Lecture 4

TopicsO MotivationO Incentive SchemesO LeadershipO Decision-Making ProcessO Employees involvement in decision-

makingO PowerO Conflict and NegotiationO Case Study

Motivation and Incentive Schemes

What is motivation?

Motivation

OMotivation is defined as the process that initiates, guides and maintains goal-oriented behaviors. Motivation is what causes us to act, whether it is getting a glass of water to reduce thirst or reading a book to gain knowledge.

Incentive Schemes: What are they?

Individual Incentives

O Piecework: Employees are paid a certain rate for each unit of output.

O Standard Hour Plans: A standard time for each unit of production and uses this time unit to determine how much employees are paid. Tasks are broken down by the amount of time it takes to complete them.

O On-the-spot Awards: It usually targets performance on areas of particular strategic value, such as safety, customer service, productivity, quality or attendance.

Individual Incentives (con.)

O Rewards for suggestions: To encourage more innovative ideas, many companies have suggestion systems that involve some form of instant incentive. According to the National Association of Suggestion Systems, its 900 members received nearly 1 million suggestions from their employees, resulting in savings of over $2 billion annually.

Individual Incentives (con.)

O Rewards and Innovations and Patents: For some companies, new inventions and patents (e.g intellectual property) are essential to success. Motorola encourages inventors by paying bonuses to employees when a patent is filed and again when a patent is issued.

Team IncentivesWhat do you think are the

advantages compared to individual incentives?

Team Incentives

When designed appropriately, team-based incentives offer four main advantages compared with individual incentive systems.OThe mere presence of team members who may have some control over rewards, evokes more vigorous and persistent behaviour than is evidenced when individuals work alone.

O The likelihood that conflicting contingencies will evoke counterproductive control over behaviour is reduced.

O The strength of the rewards is increased, since they’re now paired with group-administered rewards such as praise.

O The performance of another group member can serve as a model, encouraging other team members to imitate successful behaviour.

Leadership and Decision Making

Process

LeadershipWhat can be defined as leadership?

LeadershipO Leadership has nothing to do

with seniority or one’s position in the hierarchy of a company. 

O Leadership has nothing to do with titles.

O Leadership has nothing to do with personal attributes. 

O Leadership isn’t management. 

Do you agree with the following definitions?

O Peter Drucker: “The only definition of a leader is someone who has followers.”

O Warren Bennis: “Leadership is the capacity to translate vision into reality.”

O Bill Gates: “As we look ahead into the next century, leaders will be those who empower others.”

O John Maxwell: “Leadership is influence – nothing more, nothing less.”

So what is leadership?

DEFINITION: Leadership is a process of social influence, which

maximizes the efforts of others, towards the achievement of a goal.

Leadership

A company’s leaders should provide a vision of what the company stands for, the mission it seeks to fulfill, and the values that will guide the means it uses to achieve its mission. Leadership sets the stage for managing human resources by providing a broad set of guidelines that help people make choices and direct their energies.

Leadership Effective leadership ensures that people are generally working to achieve the same results, and that by achieving those results, the organization will satisfy the key stakeholders. HR Professionals help organizations build strong cultures by developing HR practices to ensure that everyone behaves in ways that are consistent with the corporate vision, mission and values.

Vision-Mission-ValuesO A vision is top management’s view of

the kind of company it is trying to create. It can be thought of as a best-case scenario of where the company will be in the future.

O A mission statement defines a company’s business and provides a clear view of what the company is trying to accomplish for its customers.

Vision-Mission-Values (con.)

O Values are the strong enduring beliefs and principles that the company holds – they help to define the company and differentiate it from other companies. Value statements have a direct impact on managing human resources because they state how employees are expected to behave (towards other employees, clients, suppliers, the community).

Decision-Making Process

O Decision making is a daily activity for any human being. There is no exception about that. When it comes to business organizations, decision making is a habit and a process as well. Effective and successful decisions make profit to the company and unsuccessful ones make losses. Therefore, corporate decision making process is the most critical process in any organization.

Decision Making Process

Participation of employees in decision

makingWhat do you think are the benefits from the participation of employees

in decision making?

Increasing participation of employees in Decision

MakingParticipation of employees in decision making and their empowering…OGives them the power they need to remove obstacles to effective performance, thereby reducing frustration and strain. OHaving opportunities to be self-determining, combined with the freedom and the ability to influence events in one’s surroundings, can be intrinsically motivating and highly rewarding.

O Through the repeated interchanges required by participative decision-making, members of the organization can also gain a better understanding of the demands and constraints faced by others.

O People become less isolated from their coworkers and supervisors.

O It helps prevent stress and burnout by encouraging the development of a social support network among coworkers.

O Development of new and interesting ideas.

O Increase of motivation O Feeling of belongingness

Power – Conflict - Negotiation

The most common power in the workplace lies in a title or hierarchy. The CEO, the owner, the HR director, the boss, or the manager are common representations of the traditional view of power. Beyond title or position within the organization, power comes from other sources which are more critical:OPhysical attributes, such as gender, appearance, and age

O Mental attributes, such as aptitudes, language, and problem solving

O Skills, such as industry-specific skills, verbal or written communication skills, and interpersonal skills

O Experience, such as knowledge of the field and years with the company

O Status, such as money, education, and social or professional networks

Power – Conflict - Negotiation

O Role powerWhat it is: Role power is the authority

— and any other power — that is given based on the part you play at work.

Description: Role power is the most direct sort of power; for example, a boss has power over the staff who report to him.

O Expert powerWhat it is: Expert power is the power

that comes from your skills and knowledge.

Description: A lot of the weight you carry at work comes from the quality of your results and the knowledge you bring to the table.

O Relationship powerWhat it is: Relationship power is the

influence you have on others based on your relationship with them.

Description: Relationship power is anything in your relationship with others that makes them want to do things for you.

Conflict and Negotiation

What is conflict? Is conflict bad for a business?

ConflictConflict is the process in which one party perceives that its interests are being opposed or negatively affected by another party. Conflict is a process in which people disagree over significant issues, thereby creating friction between parties. Conflict can exist when people have opposing interests, perceptions, and feelings; when those involved recognize the existence of differing points of view; when the disagreement is ongoing; and when opponents try to prevent each other from accomplishing their goals.

Is conflict bad?Conflict can have both positive and negative consequences. On the positive side, conflict can bring energy to a competition and focus participants on the task at hand. It can also increase group cohesion and stimulate open discussion of issues. On the negative side, conflict can cause participants to lose sight of common goals and focus on winning at all costs. In addition, it can lead to distorted judgments and a lack of cooperation. Finally, the losers in a conflict feel demoralized and lose motivation; this loser effect harms long-term relationships and overall organizational performance.

Conflict and Negotiation

O Negotiation is the process used by two or more parties to reach a mutually agreeable arrangement to exchange goods and services. Managers need negotiating skills to be effective in today's global, diverse, dynamic, team- oriented business environment. Culture significantly affects the negotiation process.

Conflict and Negotiation

O Mediation, or else conflict negotiation, usually involves bringing in a third party to foster communication between the disputants, talking about solutions and creating an agreement that meets both parties’ needs. The most successful types of conflict negotiations are resolved with win-win solutions, which are resolutions that are mutually satisfying for everyone involved.

Many companies train their management teams and human resources professionals in conflict negotiation. The first step is clear identification of the issue. After the problem has been identified and the negotiator has full understanding of the motives of all parties, he or she can begin to look for ways for the parties to come to a compromise. This phase of conflict negotiation usually involves talking to each party separately to learn what they are willing to “give up” and the issues on which they will not back down.

At this point, the negotiator typically creates a revised contract or agreement by incorporating the agreed-upon compromises. The mediator then presents the new draft to both parties to see if an agreement can be reached.

If a compromise is not agreed upon with the new draft, the conflict negotiation typically moves into a new phase of alternative compromises and solutions. For example, if party No. 1 wants Solution A and party No. 2 wants Solution B, the negotiator might suggest a Solution C, which might incorporate parts of Solutions A and B but often involves a completely different end solution.

CASE STUDY