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Chapter 10
Motivating Employees
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Learning Objectives
Describe the theories on motivation. Explain how firms can enhance job
satisfaction and therefore enhance motivation.
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Motivation and Performance
Efforts of employees to create and produce
a quality product
Firm’s Expenses
Firm's Earnings
Firm's Value
Firm’s Revenue
Efforts of employees to sell the product
Efforts of employees to achieve low financing costs
Efforts of employees to achieve efficient
(low-cost) production and marketing
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Major Theories on Motivation
• Hawthorne Studies• Maslow’s Hierarchy of Needs• Herzberg’s Job Satisfaction Study• Theory X, Y, and Z• Expectancy Theory• Equity Theory• Reinforcement Theory
• Hawthorne Studies• Maslow’s Hierarchy of Needs• Herzberg’s Job Satisfaction Study• Theory X, Y, and Z• Expectancy Theory• Equity Theory• Reinforcement Theory
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Summary of Hawthorne Studies
Increased Lighting for Employees
Higher Productivity
Higher Productivity
Any Adjustment in Conditions That
Reflects Increased Attention Toward
Employees
Reduced Lighting for Employees
Experiment
Conclusion
Condition Result
Higher Productivity
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Maslow’s Hierarchy of Needs
Theory: People must fulfill lower needs in order to move onto higher needs.
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Herzberg
• Policies
• Supervision
• Working Conditions
• Money
• Status
• Job Security
• Achievement
• Recognition
• Challenging Work
• Responsibility
• Opportunities for advancement
• Personal growth opportunities
Hygiene Factors (Environmental) Motivator Factors (The Job Itself)
Hygiene Factors are considered preventive not motivational but may cause motivational concerns if not present.
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Summary of McGregor’s Theory X and Y
Employees dislike work and job responsibilities and will avoid work if possible.
Supervisors’ View of Employees ImplicationsTheory
Theory
X
Theory
Y
Employees are willing to work and prefer more
responsibility.
Supervisors cannot delegate responsibilities.
Supervisors should delegate responsibilities,
which will satisfy and motivate employees.
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Expectancy Theory
Theory: An employee’s efforts are influenced by the expected outcome (reward) for those efforts.
Two requirements: Reward is desirable. Chance of winning reward.
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Equity Theory
Joe50%
Mary30%
Ron20%
Theory: Compensation should be equitable, or
proportionate, to each employee’s contribution.
Example:$100,000 bonusto be divided basedon relative contributionto a project:
Joe: $50,000Mary: $30,000Ron: $20,000
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Reinforcement Theory
Positive reinforcement: provides rewards for high performance.Examples: Bonus, promotion, oral compliment.
Negative reinforcement: motivates employees by encouraging them to behave in a manner that avoids unfavorable consequences.Examples: Job termination, reprimand.
Theory: Reinforcement can control behavior.
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Guidelines to Motivation
• Compare compensation and contribution.
• Not be satisfied with compensation alone.
• Be motivated if they can gain a reward.
• Ensure compensation is proportionate to contribution.
• Ensure employees have other needs met: respect, self-esteem, etc.
• Motivate using positive reinforcement.
Employee will: Employer should:
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Key CharacteristicsAffecting Job Satisfaction
• Money or compensation programs.
• Security.• Work schedule.• Employee involvement
programs.
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Three Compensation Programs
Merit system– Raise according to merit.
Across-the-board system– All employees get similar raise.
Incentive plans– Various forms of compensation based on specific
performance.
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Characteristics of aCompensation Program
Align compensation plan with business goals. Align compensation with specific employee goals. Establish achievable goals for employees. Allow employee input on compensation plan.
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Flexible Work Schedule(Flextime Programs)
• Compressed work week– Compresses the work load into fewer days per week.– Main purpose is to allow employees to have three-
day weekends.• Job sharing
– Two or more people share a particular full-time (40 hour) work schedule.
– This allows employees to work part-time. Many of these employees do not want to work full-time.
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Employee Involvement Programs
• Job enlargement.• Job rotation.• Empowerment.• Teamwork.• Open-book management.
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Methods Used to Enhance Job Satisfaction
Exhibit 10.9
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Methods Used to Enhance Job Satisfaction
Exhibit 10.10