PART IV: Leading
10 Chapter 10 Motivating and Rewarding Employees Copyright © 2005 Prentice Hall, Inc. All rights reserved.
PowerPoint Presentation by Charlie Cook The University of West Alabama
Learning Outcomes After reading this chapter, I will be able to: 1. Describe the motivation process. 2. Define needs. 3. Explain the hierarchy of needs theory. 4. Differentiate Theory X from Theory Y. 5. Explain the motivational implications of the motivation hygiene theory. 6. Describe the motivational implications of equity theory.
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Learning Outcomes (cont’d) After reading this chapter, I will be able to: 6. Explain the key relationships in expectancy theory. 7. Describe how managers can design individual jobs to maximize employee performance. 8. Explain the effect of workforce diversity on motivational practices. 9. Describe how entrepreneurs motivate their employees.
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Chapter Opening • How does an organization get maximum effort from employees ¾ if the organization is in bankruptcy or closing down? ¾ America West Airlines gave employees a reason to stay.
• America West, similar to many other companies at the turn of the 21st century, ¾ declared bankruptcy and significantly cut costs, cut salaries, and improved efficiencies. ¾ Their management believed it could survive. ¾ They needed pilots, flight crews, mechanics, reservation personnel ¾ But at such a crucial time facing pending doom, how
does management motivate those employees to stay?
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• America West’s solution ¾ was to offer retention bonuses to its employees.
• “Moving forward pay”, ¾ employees who stayed and “rode out the storm” were rewarded. ¾ America West managers also indicated that they would not be receiving any bonuses themselves. ¾ Company leaders were very open about the bonuses, stating
the bonus would “not make up for what they had lost, but it was the company’s way of saying thank you.”
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• Upwards of 40% of all organizations ¾ are offering some type of retention bonus, ¾ and are realizing that keeping good performers takes some additional incentive.
• Even though worker loyalty to organizations has decreased in the past two decades, ¾ retention bonuses appear to be effective in increasing employee loyalty.
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• In the end, America West recovered and employees received their retention bonuses. ¾ Most importantly, employees recognized how important they were to the airline and how much they were appreciated.
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Discussion Questions • • •
•
To identify the motivational aspects of being an employee at America West. How do these motivational aspects relate to Maslow’s hierarchy of needs theory? Do you think Herzberg’s motivation-hygiene theory applies to the employees at America West? Why or why not? Do you think that motivation theories and practices that motivate individuals at a U.S. based company like America West Airlines would be effective in explaining and generating motivation in other countries? If so, which countries? If not, why?
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10–8
Motivation And Individual Needs • Motivation ¾ The willingness to exert high levels of effort to reach organizational goals, conditioned by the effort’s ability to satisfy some individual need
• Need ¾ An internal state that makes certain outcomes appear attractive
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Components of Motivation Effort
Motivation Organizational Goals Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Needs
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The Motivation Process
Exhibit 10.1 Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Early Theories Of Motivation • Hierarchy of needs theory (Maslow) ¾ There is a hierarchy of five human needs; as each need becomes satisfied, the next need becomes dominant. Physiological:
food, drink, shelter, sex Safety: physical safety Social: affiliation with others, affection, friendship Esteem: Internal (self-respect, autonomy, and achievement); external (status, recognition, and attention) Self-actualization: personal growth and fulfillment
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Maslow’s Hierarchy of Needs
Source: Motivation and Personality, 2nd ed., by A. H. Maslow, 1970. Reprinted by permission of Prentice Hall, Inc., Upper Saddle River, New Jersey.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Exhibit 10.2 10–13
Early Theories Of Motivation (cont’d) • Theory X (McGregor) ¾ The assumption that employees dislike work, are lazy, seek to avoid responsibility, and must be coerced to perform
• Theory Y ¾ The assumption that employees are creative, seek responsibility, and can exercise self-direction
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10–14
Theory X Premises • A manager who views employees from a Theory X (negative) perspective believes: ¾ Employees inherently dislike work and, whenever possible, will attempt to avoid it. ¾ Because employees dislike work, they must be coerced, controlled, or threatened with punishment to achieve desired goals. ¾ Employees will shirk responsibilities and seek formal direction whenever possible. ¾ Most workers place security above all other factors associated with work and will display little ambition. Exhibit 10.3 Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Theory Y Premises • A manager who views employees from a Theory Y (positive) perspective believes: ¾ Employees can view work as being as natural as rest or play. ¾ Men and women will exercise self-direction and self-control if they are committed to the objectives. ¾ The average person can learn to accept, even seek, responsibility. ¾ The ability to make good decisions is widely dispersed throughout the population and is not necessarily the sole province of managers.
Exhibit 10.3 (cont’d) Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Early Theories Of Motivation (cont’d) • Motivation-Hygiene theory (Herzberg) ¾ Intrinsic factors are related to job satisfaction and extrinsic factors are related to job dissatisfaction Hygiene
factors
– Factors, such as working conditions and salary, that, when adequate, may eliminate job dissatisfaction but do not necessarily increase job satisfaction. Motivators
– Factors, such as recognition and growth, that can increase job satisfaction.
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Herzberg’s Motivation-Hygiene Theory
Exhibit 10.4 Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Contrasting Views of Satisfaction-Dissatisfaction
Exhibit 10.5 Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Contemporary Theories Of Motivation • Three-needs theory (McClelland) ¾ The needs for achievement, power, and affiliation are major motives in work Need
for achievement (nAch): the drive to excel, to achieve in relation to a set of standards, to strive to succeed. Need for power (nPow): The need to make others behave in a way that they would not have behaved otherwise. Need for affiliation (nAff): The desire for friendly and close interpersonal relationships.
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Management Classic--David McClelland and the Three-Needs Theory • David McClelland’s work related to motivation focused on aspects of personality characteristics. ¾ The questions then are: (1) How do you find out if someone is a high achiever? (2) What effect can that person’s need for achievement have on an organization?
• McClelland would give individuals a projective test in which subjects responded to a set of pictures. ¾ The responses were then classified as focusing on a need for achievement, power, or affiliation. ¾ Those who had a high need for achievement, however, shared some similar attributes.
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• High achievers perform best when they perceive their probability of success as 50-50. ¾ They dislike gambling, they dislike high probability of success, and they like to set goals that require stretching.
• Some reasonably predictions can be made ¾ between the relationship of the achievement need and job performance. ¾ There are consistent findings for power and affiliation needs also.
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• When job situations have personal responsibility, feedback, and an intermediate degree of risk, ¾ high achievers are strongly motivated; they are successful in entrepreneurial activities, such as running their own businesses or managing self-contained units within a large organization.
• A high need to achieve does not necessarily indicate that someone is a good manager— for large organizations • The needs for affiliation and power are closely related to managerial success. ¾ The best managers are high in the need for power and low in the need for affiliation.
• Last, employees can be trained successfully to stimulate their achievement need. Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Contemporary Theories Of Motivation (cont’d) • Equity theory (Adams) ¾ Employees perceive what they get from a job situation (outcomes) in relation to what they put into it (inputs) and then compare their input-outcome ratio with the input-outcome ratios of relevant others.
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Contemporary Theories Of Motivation: Equity Theory (cont’d) • Referent ¾ In equity theory, the other persons, the systems, or the personal experiences against which individuals compare themselves to assess equity. ¾ The choice of a particular set of referents is related to the information available about referents as well as to the perceived relevance.
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Equity Theory Relationships Perceived Ratio Comparison
Employee’s Assessment
*Person A is the employee, and Person B is a relevant other or referent. Exhibit 10.6 Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Equity Theory • When employees perceive an inequity they may: ¾ Distort either their own or others’ inputs or outcomes. ¾ Behave so as to induce others to change their inputs or outcomes. ¾ Behave so as to change their own inputs or outcomes. ¾ Choose a different comparison referent. ¾ Quit their job.
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Equity Theory Prepositions • If paid according to time, overrewarded employees will produce more than equitably paid employees. • If paid according to quantity of production, overrewarded employees will produce fewer but higherquality units than equitably paid employees. • If paid according to time, underrewarded employees will produce less or poorer-quality output. • If paid according to quantity of production, underrewarded employees will produce a large number of lowquality units in comparison with equitably paid employees. Exhibit 10.7 Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Job Design And Motivation • Job characteristics model (JCM) ¾ Hackman and Oldham’s job description model: The
five core job dimensions are skill variety, task identity, task significance, autonomy, and feedback.
¾ Internal rewards are obtained when: An
employee learns (knowledge of results) through (feedback) that he or she personally (experienced responsibility through autonomy of work) has performed well on a task that he or she cares about (experienced meaningfulness through skill variety, task identity, and/or task significance).
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Core Job Dimensions • Skill variety ¾ The degree to which the job requires a variety of activities so the worker can use a number of different skills and talents
• Task identity ¾ The degree to which the job requires completion of a whole and identifiable piece of work
• Task significance ¾ The degree to which the job affects the lives or work of other people Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Core Job Dimensions (cont’d) • Autonomy ¾ 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
• Feedback ¾ The degree to which carrying out the work activities required by the job results in the individual’s obtaining direct and clear information about the effectiveness of his or her performance
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The Job Characteristics Model
Source: J. R. Hackman, “Work Design,” in J. R. Hackman and J. L. Suttle, eds., Improving Life at Work (Glenview, IL: Scott, Foresman, 1977), p. 129.
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Exhibit 10.8 10–32
Guidelines for Job Redesign
Source: J. R. Hackman and J. L. Suttle eds., Improving Life at Work (Glenview. IL: Scott, Foresman, 1977). With permission of the authors.
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Exhibit 10.9 10–33
Expectancy Theory (Vroom) • A comprehensive theory of motivation that an individual tends to act in a certain way, in the expectation that the act will be followed by given outcome, and according to the attractiveness of that outcome to the individual. ¾ The extent to which individuals are motivated to perform to get a reward of value to them is based on their belief that their performance will result in the reward they want.
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Expectancy Theory (cont’d) • Emphasizes self interest in the alignment of rewards with employee wants. • Addresses why employees view certain outcomes (rewards) as attractive or unattractive. • Emphasizes the connections among expected behaviors, rewards, and organizational goals. • Is concerned with individual perceptions and the provision of feedback.
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Expectancy Relationships (Linkages) • Effort–performance ¾ The perceived probability that exerting a given amount of effort will lead to performance
• Performance–reward ¾ The belief that performing at a particular level will lead to the attainment of a desired outcome
• Attractiveness ¾ The importance placed on the potential outcome or reward that can be achieved on the job.
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Simplified Expectancy Theory Performance appraisal system
Training and development
Human resources management Exhibit 10.10
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Integrating Theories of Motivation
Exhibit 10.11 Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Dilemma in Management--Rewarding Appropriate Behavior • You have just been hired as a supervisor at the Quality Travel Agency in Charlotte, North Carolina. In this job, customers call you to arrange travel plans. Many car rental agencies and hotels frequently run contests for the sales representatives. The incentives are attractive enough for you to “steer” customers toward those companies even though it might not be the best or the cheapest for them. The programs are viewed as a bonus for your hard work. Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Questions •
• •
Is there anything wrong with your doing business with these car rental and hotel firms that offer kickbacks to you? What ethical issue do you see in this case for (1) you and (2) your customers? How could your organization design a performance reward system that would encourage you to high levels of bookings, while at the same time not compromising ethical practices and good customer service?
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Flexibility: The Key To Motivating A Diverse Workforce • Recognizing the different personal needs and goals of individuals • Providing a diversity of rewards to match the varied needs of employees • Being flexible in accommodating the cultural differences within a diverse workforce when attempting to motivate workers.
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Motivation and Compensation • Pay-for-performance programs ¾ Compensation plans such as piece-rate plans, profit sharing, and the like that pay employees on the basis of performance measures not directly related to time spent on the job.
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Compensation Alternatives • Competency-based compensation (專業加給、主管津貼等) ¾ A program that pays and rewards employees on the basis of skills, knowledge, or behaviors they possess
• Broad-banding (薪級表) ¾ Pre-set pay level, based on the degree to which competencies exist and allow an employee to contribute to the organization.
• Stock options ¾ A program that allows employees to purchase company stock at a fixed price and profit when company performance increases its stock value. Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Work-Life Balance: Alternative Work Schedules • Flextime ¾ A scheduling option that allows employees select what their work hours will be within some specified parameters.
• Job sharing ¾ A type part-time work that allows two or more workers to split a traditional 40-hour-a-week job
• Telecommuting ¾ A system of working at home on a computer that is linked to the office Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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Employee Empowerment: How Entrepreneurs Motivate Employees • Giving employees power by: ¾ Allowing them to complete the whole job. ¾ Having employees work together across departments and functions in the organization. ¾ Using participative decision making in which employees provide input into decisions. ¾ Delegating decisions and duties, turning over the responsibility for carrying them out to employees. ¾ Redesigning their jobs so they have discretion over the way they do their work. Copyright © 2005 Prentice Hall, Inc. All rights reserved.
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