MGT3002 WEEK 2 DISCUSSIONS AND PROJECT

Other Theories, From Concept to Application © 2016 South University

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Goal-Setting Theory

We can now look at goal-setting theory which suggests that setting specific, realistic, and challenging goals has a strong, positive effect on performance. However, setting goals also requires that you incorporate feedback, which helps to monitor achievement levels, and therefore, modify goals based on this feedback.

Evidence also suggests that employee participation in the goal- setting exercise can have a significant effect on increased performance. In fact, participation positively influences the achievement of more difficult goals.

Reinforcement Theory

This theory is derived from the conditioning theories of learning. It focuses on reinforcement of desired behavior and outcomes. However, it ignores factors such as attitudes, expectations, and feelings, assuming that positive reinforcement alone will lead to the desired behavior and goal accomplishment. The implicit assumption appears to be that as a result of the accomplishments, feelings of satisfaction should develop naturally.

Equity Theory

This theory argues that employees will feel motivated if they perceive that rewards are given in a fair and impartial way. Thus, if an employee perceives that his or her rewards are lower than those of others his or her motivation is likely to decrease. Equity is usually referred to as distributive justice, that is, fairness in the quantities and allocations of rewards among employees. Evidence shows that inequity in pay is the most critical factor in lowering

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motivation. However, overpayment doesn't seem to bother most people enough in terms of job performance. There is also evidence that procedural justice may play a significant role in motivation. Procedural justice concerns the level of fairness that employees perceive in the process of deciding on the distribution of rewards.

Victor Vroom's Expectancy Theory

Finally, let's look at Victor Vroom's Expectancy theory, which has a lot of research evidence to back it. This theory says that the strength of a person's motivation will depend upon, firstly, the person's expectation of how probable it is that certain rewards would be received; and secondly, how interested the person is in those expected rewards. Thus, one would be motivated toward higher performance only if one believes that certain desirable rewards are very likely to be available. If the employee is unsure that she or he would receive the rewards even with good performance or if the specific rewards are not attractive enough, motivation isn't likely to increase.

Having introduced certain theories of motivation, we can now discuss how to apply these theories to organizations.

Management by Objectives Program

Several motivation theories have been applied to different organizations with considerable success. A well-known example is the application of goal-setting theory in the Management by Objectives (MBO) program. In this program people across an organization set specific, measurable goals through a participative process, specify the time period for performance, and use regular

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performance feedback to fine-tune the process of accomplishing and even revising the set goals.

These goals need to be very specific and within a certain time frame. They need to be set jointly by employees and management, a process that replaces the traditional method of goal allocation by management. Regular feedback on performance is also necessary so that progress can be monitored and revised correctly. While there have been many documented cases of success with MBO, there have also been failures. Many of these failures can be attributed to limited commitment of top management, poor implementation of the process, and unrealistic goal setting.

Employee Recognition Program

Many organizations regularly name an employee-of-the-month; this is an example of an employee recognition program. These programs are derived from reinforcement theory because they reward high-performance employees with public recognition. These programs are an inexpensive way to inspire higher performance among employees.

Employee Involvement Programs

Employee involvement programs in which employees are involved in various degrees of decision-making, offer some degree of empowerment. For example, in participative management, employees are involved in joint decision-making with their immediate superiors. Although this would be expected to increase the level of motivation among employees, research has shown mixed results with this type of program. This may indicate that employee participation in management processes is much more complex than previously thought.

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Another type of program is representative participation in which representatives of employees participate in decisions. For example, many countries in Western Europe have passed legislation making it mandatory for companies to practice representative participation; Germany, France, and Sweden are among the many European countries that have passed legislation that requires employee representatives on company boards. In India, public-sector companies are required by law to have labor union representatives as full members of their boards.

Quality Circles

Another popular concept is that of quality circles in which employees and supervisors meet regularly in small groups and deal with quality issues. These meetings have been very effective in Japanese companies, and although the results have been mixed in North America, quality circles are still widely used in American companies.

Employee Stock-Option Plans

With employee stock-option plans (ESOPs), employees may feel more motivated to work toward the goals of a company in which they own stock. ESOPs have recently become very popular; research generally indicates that they increase employee satisfaction.

Self-Managed Work Groups

One of the most difficult programs is known by a variety of names: semi-autonomous work groups, self-managed work groups, and socio-technical systems. In this program a group of employees is assigned a complete project—in contrast to the individual and specialized jobs typical of an assembly line—with some degree of

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autonomy. For example, in some of Volvo's automobile plants in Sweden, a group of employees will be given the entire job of assembling the car engine and the transmission system. At one of General Electric's aircraft-engine plants, work groups handle the complete job of assembling jet engines within a specified period of time. Key decisions are made within the work group, and job- rotation and multi-tasking are very common.

In spite of the success of these programs, they are not widely popular in North America. Their lack of popularity appears to stem from the fact that managers do not want to relinquish their authority to self-managed work groups. Despite this it is likely that, based on their success, more complex programs of employee involvement, participation, and recognition will continue to be incorporated by companies worldwide.