that motivate them to perform specific behaviors for which they receive rewards, both extrinsic and intrinsic, that feed back and satisfy the original need. The four major perspectives on motivation are content, process, job-design, and reinforcement.

What would make you rise a half hour earlier than usual to ensure you got to work on time—and to perform your best once there? 

Among the possible inducements (such as those offered by SAS, Google, and Salesforce): free snacks and free meals, on-site laundry, Friday afternoons off, child care assistance, freedom to paint your walls, tuition reimbursement, career counseling, and having your dog at work. How about repayment of your student loan—there’s a big one! (But only 3% of companies offer it.)12 How about getting paid to live near your job? (Housing subsidies are sometimes offered to attract new hires to high-rent areas like Silicon Valley.)13

Whether employment rates are high or low, there are always companies, industries, and occupations in which employers feel they need to bend over backward to retain their human capital.

Motivation: What It Is, Why It’s Important

Why do people do the things they do? The answer is this: They are mainly motivated to fulfill their wants and needs.

What Is Motivation and How Does It Work?

Motivation  may be defined as the psychological processes that arouse and direct goal-directed behavior. 14  Motivation is difficult to understand because you can’t actually see it or know it in another person; it must be inferred from one’s behavior. Nevertheless, it’s imperative that you as a manager understand the process of motivation if you are to guide employees in accomplishing your organization’s objectives.

The way motivation works actually is complex, the result of multiple personal and contextual factors. (See  Figure 12.1 .)

FIGURE 12.1  An integrated model of motivation Page 397

The individual personal factors that employees bring to the workplace range from personality to attitudes, many of which we described in  Chapter 11 . The contextual factors include organizational culture, cross-cultural values, the physical environment, and other matters we discuss in this chapter and the next. Both categories of factors influence an employee’s level of motivation and engagement at work.

However, motivation can also be expressed in a simple model—namely, that people have certain needs that motivate them to perform specific behaviors for which they receive rewards that feed back and satisfy the original need. (See  Figure 12.2 , below.)

FIGURE 12.2  A simple model of motivation

For example, as an hourly worker you desire more money (need), which impels you (motivates you) to work more hours (behavior), which provides you with more money (reward) and informs you (feedback loop) that working more hours will fulfill your need for more money in the future.

Rewards (as well as motivation itself) are of two types—extrinsic and intrinsic. 15  Managers can use both to encourage better work performance.

· Extrinsic rewards—satisfaction in the payoff from others. An  extrinsic reward  is the payoff, such as money, a person receives from others for performing a particular task. An extrinsic reward is an external reward; the payoff comes from pleasing others.

Example: The Air Force is offering a bonus to drone pilots if they extend their commitment to remain in the military. These pilots can earn $15,000 a year by extending for either five or nine years, and they have the option to receive half the total bonus up front. The Air Force is doing this because the demand for drone pilots exceeds the supply.16   

Another example: Companies are trying to reduce health care costs by paying employees to lose weight.17 (Some firms are asking their employees to pay higher insurance premiums to spur them to take off pounds, but that has not been found to be a strong enough motivation. “Financial incentives can work well—if they are separated from insurance premiums,” suggests one team of researchers.)18

· Intrinsic rewards—satisfaction in performing the task itself. An  intrinsic reward  is the satisfaction, such as a feeling of accomplishment, a person receives from performing the particular task itself. An intrinsic reward is an internal reward; the payoff comes from pleasing yourself.

Example: When Debbie Feit, a senior copywriter at MARS, a Southfield, Michigan–based marketing agency, was given a month-long paid sabbatical at a charitable organization of her choice, she chose to donate her time writing marketing materials and completing grant applications for children’s mental health organizations. “MARS could have just sent money to the organization,” Feit says, “but instead they also devoted my time to something I felt passionate about. I was very touched by the experience.”19

Page 398

We all are motivated by a combination of extrinsic and intrinsic rewards. Which type of reward is more valuable to you? Answering this question can help you generate self-motivation and higher performance. 

SELF-ASSESSMENT 12.1  

Are You More Interested in Extrinsic or Intrinsic Rewards?

The following survey was designed to assess extrinsic and intrinsic motivation. Please be prepared to answer these questions if your instructor has assigned Self-Assessment 12.1 in Connect.

1. What is more important to you, extrinsic or intrinsic rewards? Are you surprised by the results?

2. How can you use the results to increase your motivation to obtain good grades in your classes?

3. If you were managing someone like yourself, what would you do to increase the individual’s motivation?

Why Is Motivation Important?

It seems obvious that organizations would want to motivate their employees to be more productive. But motivation also plays a role in influencing a host of outcomes, including employee engagement, organizational citizenship, absenteeism, and service quality. 20  In order of importance, you as a manager want to motivate people to:

1. Join your organization. You need to instill in talented prospective workers the desire to come to work for you.

2. Stay with your organization. Whether you are in good economic times or bad, you always want to be able to retain good people.

3. Show up for work at your organization. In many organizations, absenteeism and lateness are tremendous problems.

4. Be engaged while at your organization. Engaged employees produce higher-quality work and better customer service.

5. Do extra for your organization. You hope your employees will perform extra tasks above and beyond the call of duty (be organizational “good citizens”).

The Four Major Perspectives on Motivation: Overview

There is no theory accepted by everyone as to what motivates people. In this chapter, therefore, we present the four principal perspectives. From these, you may be able to select what ideas seem most workable to you. The four perspectives on motivation are (1) content, (2) process, (3) job design, and (4) reinforcement, as described in the following four main sections. ●

Page 399

12.2

Content Perspectives on Employee Motivation

MAJOR QUESTION What kinds of needs motivate employees?

THE BIG PICTURE

Content perspectives are theories emphasizing the needs that motivate people. Needs are defined as physiological or psychological deficiencies that arouse behavior. The content perspective includes four theories: Maslow’s hierarchy of needs, McClelland’s acquired needs theory, Deci and Ryan’s self-determination theory, and Herzberg’s two-factor theory.

Content perspectives, also known as need-based perspectives, are theories that emphasize the needs that motivate people. Content theorists ask, “What kind of needs motivate employees in the workplace?”  Needs  are defined as physiological or psychological deficiencies that arouse behavior. They can be strong or weak, and, because they are influenced by environmental factors, they can vary over time and from place to place.

In addition to McGregor’s Theory X/Theory Y (see  Chapter 2 ), content perspectives include four theories:

· Maslow’s hierarchy of needs theory.

· McClelland’s acquired needs theory.

· Deci and Ryan’s self-determination theory.

· Herzberg’s two-factor theory.

Maslow’s Hierarchy of Needs Theory: Five Levels

In 1943, one of the first researchers to study motivation, Brandeis University psychology professor Abraham Maslow (mentioned previously in  Chapter 2 ), put forth his  hierarchy of needs theory, which proposes that people are motivated by five levels of needs: (1) physiological, (2) safety, (3) love, (4) esteem, and (5) self-actualization. 21  (See  Figure 12.3 .)

FIGURE 12.3  Maslow’s hierarchy of needs Page 400

The Five Levels of Needs

In proposing this hierarchy of five needs, ranging from basic to highest level, Maslow suggested that needs are never completely satisfied. That is, our actions are aimed at fulfilling the “deprived” needs, the needs that remain unsatisfied at any point in time. Thus, for example, once you have achieved safety (security), which is the second most basic need, you will then seek to fulfill the third most basic need—love (belongingness).

EXAMPLE

The “Chief Emotion Officer”: A Hotel CEO Applies Maslow’s Hierarchy to Employees, Customers, and Investors

Chip Conley is CEO and founder of boutique hotel company Joie de Vivre (JDV), whose mission statement is “creating opportunities to celebrate the joy of life.” In Peak: How Great Companies Get Their Mojo from Maslow, he describes how JDV used Maslow’s theory to motivate the business’s three key stakeholders—employees, customers, and investors—by tapping into the power of self-actualization to create peak performance. 22

Leaders act as CEOs—“Chief Emotion Officers”—says Conley.23 Drawing on the notion that emotions are just as contagious as the flu virus, Conley believes that you can spread positive emotions in the same way. Thus, for example, every senior management meeting ends with a leader describing someone in the organization who has done outstanding work, and then an executive is dispatched to thank that person.24

Motivating Employees. Applying the Maslow pyramid to employees, says Conley, “the basic need that a job satisfies is money. Toward the middle are needs like recognition for a job well done, and at the top are needs like meaning and creative expression.” 25

Thus, housekeepers, who represent half of a hotel’s workers, would be gathered in small groups and asked what the hotels would look like if they weren’t there each day. Following their answers (unvacuumed carpets, piled-up trash, bathrooms filled with wet towels), they were then asked to come up with alternative names for housekeeping. Some responses: “serenity keepers,” “clutter busters,” “the peace-of-mind police.”

From this exercise, workers developed a sense of how the customer experience would not be the same without them. 26  And that, says Conley, “gets to a sense of meaning in your work that satisfies that high-level human motivation.” Addressing the highest-level need gives employees “a sense that the job helps them become the best people they can be.” 27

Motivating Customers. Many hotels offer clean, safe accommodations. JDV designs each of its 30 hotels to “flatter and vindicate a different category of customers’ distinct self-image,” says Conley. Thus, in San Francisco, the Hotel Rex’s tweedy décor and Jack London touches appeal to urbane literary types. The corridors feature quotes by novelists John Steinbeck and Dashiell Hammett, the bar is called the Vicious Circle (a reference to the famed New York Algonquin literary hangout), and the lobby is stuffed with books and 1920s art.28 The Vitale’s fitness-conscious services and minimalist design target “the kind of bourgeois bohemian who might like Dwell Magazine.” 29

Motivating Investors. Although most investors focus on a “returns-driven relationship” (bottom of the pyramid), some have higher motivations. They are driven not by the deal “but rather [by] an interesting, worthwhile deal,” which JDV attempts to provide. 30

YOUR CALL

Part of the appeal of Maslow’s hierarchy, says social psychologist Douglas Kenrick of Arizona State University, is that the pyramid “captures a complicated idea in a very simple way.”31 Do you agree? How do you think managers at large can use this theory?  

Using the Hierarchy of Needs Theory to Motivate Employees

Research does not clearly support Maslow’s theory, although it remains popular among managers. Still, the importance of Maslow’s contribution is that he showed that workers have needs beyond that of just earning a paycheck. To the extent the organization permits, managers should first try to meet employees’ level 1 and level 2 needs, of course, so that employees won’t be preoccupied with them. Then, however, they need to give employees a chance to fulfill their higher-level needs in ways that also advance the goals of the organization. 32

McClelland’s Acquired Needs Theory: Achievement, Affiliation, and Power

Page 401

David McClelland, a well-known psychologist, investigated the needs for affiliation and power and as a consequence proposed the  acquired needs theory, which states that three needs—achievement, affiliation, and power—are major motives determining people’s behavior in the workplace. 33  McClelland believes that we are not born with our needs; rather, we learn them from the culture—from our life experiences.

The Three Needs

Managers are encouraged to recognize three needs in themselves and others and to attempt to create work environments that are responsive to them. The three needs, one of which tends to be dominant in each of us, are as follows. (See  Figure 12.4 , right.)

FIGURE 12.4  McClelland’s three needs

· Need for achievement—“I need to excel at tasks.” This is the desire to excel, to do something better or more efficiently, to solve problems, to achieve excellence in challenging tasks.

· Need for affiliation—“I need close relationships.” This is the desire for friendly and warm relations with other people.

· Need for power—“I need to control others.” This is the desire to be responsible for other people, to influence their behavior or to control them. 34

McClelland identifies two forms of the need for power—personal and institutional.

The negative kind is the need for personal power, as expressed in the desire to dominate others, and involves manipulating people for one’s own gratification.

The positive kind, characteristic of top managers and leaders, is the desire for institutional power, as expressed in the need to solve problems that further organizational goals.

Research tells us that your performance will vary along the lines of the three acquired needs. Where do you think you stand in terms of being motivated by these three needs? You can find out by completing  Self-Assessment 12.2 .

SELF-ASSESSMENT 12.2  

Assessing Your Acquired Needs

The following survey was designed to assess your motivation in terms of acquired needs. Please be prepared to answer these questions if your instructor has assigned Self-Assessment 12.2 in Connect.

1. What is the order of your most important needs? Are you surprised by this result?

2. Given that achievement and power needs are associated with career advancement, how might you increase these two need states?

Using Acquired Needs Theory to Motivate Employees

You can apply acquired needs theory by appealing to the preferences associated with each need when you (1) set goals, (2) provide feedback, (3) assign tasks, and (4) design the job.35 Let’s consider how you can apply this theory.36

Need for Achievement

People motivated by the need for achievement prefer working on challenging, but not impossible, tasks or projects. They like situations in which good performance relies on effort and ability rather than luck, and they like to be rewarded for their efforts. High achievers also want to receive a fair and balanced amount of positive and negative feedback. This enables them to improve their performance.

Need for Power

If you, like most effective managers, have a high need for power, that means you enjoy being in control of people and events and being recognized for this responsibility. Accordingly, your preference would probably be for work that allows you to control or have an effect on people and be publicly recognized for your accomplishments.

Page 402

Need for Affiliation

If you tend to seek social approval and satisfying personal relationships, you may have a high need for affiliation. In that case, you may not be the most efficient manager because at times you will have to make decisions that will make people resent you. Instead, you will tend to prefer work, such as sales, that provides for personal relationships and social approval.

Deci and Ryan’s Self-Determination Theory: Competence, Autonomy, and Relatedness

Developed by Edward Deci (pronounced “Dee-see”) and Richard Ryan, psychologists at the University of Rochester,  self-determination theory  assumes that people are driven to try to grow and attain fulfillment, with their behavior and well-being influenced by three innate needs: competence, autonomy, and relatedness. 37

Focus on Intrinsic Motivation

Self-determination theory focuses primarily on intrinsic motivation and rewards (such as feeling independent) rather than on extrinsic motivation and rewards (such as money or fame). Intrinsic motivation is longer lasting than extrinsic motivation and has a more positive impact on task performance. 38

The Three Innate Needs

To achieve psychological growth, according to the theory, people need to satisfy the three innate (that is, inborn) needs of competence, autonomy, and relatedness:

1. Competence—“I want to feel a sense of mastery.” People need to feel qualified, knowledgeable, and capable of completing a goal or task and to learn different skills.

2. Autonomy—“I want to feel independent and able to influence my environment.” People need to feel they have freedom and the discretion to determine what they want to do and how they want to do it.

3. Relatedness—“I want to feel connected to other people.” People need to feel a sense of belonging, of attachment to others.

Using Self-Determination Theory to Motivate Employees

Managers can apply this theory by engaging in leader behavior that fosters the experience of competence, autonomy, and relatedness.39 Following are some specific suggestions:

· Competence. Managers can provide tangible resources, time, contacts, and coaching to improve employee competence, making sure that employees have the knowledge and information they need to perform their jobs. Example: At Hindustan Unilever, senior managers are expected to spend 30% to 40% of their time in grooming people below them. Executives also change roles every two or three years, so they are always learning different aspects of the business.40

· Autonomy. To enhance feelings of autonomy, managers can develop trust with their employees and empower them by delegating meaningful tasks to them. Example: Best Buy’s corporate employees work in a “Results Only Work Environment” (ROWE), which means that no one in the company cares where, when, or how you work, only what you accomplish.41

· Relatedness. Many companies, such as Sacramento-based Nugget Market, use camaraderie to foster relatedness. Example: Reporter Jeremy McCarthy reported being at an Apple Store “when every employee in the store broke into a standing ovation for ten minutes to celebrate the transfer of one of their colleagues to a new store.” He goes on: “For her the ‘relatedness’ score must have been through the roof as they all lined up to give her a hug and cheer her on for her next role.”42  

Page 403

Are you feeling motivated in this course? To what extent does the instructor for this course satisfy your needs for competence, autonomy, and relatedness? You can find out by taking  Self-Assessment 12.3 .

SELF-ASSESSMENT 12.3  

Assessing Your Needs for Self-Determination

The following survey was designed to assess the extent to which an instructor is satisfying your needs for self-determination. Please be prepared to answer these questions if your instructor has assigned Self-Assessment 12.3 in Connect.

1. Are your needs being met? Do the results make sense in terms of your level of motivation in this course?

2. Based on the results, identify two things you might do to increase your motivation.

3. Based on the results, identify two things your instructor might do to increase your motivation.

Herzberg’s Two-Factor Theory: From Dissatisfying Factors to Satisfying Factors

Frederick Herzberg arrived at his needs-based theory as a result of a landmark study of 203 accountants and engineers who were interviewed to determine the factors responsible for job satisfaction and dissatisfaction. 43  Job satisfaction was more frequently associated with achievement, recognition, characteristics of the work, responsibility, and advancement. Job dissatisfaction was more often associated with working conditions, pay and security, company policies, supervisors, and interpersonal relationships. The result was Herzberg’s  two-factor theory, which proposed that work satisfaction and dissatisfaction arise from two different factors—work satisfaction from motivating factors and work dissatisfaction from hygiene factors .

Hygiene Factors versus Motivating Factors

In Herzberg’s theory, the hygiene factors are the lower-level needs, and the motivating factors are the higher-level needs. The two areas are separated by a zone in which employees are neither satisfied nor dissatisfied. (See  Figure 12.5 , next page.)

Page 404FIGURE 12.5  Herzberg’s two-factor theory: satisfaction versus dissatisfaction

· Hygiene factors—“Why are my people dissatisfied?” The lower-level needs,  hygiene factors, are factors associated with job dissatisfaction—such as salary, working conditions, interpersonal relationships, and company policy—all of which affect the job context in which people work.

We believe you can satisfy and motivate people by providing good hygiene factors. The Container Store, regularly rated as one of the top companies to work for by Fortune (No. 27 in 2016), is a good example. The company pays retail hourly salespeople roughly double the industry average, approximately $50,000 a year in 2014.44 Its rate of employee turnover, about 5.7%, is overwhelmingly lower than the industry average of 74.9%.45  

· Motivating factors—“What will make my people satisfied?” The higher-level needs,  motivating factors, or simply motivators, are factors associated with job satisfaction—such as achievement, recognition, responsibility, and advancement—all of which affect the job content or the rewards of work performance. Motivating factors—challenges, opportunities, recognition—must be instituted, Herzberg believed, to spur superior work performance.

An example of a motivating factor would be to give workers more control over their work. When Southwest Airlines decided not to charge passengers for shipping their luggage (though many competitors had long done so), onePage 405 reason was to avoid turning flight attendants into baggage handlers, as passengers tried to stuff more and more carry-on luggage into overhead bins—which would have made the flight attendants unhappy and in turn made passengers unhappy. “We want our employees to feel that their job [is] a calling,” said Southwest CEO Garry Kelly. “And the people who most have to feel that way are the ones closest to the customer.”46

How much do you want? Would a big desk in a big office with a view represent the tangible realization of managerial success for you? Would this be a motivation that would make you feel satisfied?© Baris Simsek/Getty Images RF

Using Two-Factor Theory to Motivate Employees

During the Great Recession, with fewer jobs available, many people felt they were stuck in jobs they disliked—only 39% said they were happy with their positions in 2009, according to a survey by the Conference Board. 47  In 2015, the survey found better results—49.63% of American workers said they were satisfied with their jobs. 48  Another study, however, finds that 88% of U.S. employees report overall satisfaction with their current job, with the important parts being compensation/pay (by 60%), job security (59%), and opportunities to use skills/abilities (also 59%). 49

There will always be some employees who dislike their jobs, but the basic lesson of Herzberg’s research is that you should first eliminate dissatisfaction (hygiene factors), making sure that working conditions, pay levels, and company policies are reasonable. You should then concentrate on spurring motivation by providing opportunities for achievement, recognition, responsibility, and personal growth (motivating factors).

Positive hygiene factors include allowing pets at work; offering video game arcades, fitness classes, and intramural sports (volleyball, soccer); and providing a library of free movies, books, and magazines. 50  If you work at Google, you could also have a college reimbursement plan, legal aid, and travel assistance—and if you die, the company will pay your family half your salary for a decade. 51

The four needs theories are compared below. (See  Figure 12.6 .) Note how acquired needs theory (McClelland) and self-determination theory (Deci and Ryan) focus only on higher-level needs. ●

FIGURE 12.6  A comparison of needs and satisfaction theories: Maslow hierarchy of needs, McClelland acquired needs, Deci and Ryan self-determination, and Herzberg two-factor

Page 406

12.3

Process Perspectives on Employee Motivation

MAJOR QUESTION Is a good reward good enough? How do other factors affect motivation?

THE BIG PICTURE

Process perspectives, which are concerned with the thought processes by which people decide how to act, have three viewpoints: equity/justice theory, expectancy theory, and goal-setting theory.

Process perspectives  are concerned with the thought processes by which people decide how to act—how employees choose behavior to meet their needs. Whereas need-based perspectives simply try to understand employee needs, process perspectives go further and try to understand why employees have different needs, what behaviors they select to satisfy them, and how they decide if their choices were successful.

In this section we discuss three process perspectives on motivation:

· Equity/justice theory

· Expectancy theory

· Goal-setting theory

Equity/Justice Theory: How Fairly Do You Think You’re Being Treated in Relation to Others?

Fairness—or, perhaps equally important, the perception of fairness—can be a big issue in organizations. For example, if, as a salesperson for Target, you received a 10% bonus for doubling your sales, would that be enough? What if other Target salespeople received 15%?

Equity theory  is a model of motivation that explains how people strive for fairness and justice in social exchanges or give-and-take relationships. Pioneered by psychologist J. Stacey Adams, equity theory is based on the idea that employees are motivated to see fairness in the rewards they expect for task performance and are motivated to resolve feelings of injustice.52 We will discuss Adams’s ideas and their application, then discuss the extension of equity theory into what is called justice theory. We conclude by discussing how to motivate employees with both equity and justice theory.

Equity theory is based on cognitive dissonance (see  Chapter 11 ), the psychological discomfort people experience between their cognitive attitude and incompatible behavior—a discomfort that, it’s suggested, motivates them to take action to maintain consistency between their beliefs and their behavior. Accordingly, when we are victimized by unfair social exchanges (“I was way overcharged for that car repair!”), our resulting cognitive dissonance prompts us to correct the situation—whether it’s slightly changing our attitude or behavior (“That shop is going to get my worst rating on Yelp”) or, at the extreme, committing sabotage or workplace violence.

Example: The typical American believes a CEO earns $1 million in annual pay, whereas the actual median compensation is about $10.3 million. Regardless, most Americans (74%) believe that CEOs are paid too much relative to the average worker.53 How, then, might employees respond to knowing that the average pay for CEOs in 2015 was about 210 times the average worker’s pay, up from 181 times in 2009?54 Some experts suggest that such imbalances are partly responsible for the $600 billion that is stolen annually in U.S. workplaces, or roughly $4,500 per employee.55

The Elements of Equity Theory: Comparing Your Inputs and Outputs with Those of Others

The key elements in equity theory are inputs, outputs (rewards), and comparisons. (See  Figure 12.7 , opposite page.)

Page 407FIGURE 12.7  Equity theory How people perceive they are being fairly or unfairly rewarded.

· Inputs—“What do you think you’re putting into the job?” The inputs that people perceive they give to an organization are their time, effort, training, experience, intelligence, creativity, seniority, status, and so on.

· Outputs or rewards—“What do you think you’re getting out of the job?” The outputs are the rewards that people receive from an organization: pay, benefits, praise, recognition, bonuses, promotions, status perquisites (corner office with a view, say, or private parking space), and so on.

· Comparison—“How do you think your ratio of inputs and rewards compares with those of others?” Equity theory suggests that people compare the ratio of their own outcomes to inputs against the ratio of someone else’s outcomes to inputs. When employees compare the ratio of their inputs and outputs (rewards) with those of others—whether coworkers within the organization or even other people in similar jobs outside it—they then make a judgment about fairness. Either they perceive there is equity, and so they are satisfied with the ratio and don’t change their behavior, or they perceive there is inequity, and so they feel resentful and act to change the inequity. 56

Using Equity Theory to Motivate Employees

Adams suggests that employees who feel they are being underrewarded will respond to the perceived inequity in one or more negative ways, as by reducing their inputs (“I’m just going to do the minimum required”), trying to change the outputs or rewards they receive (“If they won’t give me a raise, I’ll just take stuff”), distorting the inequity (“They’ve never paid me what I’m worth”), changing the object of comparison (“They think I don’t work as hard as Bob? He’s a slacker compared to Sid”), or leaving the situation (“I’m outta here!”). By contrast, employees who think they are treated fairly are more likely to support organizational change, more apt to cooperate in group settings, and less apt to turn to arbitration and the courts to remedy real or imagined wrongs.

Page 408

The Elements of Justice Theory: Distributive, Procedural, and Interactional 

Beginning in the later 1970s, researchers in equity theory began to expand into an area called organizational justice, which is concerned with the extent to which people perceive they are treated fairly at work. Three different components of organizational justice have been identified: distributive, procedural, and interactional. 57

· Distributive justice—“How fairly are rewards being given out?” Distributive justice reflects the perceived fairness of how resources and rewards are distributed or allocated.

· Procedural justice—“How fair is the process for handing out rewards?” Procedural justice is defined as the perceived fairness of the process and procedures used to make allocation decisions.

· Interactional justice—“How fairly am I being treated when rewards are given out?” Interactional justice relates to the “quality of the interpersonal treatment people receive when procedures are implemented,” in one definition.58 This form of justice is not about how decision making or procedures are perceived but rather with whether people themselves believe they are being treated fairly when decisions are implemented. Fair interpersonal treatment necessitates that managers communicate truthfully and treat people with courtesy and respect.

SELF-ASSESSMENT 12.4  

Measuring Perceived Fair Interpersonal Treatment

The following survey was designed to assess the extent to which you are experiencing fair interpersonal treatment at work. Please be prepared to answer these questions if your instructor has assigned Self-Assessment 12.4 in Connect.

1. Are you being treated equitably?

2. Based on examining the three lowest scoring items, what could your manager do to improve your perceptions of equity?

3. What can you do to increase your perceptions of fair interpersonal treatment? 

Using Equity and Justice Theories to Motivate Employees

Employees often may feel quite strongly about what they perceive to be an inequitable or unjust work situation. Often the source of their frustration is pay; one Gallup poll revealed that 51% of Americans felt they were underpaid.59

Your knowledge of equity and justice theories will allow you to hear out and better understand employee concerns. As an employee yourself, you can motivate other workers by clearly understanding and communicating their opportunities to improve their situations. You can communicate reasonable expectations and make sure objective measures for rewards are well understood.

Five practical lessons can be drawn from equity and justice theories, as follows.

1. Employee Perceptions Are What Count

No matter how fair management thinks the organization’s policies, procedures, and reward system are, each employee’s perception of the equity of those factors is what counts.

Example: Financial services corporation Morgan Stanley decided to pay 2012 bonuses in four equal installments, starting in May 2013 and going through January 2016. “Employees who quit or are laid off before the payments,” reported The Wall Street Journal, “stand to lose their deferred compensation unless they negotiate a separate deal with the company.”60 Executives at the company think that this is a good way to reduce risky behavior. Employees, however, think it is unfair. What do you think?

Page 409

2. Employees Want a Voice in Decisions That Affect Them

Managers benefit by allowing employees to participate in making decisions about important work outcomes. In general, employees’ perceptions of procedural justice are enhanced when they have a voice in the decision-making process. Voice is defined as “employees’ upward expression of challenging but constructive opinions, concerns, or ideas on work-related issues to their managers.” 61

Managers are encouraged to seek employee input on organizational changes that are likely to affect the workforce, but many managers are reluctant to follow this recommendation, according to a recent study. Moreover, employees were evaluated more negatively when they engaged in challenging forms of voice. Managers also were less likely to use these employees’ ideas.62 The lesson here: Be careful when you challenge your boss’s decisions.

3. Employees Should Be Given an Appeals Process

Employees who are given the opportunity to appeal decisions that affect their welfare enhance the perceptions of distributive and procedural justice.

4. Leader Behavior Matters

Employees’ perceptions of justice are strongly influenced by the leadership behavior exhibited by their managers (leadership is discussed in  Chapter 14 ). Thus, it is important for managers to consider the justice-related implications of their decisions, actions, and public communications.

Example: Employees at Honeywell, a multinational conglomerate, felt better about being asked to take furloughs—unpaid leave, while remaining employed—when they learned that their CEO and chairman, David Cole, did not take his $4 million bonus during the time employees were furloughed.63

5. A Climate for Justice Makes a Difference

Managers need to pay attention to the organization’s climate for justice. For example, an aggregation of 38 research studies demonstrated that an organization’s climate for justice was significantly related to team performance.64 Researchers also believe a climate of justice can significantly influence the type of customer service provided by employees. In turn, this level of service is likely to influence customers’ perceptions of “fair service” and their subsequent loyalty and satisfaction.

The discussion of equity/justice theory has important implications for your own career. For example, you could work to resolve negative inequity by asking for a raise or a promotion (raising your outputs) or by working fewer hours or exerting less effort (reducing inputs). You could also resolve the inequity cognitively, by adjusting your perceptions as to the value of your salary or other benefits (outcomes) or the value of the actual work done by you or your coworkers (inputs).

Expectancy Theory: How Much Do You Want and How Likely Are You to Get It?

Introduced by Victor Vroom,  expectancy theory  suggests that people are motivated by two things: (1) how much they want something and (2) how likely they think they are to get it. 65  In other words, assuming they have choices, people will make the choice that promises them the greatest reward if they think they can get it.

The Three Elements: Expectancy, Instrumentality, and Valence

What determines how willing you (or an employee) are to work hard at tasks important to the success of the organization? The answer, says Vroom, is that you will do what you can do when you want to.

Your motivation, according to expectancy theory, involves the relationship between your effort, your performance, and the desirability of the outcomes (such as pay or recognition) of your performance. These relationships, which are shown in the following drawing, are affected by the three elements of expectancy, instrumentality, and valence. (See  Figure 12.8 .)

Page 410FIGURE 12.8  Expectancy theory: the major elements

1. Expectancy—“Will I Be Able to Perform at the Desired Level on a Task?”

Expectancy  is the belief that a particular level of effort will lead to a particular level of performance. This is called the effort-to-performance expectancy.

Example: If you believe that putting in more hours working at Target selling clothes will result in higher sales, then you have high effort-to-performance expectancy. That is, you believe that your efforts will matter. You think you have the ability, the product knowledge, and so on so that putting in extra hours of selling can probably raise your sales of clothes.

2. Instrumentality—“What Outcome Will I Receive If I Perform at This Level?”

Instrumentality  is the expectation that successful performance of the task will lead to the outcome desired. This is called the performance-to-reward expectancy.

Example: If you believe that making higher sales will cause Target to give you a bonus, then you have high performance-to-reward expectancy. You believe that, if you can achieve your goals, the outcome will be worthwhile. This element is independent of the previous one—you might decide you don’t have the ability to make the extra sales, but if you did, you’d be rewarded. (For instance, lately, because of the public’s concern about the quality of the educational system in the United States, school boards and politicians are implementing programs that tie teachers’ pay to student performance.) 66

3. Valence—“How Much Do I Want the Outcome?”

Valence  is value, the importance a worker assigns to the possible outcome or reward.

Example: If you assign a lot of importance or a high value to Target’s prospective bonus or pay raise, then your valence is said to be high.

For your motivation to be high, you must be high on all three elements—expectancy, instrumentality, and valence. If any element is low, your motivation goes down. Your effort-to-performance expectancy might be low, for instance, because you doubt making an effort will make a difference (because retail clothing selling has too much competition). Or your performance-to-reward expectancy might be low because you don’t think Target is going to give you a bonus for being a star at selling. Or your valence might be low because you don’t think the bonus or raise is going to be high enough to justify working evenings and weekends.

Using Expectancy Theory to Motivate Employees

The principal problem with expectancy theory is that it is complex. Even so, the underlying logic is understandable, and research seems to show that many managers are not following its principles. 67

When attempting to motivate employees, managers should ask the following questions:

· What rewards do your employees value? As a manager, you need to get to know your employees and determine what rewards (outcomes) they value, such as pay raises or recognition.

· Page 411

What are the job objectives and the performance level you desire? You need to clearly define the performance objectives and determine what performance level or behavior you want so that you can tell your employees what they need to do to attain the rewards.

· Are the rewards linked to performance? You want to reward high performance, of course. Thus, employees must be aware that X level of performance within Y period of time will result in Z kinds of rewards. In a team context, however, research shows that it is best to use a combination of individual and team-based rewards. 68

· Do employees believe you will deliver the right rewards for the right performance? Your credibility is on the line here. Your employees must believe that you have the power, the ability, and the will to give them the rewards you promise for the performance you are requesting.

EXAMPLE

Reducing the F’s: Applying Expectancy Theory to Failing Students

“A highly skilled CEO is hard to find,” observes a business writer. “Highly paid CEOs, however, are everywhere you look.” 69

Indeed, the mass media are full of stories about top managers who don’t produce results but are still rewarded (such as the Staples executives who didn’t make their 2013 goals but received a special bonus anyway—“for effort”). 70  Where’s the inducement to deliver superior performance when you’re going to be rewarded anyway? 71

Maybe we can learn from high school.

Fewer F’s. As a principal in Arizona high schools, Dr. Tim Richard has used a motivational program called Celebration/Remediation to improve the grades of students. For instance, at 3,000-student Westwood High School in Mesa, which had 1,200 failing pupils, the number of students with F grades dropped to 900 within the first few months. At Poston Butte High School, the number of students with one or more F’s was reduced from 555 to 262 in nine weeks. “Once we changed the culture by bringing on Celebration/Remediation … ,” Richard said, “the kids have completely embraced it.” 72  (Poston Butte also rewards students who pass all their classes with an early release from school.)

Celebration or Remediation? At Westwood, the program works like this: “Students are allowed to go outside and have fun with their friends for 28 minutes on four mornings a week,” Richard told The Arizona Republic. “But those who have even one F must stay inside for ‘remediation’—28 minutes of extra study, help from peer tutors, or meetings with teachers.” 73

Richard believes the key to motivating students is to link a highly valued reward—socializing with friends outside—with grades. Socializing includes not only hanging out but also eating snacks, playing organized games, and listening and dancing to music. “You really appreciate celebration after you have been in remediation,” said Ivana Baltazar, a 17-year-old senior who raised her grade in economics from an F to a B after receiving help through the program.

YOUR CALL

The tricky part, observes Westwood student tutor Joseph Leung, is addressing expectancy—“getting people out of the mindset that they can’t succeed. … A lot of times they just haven’t done their homework. I try to help them understand that the difference between a person passing and failing is their work ethic.” For top executives in business, expectancy doesn’t seem to be a problem; rather, it’s instrumentality and valence. How could you apply Richard’s program to reward performance in business?

Goal-Setting Theory: Objectives Should Be Specific and Challenging but Achievable

We have been considering the importance of goal setting since first introducing the topic in  Chapter 5 .  Goal-setting theory  suggests that employees can be motivated by goals that are specific and challenging but achievable. According to psychologists Edwin Locke and Gary Latham, who developed the theory, it is natural for people to set and strive for goals; however, the goal-setting process is useful only if people understand and accept the goals.

Page 412

The Four Motivational Mechanisms of Goal-Setting Theory

Goal setting helps motivate you by doing the following:

1. It Directs Your Attention

Goal setting directs your attention toward goal-relevant tasks and away from irrelevant ones.

2. It Regulates the Effort Expended

The effort you expend is generally proportional to the goal’s difficulty.

3. It Increases Your Persistence

Goal setting makes obstacles become challenges to be overcome, not reasons to fail.

4. It Fosters Use of Strategies and Action Plans

The use of strategies and action plans make it more likely that you will realize success.

Some Practical Results of Goal-Setting Theory

A goal is defined as an objective that a person is trying to accomplish through his or her efforts. Goal-setting experts Locke and Latham proposed the following recommendations when implementing a goal-setting program.74 To result in high motivation and performance, according to recent research, goals must have a number of characteristics, as follows.

1. Goals Should Be Specific

Goals that are specific and difficult lead to higher performance than general goals like “Do your best” or “Improve performance.” This is why it is essential to set specific, challenging goals. Goals such as “Sell as many cars as you can” or “Be nicer to customers” are too vague. Instead, goals need to be specific—usually meaning quantitative, as in “Boost your revenues 25%” and “Cut absenteeism by 10%.” 75

2. Certain Conditions Are Necessary for Goal Setting to Work

People must have the ability and resources needed to achieve the goal, and they need to be committed to the goal.

3. Goals Should Be Linked to Action Plans

An action plan outlines the activities or tasks that need to be accomplished in order to obtain a goal and reminds us of what we should be working on. Both individuals (such as college students) and organizations are more likely to achieve their goals when they develop detailed action plans. 76

Example: Teams of employees at Tornier, a medical device manufacturer in Amsterdam, meet every 45, 60, or 90 days to create action plans for completing their goals. Implementation of the plans can take between 6 and 18 months, depending on the complexity of the goal.77

4. Performance Feedback and Participation in Deciding How to Achieve Goals Are Necessary but Not Sufficient for Goal Setting to Work

Feedback and participation enhance performance only when they lead employees to set and commit to a specific, difficult goal.

Example: Take Jim’s Formal Wear, a tuxedo wholesaler in Illinois. “Once a week,” says one report, “employees meet with their teams to discuss their efforts and what changes should be made the next week. Employees frequently suggest ways to improve efficiency or save money, such as reusing shipping boxes and hangers.”78 Goals lead to higher performance when you use feedback and participation to stay focused and committed to a specific goal. Some of the preceding recommendations are embodied in the advice we presented in  Chapter 5 —namely, that goals should be SMART: Specific, Measurable, Attainable, Results-oriented, and having Target dates.

Page 413

12.4

Job Design Perspectives on Motivation

MAJOR QUESTION What’s the best way to design jobs—adapt people to work or work to people?

THE BIG PICTURE

Job design, the division of an organization’s work among employees, applies motivational theories to jobs to increase performance and satisfaction. The traditional approach to job design is to fit people to the jobs; the modern way is to fit the jobs to the people, using job enrichment and approaches that are based on Herzberg’s landmark two-factor theory, discussed earlier in this chapter. The job characteristics model offers five job attributes for better work outcomes.

About half of workers reported in a recent year that their current job was stagnant. 79  Is there anything that can be done about this?

Job design  is (1) the division of an organization’s work among its employees and (2) the application of motivational theories to jobs to increase satisfaction and performance. There are two different approaches to job design—one traditional, one modern—that can be taken in deciding how to design jobs. The traditional way is fitting people to jobs; the modern way is fitting jobs to people. 80

Fitting People to Jobs

Fitting people to jobs is based on the assumption that people will gradually adapt to any work situation. Even so, jobs must still be tailored so that nearly anyone can do them. This is the approach often taken with assembly-line jobs and jobs involving routine tasks. For managers the main challenge becomes “How can we make the worker most compatible with the work?”

One technique is  scientific management, the process of reducing the number of tasks a worker performs. When a job is stripped down to its simplest elements, it enables a worker to focus on doing more of the same task, thus increasing employee efficiency and productivity. This may be especially useful, for instance, in designing jobs for mentally disadvantaged workers, such as those jobs run by Goodwill Industries. However, research shows that simplified, repetitive jobs lead to job dissatisfaction, poor mental health, and a low sense of accomplishment and personal growth. 81

Fitting Jobs to People

Fitting jobs to people is based on the assumption that people are underutilized at work and that they want more variety, challenges, and responsibility. This philosophy, an outgrowth of Herzberg’s theory, is one of the reasons for the popularity of work teams in the United States. The main challenge for managers is “How can we make the work most compatible with the worker so as to produce both high performance and high job satisfaction?”

Two techniques for this type of job design are (1) job enlargement and (2) job enrichment.

Job Enlargement: Putting More Variety into a Job

The opposite of scientific management,  job enlargement  consists of increasing the number of tasks in a job to increase variety and motivation. For instance, the job of installing flat screens in television sets could be enlarged to include installation of the circuit boards as well.

Page 414

Although proponents claim job enlargement can improve employee satisfaction, motivation, and quality of production, research suggests job enlargement by itself won’t have a significant and lasting positive effect on job performance. After all, working at two boring tasks instead of one doesn’t add up to a challenging job. Instead, job enlargement is just one tool of many that should be considered in job design. 82

Job Enrichment: Putting More Responsibility and Other Motivating Factors into a Job

Job enrichment is the practical application of Frederick Herzberg’s two-factor motivator-hygiene theory of job satisfaction. 83  Specifically,  job enrichment  consists of building into a job such motivating factors as responsibility, achievement, recognition, stimulating work, and advancement.

However, instead of the job-enlargement technique of simply giving employees additional tasks of similar difficulty (known as horizontal loading), with job enrichment employees are given more responsibility (known as vertical loading).

Intuit, for example, encourages employees “to spend 10% of their working time on projects and ideas of their own, even if they are not related to their assignments.” The company has found that this practice has led to the creation of several successful new products.84

The Job Characteristics Model: Five Job Attributes for Better Work Outcomes

Developed by researchers J. Richard Hackman and Greg Oldham, the job characteristics model of design is an outgrowth of job enrichment. 85  The  job characteristics model  consists of (a) five core job characteristics that affect (b) three critical psychological states of an employee that in turn affect (c) work outcomes—the employee’s motivation, performance, and satisfaction. The model is illustrated below. (See  Figure 12.9 .)

FIGURE 12.9  The job characteristics model Source: From J. Richard Hackman and Greg R. Oldham, Work Redesign, le ©1980. Reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey. Page 415

Five Job Characteristics

The five core job characteristics are skill variety, task identity, task significance, autonomy, and feedback, as follows.

1. Skill Variety—“How Many Different Skills Does Your Job Require?”

Skill variety describes the extent to which a job requires a person to use a wide range of different skills and abilities.

Example: The skill variety required by an executive chef is higher than that for a coffeehouse barista.

Skill variety. Being a symphony conductor—or an airline pilot, a building contractor, a physician, or a watch maker—requires a greater number of skills than, say, driving a truck. Do highly skilled employees typically make good managers? What skills do airline pilots have that would make them effective managers in other kinds of work?© Alenavlad/Shutterstock RF

2. Task Identity—“How Many Different Tasks Are Required to Complete the Work?”

Task identity describes the extent to which a job requires a worker to perform all the tasks needed to complete the job from beginning to end.

Example: The task identity for a craftsperson who goes through all the steps to build a stained-glass church window is higher than it is for an assembly-line worker who installs just the windshields on cars.

3. Task Significance—“How Many Other People Are Affected by Your Job?”

Task significance describes the extent to which a job affects the lives of other people, whether inside or outside the organization.

Example: A technician who is responsible for keeping a hospital’s electronic equipment in working order has higher task significance than a person wiping down cars in a carwash.

4. Autonomy—“How Much Discretion Does Your Job Give You?”

Autonomy describes the extent to which a job allows an employee to make choices about scheduling different tasks and deciding how to perform them.

Example: College-textbook salespeople have lots of leeway in planning which campuses and professors to call on. Thus, they have higher autonomy than do toll-takers on a bridge, whose actions are determined by the flow of vehicles.

5. Feedback—“How Much Do You Find Out How Well You’re Doing?”

Feedback describes the extent to which workers receive clear, direct information about how well they are performing the job.

Example: Professional basketball players receive immediate feedback on how many of their shots are going into the basket. Engineers working on new weapons systems may go years before learning how effective their performance has been.

How the Model Works

According to the job characteristics model, these five core characteristics affect a worker’s motivation because they affect three criticalPage 416 psychological states: meaningfulness of work, responsibility for results, and knowledge of results. (Refer to  Figure 12.9  again.) In turn, these positive psychological states fuel high motivation, high performance, high satisfaction, and low absenteeism and turnover.

One other element—shown at the bottom of  Figure 12.9 —needs to be discussed: contingency factors. This refers to the degree to which a person wants personal and psychological development. Job design works when employees are motivated; to be so, they must have three attributes: (1) necessary knowledge and skill, (2) desire for personal growth, and (3) context satisfactions—that is, the right physical working conditions, pay, and supervision.

Job design works. But keep in mind that it is not for everyone. It is more likely to work when people have the required knowledge and skills, when they want to develop, and when they are satisfied with their jobs.

Applying the Job Characteristics Model

There are three major steps to follow when applying the model.

· Diagnose the work environment to see whether a problem exists. Hackman and Oldham developed a self-report instrument for managers to use called the job diagnostic survey. This will indicate whether an individual’s so-called motivating potential score (MPS)—the amount of internal work motivation associated with a specific job—is high or low.

· Determine whether job redesign is appropriate. If a person’s MPS is low, an attempt should be made to determine which of the core job characteristics is causing the problem. You should next decide whether job redesign is appropriate for a given group of employees. Job design is most likely to work in a participative environment in which employees have the necessary knowledge and skills.

· Consider how to redesign the job. Here you try to increase those core job characteristics that are lower than national norms.

Example: Employers want to save on health costs by helping employees with diabetes, heart disease, and similar chronic conditions avoid emergency room visits and hospital admissions. 86  However, since primary care doctors, who could help patients manage their conditions (as by reminding diabetics to monitor their blood-glucose levels daily), are paid less than physicians in other specialties, the system has turned such doctors “into little chipmunks on a wheel, pumping out patients every five minutes,” as one observer described it. 87

The proposed solution? Redesign the job by rewarding primary care doctors for spending more time with patients.88 (Some perils to avoid: complex compensation designs, poor alignment of goals, and lack of defined, actionable measures, all of which can lead to unintended consequences and failure.)89

Page 417

12.5

Reinforcement Perspectives on Motivation

MAJOR QUESTION What are the types of incentives I might use to influence employee behavior?

THE BIG PICTURE

Reinforcement theory suggests behavior will be repeated if it has positive consequences and won’t be if it has negative consequences. There are four types of reinforcement: positive reinforcement, negative reinforcement, extinction, and punishment. This section also describes how to use some reinforcement techniques to modify employee behavior.

Reinforcement evades the issue of people’s needs and thinking processes in relation to motivation, as we described under the need-based and process perspectives. Instead, the reinforcement perspective, which was pioneered by Edward L. Thorndike and B. F. Skinner, is concerned with how the consequences of a certain behavior affect that behavior in the future. 90

Skinner was the father of operant conditioning, the process of controlling behavior by manipulating its consequences. Operant conditioning rests on Thorndike’s  law of effect,  which says behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear. 91

From these underpinnings has come  reinforcement theory , which attempts to explain behavior change by suggesting that behavior with positive consequences tends to be repeated, whereas behavior with negative consequences tends not to be repeated. The use of reinforcement theory to change human behavior is called behavior modification.

The Four Types of Reinforcement: Positive, Negative, Extinction, and Punishment

Reinforcement  is anything that causes a given behavior to be repeated or inhibited, whether praising a child for cleaning his or her room or scolding a child for leaving a tricycle in the driveway.

There are four types of reinforcement: (1) positive reinforcement, (2) negative reinforcement, (3) extinction, and (4) punishment. (See  Figure 12.10 , next page.)

FIGURE 12.10  Four types of reinforcement These are different ways of changing employee behavior.

Positive Reinforcement: Strengthens Behavior

Positive reinforcement  is the use of positive consequences to strengthen a particular behavior.

Example: A supervisor who has asked an insurance salesperson to sell more policies might reward successful performance by saying, “It’s great that you exceeded your sales quota, and you’ll get a bonus for it. Maybe next time you’ll sell even more and will become a member of the Circle of 100 Top Sellers and win a trip to Paris as well.” Note the rewards: praise, more money, recognition, awards. Presumably this will strengthen the behavior and the sales rep will work even harder in the coming months.

Negative Reinforcement: Also Strengthens Behavior

Negative reinforcement  is the process of strengthening a behavior by withdrawing something negative.

Example: A supervisor who has been nagging a salesperson might say, “Well, so you exceeded your quota” and stop the nagging. Note the neutral statement; there is no praise but also no longer any negative statements. This could cause the sales rep to maintain his or her existing behavior.

Page 418

Extinction: Weakens Behavior

Extinction  is the weakening of behavior by ignoring it or making sure it is not reinforced.

Example: A supervisor might tell a successful salesperson, “I know you exceeded your sales-goal quota, but now that our company has been taken over by another firm, we’re not giving out bonuses anymore.” Presumably this will weaken the salesperson’s efforts to perform better in the future.

Punishment: Also Weakens Behavior

Punishment  is the process of weakening behavior by presenting something negative or withdrawing something positive.

Example: The U.S. Department of Transportation now fines airlines up to $27,500 per passenger for planes left on the tarmac for more than three hours. This policy reduced reported cases from 535 to 12 in the first year it was implemented.92

EXAMPLE

Reinforcement: How Do You Tie CEO Pay to Performance?

Earlier we mentioned the problem of CEOs who don’t produce results but are still rewarded with special bonuses anyway. However, some boards of directors are now trying to tie CEO compensation to actual performance. Consider the following.

Better Food Safety? In 2016, Chipotle Mexican Grill, which had suffered from a series of illness outbreaks thought to originate in its restaurants’ food-safety practices, decided to tie the future compensation of its executives directly to the company’s share price performance.93Page 419 However, some critics question whether this is a fair arrangement, saying that it might be better to base compensation on improvements in food safety rather than on stock price alone.94

Realizing Environmental Goals? At Intel and other companies, executive compensation is being tied to corporate sustainability goals, including reduction in energy costs and consumption. “Sustainability has slowly moved into the realm of finance and corporate oversight,” says a Forbes writer, “as energy, carbon emissions, water, and waste have become financial assets in terms of reduced cost, risk mitigation, and new lines of revenue.”95 However, not everyone is convinced tying CEO pay to sustainability is a slam dunk. For publicly traded companies that live and die by their quarterly earnings, this kind of long-term plan “is a tough nut to crack,” says one experienced observer.96

YOUR CALL

You can understand how increasing executive compensation can easily be based on performance—if the only indicator of performance is the company’s higher stock price. But what if what is really wanted is something other than money, such as food safety or better environmental practices? One study, in fact, found a link between lavish stock option grants to executives and serious product recalls.97 What’s missing, in your opinion? (To get some clarity, read on.)

Using Reinforcement to Motivate Employees

The following are some guidelines for using two types of reinforcement—positive reinforcement and punishment.

Positive Reinforcement

There are several aspects of positive reinforcement, which should definitely be part of your toolkit of managerial skills:

· Reward only desirable behavior. You should give rewards to your employees only when they show desirable behavior. Thus, for example, you should give praise to employees not for showing up for work on time (an expected part of any job) but for showing up early.

· Give rewards as soon as possible. You should give a reward as soon as possible after the desirable behavior appears. Thus, you should give praise to an early-arriving employee as soon as he or she arrives, not later in the week.

· Be clear about what behavior is desired. Clear communication is everything. You should tell employees exactly what kinds of work behaviors are desirable, and you should tell everyone exactly what he or she must do to earn rewards.

· Have different rewards and recognize individual differences. Recognizing that different people respond to different kinds of rewards, you should have different rewards available. Thus, you might give a word of praise verbally to one person, text or e-mail a line or two to another person, or send a hand-scrawled note to another.

Punishment

Unquestionably there will be times when you’ll need to threaten or administer an unpleasant consequence to stop an employee’s undesirable behavior. Sometimes it’s best to address a problem by combining punishment with positive reinforcement. Some suggestions for using punishment are as follows.

· Punish only undesirable behavior. You should give punishment only when employees show frequent undesirable behavior. Otherwise, employees may come to view you negatively, as a tyrannical boss. Thus, for example, you should reprimand employees who show up, say, a half hour late for work but not 5 or 10 minutes late.

· Page 420Give reprimands or disciplinary actions as soon as possible. You should mete out punishment as soon as possible after the undesirable behavior occurs. Thus, you should give a reprimand to a late-arriving employee as soon as he or she arrives.

· Be clear about what behavior is undesirable. Tell employees exactly what kinds of work behaviors are undesirable and make any disciplinary action or reprimand match the behavior. A manager should not, for example, dock an hourly employee’s pay if he or she is only 5 or 10 minutes late for work.

· Administer punishment in private. You would hate to have your boss chew you out in front of your subordinates, and the people who report to you also shouldn’t be reprimanded in public, which would lead only to resentments that may have nothing to do with an employee’s infractions.

· Combine punishment and positive reinforcement. If you’re reprimanding an employee, be sure to also say what he or she is doing right and state what rewards the employee might be eligible for. For example, while reprimanding someone for being late, say that a perfect attendance record over the next few months will put that employee in line for a raise or promotion. ●

Punishment. What do you feel if you see a police car with lights and siren coming up behind you? Would getting a $260 speeding ticket change your behavior? What if it happened several times? Yet consider also other, presumably stronger forms of governmental punishment that are supposed to act as deterrents to bad behavior. Does the possibility of the death penalty really deter homicides? Why or why not?© YAY Media AS/Alamy Stock Photo

This section is highlighted because it contains topics that are especially important for you.

x

Page 421

12.6

Using Compensation, Nonmonetary Incentives, and Other Rewards to Motivate: In Search of the Positive Work Environment

MAJOR QUESTION How can I use compensation and other rewards to motivate people?

THE BIG PICTURE

Compensation, the main motivator of performance, includes pay for performance, bonuses, profit sharing, gainsharing, stock options, and pay for knowledge. Other, nonmonetary incentives address needs that aren’t being met, such as work–life balance, growth in skills, positive work environment, and meaning in work. 

Here let us consider the principal tools found in the modern workplace to motivate employees to perform—and to perform at the height of their abilities. We begin with various forms of compensation. We then address nonmonetary incentives: employees’ (1) need for work–life balance, (2) need to expand their skills, (3) need for a positive work environment, and (4) need to matter—to find meaning in their work.

Would you, as a young professional, be willing to take a $7,600 pay cut for a better quality of work life?

That’s what most Millennial professionals said, in a recent study by Fidelity Investments.98 Most said they wouldn’t mind taking a hefty pay cut “if it meant improved work–life balance, career development, company culture, and purposeful work,” according to one report.99

Is Money the Best Motivator?

Whatever happened to good old money as a motivator?

Most workers rate having a caring boss higher than they value monetary benefits, according to several surveys.100 For 30 years, the Great Place to Work Institute has determined that the bedrock features of a great workplace consist of three things: “pride, camaraderie, and trust in leaders”—that is, pride in the company, camaraderie with colleagues, and trust in management.101 Clearly, then, motivating doesn’t just involve dollars.

Motivation and Compensation

Most people are paid an hourly wage or a weekly or monthly salary. Both of these are easy for organizations to administer, of course. But by itself a wage or a salary gives an employee little incentive to work hard. Incentive compensation plans try to do so, although no single plan will boost the performance of all employees. (Indeed, a Wall Street Journal analysis found that none of 2015’s highest-paid CEOs ran one of the 10 best-performing companies. Only three of those executives headed a firm ranked among the top 10% in total shareholder return.)102

Characteristics of the Best Incentive Compensation Plans

In accordance with most of the theories of motivation we described earlier, for incentive plans to work, certain criteria are advisable, as follows. (1) Rewards must be linked to performance and be measurable. (2) The rewards must satisfy individual needs. (3) The rewards must be agreed on by manager and employees. (4) The rewards must be believable and achievable by employees.

Page 422

Popular Incentive Compensation Plans

In what way would you like to be rewarded for your efforts? Some of the most well-known incentive compensation plans are pay for performance, bonuses, profit sharing, gainsharing, stock options, and pay for knowledge.

· Pay for performance. Also known as merit pay,  pay for performance  bases pay on one’s results. Thus, different salaried employees might get different pay raises and other rewards (such as promotions) depending on their overall job performance. 103

Examples: One standard pay-for-performance plan is payment according to a  piece rate, in which employees are paid according to how much output they produce, as is often used with farm workers picking fruits or vegetables. Another is the  sales commission, in which sales representatives are paid a percentage of the earnings the company made from their sales, so that the more they sell, the more they are paid. 104

· Bonuses.  Bonuses  are cash awards given to employees who achieve specific performance objectives.

Example: The department store Nieman Marcus pays its salespeople a percentage of the earnings from the goods they sell.

Unfortunately, the documents that most companies file (proxy documents to the Securities and Exchange Commission) to explain what specific targets executives had to meet to earn their bonuses are not very clear, being couched mainly in legalese. 105

· Profit sharing.  Profit sharing  is the distribution to employees of a percentage of the company’s profits.

Example: In one T-shirt and sweatshirt manufacturing company, 10% of pretax profits are distributed to employees every month, and more is given out at the end of the year. Distributions are apportioned according to such criteria as performance, attendance, and lateness for individual employees.

· Gainsharing.  Gainsharing  is the distribution of savings or “gains” to groups of employees who reduced costs and increased measurable productivity. Gainsharing has been applied in a variety of industries, from manufacturing to nonprofit, and is said to be used in more than a quarter of Fortune 1,000 companies, as well as many small to mid-size businesses. 106  In one version (the so-called Scanlon plan), a portion of any cost savings, usually 75%, is distributed to employees. 

Example: In a recent year, Indianapolis-based Mike’s Carwash paid out $569,000 in gainsharing to 437 employees in 37 locations who had been challenged to beat targets set at the corporate level. Employees averaged $1.25 extra per hour.107 Gainsharing has also been used to get truck drivers to ease off the accelerator in order to achieve fleet sustainability goals to increase fuel economy and decrease greenhouse gas emissions.108

· Stock options. With  stock options, certain employees are given the right to buy stock at a future date for a discounted price. About 20% of the U.S. workforce outside the government participate in some sort of employee stock ownership program.109 The motivator here is that employees holding stock options will supposedly work hard to make the company’s stock rise so that they can obtain it at a cheaper price. Along with its other benefits, by giving stock options to all employees who work 20 or more hours a week, Starbucks Corp. has been able to hold its employee turnover rate to about 65% per year (25% for managers) compared to 150%–400% for employees at chain retailers (50% for managers).110 

· Pay for knowledge. Also known as skill-based pay,  pay for knowledge  ties employee pay to the number of job-relevant skills or academic degrees they earn. 111

Example: The teaching profession is a time-honored instance of this incentive, in which elementary and secondary teachers are encouraged to increase their salaries by earning further college credit. However, firms such as FedEx also have pay-for-knowledge plans.

Page 423Motivation as a small business owner. Pizza chef Tony Gemignani demonstrates the proper technique for making pizza. Gemignani, who worked in and studied many U.S. pizza parlors, was inspired by a 2000 visit to Italy to learn how to make award-winning char-spotted, soft-centered Neapolitan pizza, a learning process that took seven years and involved grinding his own sausage and pulling his own mozarella. Opening his own restaurant in 2009 showed that he had read the market correctly for American public taste and love of choices. Coupling good food with a flair for the dramatic (restaurant decor featuring metal sculptures resembling tribal tattoos, for instance), Gemignani and his partners opened Pizza Rock, which now has several California and Nevada stores.112 For some people, like Gemignani, the only way to merge motivation and compensation is to own and manage their own business. What factors or incentives motivate you to work hard?© Eric Risberg/AP Photo

Nonmonetary Ways of Motivating Employees

Employees who can behave autonomously, solve problems, and take the initiative are apt to be the very ones who will leave if they find their own needs aren’t being met—namely, (1) the need for work–life balance, (2) the need to expand their skills, (3) the need for a positive work environment, and (4) the need to matter—to find meaning in their work.

The Need for Work–Life Balance

For more than half of men and women in a 2013 Accenture survey, work–life balance was the key determinant of career success—ahead of money, recognition, autonomy, or making a difference. 113  In another survey, 46% of employees said work–life balance was the thing they valued most when looking for a new job (second only to salary, cited by 57%). According to Pew Research, Millennials in particular are apt to say the most important things in life are “being a good parent” (52%) and “having a successful marriage” (30%), rather than “having a high-paying career” (15%). 114

As mentioned, most Millennial professionals said they wouldn’t mind taking a big pay cut if it meant improved work–life balance, career development, and purposeful work.115 A Gallup poll finds they want good jobs, with regular paychecks from employers, and they want to be engaged in those jobs, but they want to be able to talk to their managers about non-work-related issues.116

Among the employer offerings designed to cater to the desire for work–life balance (at least for some employees) are work–life benefits, flex-time, and vacation/sabbatical time:

· Work–life benefits. Work–life benefits  are employer-sponsored benefit programs or initiatives designed to help all employees balance work life with home life. 117  The purpose of such benefits is to remove barriers that make it hard for people to strike a balance between their work and personal lives, such as allowing parents time off to take care of sick children. The worst obstacles to work–life balance, according to one survey, are bad bosses—defined as “demanding, overbearing, and mean.” Constant work beyond standard business hours and inflexible scheduling tied for second. Third were incompetent colleagues and long commutes.118

Work–life benefits include helping employees with day care costs or even establishing on-site centers; offering domestic-partner benefits; giving job-protected leave for new parents; and providing technology such as mobile phones and laptops to enable parents to work at home.119 (Unfortunately, the workplace culture often tends to discourage paid leave for parents, particularly fathers.)120

How good are U.S. employers at making work–life benefits available? The United States actually ranks fairly low on this feature—29 out of 36 on a list of countries with the best work–life balance.121 And although two-thirds (67%) of HR professionals think their employees have a balanced work life, according to one survey, among employees themselves nearly half (45%) still crave more time each week for personal activities.122

Page 424 Balancing work with life. Work factors don’t always allow for life factors—sick children, school appointments, family emergencies, problems with aging parents, medical appointments, and other personal matters. People around the world are urging employees to ease the single-minded focus on jobs by introducing more flexibility and balance into their lives—work–life balance. What are the top three nonwork concerns that you might have to deal with that you hope your employer might accommodate for you?© Paul Bradbury/Getty Images RF

· Flex-time. By flex-time, we do not mean the so-called on-call schedules once practiced by Abercrombie & Fitch, Williams-Sonoma, and other stores that required workers to be on call for shifts that could be canceled with little notice—schedules that demoralized employees and hurt children’s well-being.123 Rather, we are talking about the flexible workplace—including part-time work, flex-time, a compressed workweek, job sharing, and telecommuting—discussed in the Manager’s Toolbox at the start of this chapter.

In one flex-time experiment, in which employees were told they could work wherever and whenever they chose as long as projects were completed on time and goals were met, such employees not only met their goals (as well as did a control group) but were sleeping better, less stressed, and less interested in leaving the organization a year later.124

· Vacations and sabbaticals. It used to be a badge of honor for Citigroup’s junior bankers to put in 100-hour work weeks. Now, says CEO Michael Corbat, “I want people to have family lives, personal lives.” Recently, the bank unveiled a program that lets young employees take a long sabbatical—an extended vacation—during which the Citigroup volunteers are paid 60% of their salary, and take a year off to do charitable work helping, say, businesses develop growth plans in Kenya.125

Tech companies like Apple and Genentech certainly understand that in a climate of 80-hour work weeks people need to recharge themselves. But even The Cheesecake Factory offers employees with at least five years of service sabbaticals of up to three weeks, with additional ones every five years thereafter. (One employee planned to hike the 220-mile John Muir Trail in California from Yosemite to Mt.Whitney.)126

About 4% of American corporations, most of them technology firms, offer unlimited paid time off.127 Whatever the arrangement, the aim, of course, is to enable employees to reenergize themselves but also, it is hoped, to cement their loyalty to the organization.128 (Ironically, however, most employees with unlimited time off are unlikely to use much of it—and if they quit or get fired, they will not get a payout for unused vacation days.)

Page 425

The Need to Expand Skills

As mentioned in  Chapter 9 , 70% of employees say they are dissatisfied with career growth opportunities at their companies, and training programs can keep them engaged with their work.129 Young workers in particular, having watched their parents undergo downsizing, are apt to view a job as a way of gaining skills that will enable them to earn a decent living in the future. Employers have another point of view: They see it as developing human capital, which, as we saw in  Chapter 9 , is the economic or protective potential of employee knowledge, experience, and actions.

Learning opportunities can take three forms:

· Studying coworkers. Managers can see that workers are matched with coworkers from whom they can learn, allowing them, for instance, to “shadow” (watch and imitate) workers in other jobs or be in interdepartmental task forces.

· Tuition reimbursement. There can also be tuition reimbursement for part-time study at a college or university.130

· Training. About 30% of small companies, 41% of midsize companies, and 29% of large companies offer some sort of training, according to a 2015 training industry report.131 Although instructor-led classrooms are still the dominant training method, we pointed out earlier that at about 46% of total student hours, 26.5% of training was delivered by online or computer-based technologies, 1.8% by mobile devices, and 31.9% by blended techniques.132  

The Need for a Positive Work Environment

Wanting to work in a positive environment begins with the idea of well-being. Well-being is the combined impact of five elements—positive emotions, engagement, relationships, meaning, and achievement (PERMA), according to renowned psychologist Martin Seligman.133 There is one essential consideration to remember about these elements: We must pursue them for their own sake, not as a means to obtain another outcome. In other words, well-being comes about by freely pursuing one or more of the five elements in PERMA.

Flourishing represents the extent to which our lives contain PERMA. When we flourish, our lives result in “goodness … growth, and resilience.”134 We should all strive to flourish because of its association with other positive outcomes, like lower cardiovascular risk, lower levels of inflammation, longer life, better sleep, and positive mental health.135 Unfortunately, many people are not flourishing. For example, a recent survey of 160,000 people around the world revealed that 33% reported above-average stress.136 U.S. data further showed that a majority of people lose sleep because of work-related stress and many people are abusing painkillers to combat it. Painkiller abuse costs employers about $25.5 billion a year in absenteeism and lost productivity.137

By contrast, positive emotions broaden your perspective about how to overcome challenges in your life—joy, for instance, is more likely to lead you to envision creative ideas during a brainstorming session. Positive emotions also build on themselves, resulting in a spreading of positive emotions within yourself and those around you.138

What is it that employers can do to create a positive work environment? Elsewhere in the book we have touched on such matters as employee engagement, social support, and recognition for achievement. Here let us discuss just two other factors: (1) surroundings and (2) an understanding boss.

· Surroundings. The cubicle, according to new research, is stifling the creativity and morale of many workers, and the bias of modern-day office designers for open spaces and neutral colors is leading to employee complaints that their workplaces are too noisy or too bland. Some businesses, such as advertising giant Grey Group in New York, have even moved beyond cubicles to completely open offices, which at Grey required a business psychologist to hold “space therapy” sessions to ease employee concerns.139

Page 426

“The key to successful workspaces is to empower individuals by giving them choices that allow control over their work environment,” says a Harvard Business Review article.140 That’s especially key when it comes to keeping employees happy.

EXAMPLE

Successful Workspaces

As we said, the traditional private office has yielded to cubicles and more recently to open-plan offices with few or no walls. (Indeed, Facebook hired a world-famous architect to design an office that is a single room stretching 10 acres and accommodating several thousand engineers.)141

Distractions or Performance? Although crowding people together can promote cooperative behavior, it also, of course, leads to lack of privacy and increased distractions, which can stifle creativity, dampen morale, and lead to diminished individual and organizational performance. 142

“There is no such thing as something that works for everybody,” says Alan Hedge, a professor of environmental analysis at Cornell University. 143  An 8-foot-by-8-foot cubicle may not be a good visual trigger for human brains, and companies wanting to improve creativity and productivity may need to think about giving office employees better things to look at.144

YOUR CALL

Although 70% of today’s organizations have open-plan offices, other designs are now being tried that go beyond the “open” and “closed” models and can balance people’s wishes for privacy against the competing desire for collaboration.145 “The emerging trend is the hybrid approach,” says one workplace strategist, “which includes about a 15% to 30% closed plan with a variety of other work areas to supplement just sitting at a desk.”146 What kind of office surroundings would work best for you?

· Thoughtful bosses. It’s said that “people don’t leave jobs, they leave managers,” points out a Forbes writer, citing evidence of a survey from the United Kingdom in which 42% of 1,374 employees left a job because of a bad boss and almost a third felt their present boss was a bad manager.147 A Gallup study also found that about 50% of the 7,200 adults surveyed left a job “to get away from their manager.”148 Some of these employees were well paid, but is this enough?

PRACTICAL ACTION

Thoughtfulness: The Value of Being Nice

“Feeling cared for by one’s supervisor has a more significant impact on people’s sense of trust than any other behavior by a leader,” says one article summarizing the results of a global workforce study. “Employees who say they have more supportive supervisors are 1.3 times as likely to stay with the organization and are 67% more engaged.”149

A study by McKinsey & Company, a global management consulting firm, found that nonfinancial incentives such as praise and commendation from one’s immediate management (which 67% of those surveyed thought extremely or very effective) and attention from leaders (by 63%) were better motivators than three financial incentives: performance-based cash bonuses (60%), increase in base pay (52%), and stock or stock options (35%).150

What the Managers Should Do

The co-founder of one start-up, James Lintern of software maker RotaCloud, suggests you need to learn to look for disgruntled employees (those who moan a lot, feign ignorance or innocence, or simply stay quiet and stop working) and then speak with them privately but professionally and provide support, if necessary.151

Giving Praise

“Being nice” to employees means, for example, giving personal and frequent praise, writing celebratory emails to supervisors (and copying the employee), giving public recognition, and writing handwritten thank-you notes. You might evenPage 427 imitate that former KFC president who recognized valued employees by giving away floppy rubber chickens and $100.152

It’s important, of course, that praise be effective. One business writer points out that managers often undermine the power of recognition by (1) withholding it altogether (so as not to accidentally favor or ignore anyone), (2) spreading praise 100% evenly across a team, and (3) mindlessly crediting groups at the expense of individuals.153

YOUR CALL

What are the top three things you’d like to see in a thoughtful boss? Would you rather work for someone who is “nice” but lacking in other qualities (decisiveness, leadership)? Or would you prefer to report to someone who seems to be indifferent to your feelings and never listens to you but is running a successful operation that’s giving you a good paycheck?

The Need to Matter—Finding Meaning in Work 

Workers now want to be with an organization that allows them to feel they matter. They want to commit to their profession or fellow team members rather than have to profess a blind loyalty to the corporation.154 In particular, employees of small firms (under 1,000 people) “want to feel their ideas and efforts materially contribute to the success of their employers,” according to one survey.155

World War II concentration camp survivor Viktor Frankl, author of Man’s Search for Meaning, strongly believed that “striving to find a meaning in one’s life is the primary motivational force” for people.156 In other words, it is the drive to find meaning in our lives that instills in us a sense of purpose and motivation to pursue goals.

Meaningfulness, then, is the sense of “belonging to and serving something that you believe is bigger than the self.” 157  What follows are three suggestions for building meaning into your life.

1. Identify activities you love doing. Try to do more of these activities or find ways to build them into your work role.

Example: Employees at St. Jude Children’s Research Hospital in Memphis embody this suggestion. They truly enjoy participating in the St. Jude Marathon weekend because it raises money for the children being treated at the hospital. One employee, a cancer survivor, commented, “Each year it provides me with another opportunity to give back so that we can help countless other children have anniversaries of their own.”158

2. Find a way to build your natural strengths into your personal and work life. Want to be more engaged with your school, work, and leisure activities? Take the time to list your highest strengths, your weaknesses, which strengths you use on a daily basis—and find what you can do to incorporate your strengths into your school, work, and leisure activities.

3. Go out and help someone. Research shows that people derive a sense of meaningfulness from helping others, that it creates an upward spiral of positivity.159

Example:  Salesforce.com  encourages this result by giving employees six paid days a year to volunteer. All told, company employees logged over 1 million volunteer hours in 2015.160