International Analysis of Organization Design
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OTMT608.Session4.pptxHuman Relations Perspective: Employee Needs, Organization Motivators, & Management Style - Session 4
OTMT 608: Theories & Models of Organization
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Class Preview
Limitations of M/B perspective
Human relations pioneers and proponents
Generational differences across motivator needs
Key elements of HR analysis
Employee needs, organization motivators, and management style
Analysis of Google’s AdSense organization
Wrap-up & announcements for Session 5
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Employee Needs & Organization Motivators: Key Elements of Analysis
Chart organization motivators and employee motivations
Identify employee needs and organization motivators
Link to Contingency Analysis
Employee needs/expectations (#4a)
Organization motivators (#4b)
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Origins of the Human Relations Movement
Elton Mayo & the Hawthorne Studies
Professor of Industrial Organization
Harvard Business School
Photography courtesy of Western Electric Company
Obtained through Baker Library, Harvard Business School
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Hawthorne Studies: Background
Location
Western Electric Hawthorne Works, Cicero, Illinois Manufacturing unit of AT&T
Telephones, cables, transmission equipment, switching equipment (switch boards)
Forerunner in applying scientific management principles (Taylorism) to production
Employees assigned to precisely measured tasks in highly specialized departments
Manufacture of some equipment required hundreds of separate assembly and inspection operations
Purpose
Examine relations between work conditions and incidence of employee fatigue and boredom
Hundreds of experiments conducted from early 1920s to early 1930s
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Cord Finishing Department
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Relay Mounting & Adjusting Department
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Relay Assembly Test Room
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Hawthorne Studies: Results & Implications
Key study results
No effects of lighting on worker efficiency in manufacturing departments
No significant relationships between work conditions & employee productivity
Non-technical factors impact employee outcomes (productivity, attitude)
Key study implications
Hawthorne effect
Workgroup dynamics (norms)
Being watched, feeling “important”
Wage incentives?
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Women of the Assembly Relay Studies
Post-study interviews with study participants
Feeling important
“I had no idea there would be so much happening and so many people watching us.” (Theresa Layman Zajac, Relay Assembly Test Room Operator)
Intimate atmosphere and sense of freedom in test room
Development of informal structure and relationships
“We felt more at ease to talk and over time developed strong friendships. We’ve been the best of friends since the day we were in the test room.”
Mayo’s conclusions
“The six individuals became a team and the team gave itself wholeheartedly and spontaneously to co-operation in an experiment.”
Mental attitudes, proper supervision, & informal social relationships experienced in a group were key to productivity and job satisfaction
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Maslow’s
Hierarchy
of Needs
Job as major expressive dimension of life
Complete employee engagement
Development of one’s full potential
Jobs with scope for achievement & autonomy
Work enhancing personal identity
Feedback and recognition for performance
Work that allows interaction with peers
Social and recreation facilities
Office parties & social events
Pension & healthcare plans
Job tenure
Career paths within org
Salaries & wages
Safe & pleasant working conditions
Self-Actualization
Social
Security
Physiological
Esteem
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Herzberg’s
Two Factor
Approach
to Motivation
Motivating
Factors
Hygiene
Factors
Supervision
Company Policy
Salary
Peer and Supervisor
Relationships
Status
Achievement
Recognition
Responsibility
Advancement
Growth
Work Itself
Extrinsic
Motivators
Intrinsic
Motivators
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What Managers Think Motivates Employees
1. Salary
2. Bonuses
3. Vacation
4. Retirement
5. Other Benefits and Perks
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What Managers Think Motivates Employees
6. Interesting Work
7. Involved in Decisions
8. Feedback
9. Training
10. Respect
(Source: CITE HR – Robert F. Gately)
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What Employees Say
1. Interesting Work
2. Involved in Decisions
3. Feedback
4. Training
5. Respect
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What Employees Say
6. Salary
7. Bonuses
8. Vacations
9. Retirement
10. Other Benefits and Perks
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Towers Perrin: Total Rewards Alignment
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Pay
Salary
Benefits
Medical/dental
Learning & Develop-ment
Job challenge
Work Environ-ment
Flexible work arrangements
Bonus pay & incentives
Stock/equity
Profit sharing
Retirement
Wellness programs
Elder/child care
Maternity/paternity leave
Sabbaticals
Job rotation/placement
Stretch assignments
Leadership development programs
Tuition reimbursement/ continuing education
Workplace culture/climate
Management style
Workplace collegiality/ networks
Social activities/events
Work pace/intensity
Employee Needs & Organization Motivators: Google’s AdSense Organization
Complete Motivation Chart for the Ad Sense organizational unit
Team 1: Segment by function
Group 1 (Sales/Operations/Marketing) & Group 2 (Engineering)
Team 2: Segment by mgmt. level
Group 1 (Managers) & Group 2 (Staff)
Team 3: No segmentation
Conduct single analysis across all AdSense employees
2. Brief presentation to class
Present your motivation chart findings
Discuss where on the Contingency Analysis you would assess the organization for employee needs and org motivators
Discuss the degree of alignment with other internal organization design dimensions (task technology, structure, management style, etc.)
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Implications for Your Team Case Analysis Presentation Assignment
Segmentation of individuals and/or groups for Motivation Chart depends on dynamics of your work unit
You may select a single person and/or groups depending on dynamics (e.g., mgmt level, functional area, age/proximity to retirement, mid-career, early career, or partner, pre-partner, associate, etc.)
You are encouraged to examine generational differences, if applicable
Point of analysis is not to match employee needs with the motivators provided by the organization
Matching employee needs and organization rewards may be misaligned with environment
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Management Style: Key Elements of Analysis
Apply transactional/transformational leadership
Reveal management’s behaviors and competencies relative to leading/influencing others that explain management style
Link to Contingency Analysis
Management style (#6)
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Changing Expectations of Leaders
How has what we ask of leaders in organizations and our communities fundamentally changed?
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Changes in Workforce Demographics
Surge in ethnic minorities & immigrants in workforce
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AGE
1/3 of all Americans reach retirement age within 10 years
GENDER
2/3 of working age women in workforce
ETHNICITY
48% overall
Share of Labor Force by Age Group
Source: Bureau of Labor Statistics
+29%
Source: Bureau of Labor Statistics
Annual Growth Rate
55+: 3.3, 4.6, 2.6
25-54: 1.1, 0.0, 0.2
16-24: 0.3, -.5, -1.4
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1992.0 2002.0 2012.0 2022.0 0.169 0.154 0.137 0.113 25-54
1992.0 2002.0 2012.0 2022.0 0.714 0.702 0.653 0.631 55+
1992.0 2002.0 2012.0 2022.0 0.118 0.143 0.209 0.256
Changes in Workforce Values
More likely to job-hop despite T/D investment
No lifelong commitment to single org (career)
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VALUES
Diversity
Work/life balance
CAREER NEEDS
Performance feedback
Autonomy & team-based work
LOYALTY
Work that is stimulating (values)
Enjoyable workplace
Changes in Organization Design
Social responsibility
External stakeholders
Team/project-based work
Horizontal design
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Flat Structure
Job Design
Community Engagement
Knowledge workers
Flexible job roles
Enhanced autonomy
Transformational Leadership
Defined
Leadership that serves to change the status quo by articulating a vision of the future that appeals to followers’ values and sense of collective cohesion (Bass & Avolio, 1998)
Change-oriented leadership
Process of influencing followers to engage in major personal and organizational change (leadership—transformational leadership)
Compared to efficiently sustaining the status quo through an equitable exchange relationship (management—transactional leadership)
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Transformational Leadership
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Transformational Leadership
Generates awareness and acceptance of the mission of the team and organization
Transactional Leadership
Clarifies what needs to be done
Facilitates efficient interaction between human, physical, and fiscal resources
Specifies benefits to SELF INTEREST of followers if they assist in achievement of objectives
Broadens and elevates interests of followers
Stimulates followers to look BEYOND SELF-INTEREST to the good of the team and organization
Encourages and stimulates efforts to envision and implement change
Management behaviors
Transactional Leadership Dimensions
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Contingent
Reward
Provides goals and objectives
Actively monitors to provide supportive feedback
Active Management-by-Exception
Arranges to know if something has gone wrong
Passive Management-by-Exception
Takes no action unless a problem arises
Avoids unnecessary changes
Enforces corrective action when mistakes are made
Places energy on maintaining the status quo
Fixes problems then resumes normal functioning
Attends mostly to mistakes and deviations
Remains alert for infractions of the rules
Teaches followers how to correct mistakes
“I am watching to see that you don’t …”
“If I happen to see that you didn’t…”
Recognizes and rewards achievement
Exchanges rewards and recognition for accomplishments
“If you do as we agreed…”
Transformational Leadership Dimensions
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Idealized
Influence
Engenders trust in his/her ability to overcome crisis
Individualized Consideration
Recognizes follower differences and enlarges their discretion
Intellectual Stimulation
“If you change your assumptions, then…”
Re-examines critical assumptions to problems
Inspirational Motivation
Helps followers achieve levels of performance beyond expectations
Promotes self-development, coaches, and counsels
Encourages others to take initiative
Targets areas to develop and to elevate individual needs
“I identify follower needs and work to elevate them”
Encourages followers not to think like him/her; encourages broad interests
Is willing to put forth or entertain seemingly foolish ideas
Encourages followers to use divergent perspectives
Demonstrates self-determination and commitment to reaching goals
Presents an optimistic and attainable view of the future
Arouses in followers emotional acceptance of challenges
Celebrates followers’ achievements and shares limelight
Sacrifices self-gain for the gain of others
Creates a sense of joint mission and ownership
“If you keep in mind what’s really important…”
“I believe this is what’s right, not simply the right thing…”
Values-centered Transformational Leaders
Indra Nooyi
Chairman & CEO
Jim Goodnight
Founder, Chairman, & CEO
Anita Roddick
Founder & Former President/CEO
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Robust Outcomes of Transformational Leadership
Organization-level outcomes
Greater sales, market share, earnings, ROI, net profit margin, and stock value
Transformational leadership can explain 45%-60% of variance in organizational performance
Team-level outcomes
Greater top management team motivation and cohesion
Higher product innovation in R&D teams
Individual-level outcomes
Greater alignment around strategic visions & missions
Greater follower effort, performance, commitment, and job satisfaction
Lower turnover and turnover intentions
Greater employee creativity and innovative behavior
Greater organizational citizenship behaviors
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Organization-Level Outcomes of Transformational Leadership
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Org-Level
Net Profit Margin
Market Share
Sales/ Revenue
ROI
Stock Value
Team-Level Outcomes of Transformational Leadership
Team-Level
Team Cohesion
Product Innovation
Team Conflict
Team Productivity
Individual-Level Outcomes of Transformational Leadership
Individual-Level
Turnover
Job Performance
Creativity
Citizenship Behaviors
Job Satisfaction
Business Case: Voluntary Turnover Rate by Generation
Percent Turnover Rate
Generational Cohorts
5.4%
7.7%
14.5%
Source: Saratoga/ PricewaterhouseCoopers (2009)
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Success Factors of Leading Organizational Transformation
1. Establishing Sense of Urgency
2. Forming Guiding
Coalition
3. Creating & Articulating
a Vision
4. Empowering Others
to Act on Vision
5. Planning & Creating Short-term Wins
Leading
Organizational
Transformation
8. Institutionalizing
Changes
7. Sustaining Momentum & Reinforcing Changes
6. Leveraging Successes for More Change
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Employee Resistance to Change
Reasons for resistance
Loss of control
Excess uncertainty
Loss of face
Concerns about future competence
More work!
Past resentments
Sometime the threat is real
Self-interest
Lack of understanding & trust
How change agents and leaders minimize resistance
Involve people and give them decision-making power
Give people enough information about what is happening to them
Present change as continuous with tradition rather than as a wild difference from familiar routines
Put past actions in perspective rather than put them down
Make sure people feel competent and provide necessary education/training
Acknowledge unresolved problems and previously unsuccessful change efforts
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Organizational Cultures
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Adaptability Culture
Focus on External Environment
Use of Flexibility and Change to Meet Customer Need
Encourages Entrepreneurial Values
Internet-based, Marketing, Electronics, Cosmetic Companies
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Mission Culture
Serves Specific Customers Without Need for Rapid Change
Clear Vision of Purpose and Goals: Market Share, Sales Growth, Profitability
Anheuser-Busch, Pepsi, Coke
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Clan Culture
Focuses on Organization’s Members
Rapidly Changing External Environment Expectations
Meet Employee Needs/Achieve High Performance
SAS Institute, Southwest Airlines
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Bureaucratic Culture
Internal Focus
Oriented for Stability
Methodical Approach
Symbols, Heroes, Stories Reinforce Culture
Pacific Edge Software
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Look Ahead to Week 5
Zappos Case Study
Sakai Articles
Team Project Work
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2
4
6
8
10
12
14
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Baby BoomersGeneration XGeneration Y
Chart3
| 5.4 |
| 7.7 |
| 14.5 |
Slide 4
| 1 S.D. Above Mean | 15.4 | |
| 1 S.D. Below Mean | 21.5 |
Slide 4
| 0 |
| 0 |
Slide 6
| 1 S.D. Above Mean | 79.0 | |
| 1 S.D. Below Mean | 60.0 |
Slide 6
| 0 |
| 0 |
BLS1
| 16-24 | 15 | |
| 25-34 | 8 | |
| 35-44 | -10 | |
| 45-54 | 21 | |
| 55-64 | 52 | |
| 65+ | 30 |
BLS1
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
BLS2
| 16-24 | 14.3 | 12.7 | |
| 25-34 | 21.6 | 22.1 | |
| 35-44 | 22.7 | 20.8 | |
| 45-54 | 23.3 | 20.6 | |
| 55+ | 18.1 | 23.9 |
BLS2
| 0 | 0 |
| 0 | 0 |
| 0 | 0 |
| 0 | 0 |
| 0 | 0 |
PWC
| Baby Boomers | 5.4 | |
| Generation X | 7.7 | |
| Generation Y | 14.5 |
PWC
| 0 |
| 0 |
| 0 |
