Motivation II: Equity, Expectancy, and Goal Setting

Chapter Seven

Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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After reading the material in this chapter, you should be able to:

• Discuss the role of perceived inequity in employee motivation.

• Describe the practical lessons derived from equity theory.

• Explain Vroom’s expectancy theory.• Describe the practical implications of expectancy

theory.• Identify five practical lessons to be learned from

goal-setting research.• Specify issues that should be addressed before

implementing a motivational program.

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Equity Theory

• Equity theory- Holds that

motivation is a function of fairness in social exchanges

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The Individual-Organization Exchange Relationship

• An employee’s inputs, for which he expects a just return, include education/training, skills, creativity, seniority, age, personality traits, effort expended, and personal appearance.

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The Individual-Organization Exchange Relationship

• On the outcome side the organization provides such things as pay/bonuses, fringe benefits, challenging assignments, job security, promotions, status symbols, recognition, and participation in important decisions.

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Negative and Positive Inequity

• Negative inequity - Comparison in which another person receives

greater outcomes for similar inputs.

• Positive inequity - Comparison in which another person receives

lesser outcomes for similar inputs.

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Dynamics of Perceived Inequity

1. People have varying sensitivities to perceived equity and inequity

2. Inequity can be reduced in a variety of ways

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Negative and Positive Inequity

Figure 7-1

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Thresholds of Equity and Inequity

• Equity sensitivity- An individual’s

tolerance for negative and positive equity

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Thresholds of Equity and Inequity

• Benevolents - people who have a higher tolerance for negative

inequity prefer their outcome/input ratio to be lower than ratios from comparison others

• Sensitives - adhere to a strict norm of reciprocity and are quickly

motivated to resolve both negative and positive inequity

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Thresholds of Equity and Inequity

• Entitleds - have no tolerance for negative inequity- expect to obtain greater output/input ratios

than comparison others and become upset when this is not the case.

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Organizational Justice

• Distributive justice - The perceived fairness of how resources and

rewards are distributed.• Procedural justice

- The perceived fairness of the process and procedures used to make allocation decisions.

• Interactional justice - Extent to which people feel fairly treated when

procedures are implemented.

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Question?

Employees at Globe Trade have always felt that resources and rewards are allocated unfairly at work. Such employee perceptions reflect _________.

A.Distributive justiceB.Interpersonal justiceC.Equitable justiceD.Procedural justice

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Practical Lessons from Equity Theory

• Employees are more likely to accept and support organizational change when they believe it is implemented fairly and when it produces equitable outcomes.

• Managers can promote cooperation and teamwork among group members by treating them equitably.

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Practical Lessons from Equity Theory

• Treating employees inequitably can lead to litigation and costly court settlements.

• Employees’ perceptions of justice are strongly influenced by the leadership behavior exhibited by their managers

• Managers should pay attention to the organization’s climate for justice

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Question?

At work, if Jamal's outcome to input ratio is greater than that of Tony's (his relevant co-worker), Jamal will experience

A.Equity.B.No satisfaction.C.Positive inequity.D.High dissatisfaction.

Expectancy Theory of Motivation

• Expectancy theory - Holds that people

are motivated to behave in ways that produce valued outcomes.

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Vroom’s Expectancy Theory

• Motivation boils down to the decision of how much effort to exert in a specific task situation.

• Expectancy - Belief that effort leads to a specific level of

performance.

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Expectancy

The following factors influence an employee’s expectancy perceptions:

- Self-esteem.- Self-efficacy.- Previous success at the task.- Help received from others.- Information necessary to complete the task.- Good materials and equipment to work with

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Vroom’s Expectancy Theory

• Instrumentality - A performance outcome perception

• Valence - The value of a reward or outcome

• Outcomes - refer to different consequences that are

contingent on performance

Question?

Niles believes that he will be promoted if he meets his sales goals. This is his ___________ perception.

A.ExpectancyB.InstrumentalityC.ValenceD.Outcome

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Managerial and Organizational Implications of Expectancy Theory

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Managerial and Organizational Implications of Expectancy Theory

• Some workers value interesting work and recognition more than money

• Extrinsic rewards can lose their motivating properties over time and may undermine intrinsic motivation

Question?

Dana believes in designing challenging jobs for her employees. This is an implication of _________ theory.

A.EquityB.MotivationC.ExpectancyD.Reinforcement

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Prerequisites to Linking Performance and Rewards

1. Managers need to develop and communicate performance standards to employees

2. Managers need valid and accurate performance ratings with which to compare employees

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Prerequisites to Linking Performance and Rewards

3. Managers need to determine the relative mix of individual versus team contribution to performance and then reward accordingly

4. Managers should use the performance ratings to differentially allocate rewards among employees

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Goals: Definition and Background

• Goal - what an individual is trying to accomplish

• Management by objectives - management system incorporating

participation in decision making, goal setting, and feedback

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How Does Goal Setting Work

• Goals direct attention• Goals regulate effort• Goals increase persistence• Goals foster the development and application of task strategies and action plans

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Insights from Goal-Setting Research

1. Difficult goals lead to higher performance2. Specific, difficult goals lead to higher

performance for simple rather complex tasks

• Goal specificity – quantifiability of a goal

3. Feedback enhances the effect of specific, difficult goals

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Insights from Goal-Setting Research

4. Participative goals, assigned goals, and self-set goals are equally effective

5. Goal commitment and monetary incentives affect goal-setting outcomes

• Goal commitment – extent to which an individual is personally committed to achieving a goal

Question?

Julia wants to become a successful heart surgeon. This reflects Julia's

A.ExpectancyB.PerceptionC.GoalD.Personality

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Relationship between Goal Difficulty and Performance

Figure 7-2

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Practical Application of Goal Setting

Step 1: Set goalsStep 2: Promote goal commitmentStep 3: Provide support and feedback

Guidelines for Writing SMART Goals

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Question?

Jim is the manager of a sales team at Woo Automotive. He expects his salespeople to sell 250 cars per week. Which guideline for writing SMART goals does this violate?

A.SpecificB.MeasurableC.AttainableD.Time-bound

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Managerial Actions for Enhancing Goal Commitment

1. Provide valued outcomes for goal accomplishment.

2. Raise employees’ self-efficacy about meeting goals by:

a) Providing adequate trainingb) Role modeling desired behaviors and actionsc) Persuasively communicating confidence in the

employees ability to attain the goal

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Managerial Actions for Enhancing Goal Commitment

3. Have employees make a public commitment to the goal.

4. Communicate an inspiring vision and explain how individual goals relate to accomplishing the vision.

5. Allow employees to participate in setting the goals.

Managerial Actions for Enhancing Goal Commitment

6. Behave supportively rather than punitively.

7. Break a long-term goal (i.e., a yearly goal) into short-term sub-goals.

8. Ensure that employees have the resources required to accomplish the goal.

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Supplemental Slides

• Slides 36-40 contain extra non-text examples to integrate and enhance instructor lectures

- Slide 36: A General Model of Expectancy Theory- Slides 37: Expectancy Theory Application- Slide 38: Goal Setting- Slide 39: Movie Example: Mr. Holland’s Opus- Slide 40: Video discussion slide

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A General Model of Expectancy Theory

High Effort

Low Effort

Performance

Goal

Performance

Goal

Decision

To Exert

Effort

Outcome 1

Outcome 2

Outcome 3

Outcome 1

Outcome 2

Outcome 3

Expectancy: “What are my

chances of reaching

my goal if I work hard?”

Expectancy: “What are my

chances of reaching my goal if I slack

off?”

Instrumentality: “What are my

chances of getting various outcomes if I achieve my

goal?

Valence: “How much do I value these outcomes?”

Expectancy Theory Application

• STEP 1 Valence represents the value placed on outcomes. Calculate the valence for all levels of performance. The equation is:

• Performance Valence = [(Instrumentality1 x Valence1) + (I2 x V2) + (I3 x V3) + … (In x Vn)]

• STEP 2 Calculate the force on an individual to exert different levels of effort. Force represents the strength of an individual’s intention to respond in a particular manner. The equation is:

• Force = the sum of [Expectancy x Performance Valence] for all levels of performance associated with one level of effort.

• STEP 3 Compare force values for each performance level.

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Goal Setting

Read an article by Latham and Locke on “Goal Setting-A Motivational Technique that Works”

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Movie Example: Mr. Holland’s Opus

As a manager, is it important for Principal Jacobs to know the motivations of her subordinates?

Video Case: Hot Topic

• What unique features does the culture at Hot Topic have? How do these features contribute to their success?

• What benefits do you like that are offered by Hot Topic? Are they different than the benefits you have heard about from your parents or others?

• How does Hot Topic keep itself current with what its customers and employees want?

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Video Case: Motivation Convention

• Are people fundamentally different today than in the past? Why do workers need to be “buttered up” more today?

• What are some different types of incentives employees are given today to “motivate” them? What have you received in terms of different incentives from your employers?

• Why is motivating employees so important - do you think it makes that big of a difference?

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