Lecture Summary Lecture No 3

Individual Performance Factors

The idea of a psychological contract between the individual employee and the
organization helps clarify why people might stay or leave a job. But for an employer to
want to keep an employee, that person must be performing well.The HR unit in an
organization exists in part to provide ways to analyze and address the performance and
motivation of individual employees.
Individual Performance Factors: - The three major factors that affect how a given
individual performs are illustrated in Figure 5-4. They are:
(1) individual ability to do the work,
(2) effort expended, and
(3) organizational support
The relationship of those factors is widely acknowledged in management
literature as follows:
Performance (P)= Ability (A)x Effort (E)x Support (S)

Individual Motivation and Management Implications The desire within a person

causing that erson to act is called motivation. People usually act to reach a goal,
which means that motivation is a goal-directed drive that seldom occurs in a void. The
words need, want, desire, and drive are all similar to motive, from which the word
motivation is derived.
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Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com

(1)
Maslows Hierarchy of Needs: -Maslow's hierarchy of needs is a theory in
psychology proposed by Abraham Maslow in his 1943 paper "A Theory of Human
Motivation" in Psychological Review. Maslow
subsequently extended the idea to include his
observations of humans' innate curiosity. His theories
parallel many other theories of human developmental
psychology, some of which focus on describing the
stages of growth in humans.Categories of needs that
ascend in order; lower needs must be fulfilled before
person will strive to meet higher needs.

Physiological needs
Safety and security needs
Belonging and love needs
Esteem needs
Self-actualization needs

(2)
Herzbergs Motivation/Hygiene: - TheoryThe two-factor theory (also known as
Herzberg's motivation-hygiene theory and dual-factor theory) states that there are
certain factors in the workplace that cause job satisfaction, while a separate set of
factors cause dissatisfaction
Motivatorsaccount for job satisfaction and motivation
Achievement
Recognition
Work itself
Responsibility
Advancement
Hygiene factorscause dissatisfaction with work
Interpersonal relationships
Company policy/administration
Supervision
Salary
Working conditions
Equity motivation theory
(3)
Equity theory is based in the idea that individuals are motivated by fairness.
John Stacey Adams suggests that the higher an individual's perception of equity, the
more motivated they will be and vice versa: if someone perceives an unfair
environment, they will be de-motivated.

Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com

(4)
Expectancy Theory: -It explains the processes that an individual undergoes to
make choices. In the study of organizational behavior, expectancy theory is a
motivation theory first proposed by Victor Vroom of the Yale School of Management.
Effort-to-Performance Expectations
Belief in the ability to perform the task well
Performance-to-Reward Linkage
Belief that high performance will result in receiving rewards
Value of Rewards
The rewards have value to the individual

Expectancy model: (1)

Principles of the Model: - The expectancy model is based on three
components. Expectancy is the relationship between effort and performance. An
employee will make a mental measurement of the work effort he perceives as
necessary to perform at a certain level. Instrumentality is the relationship between
performance and reward. If the employee reaches the target level of performance, he
will receive the desired outcome. The third principle is valance, or the attractiveness of
the reward. It is the measure of importance the employee places on receiving the
reward. Motivational force is the combination of these three components.
(2)
Rewarding the Employee: - The expectancy model can be summed up in a few
questions that your employees ask themselves. Each employee asks himself -consciously or subconsciously -- How hard is the work? Can I do it? Whats the reward
if I do it? Do I want it? What the employee wants to know is, if he does the work, can he
reach the desired level of performance, and if he does, will he reap the reward he has
been promised. In practical terms, this means that your employees must have a level of
confidence in themselves that allows them to think they can perform at the level you
desire.

Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com

(3)

Attitudes: - The model is about each employees attitudes -- about himself, his
work and the degree of trust he has that successful performance will result is
reward. The theory is based on perceptions, not necessarily reality. The outcomes
that the employee perceives may be positive, neutral or negative. Positive rewards
include a bonus, pay raise, praise or some other form of recognition. Negative
outcomes take the form of disciplinary action or personal stress, such as anxiety or
boredom. With neutral outcomes the employee simply does not care.

(4)

Application: - Most employees want to know specifically what is expected of

them. This sets up in their minds the relationship between the workload and an
expectation of satisfactory performance. The expectancy model is built on the
principle that employees are motivated by self-interest and that they will behave in
ways that give themselves the most satisfaction. Since compensation is frequently
based on other factors besides performance -- seniority, experience and
education, for example -- you as a small-business owner must personalize your
incentives to be sure that the rewards your employees receive are commensurate
with the work that they do and are not constrained by other factors.

Management Implications for Motivating Performance

The need for comprehensive strategies and tactics to address both equity and
expectations of employees.
The provision of training to encourage high performance.
The development of evaluation methods that properly appraise and reward
performance.
An understanding of what kinds of rewards are desired and valued by
employees

Individual/Organizational Relationships
(1)
The Psychological Contract: - The unwritten expectations employees and
employers have about the nature of their work relationships. Affected by age of
mployee and changes in economic conditions.
Employers provide:
Competitive compensation and benefits
Career development opportunities
Flexibility to balance work and home life
Employees contribute:
Continuous skill improvement
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Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com

Reasonable time with the organization

Extra effort when needed
Job Satisfaction and Organizational Commitment

Factors Affecting Job Performance and Organizational

Commitment

(1)

Absenteeism: Involuntary absenteeism

Unavoidable with understandable cause (e.g., actual illness)
Voluntary absenteeism
Avoidable without justifiable cause (e.g., feigning illness)

(a)
Disciplinary approach: - Increasingly severe disciplinary action leading
eventually to dismissal Positive reinforcement: - Rewarding attendance with prizes and
bonuses
(b)
Combination approach - Use of both discipline and rewards to motivate
employee attendance.
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Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com

(c)
No fault absenteeism: - Reasons for absence do not matter.
Absenteeism in excess on normal limits can trigger isciplinary action and lead to
eventually to dismissal
(d)
Paid time-off programs: - Time-off is not categorized by type. Absences
in excess of employer-paid time-off are unpaid.
Turnover: - The process in which employees leave the organization and have to be
eplaced.
(1)
Types of Turnover: Involuntary turnoverterminations for poor
performance or work rule violations.
(2)
Voluntary turnover: -employee leaves the organization by choice.
(3)
Functional turnover: - Lower-performing or disruptive employees leave
the organization.
(4)
Dysfunctional turnover: - Key individuals and high performers leave at
critical times.
(5)
Uncontrollable turnover: - Occurs for reasons outside the impact of the
organization.
(6)
Controllable turnover: - Occurs due to factors that could be influenced
by the employer
Retention of Human Resources
(1)
Impact of Retention Failure: Inability to achieve business goals
Loss of image to attract other individuals
High costs of turnover and replacement
(2)
Why People Stay
Great company: - Value and culture, well-managed, and offers exciting
challenges
Great job: - Freedom and
autonomy, exciting challenges,
and career advancement and
growth
Compensation and lifestyle: -
Differentiated pay package,
high
total
compensation,
geographic
location,
and
respect for lifestyle

The Retention Management

Process Process
(1)
Measuring Turnover: - Ways in
which to measure turnover are;
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Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com

(2)

Job and job levels Department, units, and location

Reason for leaving Length of service
Demographic characteristics
Education and training
Knowledge, skills and abilities
Performance ratings/levels
Computing the turnover rate: -

(3)

Costs of Turnover
Hiring costs
Training costs
Productivity costs
Separation costs
(4)
Employee Surveys
Attitude survey
focuses on employees feelings and beliefs about their
jobs and the organization.
(5)
Exit Interviews
An interview in which individuals are asked to
identify reasons for leaving the organization.

Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com

Lecture Summary Lecture No 1 SP/2015 /MSc EM/007

Muhammad Umar Farooq
Foki_87@yahoo.com