chapter sixteen - california state university,...

1/16/2009

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Slide content created by Charlie Cook, The University of West Alabama

Copyright © Houghton Mifflin Company. All rights reserved.

Chapter Sixteen

Managing Employee

Motivation and

Performance

Copyright © Houghton Mifflin Company. All rights reserved. 16–2

Learning Objectives

After studying this chapter, you should be able to:

1. Characterize the nature of motivation, including its importance and basic historical perspectives.

2. Identify and describe the major content perspectives on motivation.

3. Identify and describe the major process perspectives on motivation.

4. Describe reinforcement perspectives on motivation.

5. Identify and describe popular motivational strategies.

6. Describe the role of organizational reward systems in motivation.


The Nature of Motivation

• Motivation

– The set of forces that cause people to behave in certain ways.

– The goal of managers is to maximize desired behaviors and minimize undesirable behaviors.

• The Importance of Motivation in the Workplace

– Determinants of Individual Performance• Motivation—the desire to do the job.

• Ability—the capability to do the job.

• Work environment—the resources to do the job.

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Figure 16.1: The

Motivation Framework


Content Perspectives on

Motivation• Content Perspectives

– Approaches to motivation that try to answer the question, ―What factors in the workplace motivate people?‖

• Content Perspectives of Motivation

– Maslow’s Hierarchy of Needs

– Aldefer’s ERG Theory

– Herzberg’s Two-Factor Theory

– McClelland’s Achievement, Power, and Affiliation Needs



Motivation (cont’d)• The Need Hierarchy Approach

– Maslow’s Hierarchy of Needs• Physiological—basic survival and biological function.

• Security—a safe physical and emotional environment.

• Belongingness—love and affection.

• Esteem—positive self-image/self-respect and recognition and respect from others.

• Self-actualization—realizing one’s potential for personal growth and development.

– Weakness of Maslow’s theory• Five levels of need are not always present.

• Ordering or importance of needs is not always the same.

• Cultural differences.

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Figure 16.2: Maslow’s

Hierarchy of Needs



Motivation (cont’d)• The ERG Theory

– Needs are grouped into three overlapping categories:

• Existence needs—physiological and security needs.

• Relatedness needs—belongingness and esteem by others.

• Growth needs—self-esteem and self-actualization.

– ERG theory assumes that:

• Multiple needs can be operative at one time (there is no absolute hierarchy of needs).

• If a need is unsatisfied, a person will regress to a lower-level need and pursue that need (frustration-regression).



Motivation (cont’d)

• The Two-Factor Theory (Herzberg)

– Satisfaction and dissatisfaction are influenced by

two independent sets of factors.

– Theory assumes that job satisfaction and job

dissatisfaction are on two distinct continuums:

• Motivational factors (work content) are on a continuum

that ranges from satisfaction to no satisfaction.

• Hygiene factors (work environment) are on a separate

continuum that ranges from dissatisfaction to no

dissatisfaction.

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• The Two-Factor Theory (cont’d)

– Theory posits that motivation is a two-step

process:

• Ensuring that the hygiene factors are not

deficient and not blocking motivation.

• Giving employees the opportunity to experience

motivational factors through job enrichment.


Figure 16.3: The Two-Factor

Theory of Motivation



Motivation (cont’d)• Individual Human Needs (McClelland)

– The need for achievement• The desire to accomplish a goal or task more effectively

than in the past.

– The need for affiliation• The desire for human companionship and acceptance.

– The need for power• The desire to be influential in a group and to be in control

of one’s environment.

• Implications of the Content Perspectives– Content (what causes motivation) → Process (how motivation

occurs)

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Process Perspectives on

Motivation• Process Perspectives

– Approaches to motivation that focus on:• Why people choose certain behavioral options to satisfy

their needs

• How they evaluate their satisfaction after they have attained their goals.

• Process Perspectives of Motivation– Expectancy Theory

– Porter-Lawler Extension of Expectancy Theory

– Equity Theory

– Goal-Setting Theory



Motivation (cont’d)• Expectancy Theory

– Motivation depends on how much we want something and how likely we are to get it.

– Assumes that:

• Behavior is determined by personal and environmental forces.

• People make decisions about their behavior in organizations.

• People have different types of needs, desires, and goals.

• People choose among alternatives of behaviors in selecting one that that leads to a desired outcome.

• Motivation leads to effort that, when combined with ability and environmental factors, results in performance which leads to various outcomes that have value (valence) to employees.



Motivation (cont’d)• Elements of Expectancy Theory

– Effort-to-Performance Expectancy• The employee’s perception of the

probability that effort will lead to a high level of performance.

– Performance-to-Outcome Expectancy

• The employee’s perception of the probability that performance will lead to a specific outcome—the consequence or reward for behaviors in an organizational setting.

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Motivation (cont’d)• Elements of Expectancy Theory (cont’d)

– Valence• An index of how much an individual values a particular

outcome.

• It is the attractiveness of the outcome to the individual.

– Attractive outcomes have positive valences and unattractive outcomes have negative valences.

– Outcomes to which an individual is indifferent have zero valences.

– For motivated behavior to occur:• Both effort-to-performance expectancy and performance-

to-outcome expectancy probabilities must be greater than zero.

• The sum of the valences must be greater than zero.


Figure 16.4: The Expectancy

Model of Motivation



Motivation (cont’d)• The Porter-Lawler Extension of Expectancy

Theory

– Assumptions:• If performance results in equitable and fair rewards,

people will be more satisfied.

• High performance can lead to rewards and high satisfaction.

– Types of rewards:• Extrinsic rewards are outcomes set and awarded by

external parties (e.g., pay and promotions).

• Intrinsic rewards are outcomes internal to the individual (e.g., self-esteem and feelings of accomplishment).

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Figure 16.5: The Porter-Lawler

Extension of Expectancy Theory




• Equity Theory

– People are motivated to seek social equity in the

rewards they receive for performance.

• Equity is an individual’s belief that the treatment he or

she receives is fair relative to the treatment received by

others.

– Individuals view the value of rewards (outcomes)

and inputs of effort as ratios and make subjective

comparisons of themselves to other people.

outcomes (self)

inputs (self)=

outcomes (other)

inputs (other)



Motivation (cont’d)• Equity Theory (cont’d)

– Conditions of and reactions to equity comparisons:• Feeling equitably rewarded.

– Maintain performance and accept comparison as fair estimate.

• Feeling under-rewarded—try to reduce inequity.

– Change inputs by trying harder or slacking off.

– Change outcomes by demanding a raise.

– Distort the ratios by altering perceptions of self or of others.

– Leave situation by quitting the job.

– Change comparisons by choosing another object person.

• Feeling over-rewarded.

– Increase or decrease inputs.

– Distort ratios by rationalizing.

– Help the object person gain more outcomes.

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Motivation (cont’d)• Goal-Setting Theory

– Assumptions• Behavior is a result of conscious goals and intentions.

• Setting goals influence the behavior of people in organizations.

• Characteristics of Goals

– Goal difficulty• Extent to which a goal is challenging and requires effort.

• People work harder to achieve more difficult goals.

• Goals should be difficult but attainable.

– Goal specificity• Clarity and precision of the goal.

• Goals vary in their ability to be stated specifically



Motivation (cont’d)• Characteristics of Goals (cont’d)

– Goal acceptance• The extent to which persons accept a

goal as their own.

– Goal commitment• The extent to which an individual is

personally interested in reaching a goal.

• Implications of the Process Perspectives

– If rewards are to motivate employees, they must be perceived as being valued, attainable, fair and equitable.


Figure 16.6: The Expanded Goal-

setting Theory of Motivation

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Reinforcement Perspectives

on Motivation

• Reinforcement Theory

– The role of rewards as they cause behavior

to change or remain the same over time.

– Assumes that:

• Behavior that results in rewarding

consequences is likely to be repeated, whereas

behavior that results in punishing

consequences is less likely to be repeated.



on Motivation (cont’d)• Kinds of Reinforcement in Organizations

– Positive reinforcement• Strengthens behavior with rewards or positive outcomes

after a desired behavior is performed.

– Avoidance • Strengthens behavior by avoiding unpleasant

consequences that would result if the behavior is not performed.

– Punishment• Weakens undesired behavior by using negative

outcomes or unpleasant consequences when the behavior is performed.

– Extinction• Weakens undesired behavior by simply ignoring or not

reinforcing that behavior.



on Motivation (cont’d)

• Providing Reinforcement in Organizations

– Reinforcement schedules

• Fixed interval schedule—reinforcement applied at fixed

time intervals, regardless of behavior.

• Variable interval—reinforcement applied at variable time

intervals.

• Fixed ratio—reinforcement applied after a fixed number

of behaviors, regardless of time.

• Variable Ratio—reinforcement applied after a variable

number of behaviors, regardless of time.

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Table 16.1: Elements of

Reinforcement Theory



on Motivation (cont’d)• Providing Reinforcement in Organizations

(cont’d)

– Behavior modification (OB mod)• A method for applying the basic elements of

reinforcement theory in an organizational setting.

• Specific behaviors are tied to specific forms of reinforcement.

• Implications of the Reinforcement Perspectives– Consistently applied reinforcement helps maintain

employee motivation by:• encouraging (rewarding) positive behaviors

• discouraging (punishing) dysfunctional behaviors in an organization.


Popular Motivational

Strategies• Empowerment and Participation

– Empowerment• Enabling workers to set their own work goals, make

decisions, and solve problems within their sphere of influence.

– Participation• Giving employees a voice in making decisions about

their work.

– Areas of participation for employees:• Making decisions about their jobs.

• Decisions about administrative matters (e.g., work schedules).

• Participating in decision making about broader issues of product quality.

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Popular Motivational

Strategies (cont’d)• Techniques and Issues in Empowerment

– Using work teams• Collections of employees empowered to plan, organize,

direct, and control their work.

– Decentralization• Changing the overall method of organizing the firm

– Conditions necessary for empowerment:• Power spread to lower organizational levels

• Commitment to empowering workers

• Systematic and patient efforts to empower workers.

• Increased commitment to training.


Using Reward Systems to

Motivate Performance (cont’d)• Reward System

– The formal and informal mechanisms by which employee performance is defined, evaluated, and rewarded.

• Effects of Organizational Rewards

– Higher-level performance-based rewards motivate employees to work harder.

– Rewards help align employee self-interest with organizational goals.

– Rewards foster increased retention and citizenship



Motivate Performance (cont’d)• Merit Reward Systems

– Base a meaningful portion of individual compensation on merit—the relative value of an individual’s contributions to the organization.

• Employees who make greater contributions are given higher pay than those who make lesser contributions.

• Incentive Reward Systems

– Concept: employee pay is based on employee output.

– Assume that:• Performance is under the control of the individual worker.

• The employee work at a single task continuously.

• Pay is tightly tied to performance (i.e., pay varies with output).

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Motivate Performance (cont’d)• Incentive Reward Systems (cont’d)

– Incentive pay plans• Piece-rate systems

• Sales commissions

– Other forms of incentives• Non-monetary incentives (perks)

• Team and Group Incentive Reward Systems

– Gainsharing programs

– Scanlon Plan

– Employee stock ownership plans (ESOPs)



Motivate Performance (cont’d)• Executive Compensation

– Standard forms of executive compensation• Base salary

• Incentive pay (bonuses)

– Special forms of executive compensation• Stock option plans

• Executive perks

– Criticism of executive compensation• Excessively large compensation amounts

• Compensation not tied to overall performance of the organization

• Earnings gap between executive pay and typical employee pay



Motivate Performance (cont’d)• New Approaches to Performance-Based

Rewards

– Leveraging the value of incentives

• Allowing individuals and groups in the organization to have a say in how rewards are distributed.

– Getting increasingly innovative in incentive programs:

• Offering stock options to all employees

• Individualizing the rewards available to individuals in reward systems

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Key Terms

• motivation

• content perspectives

• Maslow’s hierarchy of needs

• ERG theory of motivation

• two-factor theory of motivation

• need for affiliation

• need for achievement

• need for power

• process perspectives

• expectancy theory

• effort-to-performance expectancy

• outcomes

• valence

• equity theory

• avoidance

• positive reinforcement

• extinction

• variable-ratio schedule

• variable-interval schedule

• participation


Key Terms

• behavior modification (OB Mod)

• compressed work schedule

• job sharing

• telecommuting

• merit pay plan

• reward system

• piece-rate incentive plan

• gainsharing programs

• Scanlon plan

• stock option plan

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