Principles of Management Homework

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A Early Theories ofzlMotivation (resos & 1e6ost 1 1 -? Compare and contrast early theories of motivation.

Know these early theories hecause they: Q Represent the foundation from which contemporary theories grew, and €) Still are used by practicing managers to explai n employee motivati on.

Maslow's Hierarchy of Needs Theory ( p ro b a b ly b est- kn own m otivati o n th e o ry)o

Ahraham Maslow-a psychologist-proposed that within every person is a hierarchy of five needs.

Growrh achrevrng polerlial, sell- -&.iJ;il;;;;r:il;i;il#,m

lnternal (self-respect, autonomy, achlevement) and

external (status, rec0gniti0n, attention)

lJllil;li;11:l:ill?li

Security and protectl0n from harm; assurance

that physical needs will continue t0 be met

iilj,i;ij;ii:llij;iljf., ilI I ll Exhibit t1-1. Maslow's Hierarchy of Needs Source:Maslow Abraham H.; Frager, Robert D; Fadiman, James, Motivation and Personality,3rd ed., @1987 Reprinted and electronically reproduced by permission of Pearson Education, lnc., NewYork, NY

o Each level must be substantially satisfied before the next need becomes dominant; an individual moves up the hierarchy from one level to the next.

. Lower-order needs are satisfied predominantly externally, and higher-order needs are satisfied internally.

HOW is Maslow's hierarchy used to motivate employees?

o Managers will do things to satisfy employees' needs. . Remember: Once a need is substantially satisfied, nf#J,i}l,flT,ffii,1iJffi,"JIi,.h,*,nn.,d,,

it nO lOngef mOtiVateS. phvsiolosical,safetv.social.esteem.andself-actualization

H erzberg's Two-Factor Theory . Frederick Herzberg's two-factor theory @lso called motivation-hygiene

theorr)-.rntrinsic factors are related to job satisfaction, while extrinsic factors

are associated with job dissatisfaction.l0

r Popular theory from the 1960s to the early 1980s. r Criticized for being too simplistic, r lnfluenced today's approach to job design. (See From Past to Present box on p. 338.)

theory X theoryY The assumplion that employees dislke work, are lazy, The assumpli0n that employees are creative, enioy work avoid responsibility, and must be coerced to work seek responsibility, and can exercise self-direction

two-factor theory Herzberg's motivalion theory, which proposes that intrinsic factors

are related to job satisfaction and motivation, whereas extrinsic

factors are associated with job dissatisfaction

Widely popular among practicing managers probably because it's easy to under-

stand and intuitive.T

No empirical support provided for theory; other studies could not validate it.8

McGregor's Theory X and Theory Y

Based on two assumptions about human nature.9 r Theory X: a negative view of people that assumes workers have little ambition, dislike

work, want to avoid responsibility, and need to be closely controlled to work effectively.

r Theory Y: a positive view that assumes employees enjoy work, seek out and accept responsibility, and exercise self-direction.

To maximize employee motivation,

use Theory Y practices-allow

employees to pafticipate in decisions,

create responsible and challenging iobs,

and encourage g00d group relations.

No evidence to confirm either set 0f

assumptions 0r that being a Theory Y

manager is the only way to motivate employees.

Research focus: When people felt exceptionally good

(satisfied-see left-hand side of Exhibit 11-2) orbad (dissatisfied-see right-hand side of exhibit) about their jobs 'l Beplies showed these were two different factorsl r When people felt good about their work, they tended to cite

intrinsic factors arising from the job content (job itself), such as ac hievement, recog nition, a nd responsibility.

r When they were dissatisfied, they tended to cite extrinsic factors arising from the job contexl such as company policy and administration, supervi- sion, interpersonal relationships, and working conditions.

Exhibit 1,1,-2 Herzberg's Two-Factor Theory MOTIVATORS HYGIENE FACTORS

ru Andersphoto/Foto ia

Extremely Satisfied

Extremely Dissatisfied

Beplies also gave us the new view of Satisfaction vs. Dissatisfaction (see Exhibit 1 1-3). Exhibit 1L-3 Contrasting Views of Satisfaction and Dissatisfaction

TBADITIONALVIEW

Satisfied Dissatisfied

Mativators HEilZBEBG'S VIEW f{y.qJiexr {x*tars Satisfaction No Satisfaction No Dissatisfaction Dissatisfaction

Source:Robbins, Stephen P. Coulter, Mary, Management, 13th Ed., O 2016, p. 465. Reprinted and electronically reproduced by permission of Pearson Education, Inc., NewYork, NY

r Herzberg concluded that the traditional view-fhe opposite of satisfaction is dissatisfaction- was wrong.

r He believed that the factors that led to job satisfaction were separate and distinct from those that led to job dissatisfaction.

hygiene factors Factors that eliminate job dissatisfaction br

334

three-needs

Supervision Company policy Relationship with supervisor Working conditions Salary Relationship with peers Personal life Relationship with employees Status

motivators

r Removing dissatisfying characteristics from a job didn't necessarily make that job more satisfying (or motivating); it simply made you "less" dissatisfied.

r Proposed a dual continuum:The opposite of "satisfaction" is "no satisfaction," and the opposite of "dissatisfaction"

is "no dissatisfaction."

Motivating Employees: When hygiene factors are adequate, people wont be dissatisfied, but they won't be motivated, either.

To motivate people, use the motivators rl

R. "*:

McGlel land's Three-Needs Theory n David McClelland and his associates proposed the three-needs theory, which

saysthree acquired (not innate) needs are major motives in work, including:11

need for achievement (nAch), need for power (nPow), need for affiliation (nAff), which is the drive to succeed and which is the need to make others which is the desire forfriendly and excel in relation to a set of standards behave in a way that they would close interpersonal relationships

not have behaved otherwise

o nAch has been researched the most: r People with a high nAch are striving for personal achievement rather than for the trappings and

rewards of success.

r They have a desire to do something better or more efficiently than it's been done before.l2 r They prefer O toUs that offer personal responsibility for finding solutions to problems, @ receiving

rapid and unambiguous feedback on their performance in order to tell whether they're improving, and G) moderately challenging goals.

r High achievers avoid what they perceive to be very easy or very difficult tasks. r A high nAch doesn't necessarily lead to being a good manager, especially in large organizations.

Why? Because high achievers focus on their own accomplishments, while good managers emphasize helping- others accomplish thelr goals.l3

I Employees can be trained to stimulate their nAch by being in situations where they have personal responsibility, feedback, and moderate risks.ra

r The best managers tend to be high in nPow and low in nAff.15 need for achievement (nAchl need for power (nPow) neecl for affiliation (nAff) Thedrivetosucceedandexcel nrelatlont0asetcf Theneedtcmakecthersbehaveiralvaylhatthe) Thedeslreforfnendlyanclr;loseinterpersonai standards would not have behaved othenvise re ationships

How Do the Contemp0rary Theories Explain Motivation?

1 1-3 compare and contrast contemporary theories of motivation.

goal-setting theory The proposition that specific goals increase

performance and that difficult goals, when

accepted, result in higher performance than do

easy goals

Workrng toward a goal is a major source of motivatron for Mary Kay Cosmetics beauty consultants who set their own sales goals and earn rewards for achieving them. Consultants Shannon Nelson (center) and her sister and mother are shown here with a Mustang Shannon earned for meeting an ambitious sales goal

336 Pa rt 4 Leading

f) Watch lt 1! If your professor has assigned this, go to the Assignments section of mymanagementlalr.com to complete the video exercise titled Rudi's Bakery: Motivation.

At Electronic Ans (EA), one of the world's largest video game designers, employees put in grueling hours developing games. However, EA takes care of its game developers by providing them with workday intramural sports leagues, pinball arcades, group fitness classes, and an open invite to pets at work.16With a little over 8,000 workers in more than 20 countries, EA's managers need to understand employee motivation.

The theories we look at in this section-goal-setting, job design, equity, and expectancy-represent current explanations of employee motivation. Although maybe not as well known as those we just discussed, these are backed by research.lT

Before a big assignment or major class project presentation, has a teacher ever encouraged you to "Just do your best"? What does that vague statement "do your best" mean? Would your performance on a class project have been higher had that teacher said you needed to score a 93 percent to keep your A in the class? Research on goal-setting theory addresses these issues, and the findings, as you'll see, are impressive in terms of the effect that goal specificity, challenge, and feedback have on performance.ls

Substantial research support has been established for goal-setting theory, which says that specific goals increase performance and that difficult goals, when accepted, result in higher performance than do easy goals. What does goal-setting theory tell us?

(a) Working toward a goal is a major source of job motivation. Studies on goal setting have demonstrated that specific and challenging goals are superior motivating forces.l9 Such goals produce a higher output than does the generalized goal of "do your best." The specificity of the goal itself acts as an internal stimulus. For instance, when a sales rep commits to making eight sales calls daily, this intention gives him a specific goal to try to attain.

(b) Will employees try harder if they have the opportuni- ty to participate in the setting of goals? Not always. In

some cases, participatively set goals elicit superior per- formance; in other cases, individuals performed best when their manager assigned goals. However, par-

ticipation is probably preferable to assigning goals when employees might resist accepting difficult challenges.20 (c) We know that people will do better if they get

feedback on how well they're progressing toward their goals because feedback helps identify dis- crepancies between what they've done and what they want to do. But all feedback isn't equally effective. Self-generated feedback-where an employee monitors his or her own progress-has been shown to be a more powerful motivator than feedback coming from someone else.2l

E !;

l N

What ls Goal-Sefiing Theory?

Three other contingencies besides feedback influence the goal-performance relationship: goal commitment, adequate self-efficacy, and national culture.

(1) First, goal-setting theory assumes that an individual is committed to the goal. Commitment is most likely when goals are made public, when the individual has an internal locus of control, and when the goals are self-set rather than assigned.22

(2) Next, self-eff icacy refers to an individual's belief that he or she is capable of performing a task.23 The higher your self-efficacy, the more confidence you have in your ability to succeed in a task. So, in dffircult situations, we find that people with low self-efficacy are likely to reduce their effort or give up altogether, whereas those with high self-efficacy will try harder to master the chal1enge.2a In addition, individuals with high self-efficacy seem to respond to negative feedback with increased effort and motivation, whereas those with low self-efficacy are likely to reduce their effort when given negative feedback.2s

(3) Finally, the value of goal-setting theory depends on the national culture. It's well adapted to North American countries because its main ideas align reasonably well with those cul- tures. It assumes that subordinates will be reasonably independent (not a high score on power distance), that people will seek challenging goals (low in uncertainty avoidance), and that performance is considered important by both managers and subordinates (high

in assertiveness). Don't expect goal setting to lead to higher employee performance in countries where the cultural characteristics aren't like this.

Exhibit 11-4 summarizes the relationships among goals, motivation, and performance. Our overall conclusion: The intention to work toward hard and specific goals is a powerful motivating force. Under the proper conditions, it can lead to higher performance. However, there's no evidence that such goals are associated with increasedjob satisfaction.26

Hcr+ Dces Jcb llesicn infiuence Mi:tivati*n?

Yes-you can design iobs that motivatel

Because managers want to motivate individuals on the job, we need to look at ways to design motivating jobs. If you look closely at what an organization is and how it works, you'll find that it's composed of thousands of tasks. These tasks are, in turn, aggregated into jobs. We use the term iob design to refer to the way tasks are combined to form complete jobs. The jobs that people perform in an organization should not evolve by chance. Managers should design jobs deliberately and thoughtfully to reflect the demands of the changing environ- ment, the organization's technology, and employees' skills, abilities, and preferencet.2T Whe, jobs are designed like that, employees are motivated to work hard. What are the ways that managers can design motivating jobs? We can answer that with the iob characteristics model (JCM), developed by J. Richard Hackman and Greg R. Oldham.28

Exhibit 11-4 Goal-Setting Theory

Self-Generated Feedback on

Prog ress

CHAPTER 11 . Motivating and Rewarding Employees 337

self-efficacy An individual's belief that he 0r she is capab e

of performing a task

job design The way tasks are combined 10 form complete l:: l

!ob characteristics model (JCM} A framework for analyzing and designing jobs that

identifies five primary core job dimensions, their

interrelationships, and their impacl 0n outcomes

I ) S

d ;-

v n

o Goals are public o lndividual has internal

locus of control

. Specific o Difficult

338 Parl 4 . Leading

Deciding how work tasks should be performed has long been of interest to managers.29 From scientific manage- ment's attempts to find the "one best way" to do work to the Hawthorne Studies that attempted to unravel patterns of human behavior at work, researchers have been curious about the ideal ap- proach to work design. ln the '1950s,

Frederick Herzberg and his associ- ates began research to "discover the importance of attitudes toward w,ork and the experiences, both good and bad, that workers reportedl' He

Job Design: How shouldwork tasks get done?

more on the Job content aspects (the motivators) than on the job context aspects (the hygiene factors).

ln addition, Herzberg's research stimulated additional interest in work design The Job Characteristics model, for one,

built upon Herzberg's findings in iden- tifying the five core job dimensions, especially autonomy. As managers and organizations continue to search for work designs that will energize and engage employees, Herzberg's study of when people felt good and felt bad at work continues as a classic.

oo E

o E

wanted to know the kinds of things that made people at their work happy and satisfied or unhappy and dissatisfied. What he discovered changed the way we view job design. The fact that job dissatisfaction and job satisfaction were the results of different aspects of the work environment was an important finding. Herzberg's two-factor theory gave practic- ing managers insights into both job context and job content. And if you wanted to motivate employees, you'd better focus

The lob of this pedlatric nurse canng for newborn babies at a children's hospital in Germany scores high on task sigirnficance as she uses her specialized knowledge and skills in caring for chldren from infancy through the Iate teen years, and their families. Task significance contnbutes to the meanngfulness of her job and high intemal work motivatron.

lf your professor has assigned this, go to the Assignments section of mymanagementlab.com to complete these discussion questions.

d} talt< About lt 1: Why do you think lobs need to be " designed " 7

0 fatt About lt 2: How can job design contribute to employee motivation?

According to Hackman and Oldham, any job can be described in terms of the following five core job dimensions:

l. Skill variety. The degree to which the job requires a variety of activities so the worker can use a number of different skills and talents

2. Task identity. The degree to which the job requires completion of a whole and identifi- able piece of work

3. Task significance. The degree to which the job affects the lives or work of other people 4. Autonomy. The degree to which the job provides freedom, independence, and discretion

to the individual in scheduling the work and in determining the procedures to be used in carrying it out

5. Feedback. The degree to which carrying out the work activities required by the job re- sults in the individual's obtaining direct and clear information about the effectiveness of his or her performance

Exhibit l1-5 presents the model. Notice how the first three dimensions-skill variety, task iden- tity, and task significance-combine to create mean- ingful work. What we mean is that if these three characteristics exist in ajob, we can predict that the person will view his or her job as being important, valuable, and worthwhile. Notice, too, that jobs that possess autonomy give the job incumbent a feeling of personal responsibility for the results and that, if a job provides feedback, the employee will know how effectively he or she is performing.

From a motivational point of view, the JCM suggests that internal rewards are obtained when an employee learns (knowledge of results through feed- back) that he or she personally (experienced respon- sibility through autonomy of work) has performed well on a task that he or she cares about (experienced

( ( ( From the Past to the Present > > >

Exhibit 1.1-5 Job Characteristics Model

Source: Reprinted by permission from Judith D. Hackman (w/o) J. Richard Hackman.

meaningfulness through skill variety, task identity, and/or task significance). The more these three conditions characterize a job, the greater the employee's motivation, performance, and satisfaction and the lower his or her absenteeism and the Iikelihood of resigning. As the model shows, the links between the job dimensions and the outcomes are moderated by the strength of the individual's growth need (the person's desire for self-esteem and self-actualization). Individuals are more likely to experience the critical psychological states and respond posi- tively when their jobs include the core dimensions than are individuals with a low growth need. This distinction may explain the mixed results with job enrichment (vertical expansion of a job by adding planning and evaluation responsibilities): Individuals with low growth need don't tend to achieve high performance or satisfaction by having theirjobs enriched.

The JCM provides significant guidance to managers for job design for both individuals and teams.30 The suggestions shown in Exhibit 1l-6, which are based on the JCM, specify the types of changes in jobs that are most likely to improve each of the five core job dimensions.

Exhibit Lt-6 Guidelines for Job Hedesign

CHAPTER 11 Motivating and Rewarding Employees 339

job enrichment The vertical expansion of a job by addrng pianning

and evaluatlon responsibilrties

Suggested Action Core Job Dimension

Source: Reprinted by permission from Judith D. Hackman (w/o) J. Richard Hackman

Skill variety Task identity

Task significance

Experienced

meaningfulness of the work

Experienced responsibility for

outcomes of the work

High-quality work performance

High satisfaction with the work

Low absenteeism

and turnover

Task identity

Task significance

Autonomy

340 Part4. Leading

equity theory The theory that an employee compares hls or her j0b s input-to-outcome ratio with that of relevant

others and then corrects anV inequity

referent The persons, systems, or selves against which

rndividuals compare themselves ro assess equiry

distributive iustice Perceived fairness of the am0unt and allocati0n

of rewards among individuals

procedural justice Perceived fainress of the process used to determine

the distribution of rewards

\AJhat ls Equity Theorv? Have you ever wondered what kind of grade the person sitting next to you in class makes on a test or on a major class assignment? Sure you have-most of us do! Being human, we tend to compare ourselves with others. If someone offered you $55,000 a year on your first job after graduating from college, you'd probably jump at the offer and report to work enthusiastic, ready to tackle whatever needed to be done, and certainly satisfied with your pay. How would you react, though, if you found out a month into the job that a coworker-another recent graduate, your age, with comparable grades from a comparable school, and with comparable work experience-was getting $60,000 a year? You'd probably be upset! Even though in absolute terms, $55,000 is a lot of money for a new graduate to make (and you know it!), that suddenly isn't the issue. Now you see the issue as what you believe isfair-whatis equitable. The term equity is related to the concept of fairness and equitable treatment compared with others who behave in similar ways. There's considerable evidence that employees compare themselves to others and that inequities influence how much effort employees exert.3l

Equity theory, developed by J. Stacey Adams, proposes that employees compare what they get from a job (outcomes) in relation to what they put into it (inputs) and then compare their inputs-outcomes ratio with the inputs-outcomes ratios of relevant others (Exhibit 1 l-7). If an employee perceives her ratio to be equitable in comparison to those of relevant others, there's no problem. However, if the ratio is inequitable, she views herself as underewarded or overrewarded. When inequities occur, employees attempt to do something about it.32 The result might be lower or higher productivity, improved or reduced quality of output, increased absenteeism, or voluntary resignation.

The referent-the other persons, systems, or selves individuals compare themselves against in order to assess equity-is an important variable in equity theory.33 Each of the three referent categories is important. (1) The "persons" category includes other individuals with similar jobs in the same organization but also includes friends, neighbors, or profes- sional associates. Based on what they hear at work or read about in newspapers or trade jour- nals, employees compare their pay with that of others. (2) The "system" category includes organizational pay policies, procedures, and allocation. (3) The "self' category refers to inputs-outcomes ratios that are unique to the individual. It reflects past personal experiences and contacts and is influenced by criteria such as past jobs or family commitments.

Originally, equity theory focused on distributive iustice, which is the perceived faimess of the amount and allocation of rewards among individuals. More recent research has focused on looking at issues of procedural justice, which is the perceived fairness ofthe process used to determine the distribution of rewards. This research shows that distributive justice has a greater influence on employee satisfaction than procedural justice, while procedural justice tends to affect an employee's organizational commitment, trust in his or her boss, and intention to quit.3a What are the implications for managers? They should consider openly sharing infor- mation on how allocation decisions are made, follow consistent and unbiased procedures, and engage in similar practices to inbrease the perception of procedural justice. By increasing the perception of procedural justice, employees are likely to view their bosses and the organization as positive even if they're dissatisfied with pay, promotions, and other personal outcomes.

Exhibit i.1-7 Equity Theory Relationships

PERCEIVED RATIO COMPARISON* EMPLOYEE'S ASSESSMENT

Outcomes A Outcomes B lnputsA - InputsB

Outcomes A

I nequity (u nderrewarded)

Equity

I nequ ity (overrewa rded)

Outcomes B: -inputaE-- Outcomes B

- lnputs B

lnputs A

Outcomes A --mputs-A-

*Person A is the employee, and Person B is a relevant other or referent

cHAPTER 11 . Motivating and Rewardrng Employees 341

Exhibit LL-8 Expectancy Model

Effort-perf ormance li nkage (expectancy)

Performance-reward I in kage (instrumentality)

Attractiveness (valence)

i-i*m, i]**s Exi:**iancy Tii*0i'y ilxpiain *vf ctivati*n? . How hard do I have to work to achieve a certain level of performance? . Can I actually do that? . What reward will I get for reaching it? . How much do I want that reward? The most comprehensive explanation of how employees are motivated is Victor Vroom's expectancy theory. Although the theory has its critics,35 most research evidence supports it.36

Expectancy theory states that an individual tends to act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. It includes three variables or relationships (see Exhibit 1l-8):

l. Expectancy or effort-perfonnance linkage is the probability perceived by the individual that exerting a given amount of effort will lead to a certain level of perfornance.

2. Instrumentality or performance-reward linkage is the degree to which the individual believes that performing at a particular level is instrumental in attaining the desired outcome.

3. Valence or qttractiveness of reward is the importance that the individual places on the potential outcome or reward that can be achieved on the job. Valence considers both the goals and needs ofthe individual.

This explanation of motivation might sound complicated, but it really isn't. It can be summed up in the questions: How hard do I have to work to achieve a certain level of per- formance, and can I actually achieve that level? What reward will performing at that level get me? How attractive is the reward to me, and does it help me achieve my own personal goals? Whether you are motivated to put forth effort (that is, to work hard) at any given time depends on your goals and your perception of whether a certain level of performance is nec- essary to attain those goals. Let's look at an example. Many years ago, when a woman went to work for IBM as a sales rep, her favorite work "reward" became having an IBM corporate jet fly to pick up her best customers and her and take them for a weekend of golfing at some fun location. But to get that particular "reward," she had to achieve at a certain level of per- formance, which involved exceeding her sales goals by a specified percentage. How hard she was willing to work (that is, how motivated she was to put forth effort) was dependent on the level of performance that had to be met and the likelihood that if she achieved at that level of performance she would receive that reward. Because she "valued" that reward, she always worked hard to exceed her sales goals. And the performance-reward linkage was clear because her hard work and performance achievements were always acknowledged by the company with the reward she valued (access to a corporate jet).

The key to expectancy theory is understanding an individual's goal and the linkage be- tween effort and performance, between performance and rewards, and finally, between rewards and individual goal satisfaction. It emphasizes payoffs, or rewards. As a result, we have to be- lieve that the rewards an organization offers align with what the individual wants. Expectancy theory recognizes that no universal principle explains what motivates individuals and thus stresses that managers understand why employees view certain outcomes as attractive or unat- tractive. After all, we want to reward individuals with those things they value positively. Also, expectancy theory emphasizes expected behaviors. Do employees know what is expected of

expectancy theory The the0ry that an individual tends t0 act in a

certain way based on the expectalion that the act

will be followed by a given outcome and 0n the

attractiveness of that 0utcome to the rndividual

342 Part 4 Leading

Foxconn chairman and founder Terry Gou (center) honored 140 employees rn Shenzhen, China, for therr excellent pedormance at an awards and recognition banquet for ihem and theft relatrves. Recognition programs

that express appreciaiion for a job well done play a powedul role rn motivating appropriate employee behavior.

them and how they'll be evaluated? Finally, the theory is concerned with perceptions. Reality is irrelevant. An individual's own perceptions of performance, reward, and goal outcomes, not the

outcomes themselves, will determine his or her motivation (level of effort).

Hnw ean W* lntegrat* tonterr:pc:rfi ry Mfttivatiurr Th*mrics? Many of the ideas underlying the contempo- rary motivation theories are complementary, and you'll understand better how to motivate people if you see how the theories fit together.3T Exhibit 11-9 presents a model that integrates much of what we know about motivation. Its basic foundation is the expectancy model. Let's work through the model, starting on the left.

. The individual effort box has an arrow leading into it. This arrow flows from the individ- ual's goals. Consistent with goal-setting theory-, this goals-effort link is meant to illustrate that goals direct behavior.

. Expectancy theory predicts that an employee will exert a high level of effort if he or she per- ceives a strong relationship between effort and performance, performance and rewards, and rewards and satisfaction of personal goals. Each of these relationships is, in turn, influenced

by certain factors. You can see from the model that the leve1 of individual performance is determined not only by the level of individual effort but also by the individual's ability to perform and by whether the organization has a fair and objective performance evaluation system. The performance-reward relationship will be strong if the individual perceives that it is performance (rather than seniority, personal favorites, or some other criterion) that is rewarded. The final link in expectancy theory is the rewards-goal relationship.

. The traditional need theories come into play at this point. Motivation would be high to the degree that the rewards an individual received for his or her high performance satisfied the

dominant needs consistent with his or her individual goals.

A closer look at the model also shows that it considers other theories.

. Achieyement-need is seen, in that the high achiever isn't motivated by the organization's assessment of his or her performance or organizational rewards, hence the jump from effort to individual goals for those with a high nAch. Remember that high achievers are internally driven as long as the jobs they're doing provide them with personal responsibility, feed- back, and moderate risks. They're not concerned with the effort-performance, performance-

reward, or rewards-goals linkages. . Reinforcement theory is seen in the model by recognizing that the organization's rewards

reinforce the individual's performance. If managers have designed a reward system that is seen by employees as "paying off'for good performance, the rewards will reinforce and encourage continued good performance.

. Rewards also play a key part in equiQ theo ry- . Individuals will compare the rewards (out- comes) they have received from the inputs or efforts they made with the inputs-outcomes ratio of relevant others. If inequities exist, the efforl expended may be influenced.

. Finally, the JCM is seen in this integrative model. Task characteristics (ob design) influence job motivation at two places. First, jobs that are designed around the five job dimensions are likely to lead to higher actual job performance because the individual's motivation will be stimulated by the job itself-that is, they will increase the linkage between effort and performance. Second, jobs that are designed around the five job dimensions also increase an employee's control over key elements in his or her work. Therefore. jobs that offer autonomy, feedback, and similar task characteristics help to satisfy the individual goals of employees who desire greater control over their work.

CHAPTER 11 . Motivating and Rewarding Employees 343

Exhibit 1L-9 lntegrating Contemporary Theories of Motivation

o Try lt! If your professor has assigned this, go to the Assignments section of mymanagementlab.com to complete the Simulation : Motivation.

What Current Motivation lssues Do Managers Face?

11-4 Discuss current issues in motivating employees.

motivating in tough economic circumstances, managing cross-cultural chal- lenges, motivating unique groups of workers, and designing appropriate rewards programs.

Understanding and predicting employee motivation is one of the most popular areas in management research. We've introduced you to several motivation theories. However, even current studies of employee motivation are influenced by some significant workplace is"ues-

#r"; t t"d*td"rt I Performanceffi

^} -e

, Abititu \d

L Objective

ffi System

344 Part 4 . Leading

How Can Managers Motivate En:ployees \i/hen the Ec*rTomrr Stinks? Zappos, the quirky Las Vegas-based online shoe retailer (now a part of Amazon.com), has always had a reputation for being a fun place to work.3S However, during the economic recession, it, like many companies, had to cut staff-124 employees in total. CEO Tony Hsieh wanted to get out the news fast to lessen the stress for his employees. So he announced the layoff in an e-mail, on his blog, and on his Twitter account. Although some might think these are terrible ways to communicate that kind of news, most employees thanked him for being so open and so honest. The company also took good care of those being laid off Laid-off employees with less than two years of service were paid through the end of the year. Longer-tenured employees got four weeks severance pay for every year of service. All got six months of continued paid health coverage and, at the request of the employees, got to keep their 40 percent merchandise discount through the Christmas season. Zappos had always been a model of how to nurture employees in good times; now it showed how to treat employees in bad times.

Economic recessions can be diffrcult for many organizations, especially when it comes to their employees. Layoffs, tight budgets, minimal or no pay raises, benefit cuts, no bonuses, long hours doing the work of those who had been laid off-this can be the reality that many employees face. As conditions deteriorate, employee confidence, optimism, and job engagement plummet as well. As you can imagine, it isn't an easy thing for managers to keep employees motivated under such challenging circumstances.

In an uncertain economy, managers have to be creative in keeping their employees' efforts energized, directed, and sustained toward achieving goals. They are forced to look at ways to motivate employees that don't involve money or that are relatively inexpensive.3g So they use actions such as holding meetings with employees to keep the lines of communication open and to get their input on issues; establishing a common goal, such as maintaining excel- lent customer service, to keep everyone focused; creating a community feel so employees could see that managers cared about them and their work; and giving employees opportuni- ties to continue to learn and grow. And, of course. an encouraging word always goes a long way, as well.

Hcur Docs Counirv Cuiture Affect lVlotivation Efforts?

The desire for interesting work seems to be globai.

In today's global business environment, managers can't automatically assume that motivational programs that work in one geographic location are going to work in others. Most current motivation theories were developed in the United States by Americans and about Americans.40 Maybe the most blatant pro-American characteristic in these theories is the strong emphasis on individualism and achievement. For instance, both goal-setting and expectancy theories emphasize goal accomplishment as well as rational and individual thought. Let's look at the cross-cultural transferability of the motivation theories.

Maslow's need hierarchy argues that people start at the physiological level and then move progressively up the hierarchy in order. This hierarchy, if it has any application at all, aligns with American culture. In countries such as Japan, Greece, and Mexico, where uncertainty avoidance characteristics are strong, security needs would be on top of the need hierarchy. Countries that score high on nurturing characteristics-Denmark, Sweden, Norway, the Netherlands, and Finland-would have social needs on top.4l We would predict, for instance, that group work will be more motivating when the country's culture scores high on the nurturing criterion.

Another motivation concept that clearly has an American bias is the achievement need. The view that a high achievement need acts as an internal motivator presupposes two cultural characteristics-a willingness to accept a moderate degree of risk (which excludes coun- tries with strong uncertainty avoidance characteristics) and a concern with performance (which applies almost singularly to countries with strong achievement characteristics).

CHAPTER 11 ' Motivating and Rewarding Employees

This combination is found in the Anglo-American countries of the United States, Canada, and Great Britain.42 On the other hand, these characteristics are relatively absent in countries such as Chile and Portugal.

Equity theory has a relatively strong follow- ing in the United States, which is not surprising given that U.S.-style reward systems are based on the assumption that workers are highly sensitive to equity in reward allocations. In the United States, equity is meant to closely link pay to performance. However, recent evidence suggests that in collec- tivist cultures, especially in the former socialist countries of Central and Eastern Europe, employees expect rewards to reflect their individual needs as well as their performance.43 Moreover, consistent with a legacy of communism and centrally planned economies, employees exhibited a greater "entitle- ment" attitude-that is, they expected outcomes to be greater than their inputs.a4 These findings suggest that U.S.-style pay practices may need to be modified in some countries in order to be perceived as fair by employees.

Despite these cross-cultural differences in motivation, a number of cross-cultural consis- tencies can be found. For instance, the desire for interesting work seems important to almost all workers, regardless of their national culture. In a study of seven countries, employees in Belgium, Britain, Israel, and the United States ranked "interesting work" number one among 11 work goals. It was ranked either second or third in Japan, the Netherlands, and Germany.4s Similarly, in a study comparing job-preference outcomes among graduate stu- dents in the United States, Canada, Australia, and Singapore, growth, achieve- ment, and responsibility were rated the top three and had identical rankings.a6 Both studies suggest some universality to the importance of intrinsic factors identified by Herzberg in his two-factor theory. Another recent study examin- ing workplace motivation trends in Japan also seems to indicate that Herzberg's model is applicable to Japanese employees.aT

il*:,'''; il*i'; liri*i:Eij**r'* F#*fi*"*e* ;1/r:i,i,** Gru=-u;:s r:i i."1*rii*,-sir Motivating employees has never been easy! Employees come into organizations with different needs, personalities, skills, abilities, interests, and aptitudes. They have different expectations of their employers and different views of what they think their employer has a right to expect of them. And they vary widely in what they want from their jobs. For instance, some employees get more satisfaction out of their personal interests and pursuits and only want a weekly paycheck- nothing more. They're not interested in making their work more challenging or interesting or in "winning" performance contests. Others derive a great deal of satisfaction in their jobs and are motivated to exert high levels of effort. Given these differences, how can managers do an effective job of motivating the unique groups of employees found in today's workforce? One thing is to understand the motivational requirements of these groups including (1) diverse employees, (2) professionals, and (3) contingent workers.

(1) MOTIVATING A DIVERSEWORKFORCE. To maximize motivation among today's workforce, managers need to think in terms of flexibility. For instance, studies tell us that men place more importance on having autonomy in their jobs than do women. In contrast, the opportunity to learn, convenient and flexible work hours, and good interpersonal relations are more important to women.49 Having the opportunity to be independent and to be exposed to different experi- ences is important to Gen Y employees, whereas older workers may be more

345

#! Jae C Hong/Assocated Press

Llke workers in most cultures, the desire for interesting work motivates Japan's Shigeru Miyamoto, the creator of many of Nrntendo's characters including Mario, shown here. As a vrdeo game designer and producer, Miyamoto has also been motlvated to achieve his goal of creating untque games that offer fun and joy to people of all ages throughout the world.

A scary thing is happening. Workers facing extra0rdinary work demands are turning to ADHD (attention deficit hyperactivity disorder) drugs to b00st their energy. These pills are amphetamine-based stimulants that give users a b00st 0f energy, Although some students may

use these when studying for exams 0r puttrng

the frnal t0uches on a research paper/presenta-

tion, experts now say that stimulant abuse is moving into the workplace. Many young work-

ers using the drugs to increase their productivity

say that "these drugs are used not t0 get high, but hired." Such seemingly harmless abuse can

lead to serious consequences.4S

lf your professar has assigned this, go to the Assignments section of mymanagementlab .com t0 cznplete these discussion questions.

* ralt About lt 3: What do you think? ls this a problem oflfor employee motivation? Explain.

* fatt About lt 4: Why is this a potential ethical issue? How might managers address this?

A Ouestion ol Ethics

346 Part 4 Leading

interested in highly structured work opportunities.s0 Managers need to recognize that what motivates a single mother with two dependent children who's working full time to support her family may be very different from the needs of a single part-time employee or an older employee who is working only to supplement his or her retirement income. A diverse array of rewards is needed to motivate employees with such diverse needs. Many of the worV life balance programs (see Chapter 7) that organizations have implemented are a response to the varied needs of a diverse workforce. In addition, many organizations have developed flexible work arrangements (see Chapter 6) that recognize different needs. These types of programs (including telecommuting, compressed workweeks, flextime, and job sharing) may become even more popular as employers look for ways to help employees cope with high fuel prices.

Do flexible work arrangements motivate employees? Although such arrangements might seem highly motivational, both positive and negative relationships have been found. For instance, one study of the impact of telecommuting on job satisfaction found that job satisfac- tion initially increased as the extent of telecommuting increased, but as the number of hours spent telecommuting increased, job satisfaction started to level off, decreased slightly, and then stabilized.sl

(2) MOTIVATING PROFESSIONALS. In contrast to a generation ago, the typical em- ployee today is more likely to be a professional with a college degree than a blue-collar fac- tory worker. What special concerns should managers be aware of when trying to motivate a team of engineers at Intel's India Development Center, software designers at SAS Institute in North Carolina, or a group of consultants at Accenture in Singapore?

Professionals are different from nonprofessionals.s2 They have a strong and long-term commitment to their field of expertise. To keep current in their field, they need to regularly update their knowledge, and because of their commitment to their profession they rarely de- fine their workweek as 8 .c.N{. to 5 p.na. five days a week.

What motivates professionals? Money and promotions typically are low on their prior- ity list. Why? They tend to be well paid and enjoy what they do. In contrast, job challenge tends to be ranked high. They like to tackle problems and find solutions. Their chief reward is the work itself. Professionals also value support. They want others to think that what they're working on is important. That may be true for all employees, but professionals tend to be focused on their work as their central life interest, whereas nonprofessionals typically have other interests outside of work that can compensate for needs not met on the job.

(3) MOTIVATING CONTINGENT WORKERS. As full-time jobs have been eliminated through downsizing and other organizational restructurings, the number of openings for part-time, contract, and other forms of temporary work have increased. Contingent workers don't have the security or stability that permanent employees have, and they don't iden- tify with the organization or display the commitment that other employees do. Temporary workers also typically get little or no benefits such as health care or pensions.s3

There's no simple solution for motivating contingent employees. For that small set of individuals who prefer the freedom of their temporary status, the lack of stability may not be an issue. In addition, temporariness might be prefened by highly compensated physicians, en- gineers, accountants, or financial planners who don't want the demands of a full-time job. But these are the exceptions. For the most part, temporary employees are not temporary by choice.

What will motivate involuntarily temporary employees? An obvious answer is the oppor- tunity to become a permanent employee. In cases in which permanent employees are selected from a pool of temps, the temps will often work hard in hopes of becoming permanent. A less obvious answer is the opportunity for training. The ability of a temporary employee to find a new job is largely dependent on his or her skills. If an employee sees that the job he or she is doing can help develop marketable skills, then motivation is increased. From an equity stand- point, when temps work alongside permanent employees who earn more and get benefits too for doing the same job, the performance of temps is likely to suffer. Separating such employ- ees or perhaps minimizing interdependence between them might help managers counteract potential problems.sa

hl * vv il m n $/[ n i"i * g e r s ff e *cigt ro .s] pprr:pi'f * is, ff s ir,.r-q r*-s Fr* gr a ms? At Blue Cross of California, doctors in its health maintenance organizations are paid bonuses on whether customers (patients) are satisfied. At FedEx, drivers are paid on the basis of the quantity of packages delivered and whether those packages are delivered on time.ss There's no doubt that employee rewards programs play a powerful role in motivating appropriate employee behavior. Some of the more popular rewards programs include open-book manage- ment, employee recognition, and pay-for-performance.

HOW CAN OPEN-BOOK MANAGEMENT PROGRAMS MOTIVATE EMPLOYEES? WithiN 24 hours after managers of the Heavy Duty Division of Springfield Remanufacturing Company (SRC) gather to discuss a multipage financial document, every plant employee will have seen the same information. If the employees can meet shipment goals, they'll all share in a large year-end bonus.56 Many organizations of various sizes involve their employees in workplace decisions by opening up the financial statements (the "books"). They share that information so that employees will be motivated to make better decisions about their work, be better able to understand the implications of what they do and how they do it, and see the ultimate impact on the bottom line. This approach is called open- book management and many organizations are using it.57

The goal of open-book management is to get employees to think like an owner by seeing the impact their decisions have on financial results. Because many employees don't have the knowledge or background to understand the financials, they have to be taught how to read and understand the organization's financial statements. Once employees have this knowledge, how- ever, managers need to regularly share the numbers with them. By sharing this information, em- ployees begin to see the link between their efforts, level of perfornance, and operational results.

HOW CAN MANAGERS USE EMPLOYEE RECOGNITION PROGRAMS? Employee recognition programs consist of personal attention and expressions of interest, approval, and appreciation for a job well done.58 They can take numerous forms. For instance, Kelly Services introduced a new version of its points-based incentive system to better promote productivity and retention among its employees. The program, called Kelly Kudos, gives employees more choices of awards and allows them to accumulate points over a longer time

CHAPTER 11 . Motivating and Rewarding Employees 347

open-book management A motivational approach in which an organization s

financial statements (the "books") are shared wkh

all employees

employee recognition programs Programs that consist of personal attention and

expressions of interest, approval, and appreciation

for a job well done

gamification Applying typical aspects ol game playing to other

areas of actrvrty especially ,n a work setting

Technology and the Manager's Job

0rganizations have historically assumed that "one size fits all" when

it comes to allocating rewards. Managers typically assumed that

everyone wants more money and more vacation time. But as organi-

zations become less bureaucratic and more capable of differentiat-

ing rewards, managers will be encouraged to differentiate rewards

among employees as well as for individual employees over time.

0rganizations control a vast number of potential rewards

that employees might find appealing. A partial list would include

increased base pay, bonuses, shortened workweeks, extended vaca-

tions, paid sabbaticals, flexible work hours, part{ime employment,

guaranteed job security, increased pension contributions, college

tuition reimbursement, personal days off, help in purchasing a

home, recognition awards, paid club memberships, and work-from-

home options. And the latest twist in employee rewards comes

through the use of social networking, mobile accessibility, and

samification-that is, applying typical aspects of game play-

ing to other areas of activity especially in a work setting-giving

employees the opportunity to earn ongoing "badges" or "honors."

These types of reward programs have the potential to engage and

inspire employees. ln the future, most organizations will structure

individual reward packages in ways that will maximize employee

motivation,

lf your professor has assigned this, go to the Assignments section of

mymanagementlah.com to complete these discussion questions.

O rnlr AB0UT lT 5: What are the positive aspects of having individualized rewards? (Think in terms of employees and managers.)

0 rnlX ABOUT lT 6: What are the negative aspects of having individualized rewards? (Again, think in terms of employees and managers.)

INDIVIDUALIZED REWARDS

348 Part 4 Leading

pay-for-performance pro9rams Variable compensati0n plans that pay employees on

the basis of some perlormance measure

This baker at Zingerman's Deli in Ann Arbor, Mlchigan, is empowered vurth mformation that enables him to think and act like an owner. Embracing open-book malagement, Zingerman shares financial product, custom- er service, and other information employees need to understand how the company works and how their decisions affect the company's profitability.

period.59 And it's working. Participants generate three times more revenue and hours than employees not receiving points. Most managers, however, use a far more informal approach. For example, when Julia Stewart-currently chairman and CEO of DineEquity, Inc.-was president ofApplebee's Restaurants, she would frequently leave sealed notes on the chairs of employees after everyone had gone home.60 These notes explained how important Stewart thought the person's work was or how much she appreciated the completion of a project. Stewart also relied heavily on voice mail messages left after office hours to tell employees how appreciative she was for a job well done. And recognition doesn't have to come only from managers. Some 35 percent of companies encourage coworkers to recognize peers for outstanding work efforts.61 For instance, managers at Yum Brands Inc. (the Kentucky-based parent of food chains Taco Bell, KFC, and PizzaHut) were looking for ways to reduce em- ployee turnover. They found a successful customer-service program involving peer recogni- tion at KFC restaurants in Australia. Workers there spontaneously rewarded fellow workers with "Champs cards, an acronym for attributes such as cleanliness, hospitality, and accu- racy." Yum implemented the program in other restaurants around the world, and credits the peer recognition with reducing hourly employee turnover from 18 1 percent to 109 percent.62

A survey of organizations found that 84 percent had som_e type of-progiam to recognize worker achievements.o3

And do employees think these programs are important? You betl A survey of a wide range of employees asked them what they considered the most powerful workplace motiva- tor. Their response? Recognition, recognition, and more recognitionl6a

Consistent with reinforcement theory (see Chapter 9). rewarding a behavior with recog- nition immediately following that behavior is likely to encourage its repetition. And recogni- tion can take many forms. You can personally congratulate an employee in private for a good job. You can send a handwritten note or e-mail message acknowledging something positive that the employee has done. For employees with a strong need for social acceptance. you can publicly recognize accomplishments. To enhance group cohesiveness and motivation. you can celebrate team successes. For instance. you can do something as simple as throw apizz,a party to celebrate a team's accomplishments. Some of these things may seem simple. but they can go a long way in showing employees they're valued.

O Watch lt 2! If your professor has assigned this, go to the Assignments section of mymanagementlah.com to complete the video exercise litled CHZMHiII: Motivation.

HOW CAN MANAGERS USE PAY.FOR- PERFORMANCE TO MOTIVATE EMPLOYEES? Here's a survey statistic that may surprise you: 40 percent of employees see no clear link between performance and pay.6s You have to think: What are the companies where these employees work paying for? They're obviously not clearly communicating performance expectations.66 Pay-for-p.rformance programs are variable compensation plans that pay employees on the basis of some performance measu.e.67 Piece-rate pay plans, wage incentive plans, profit-sharing, and lump-sum bonuses are examples. What differentiates these forms of pay from more traditional compensation plans is that instead of paying a person for time on the job, pay is adjusted to reflect some performance measure. These performance measures might include such

Jefi Greenberg 6 o{ 6/Alamy

CHAPTER 11 . Motivating and Rewarding Employees 349

things as individual productivity, team or work group productivity, departmental productiv- ity, or the overall organization's profit performance.

Pay-for-performance is probably most compatible with expectancy theory. Individuals should perceive a strong relationship between their performance and the rewards they receive for motivation to be maximized. If rewards are allocated only on nonperformanss fnst6ls- such as seniority, job title, or across-the-board pay raises-then employees are likely to re- duce their efforts. From a motivation perspective, making some or all of an employee's pay conditional on some performance measure focuses his or her attention and effort toward that measure, then reinforces the continuation of the effort with a reward. If the employee, team, or organization's performance declines, so does the reward. Thus, there's an incentive to keep efforts and motivation strong.

Pay-for-performance programs are popular. Some 80 percent of large U.S. companies have some form of variable pay plan.68 These types of pay plans have also been tried in other countries such as Canada and Japan. About 30 percent of Canadian companies and22 percent of Japanese companies have company-wide pay-for-performance plans.69

Do pay-for-performance programs work? For the most part, studies seem to indicate that they do. For instance, one study found that companies that used pay-for-performance programs performed better financially than those that did not.70 Another study showed that pay-for-performance programs with outcome-based incentives had a "positive impact on sales, customer satisfaction, and profits."7l If an organization uses work teams, managers should consider group-based performance incentives that will reinforce team eflbrt and com- mitment. But whether these programs are individual based or team based, managers need to ensure that they're specific about the relationship between an individual's pay and his or her expected level of appropriate performance. Employees must clearly understand exactly how performance-theirs and the organization's-translates into dollars on their paychecks.T2

A FINAL NOTE ON EMPLOYEE REWARDS PROGRAMS. During times of economic and financial uncertainty, managers' abilities to recognize and reward employees are often severely constrained. It's hard to keep employees productive during challenging times, even though it's especially critical. It's not surprising, then, that employees feel less con- nected to their work. In fact, a recent study by the Corporate Executive Board found that declining employee engagement has decreased overall productivity by 3 to 5 percent.T3 But there are actions managers can take to maintain and maybe even increase employees' moti- vation levels. One is to clarify each person's role in the organization. Show them how their efforts are contributing to improving the company's overall situation. It's also important to keep communication lines open and use two-way exchanges between top-level managers and employees to soothe fears and concerns. The key with taking any actions is continu- ing to show workers that the company cares about them. As we said at the beginning of the chapter, the value in companies comes from employees who are motivated to be there. Managers have to give employees a reason to want to be there.

MyManagementLab@ Go to mymanagementlab.com to complete the problems marked with this icon Q.