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Chapter 5 Motivation in the Workplace

5
MOTIVATION IN THE WORKPLACE

LEARNING OBJECTIVES
After reading this chapter, students should be able to:
Compare and contrast Maslow’s needs hierarchy theory with Alderfer’s ERG theory.
Describe Lawrence and Nohria’s four innate drives and explain how these drives influence
motivation and behaviour.
Summarize McClelland’s learned needs theory, including the three needs he studied.
Discuss the practical implications of needs-based motivation theories.
Diagram the expectancy theory model and discuss its practical implications for motivating
employees.
Describe the characteristics of effective goal setting and feedback.
Summarize the equity theory model, including how people try to reduce feelings of inequity.
Identify the factors that influence procedural justice, as well as the consequences of
procedural justice.

CHAPTER GLOSSARY

360-degree feedback Performance feedback received equity theory Theory that explains how people
from a full circle of people around an employee. develop perceptions of fairness in the distribution and
exchange of resources.
distributive justice The perceived fairness in
outcomes we receive relative to our contributions and ERG theory Alderfer’s motivation theory of three
the outcomes and contributions of others. instinctive needs arranged in a hierarchy, in which
people progress to the next higher need when a lower
effort-to-performance (E-to-P) expectancy The
one is fulfilled, and regress to a lower need if unable to
individual’s perceived probability that his or her effort
fulfill a higher one.
will result in a particular level of performance.
equity sensitivity One’s outcome– input preferences
and reaction to various outcome–input ratios.

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executive coaching A helping relationship using need for achievement (nAch) A learned need in
behavioural methods to assist clients in identifying and which people want to accomplish reasonably
achieving goals for their professional performance and challenging goals through their own efforts, like to be
personal satisfaction. successful in competitive situations, and desire
unambiguous feedback regarding their success.
existence needs A person’s physiological and
physically related safety needs, such as the need for need for affiliation (nAff) A learned need in which
food, shelter, and safe working conditions. people seek approval from others, conform to their
wishes and expectations, and avoid conflict and
expectancy theory The motivation theory based on the
confrontation.
idea that work effort is directed toward behaviours that
people believe will lead to desired outcomes. need for power (nPow) A learned need in which
people want to control their environment, including
feedback Any information that people receive about
people and material resources, to benefit either
the consequences of their behaviour.
themselves (personalized power) or others (socialized
frustration-regression process A process whereby a power).
person who is unable to satisfy a higher need becomes
needs Deficiencies that energize or trigger behaviours
frustrated and regresses to the next lower need level.
to satisfy those needs.
goal setting The process of motivating employees and
needs hierarchy theory Maslow’s motivation theory
clarifying their role perceptions by establishing
of five instinctive needs arranged in a hierarchy,
performance objectives.
whereby people are motivated to fulfill a higher need
goals The immediate or ultimate objectives that as a lower one becomes gratified.
employees are trying to accomplish from their work
performance-to-outcome (P°˜O) expectancy The
effort.
perceived probability that a specific behaviour or
growth needs A person’s needs for self-esteem through performance level will lead to specific outcomes.
personal achievement as well as for self-actualization.
procedural justice The fairness of the procedures used
management by objectives (MBO) A participative to decide the distributions of resources.
goal-setting process in which organizational objectives
relatedness needs A person’s needs to interact with
are cascaded down to work units and individual
other people, receive public recognition, and feel
employees.
secure around other people.
motivation The forces within a person that affect his or
satisfaction-progression process A process whereby
her direction, intensity, and persistence of voluntary
people become increasingly motivated to fulfill a
behaviour. (2, 5)
higher need as a lower need is gratified.
valence The anticipated satisfaction or dissatisfaction
that an individual feels toward an outcome.

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CHAPTER SYNOPSIS
Motivation refers to the forces within a person that improving the employee’s ability and confidence to
affect his or her direction, intensity, and persistence of perform the job. The P-->O expectancy increases by
voluntary behaviour in the workplace. As a new measuring performance accurately, distributing higher
generation of employees enters the workplace and as rewards to better performers, and showing employees
globalization creates a more diverse workforce, that rewards are performance based. Outcome valences
companies need to rethink their motivational practices. increase by finding out what employees want and using
Two motivation theories -- Maslow’s needs these resources as rewards.
hierarchy and Alderfer’s ERG theory – propose how Goal setting is the process of motivating employees
employee needs change over time through a needs and clarifying their role perceptions by establishing
hierarchy. Maslow’s theory groups needs into a performance objectives. Goals are more effective when
hierarchy of five levels and states that the lowest needs they are specific, relevant, challenging, have employee
are initially most important, but higher needs become commitment, and accompanied by meaningful
more important as the lower ones are satisfied. feedback. Participative goal setting is important in
Alderfer’s ERG theory groups needs into a hierarchy of some situations. Effective feedback is specific, relevant,
three levels: existence, relatedness, and growth. It also timely, credible, and sufficient frequent (which depends
suggests that those who are unable to satisfy a higher on the employee’s knowledge/experience with the task
need become frustrated and regress back to the next and the task cycle). Two increasingly popular forms of
lower need level. Both Malsow’s and Alderfer’s feedback are multisource (360-degree) assessment and
theories are popular, but many scholars are now executive coaching. Feedback from non-social sources
doubtful that people have an inherent hierarchy of is also beneficial.
needs. Organizational justice consists of distributive justice
Paul Lawrence and Nitkin Nohria proposed an (perceived fairness in the outcomes we receive relative
evolutionary psychology theory involving four innate to our contributions and the outcomes and
drives – the drive to acquire, bond, learn, and defend. contributions of others) and procedural justice (fairness
These drives create emotional markers that indicate the of the procedures used to decide the distribution of
relevance and strength of perceived information about resources). Equity theory, which considers the most
our environments and thereby motivate us to act on common principle applied in distributive justice, has
those conditions. McClelland’s learned needs theory four elements: outcome/input ratio, comparison other,
argues that people have secondary needs or drives that equity evaluation, and consequences of inequity. The
are learned rather than instinctive, including need for theory also explains what people are motivated to do
achievement, need for power, and need for affiliation. when they feel inequitably treated. Equity sensitivity is
The practical implications of needs-based a personal characteristics that explains why people
motivation theories is that corporate leaders need to react differently to varying degrees of inequity.
balance the demands and influences of the different Procedural justice is influenced by both structural
innate drives. They must also recognize that different rules and social rules. Structural rules represent the
people have different needs at different times. These policies and practices that decision makers should
theories also warn us against relying too heavily on follow, of which giving employees “voice” in the
financial rewards as a source of employee motivation. decision process is the most commonly identified.
Expectancy theory states that work effort is Social rules refer to standards of interpersonal conduct
determined by the perception that effort will result in a between employees and decision makers and are noted
particular level of performance (E-->P expectancy), the by showing respect and providing accountability for
perception that a specific behaviour or performance decisions. Procedural justice is as important as
level will lead to specific outcomes (P-->O distributive justice, and influences organizational
expectancy), and the valences that the person feels for commitment, trust, various withdrawal and aggression
those outcomes. The E-->P expectancy increases by behaviours.

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POWERPOINT® SLIDES
Canadian Organizational Behaviour includes a complete set of Microsoft PowerPoint ® files for each chapter. (Please
contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture
outline that follows, a thumbnail illustration of each PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.) The transparency masters for this chapter are very similar to the PowerPoint files.

LECTURE OUTLINE (with PowerPoint® slides)

MOTIVATION IN THE WORKPLACE

Motivation in the
Workplace
Slide 1

OPENING VIGNETTE: MOTIVATION AT KRAVE’S


CANDY (CLODHOPPERS)
Chris Emery and Larry Finnson have entrepreneurial drive that has
Motivation at Krave’s
Candy helped the Winnipeg-based company become successful
Slide 2

Motivation -- the internal forces that affect the direction, intensity, and
persistence of voluntary behaviour
More challenging today because:
1. Employee needs are changing – diverse employees with
diverse values, young employees have different needs
Challenges of Motivating 2. Layoffs, restructuring have damaged employee trust
Employees
Slide 3
3. Flatter organizations -- not enough supervisors to practice
‘command-and-control’ management

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NEEDS-BASED THEORIES OF MOTIVATION


Needs -- deficiencies that energize behaviours to satisfy those needs

1. Needs hierarchy theory (Maslow)


• Five basic human needs in a hierarchy of importance
- physiological, safety, belongingness, esteem, and self-
actualization
• Satisfaction-progression hypothesis
Needs Hierarchy Theory - as a need level is satisfied, move to next level up the
Slide 4 hierarchy
- self-actualization is the exception -- people desire more
of this need
• Problem: Needs hierarchy theory lacks empirical support
- too rigid for dynamics of human needs
- needs do not cluster around Maslow’s categories

2. ERG theory (Alderfer)


• Three need categories: existence, relatedness, and growth
• Applies both satisfaction-progression and frustration-
regression process—people shift to a lower need if a higher
need is blocked
ERG Theory -- Behaviour is motivated to meet more than one need
Slide 5 level simultaneously
• Provides good representation of need dynamics
-- less rigid, more accurate than needs hierarchy theory,
however, scholars question whether human beings have
an inherent needs hierarchy

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3. Innate human drives theory


• Innate drives are “hard-wired” into our genes and
manifested as conscious emotions that influence our
behaviour and decisions
Four fundamental drives
-- Drive to acquire – to seek, take control, and retain
objects and personal experiences; includes need for
Innate Drives Theory status and recognition; foundation of competition
Slide 6 -- Drive to bond – to form social relationships; motivates
people to cooperate
-- Drive to learn – to satisfy one’s curiosity, to know and
understand ourselves and our environment; related to higher
order needs of growth and self-actualization
-- Drive to defend – to protect ourselves physically and
socially; ‘fight or flight’ response; includes defending our
relationships and belief systems; always reactive i.e.
triggered by threat
Innate drives influence on motivation
• People process information both emotionally and rationally.
Innate Drives and • Innate drives speed up decision-making -- trigger emotional
Motivation markers which become the conscious sources of motivation
Slide 7

4. McClelland’s theory of learned needs


• Secondary needs – learned and reinforced rather than
instinctive. Several learned needs can motivate us at the
same time.
Learned Needs Theory • Need for achievement (nAch)
Slide 8 -- High nAch people need to reach goals, take
responsibility, prefer working alone, comfortable with
moderate risk, desire recognition
-- Low nAch people work better when money is an
incentive; leaders should have a somewhat lower nAch
because they need to build involvement
-- entrepreneurs have high achievement need

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• Need for affiliation (nAff)


-- want others’ approval, avoid conflict, conform to their
wishes and expectations and avoid conflict and
confrontation
-- effective executives -- low affiliation need, less affected
by need for approval, otherwise appear indecisive
• Need for power (nPow)
-- want to control one’s environment, concerned about
maintaining leadership position
-- socialized (help others) vs. personal power need
(personal gain)
-- Corporate and political leaders -- need high nPow in
order to influence others; need socialized power to
achieve organizational goals
• Training programs can strengthen learned needs

Implications of needs-based theories


• Organizations need to support employees to achieve a
balance of their innate needs e.g. offer financial and other
rewards that emphasize both individual achievement and
Implications of Needs- teamwork
Based Theories
Slide 9
• People have different needs at different times – so increase
motivation by matching job content and rewards with
employee needs
• Offer employees a choice of rewards -- a flexible reward
system
• Do not rely too heavily on financial rewards as a source of
employee motivation – there are potentially more powerful
sources of motivations such as challenging work, learning
opportunities etc.

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EXPECTANCY THEORY OF MOTIVATION


• Rational process to direct work effort toward behaviours
believed to lead to desired outcomes
• Effort -- a person’s actual exertion of energy
Employee motivation is influenced by all 3 components:
Expectancy Theory of
Motivation 1. Effort—>performance (E-to-P) expectancy
Slide 10 • Individual’s perception that his/her effort will result in a
particular performance level
• Ranges from 0.0 (no chance) to 1.0 (certainty)

2. Performance—>outcome (P-to-O) expectancy


• Perceived probability that a specific behaviour or
performance level will lead to specific outcomes—we don’t
consider all outcomes—just those that are of interest to us
at any given time.
• Developed from previous learning. Ranges from 0.0 (no
chance) to 1.0 (certainty)
3. Outcome valences
• Anticipated satisfaction/dissatisfaction toward each
outcome that you consider
• Range from negative to positive feelings about outcome and
is influenced by our personal values

EXPECTANCY THEORY IN PRACTICE


1. Increasing the E-to-P expectancy
• Provide training
Expectancy Theory in • Select qualified applicants
Practice • Provide sufficient resources
Slide 11 (build)
• Clarify role perceptions
• Increase self-efficacy -- coaching, feedback, shaping

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2. Increasing the P-to-O expectancy


• Measure performance accurately -- give higher rewards to
better performers
• Communicate the performance-based reward system
• Explain how rewards are based on past performance
• Provide examples of other employees whose good
performance has resulted in higher rewards
3. Increasing outcome valences
• Distribute rewards that employees value
• Individualize rewards
• Minimize the presence of countervalent outcomes e.g. peer
pressure to reduce work effort
Does expectancy theory fit reality?
• Predicts work effort well
• Works across cultures,
• Problem -- expectancy theory ignores the role of emotion in
employee effort and behaviour

GOAL SETTING AT CDW COMPUTER CENTRES


CDW Computer Centres has become a leading direct marketer of
computers and peripherals by setting specific, challenging goals for
Goal Setting at CDW
its employees. “We set BHAGS – which are big, hairy, aggressive
Computer Centres goals,” says CEO, John A. Edwardson.
Slide 12

GOAL SETTING
Goal setting is one of the most effective theories of motivation in
organizations. Process of motivating employees and clarifying their role
perceptions by establishing performance objectives
• Goals -- objectives that employees try to accomplish from
their work effort
• Improves motivation and role perceptions
Management-by-objectives
• A formal goal-setting process in which organizational
objectives are cascaded down to work units and employees.

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Characteristics of Effective Goals


• Specific goals -- measurable change over specific time
• Relevant goals
- relevant to the individual’s job and within his/her control
Effective Goal Setting
• Challenging goals
Slide 13 - greater effort and persistence than easier goals
- fulfil need for achievement or growth needs
- stretch goals effective when employees have necessary
resources
• Goal commitment
- employees must be committed to the goal
- need to find optimal level of goal difficulty
Effect of Goal Difficulty on • Goal Participation (sometimes)
Performance
- may improve goal quality and commitment
Slide 14
- today’s workforce increasingly expects to be involved
• Goal feedback
- need to know whether the goal achieved or effort is
properly directed

CHARACTERISTICS OF EFFECTIVE FEEDBACK


Information that people receive about the consequences of their
behaviour
Characteristics of
• Improves role perceptions, ability and motivation
Effective Feedback • Corrective feedback – identifies performance errors and
Slide 15 helps to correct them
• Feedback motivates future behaviour

1. Specific – connected to the details of the goal; focuses on the


task e.g. “You exceeded your sales quota by 5% this month.”
2. Relevant – Relates to the individual’s behaviour
3. Timely – Available as soon as possible; clear association between
behaviour and consequences
4. Sufficiently frequent – based on contingencies of employees
knowledge/experience; task cycle
5. Credible – more acceptable from trustworthy source

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Feedback Sources
Social Sources – supervisors, clients, co-workers, etc.—tend to seek out
positive feedback from social sources
• Multisource feedback (360-degree feedback)
Multi-source (360-degree) -- anonymous
Feedback
Slide 16
-- received from a full circle of people around the employee
-- provides more complete and accurate information
• Challenges
-- expensive and time-consuming
-- can produce ambiguous and conflicting feedback
-- peers may inflate feedback
• Executive coaching
-- a helping relationship with an outside consultant
-- clarify and achieve goals
-- thought partners
-- effective way to improve emotional intelligence,
interpersonal skills etc.
• Challenges – treats symptoms, need to ensure consultant is
credible
Non-Social Sources – the job itself or results
• prefer non-social feedback to learn about progress toward goal
accomplishment
• considered more accurate, protects self-esteem
Applications and Limitations of Goal Setting and Feedback:
• When goals are tied to monetary incentives, employees tend
to select easy rather than difficult goals
• Cannot apply goal setting to every performance dimension of
a job – may focus employees on narrow, short-term goals

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ORGANIZATIONAL JUSTICE
To maximize employee motivation, satisfaction and organizational
commitment employees need to be treated fairly
 Distributive justice – perceived fairness in outcomes we
receive relative to our contributions and the outcomes and
contributions of others
 Procedural justice – fairness of the procedures used to decide the
distribution of resources

EQUITY THEORY
• How people develop perceptions of fairness in the
distribution and exchange of resources
• What employees are motivated to do when they feel
inequitably treated

Elements of Equity Theory


1. Outcome/input ratio
• Inputs -- what employee contributes (e.g. skills, efforts, time
Elements of Equity Theory worked, results, etc.)
Slide 17
• Outcomes – what employee receives (e.g. pay, promotions,
recognition, etc.)
• Inputs and outcomes weighted by importance – unique to
each person
2. Comparison other
• Compare situation with others
• Comparison other is not easily identifiable – may be
someone in the same job, another job, or another company,
even yourself in the past
3. Equity comparison
• Compare outcome/input ratio with comparison other
• Result is – equity, underreward inequity or overreward
inequity

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Equity Evaluation:
• Equity condition – you and the comparison other have the
same outcome/input ratios
• Underreward inequity – comparison other has a higher ratio
than your ratio – more valuable outcomes proportional to
Overreward vs inputs
Underreward Inequity • Overreward inequity – you seem to have a higher ratio than
Slide 18
the comparison other’s ratio – you received more valuable
outcomes proportional to inputs

Inequity Consequences – Motivation to Reduce Inequity


1. Change inputs – reduce effort corrects underreward
2. Change outcomes – ask for pay increase corrects
underreward
Consequences of Inequity 3. Change perceptions – if overrewarded, perceive more
Slide 19 value of one’s experiences, skills, etc.
4. Leave the field – transfer to more equitable environment
5. Act on the comparison other – if underrewarded
employee encourages comparison other to work more
6. Change comparison other – better O/I ratio

Equity Sensitivity – Individual Difference in Equity


• Outcome/input preferences and reaction to various
outcome/input rations
• Benevolents
Equity Sensitivity
Slide 20
-- tolerant of being underrewarded
-- tend to have higher internal locus of control,
conscientiousness, and agreeableness
• Equity Sensitives
-- want ratio be equal to the comparison other
-- applies standard equity model
• Entitleds
-- prefer receiving proportionately more than others

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Problems with Equity Theory


• Not specific enough to predict employee motivation and
behaviour -- inputs/outputs/comparison other are vague
• Assumes people are individualistic, rational and selfish
• Equity theory explains only some of our feelings of fairness
or justice in the workplace -- also need to consider
procedural justice

PROCEDURAL JUSTICE
People seek justice for its own sake, not just as a means to improve their
pay
Procedural justice may be as important as distributive justice in
Components of
Organizational Justice explaining employee attitudes, motivation and behaviour
Slide 21
Two sets of influences on procedural justice:
1. Structural rules – policies and practices that decision makers
should follow
-- voice – employees want a voice in decision process
-- unbiased decision maker
-- knowledgeable decision maker
Procedural Justice
Structural rules -- rules applied consistently
Slide 22 -- decision maker listen to all views
-- decision is appealable
2. Social rules – standards of personal conduct between
employees and decision makers – interactional justice e.g.
respect and accountability
Consequences of Procedural Injustice:
• Aggression (sabotage, theft, conflict, acts of violence)
• Withdrawal (reduced compliance with higher authorities,
lower motivation to attend work, engage in organizational
citizenship and perform to a high standard)
Organizational Justice in Practice
• Continually treat people fairly in the distribution of rewards
• Create a fair decision-making process in the workplace

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TRANSPARENCY MASTERS
Transparency 5-1: Challenges of Motivating Employees
Transparency 5-2: Needs Hierarchy Theory
Transparency 5-3: ERG Theory
Transparency 5.4: Innate Drives Theory
Transparency 5.5: Innate Drives and Motivation
Transparency 5.6: Learned Needs Theory
Transparency 5-7: Implications of Needs-based Theories
Transparency 5.8: Expectancy Theory of Motivation
Transparency 5.9: Expectancy Theory in Practice
Transparency 5.10: Effective Goal Setting
Transparency 5.11: Effect of Goal Difficulty on Performance
Transparency 5.12: Characteristics of Effective Feedback
Transparency 5.13: Multisource (360-degree) Feedback
Transparency 5.14: Elements of Equity Theory
Transparency 5.15: Overreward vs. Underreward Inequity
Transparency 5.16: Consequences of Inequity
Transparency 5.17: Equity Sensitivity
Transparency 5.18: Components of Organizational Justice
Transparency 5.19: Procedural Justice Structural Rules

SOLUTIONS TO DISCUSSION QUESTIONS


1. Identify three reasons why motivating employees Consequently, there aren’t enough supervisors
is becoming increasingly challenging. around to practice the old ‘command-and-control’
methods of motivating employees. This is probably
Most employers—92 percent of them, according to
just as well, because direct supervision is
one recent survey—agree that motivating
incompatible with the values of today’s educated
employees has become more challenging. The
work force. Still, many businesses have not
beginning of this chapter identifies three reasons
discovered other ways to motivate employees.
why it is currently very challenging to motivate
employees. One concern is that globalization has Third, the work force is changing. Younger
dramatically changed the jobs that people perform generations of employees are bringing different
resulting in corporate restructuring and needs and expectations to the workplace than their
downsizing. These actions have significantly baby-boom counterparts. Meanwhile, baby
damaged the levels of trust and commitment boomers needs are shifting as they enter new
necessary for employees Components to put out stages of their life. In addition, workforce
effort beyond the minimum requirements. Some diversity and globalization have added to this
organizations have completely given up on complexity because diverse employees typically
motivation from the heart and, instead, rely on have diverse values. These values influence what
pay-for-performance and layoff threats. These we want, what we need, and what organizations
strategies may have some effect (both positive and should and should not do to fulfil those needs.
negative), but they do not capitalize on the Companies must realign their sources of
employee’s motivational potential. motivation with these changes.
A second problem is that organizations have 2. Harvard Business School professors have recently
flattened their hierarchies to reduce costs. proposed four fundamental human drives. Relate

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these innate drives to Maslow’s needs hierarchy showing up in a snow storm, whereas another
theory and Alderfer’s ERG theory. How are they person may perceive that the company does reward
similar? How do they differ? employees who make this effort.
These four fundamental human drives include: Valences. Employees value different outcomes of
going to work or staying at home in a snow storm.
Drive to acquire. This is the drive to seek, take
One person might stay at home because he/she
control, and retain objects and personal
doesn’t like the job anyway and this is a good
experiences. This relates to not only physiological
excuse to miss a day of work. Another employee
(Maslow) and existence (Alderfer) but also forms
might trek through a snow storm because he/she
the foundation for competition and the basis for
thoroughly enjoys work compared to staying at
our need for esteem (Maslow) and growth
home. In fact, this person might enjoy the
(Alderfer).
challenge of driving in snow storms!
Drive to bond. This is the drive to form social
4. What are the limitations of expectancy theory in
relationships and develop mutual caring
predicting an individual’s work effort and
commitments with others. This relates to
behaviour?
belongingness (Maslow) and relatedness
(Alderfer). Although one of the appealing characteristics of
expectancy theory is that it provides clear
Drive to learn. This is the drive to satisfy one’s
guidelines for increasing employee motivation this
curiosity, to know and understand ourselves and
theory also has potential limitations with respect to
the environment around us. This relates to the
predicting an individual’s work effort and
higher order needs of self-actualization (Maslow)
behaviour.
and growth (Alderfer).
Some critics suggest that expectancy theory is
Drive to defend. This is the drive to protect
culture-bound, arguing that the theory makes
ourselves physically and socially. This is the only
Western-oriented assumptions that employees have
drive that is reactive because it is triggered by a
strong feelings of personal control. In reality,
threat. Because the drive to defend also extends
however, expectancy theory does not assume that
beyond protecting our physical self to defending
people feel they have complete control over their
our relationships and our belief systems it relates
lives; the contrary, the E-to-P expectancy varies
to both safety, belonginess and esteem needs
directly with the employer’s perceived control over
(Maslow) and existence and relatedness
the work situation. In conclusion, research
(Alderfer).
indicates this criticism is not valid and that
The innate human drives theory of motivation expectancy theory does predict employee
reinforces the work of Maslow and Alderfer in that motivation in different cultures.
needs are part of human nature. However, the
Another challenge is that expectancy theory seems
innate human drives theory suggests that needs are
to ignore the central role of emotion in employee
based on innate drives, that are hard-wired into
effort and behaviour. Emotion serves an adaptive
our genes and manifested as conscious emotions
function that demands our attention and energizes
that influence rational calculations.
us to take action. The valence element of
3. Use all three components of expectancy theory to expectancy theory captures some of this emotional
explain why some employees are motivated to process, but only peripherally. As a result,
show up for work during a snowstorm whereas theorists likely need to redesign the expectancy
others don’t make any effort to leave their home. theory model in light of this new information
about the importance of emotions in determining
E-to-P Expectancy. This is a perception, so two
an individual’s behaviour.
neighbours will develop different perceptions
about their expectancy of reaching the workplace 5. Several service representatives are upset that the
safely in the same snow storm. newly hired representative with no previous
experience will be paid $1,00 a year above the
P-to-O Expectancy. Two people may have
usual starting salary in the pay range. The
different perceptions about the outcomes of
department manager explained that the new hire
attending work. One person may believe that the
would not accept the entry-level rate, so the
company doesn’t praise or reward employees for
company raised the offer by $1,000. All five reps

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currently earn salaries near the top of the scale example, what is challenging to one student, may
($10,000 higher), although they all started at the be unattainable, therefore, de-motivating to
minimum starting salary a few years earlier. Use another student.
equity theory to explain why the five service
7. When do employees prefer feedback from non-
representatives feel inequity in this situation.
social rather than social sources. Explain why
(Note: This incident is based on an actual non-social sources are preferred under these
experience in a Canadian telecommunications conditions.
company, as conveyed to the author by the
Non-social feedback sources include computer
department manager.)
printouts, and the job itself. There are three
In this incident, the five reps are experiencing primary situations in which employees prefer
underreward inequity. They are using the new feedback from non-social sources.
hire as the comparison other. Their main inputs
a) When learning about progress toward their
are length of service and previous experience. The
goals. Generally, people feed that non-social
main outcome in this equity equation is salary.
feedback is more accurate and informative
The reps seem to believe the standard pay scale is
than social sources for monitoring progress
equitable because their inequity stems from the
toward goal accomplishment.
fact that the new hire is receiving more than the
entry level rate. Thus, the reps feel that the new b) When receiving negative feedback. Non-
hire is receving more outcomes per input social feedback is less damaging to the
(salary/experience) compared to their equity ratio. person’s self-esteem.
This ratio is particularly easy for them to
c) When actively seeking feedback. When a
determine because they received the standard entry
person is eager to hear how they are doing,
rate when they began working in the department.
they might appear insecure to a social source,
6. Using your knowledge of the characteristics of so people in this situation feel more
effective goals, establish two meaningful goals comfortable with non-social feedback sources.
related to your performance in this class.
8. Inequity can occur in the classroom as well as in
Six conditions to maximize task effort and the workplace. Identify classroom situations in
performance are identified. Effective goals should which you experienced feelings of inequity. What
reflect each of the following elements. can instructors do to maintain an environment that
fosters both distributive and procedural justice?
Specific. A specific goal communicate precise
outcome expectations There should be no shortage of discussion here.
Feelings of inequity seem to develop easily in
Relevant. Relates to the individual’s role and is
evaluative settings (such as a course where student
within his/her control
grades have value for receiving degrees and
Challenging. Goal that is challenging enough to scholarships). One common complaint we often
stretch the employee’s abilities and motivation hear about from students who receive a low grade
toward peak performance on an exam, case, or other assignment is that they
“worked harder than many other students” on the
Goal commitment. Commitment exists to
assignment. Although you might point out that
accomplishing the goal
the grade is based on results, not effort, some
Goal participation. Individual (sometimes) students still feel as sense of inequity. Their
participates in setting the goal outcome/input ratio considers amount of time, so
inequity occurs when their comparison other
Goal feedback. Information that people receive
receives a higher grade with less time.
about the consequences of their behaviour
Another source of inequity occurs when some
Students should be encouraged to write draft goal
students successfully bypass the limitations of an
statements and then working in small groups or
assignment. The author recently experienced this
with a partner, refine their draft goal statements to
with a case analysis that had a seven page limit.
ensure each of the above criteria are applied. Each
The assignment clearly stated that the case write-
goal statement needs to reflect the individual’s
up must be double-spaced and use normal font size
current level of performance, knowledge etc. For
and margins. Some students complained because

141
Part 2 Individual Behaviour and Processes

they saw others successfully use a 10-point font, In conclusion, it is important that instructors
which gave them more words to answer the case maintain an environment that fosters both
questions. The offending students claimed this was distributive and procedural justice in order to
their “normal” font size whereas others said it enhance students’ motivation. Instructors need to
wasn’t. (Microsoft’s default is 12-point New Times ensure that students believe that the evaluation
Roman.) A couple of students also successfully process is fair. Instructors may require training
shrunk the line spacing slightly less than double- and development to understand how to develop
spacing. The complaining students felt this was and apply objective grading rubrics for assessing
unfair, claiming that they could have received a student assignments and exams. Instructor
higher grade if they could have written more development and coaching may be needed to
words. develop behaviours associated with procedural
justice eg. exhibiting a supportive demeanour,
giving students some control over process etc.

PHOTO CAPTION CRITICAL THINKING


QUESTIONS

Triangle Suspension Systems Ltd.


EnCana Corporation
Q: How would the other three innate human drives be
affected by layoffs? Q: Under what conditions would money be a strong
motivator?
A: This is an excellent discussion (or exam) question
because students are caught off-guard by the fact that A: Several factors need to be considered to answer this
layoffs might affect other innate drives. The most question. First, individuals vary in their need for
obvious innate drive (other than the need to bond) is money. Everyone has a drive to acquire, but this is
the drive to defend because layoffs involve a personal stronger in some people than in others. Learned needs
loss of income, status, and relationships. The drive to theory similarly suggests that people with high need
acquire also applies here because employment has for achievement value money as an indicator of their
status implications. People who are laid off lose status success. Second, money has more motivational value
in many societies. Probably least central to layoffs is when it is given support and recognition by others. In
the drive to learn. Still, students might identify how some societies, people are supposed to subdue their
layoffs increase the drive to learn because being laid off wealth, whereas displaying your wealth is respected in
creates new unknown situations that need to be other cultures. This ability to display and recognize the
explored. In some instances, layoffs result in the need value of money might influence its motivational
to learn a new career. potential. Third, the amount of money received is a
factor in its motivational value. The $5 certificates
described in this photo caption illustrate that the
recognition value had higher value than the monetary
value of the reward.

142
Chapter 5 Motivation in the Workplace

CDW Computer Centres


Q: To what extent is this goal-setting process
compatible with the characteristics of effective goals?

A: This question is answered by the characteristics of


effective goals, including specific goals, relevant goals,
challenging goals, goal commitment, participation in
goal formation (sometimes), and goal feedback. CDW
seems to apply most of these conditions. The goals are
certainly specific because they apply numerical
objectives within a specific time. The goals are
relevant to the organization, and likely are relevant to
the sales force. These goals might be less relevant to
support staff and others within CDW who cannot
directly influence sales. Without a doubt, CDW applies
challenging goals. The fact that these goals were
achieved suggests that they were not viewed as
impossible by most employees. In other words, goal
commitment was sufficiently strong. It isn’t clear that
CDW involved employees in forming the goals.
However, the success of this goal setting suggests that
participation might not be necessary here. Lastly,
CDW provided clear feedback regarding goal
achievement.

ACTIVITY 5.1: CASE ANALYSIS


NO FAIR PAY IN THIS PLACE

These case notes have been prepared by By Susan Meredith, Selkirk College

Case Synopsis
The author describes a situation in a previous job in British Columbia in which head office treated the BC operations as
insignificant. The author was particularly concerned when she discovered that Helen, an employee at head office, was
paid significantly more than she was paid in British Columbia. The author complained to her boss, who dismissed the
difference in terms of how much people in Toronto get paid. The case describes the outcome of this incident.

Current state of affairs in Mr. James’ office:


Several people have come and gone – only one remains from when I worked there six years ago. The front office
receptionist that I had trained and mentored is still there. She now has my old position but with fewer staff to supervise.
With the elimination of 2 staff positions Mr. James finally realized that to keep anybody he was going to have to
increase their salary. The current manager makes $50,000 – the same $30,000 I had plus $20,000 from one of the
eliminated positions. I have no idea what Horrible Helen is earning.

Suggested Answers to Case Questions

143
Part 2 Individual Behaviour and Processes

Author’s note: This case is primarily intended to Each individual was concentrating on the apparent
illustrate equity theory and job dissatisfaction as differences rather than similarities.
well as perceptions, stress, and cognitive
3. How was the inequity solved?
dissonance.
For the B.C. worker, the initial solution was to
1. What are some of the elements that contributed to
voice her concerns and when those concerns were
this employee’s feelings of inequality?
not acknowledged and no attempt at resolution
The worker had the perception of an imbalance in offered, the worker excited.
workload plus very demanding daily interactions
4. What other factors may have contributed to the job
with customers. As well, it appears the worker in
dissatisfaction experienced by these two
BC felt her academic qualifications were superior
employees?
along with specific work experience that should
have increased her value to her employer. Other factors might include an obvious absence of
respect on the boss’ part. Another factor was the
2. Why was the Toronto worker considered a
apparent lack of communication between the
“comparison other” but not the co-worker in B.C?
regional office and the head office, which lead to a
It’s not so much that the co-worker in B.C. was feeling of not truly being heard or respected. No
not a comparison other rather there were no acknowledgement or fair reward for the
perceived inequities in their workloads or salaries. consistently challenging work without which the
head office might just as well shut down.

Additional Comments on the Case


This is a classic case useful in explaining Equity  They may change their inputs as I did by
Theory. Employees do compare their job duties and lessening my effort.
results with others. Those job duties or inputs are the
amount of effort, education, experience, personality  They may change the comparison or referent
and/or skill sets that a person contributes to their other, which I tried to do but there were none.
organization. I had begun comparing my inputs and  They may evaluated their perceptions and test
outputs to those of Horrible Helen. them out with someone not emotionally
I perceived my value to the effective functioning of the attached to the outcome, so they can make
business to be almost double what I perceived my adjustments. I did do this but others supported
“comparison other’s” value as being. Unfortunately I my perceptions, so that didn’t help.
could not convince the owner that my outputs were far  They may revaluate the referent other thereby
superior in quantity and quality when compared to giving more credit for inputs of which they
Horrible Helen, even though everyone else in the office might be unaware. I had been in Toronto and
could see the reality. had witnessed Helen’s inputs. I just couldn’t
When employees encounter a perceived inequality they give her more credit.
will usually choose one of several actions:  They may eventually leave the field, when all
else fails, as I did.

144
Chapter 5 Motivation in the Workplace

ACTIVITY 5.2: CASE ANALYSIS


KEEPING SUZANNE CHALMERS

Case Synopsis
This case describes a meeting with software engineer Suzanne Chalmers and Thomas Chan, the vice-president of
software engineering at Advanced Photonics Ltd. (APL). Chalmers arranges the meeting to indicate her intention to
leave APL. Chan tries to keep her by offering better conditions and, eventually, more money and share options. But
Chan knows that Chalmers is already a millionaire from her share options and the appreciation of APL’s share price.
The case highlights the difficulty in motivating people to stay and the relative importance of financial rewards
compared to other sources of motivation. Soon after the meeting, Chalmers submits her resignation and, after a few
months rest, takes up a position at a start-up company.

Suggested Answers to Case Questions


1. Why didn’t money motivate Suzanne Chalmers to interest. Thomas Chan could have probed what
stay with APL? Suzanne is lacking in her work, and likely would
have discovered that she needs a change on job
In this particular situation, the needs fulfilled by
activities that would offer more variety and new
money (mainly physiological, safety, and social)
challenges.
were not strongest for Suzanne. Instead, it seems
that Suzanne required more self-actualization, 3. What innate drives seem to be motivating
particularly work with more variety and challenge. Suzanne Chalmers?
The job seems to be getting routine. Moreover,
All drives operate in everyone, with the drive to
she later took a job at a start-up firm where she
defend most active only when the person is
probably performed a wider variety of tasks.
threatened. However, it seems that the drive to
2. If you were Thomas Chan, what strategy, if any, learn is probably the most important one for
would you use to motivate Susan Chalmers to stay Suzanne in this situation because she subsequently
at Advanced Photonics Ltd.? entered a new job with a variety of job duties.
Students might also suggest that the drive to
In any situation, Thomas Chan’s first task is to
acquire is apparent, specifically that she wants to
determine what drives the employees, that is, what
acquire new experiences. At the same time,
is the most important source of motivation. Notice
Suzanne definitely does not have a drive to acquire
in this case that Chan continuously pushed
material goods such as money or physical
“hygiene” factors, such as better working
resources. Moreover, she doesn’t express a strong
conditions (office space), money, and time off.
drive to bond, particularly since she is motivated
With each offering, Suzanne showed a lack of
to leave APL.

145
Part 2 Individual Behaviour and Processes

ACTIVITY 5.3: TEAM EXERCISE


A QUESTION OF FEEDBACK
Purpose Step 3: The class will gather to debrief this exercise.
This exercise is designed to help students to This may include discussion on the importance of
understand the importance of feedback, including feedback, the characteristics of effective feedback for
problems that occur with imperfect communication in individual learning, and how feedback is a form of
the feedback process. reinforcement in behaviour modification.

Materials Comments to Instructors


The instructor will distribute a few pages of exhibits to This exercise illustrates the importance of feedback
one person on each team. The other students will because students drawing the exhibit quickly realize
require a pencil with eraser and blank paper. Movable the vital importance of feedback to provide direction.
chairs and tables in a large area is helpful. Instructors will distribute the exhibits on the following
pages in this instructors’ guide. Please be sure to give
Instructions the exhibits to the person who describes them, and
Step 1: The class is divided into pairs of students. Each ensure that the person drawing these does not see them
pair is ideally located in a private area, away from in advance. Instructors can substitute their own
other students and where one person can write. One diagrams if they prefer.
student is given the pages of exhibits from the I find it useful during the debriefing session to
instructor. The other student in each pair is not review the main functions of feedback: learning
allowed to see these exhibits. (corrective) and motivational. Specifically, students
Step 2: The student holding the materials will describe should see the need for corrective feedback in this
each of the exhibits and the other student’s task is to exercise. The person giving instructions is limited in
accurately replicate each exhibit. The pair of students the ability to provide corrective feedback either because
can compare the replication with the original at the he/she isn’t observing the results (Exhibit 1) or isn’t
end of each drawing. They may also switch roles for allowed to say anything unless specifically asked. You
each exhibit, if they wish. If roles are switched, the might ask students who described Exhibit 2 whether
instructor must distribute exhibits separately to each they were frustrated by this inability to say anything
student so that they are not seen by the other person. while the person drawing was deviating from the
Each exhibit has a different set of limitations, as intended goal.
described below: While most people will focus on the value of
corrective feedback in this exercise, feedback also
Exhibit 1: The student describing the exhibit cannot serves a valuable motivational role. The person
look at the other student or his/her diagram The describing the exhibit has limited ability to provide
student drawing the exhibit cannot speak or otherwise motivational feedback because he/she can’t see whether
communicate with the person describing the exhibit. the drawing is correct (exhibit 1) or can’t say anything
unless asked (Exhibit 2). However, the person drawing
Exhibit 2: The student describing the exhibit may look receives feedback as soon as he/she compares the result
at the other student’s diagram. However, he/she may with the original.
only say “Yes” or “No” when the student drawing the The instructor might bring out some discussion on
diagram asks a specific question. In other words, the the value of feedback for motivating people. Ask
person presenting the information can only use these students to imagine the situation where, at the end of
words for feedback and only when asked a question by each activity, the person drawing receives no verbal or
the writer. visual feedback. Note how this often happens in
Exhibit 3: (optional -- if time permits) The student organizations, and ask students for situations where
describing the exhibit may look at the other student’s they experienced this lack of feedback.
diagram and may provide any feedback at any time to
the person replicating the exhibit.

146
A QUESTION OF FEEDBACK
EXHIBIT 1
IMPORTANT: The student describing this exhibit cannot look at the other student or his/her diagram The student
drawing the exhibit cannot speak or otherwise communicate with the person describing the exhibit. The student
drawing this exhibit must not see this sheet until after this activity is completed. No additional tools or instruments
(e.g. no rulers) may be used for this activity.

© Steven L. McShane
A QUESTION OF FEEDBACK
EXHIBIT 2
IMPORTANT: The student describing this exhibit may look at the other student’s diagram. However, he/she may only
say “Yes” or “No” when the student drawing the diagram asks a specific question. In other words, the person presenting
the information can only use these words for feedback and only when asked a question by the writer. The student
drawing this exhibit must not see this sheet until after this activity is completed. No additional tools or instruments
(e.g. no rulers) may be used for this activity.

© Steven L. McShane
A QUESTION OF FEEDBACK
EXHIBIT 3
IMPORTANT: The student describing this exhibit may look at the other student’s diagram and may provide any
feedback at any time to the person replicating the exhibit. The student drawing this exhibit must not see this sheet until
after this activity is completed. No additional tools or instruments (e.g. no rulers) may be used for this activity.

© Steven L. McShane
ACTIVITY 5.4: SELF-ASSESSMENT
MEASURING YOUR EQUITY SENSITIVITY

Purpose preferences and reaction to various outcome/input


ratios when compared to other people. Students are
This self-assessment is designed to help students to asked to read each of the statements in the scale and
estimate their level of equity sensitivity circle the response that they believe best reflects their
position regarding each statement. Students then
Overview and Instructions calculate their results using the scoring key in
Appendix B or through the student CD for self-scoring.
Correcting feelings of inequity is one of the most
powerful motivating forces in the workplace. But Students are asked to read each statement in this
people react differently to equitable and inequitable instrument and indicate the degree to which they
situations based on their equity sensitivity. Equity personally agree or disagree with that statement. This
sensitivity refers to a person’s outcome/input instrument has 16 statements.

Feedback for the Equity Sensitivity Scale


[NOTE: The following information is also provided in Appendix B and/or the Student CD.]

The Equity Sensitivity scale ranges from 16 to 80. “Benevolents” (59-80 points on the scale) are tolerant
People are divided into three categories, depending on of situations where they are underrewarded. They
their score along this scale. The three categories are: might still prefer equal outcome/input ratios to the
“Entitleds” (16-37 points on the scale) feel more comparison other, but don’t mind if others receive
comfortable receiving proportionately more than more than they do for the same inputs.
others. They might accept having the same
Score Interpretation
outcome/input ratio as others, but would prefer
receiving more than others performing the same work. 59 to 80 Benevolents
“Equity sensitives” (38-58 points on the scale) fit the
38 to 58 Equity sensitives
standard equity theory model. They want their
outcome/input ratio to be equal to the outcome/input 16 to 37 Entitleds
ratio of the comparison other. As the ratios become
different, equity sensitives feel an uncomfortable
tension.
ACTIVITY 5.5: SELF-ASSESSMENT
MEASURING YOUR GROWTH NEED STRENGTH

Purpose important to them. For each question, two different


kinds of jobs are briefly described. Students are asked
This self-assessment is designed to help students to to indicate which of the two jobs they personally would
estimate your level of growth need strength. prefer if they had to make a choice between them. In
answering each question, students should assume that
Overview and Instructions everything else about the jobs is the same. Students
should pay attention only to the characteristics actually
People differ in the kinds of jobs they would most like listed. After circling each answer, students use the
to hold. The questions in the exercise give students a scoring key to calculate their results for this scale.
chance to say just what it is about a job that is most

Feedback for the Growth Need Strength Scale


[NOTE: The following information is also provided in the Student CD.]

This well-known scale estimates the strength of your


growth needs. ERG theory groups human needs into
three broad categories: existence, relatedness, and
growth. The theory proposes that people are motivated
simultaneously by more than one need level. However,
growth needs dominate our motivation only after
existence and relatedness needs have been reasonably
fulfilled. Growth need strength indicates the strength
of your growth needs, including self-esteem, personal
achievement, self-actualization. Although
organizational behaviour scholars now doubt that
people have a pre-determined needs hierarchy, it is
well established that we do have growth needs.

Scores on the Growth Need Strength Scale can range


from 12 to 60. Higher scores indicate that you have a
higher growth need strength (i.e stronger growth
needs). As the graph shows, total score below 30
indicates a relatively low growth need strength,
whereas a score above 42 indicates a relatively high
growth need strength.
Score Interpretation
43 to 60 High Growth Needs
30 to 42 Moderate Growth Needs
12 to 29 Low Growth Needs
SUPPLEMENTAL TEAM EXERCISE
BONUS DECISION MAKING

Purpose manager should receive. These amounts will be


This exercise is designed to help students understand written in the “Team Decision” column.
the elements of equity theory and how people differ in Step 4: The instructor will call the class together to
their equity perceptions. compare team results and note differences in inputs
and input weights used by individual students.
Instructions Discussion of these results in terms of equity theory
Four managers in a large national insurance company will follow.
are described below. The national sales director of the
company has given your consulting team (first Comments for Instructors
individually, then together) the task of allocating I find it useful to post the results for each team in a
$100,000 in bonus money to these four managers. It is chart (team numbers across the top and the four
entirely up to your team to decide how to divide the managers on the left side to form rows.) When the
money among these people. The only requirements are entire set of results are documented, ask participants to
that all of the money must be distributed and that no debate any variations across teams. The discussion
two branch managers can receive the same amount. should make students aware that it is very difficult to
The names and information are presented in no consider all of the employee inputs when allocating
particular order. You should assume that economic bonuses. Very likely, someone will feel that the process
conditions, client demographics, and other external is unfair because different people assign different
factors are very similar for these managers. weights to these factors
Step 1: Students will form teams of 4 or 5 people. Where team members easily agree on factors, it is
Working alone, they read information about the four useful to remind them that (1) they are a relatively
managers. Then they fill in the amount they would homogeneous group of business students (consensus
allocate to each manager in the “Individual Decision” may be more difficult if nonbusiness students are
column. included in the teams), and (2) people from different
cultures hold different values. For example, students
Step 2: Still working alone, students fill in the “Equity from some African and Asian countries tend to have
Inputs Form.”. First, in the “Input Factor” column, difficulty accepting a very high performance
they list in order of importance the factors they orientation.
considered when allocating these bonus amounts (e.g. The results of this exercise will vary from one team
seniority, performance, age, etc.). The most important to the next, particularly if the class includes
factor should be listed first and the least important last. nonbusiness students and/or people from diverse
Next, in the “Input Weight” column, students estimate cultural backgrounds. For example, the average
the percentage weight that they assigned to this factor. distribution of bonus money in my classes has been
The total of this column must add up to 100 percent. approximately $17K, $37K, $23K, and $23K to Bob,
Edward, Lee, and Sandy, respectively. However, the
Step 3: After individually allocating the bonus money amount varies considerably. One team with a strong
and determining the input factors and weights, team seniority-orientation allotted $43K, $19K, $28K, and
members will compare their results and note any $10K to the four managers, whereas another team with
differences. Then, for each job, team members will a strong performance orientation allotted $5K, $50K,
reach a consensus on the bonus amount that each $15K, and $30K.
BONUS DECISION MAKING EXERCISE
STUDENT HANDOUT (PAGE 1 OF 3)

Background Information
Four managers in a large national insurance only requirements are that all of the money must be
company are described below. The national sales distributed and that no two branch managers can
director of the company has given your consulting receive the same amount. The names and
team (first individually, then together) the task of information are presented in no particular order.
allocating $100,000 in bonus money to these four You should assume that economic conditions, client
managers. It is entirely up to your team to decide demographics, and other external factors are very
how to divide the money among these people. The similar for these managers.

Student Instructions
Step 1: Form teams of 4 or 5 people. Working Step 3: After individually allocating the bonus
alone, read the following information about the money and determining the input factors and
four managers. Then fill in the amount you would weights, team members will compare their results
allocate to each manager in the “Individual and note any differences. Then, for each job, team
Decision” column of the “Bonus Allocation Form”. members will reach a consensus on the bonus
amount that each manager should receive. These
Step 2: Next, still working alone, fill in the “Equity amounts will be written in the “Team Decision”
Inputs Form.” First, in the “Input Factor” column, column.
list in order of importance the factors you
considered when allocating these bonus amounts Step 4: The instructor will call the class together to
(eg. seniority, performance, age, etc.). The most compare team results and note differences in inputs
important factor should be listed first and the least and input weights used by individual students.
important last. Next, in the “Input Weight” column Discussion of these results in terms of equity theory
estimate the percentage weight that you assigned to will follow.
this factor. The total of this column must add up to
100 percent.
BONUS DECISION MAKING EXERCISE
STUDENT HANDOUT (PAGE 2 OF 3)

Manager Profiles
Bob B. Bob has been in the insurance business for Lee L. Lee has been with this organization for
over 27 years and has spent the past 21 years with seven years. The first two years were spent as a
this company. A few years ago, Bob’s branch sales representative in the office that she now
typically made the largest contribution to regional manages. According to the regional director, Lee
profits. More recently, however, it has brought in rates about average as a branch manager. She
few new accounts and is now well below average in earned an undergraduate degree in geography from
terms of its contribution to the company. Turnover the University of Calgary and worked in Alberta as
in the branch has been high and Bob doesn’t have a sales representative for four years with another
the same enthusiasm for the job as he once did. insurance company before joining this organization.
Bob is 56 years old and is married with five Lee is 40 years old, divorced, and has no children.
children. Three children are still living at home. She is a very ambitious person but sometimes has
Bob has a high school diploma as well as a problems working with her staff and other branch
certificate from a special course in insurance managers.
management.
Sandy S. Sandy is 47 years old and has been a
Edward E. In the two years that Edward has been branch manager with this company for 17 years.
a branch manager, his unit has brought in several Seven years ago, her branch made the lowest
major accounts and now stands as one of the top contribution to the region’s profits, but this has
units in the country. Edward is well respected by steadily improved and is now slightly above
his employees. At 29, he is the youngest manager in average. Sandy seems to have a mediocre attitude
the region and one of the youngest in the country. toward her job but is well liked by her staff and
The regional director initially doubted the wisdom other branch managers. Her experience in the
of giving Edward the position of branch manager insurance industry has been entirely with this
because of his relatively young age and lack of organization. She previously worked in non-sales
experience in the insurance industry. Edward positions, and it is not clear how she became a
received an undergraduate business degree from the branch manager without previous sales experience.
University of Prince Edward Island and worked for Sandy is married and has three school-aged
five years as a sales representative in Kitchener, children. Several years ago, Sandy earned a
Ontario before joining this company. Edward is diploma in business from a nearby community
single and has no children. college by taking evening courses.

© 1997, 1983 Steven L. McShane


BONUS DECISION MAKING EXERCISE
STUDENT HANDOUT (PAGE 3 OF 3)

Bonus Allocation Form

Name Individual Decision Team Decision


Bob B. $_________ $_________

Edward E. $_________ $_________

Lee L. $_________ $_________

Sandy S. $_________ $_________

TOTALS: $100,000 $100,000

Equity Inputs Form

Input Factor* Input Weight**


_________________________ _________%

_________________________ _________%

_________________________ _________%

_________________________ _________%

_________________________ _________%

TOTAL: 100%

* List factors in order of importance, with most important factor listed first.
** The weight of each factor is a percentage ranging from 1 to 100. All factor weights together must add up to 100
percent.
SUPPLEMENTAL CASE: STEELFAB CORP.
STUDENT HANDOUT
Jackie Ney was an enthusiastic employee when she regarded by others in the finance department as a
began working in the accounting department at particularly outstanding performer. According to
Steelfab Corp. In particular, she prided herself on others who worked with him on some assignments,
discovering better ways of handling invoice and Jim lacked the skills to perform the job well enough
requisition flows. The company had plenty of to receive such a high reward. However, Jim Sandu
bottlenecks in the flow of paperwork throughout had become a favoured employee to Mr. Johnston
the organization and Jackie had made several and they had even gone on a fishing trip together.
recommendations to her boss, Mr. Johnston, that
would improve the process. Mr. Johnston Jackie's enthusiasm toward Steelfab Corp. fell
acknowledged these suggestions and even dramatically during her second year of
implemented a few, but he didn't seem to have employment. She still enjoyed the work and made
enough time to either thank her or explain why friends with some of her co-workers, but the spirit
some suggestions could not be implemented. In that had once carried her through the morning rush
fact, Mr. Johnston didn't say much to any of the hour traffic had somehow dwindled. Eventually,
other employees in the department about anything Jackie stopped mentioning her productivity
they did. improvement ideas. On two occasions during her
second year of employment, she took a few days of
At the end of the first year, Jackie received a 6 sick leave to visit friends and family in Vermont.
percent merit increase based on Mr. Johnston's She had used only two sick days during her first
evaluation of her performance. This increase was year and these were for a legitimate illness. Even
equal to the average merit increase among the 11 her doctor had to urge Jackie to stay at home on
people in the accounting department and was above one occasion. But by the end of the second year,
the inflation rate. Still, Jackie was frustrated by the using sick days seemed to "justify" Jackie's
fact that she didn't know how to improve her continued employment at Steelfab Corp. Now, as
chances of a higher merit increase the next year. her second annual merit increase approached,
She was also upset by the fact that another new Jackie started to seriously scout around for another
employee, Jim Sandu, received the highest pay job.
increase (10 percent) even though he was not

Discussion Questions
1. What symptom(s) exist in this case to suggest that something has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should the organization take to correct these problems?

© Copyright. Steven L. McShane.


SUPPLEMENTAL CASE ANALYSIS:
STEELFAB CORP.

Case Synopsis
This case describes Jackie Ney’s first two years of work experience in the accounting department of Steelfab Corp.
Jackie was initially enthusiastic and contributed ideas for improved work flow efficiency, but she received little
feedback or support from her boss. Her first year merit increase was average, but was less than she had expected.
Moreover, the highest increase went to an employee who goes fishing with the supervisor and whose performance
record is considered by coworkers as deserving the highest increase. By the second year, Jackie had stopped giving new
ideas, had begun to take unwarranted sick leave, and was thinking about quitting her job.

Suggested Answers to Case Questions


1. What symptom(s) exist in this case to suggest that solutions to paperwork flow problems in the
something has gone wrong? organization (i.e., high EP expectancy). In
other words, she exhibited a high expectancy of
By the end of the second year, Jackie Ney
the probability that her efforts would lead to high
experienced lower motivation and higher job
performance. Due to Mr. Johnston’s actions (and
dissatisfaction regarding supervisor and company
inaction), however, Jackie’s belief decreased in the
policies. She had stopped providing productivity
probability that high performance would lead to
improvement ideas. She began making improper
desired rewards (i.e., decreasing P>O
use of sick leave and was thinking of leaving the
expectancy). Although some of Jackie’s ideas were
company.
implemented, Mr. Johnston did not reward Jackie
2. What are the causes of these symptoms? through praise. It is clear from her actions and
statements that Jackie is achievement-oriented and
Jackie Ney feels a strong sense of inequity over the
would value praise from her boss. She would also
merit system. She compares herself to others
value feedback describing how well her ideas are
within the department and, in particular, to
working, but this information was not freely
another new employee, Jim Sandu. Sandu received
provided by Mr. Johnston. Finally, although
the highest merit increase even though his skill
Jackie’s merit increase may have been based partly
and performance levels were generally regarded as
on the ideas she provided, this connection was not
lower than Jackie’s. Jackie feels that her lower
clarified. Moreover, due to equity problems
merit increase is inequitable because Jim’s inputs
(described above), the merit increase was not
--particularly his effort and skills -- are less than
strongly valued.
hers. She does not believe that being a good friend
of the boss is a valid input. Jackie’s response to 3. What actions should the organization take to
this inequity is to reduce her inputs. She stops correct these problems?
giving new ideas (although this is also due in part
Jackie’s practice of offering suggestions are
to factors explained by expectancy theory below)
consistent with organizational goals because
and uses paid absenteeism to balance the scales.
companies need any information to improve their
Eventually, Jackie addresses her feelings of
effectiveness. Consequently, we find out why
inequity (along with other sources of
Johnston made the merit increase decisions in this
dissatisfaction here) by looking for work in
way. It may be that he had valid reasons for this
another organization.
merit pay distribution. If so, he should be
Expectancy theory can be used to explain why encouraged or trained to communicate these
Jackie Ney stopped giving new ideas to her boss, reasons more clearly to employees in the
Mr. Johnston. Jackie seemed to be confident (at department.
least initially) that she could work out innovative
Johnston does not provide a performance review, feedback to Jackie Ney on her paperwork flow
yet this should be encouraged to strengthen ideas. Again, if Johnston lacks the interpersonal
employees’ PO expectancy. If the merit skills to provide praise and feedback, he should
decisions were poorly made, the reasons for this receive proper supervisory training or be moved to
should be determined. Johnston may lack the skills a job where these skills are less important. If
to properly evaluate, in which case he should Johnston seems to lack the motivation to fulfill
receive rater training. If Johnston is not motivated these supervisory responsibilities, his superior may
to reward employees based on valid performance want to re-examine Johnston’s own reward system
factors, his superior may wish to transfer him to a so that supervisory coaching is more clearly
job where performance evaluation is not required. rewarded.
Or the superior may want to find out why Johnston
In the short term, Jackie should be approached to
is not motivated to do this task properly, then
reinforce her importance to the organization and
realign the reward system so he is motivated to
the value of her efforts. She should be made aware
make fair merit decisions.
of the above-mentioned reviews of the
Johnston’s superior should also find out why performance appraisal system and have an
Johnston failed to give encouragement and opportunity to provide input to this process.

SUPPLEMENTAL LECTURE: EQUITY IN THE PAY-


SETTING PROCESS
Equity theory is frequently discussed in the context of entry level technicians and believe that these
monetary rewards, and organizational leaders have technicians provide fewer inputs (education, value-
developed some rather elaborate procedures to ensure added, etc.) to the organization.
that employees receive “a fair day’s pay for a fair day’s To minimize inequities between jobs, many
work.” organizations use a process called job evaluation (see
Three types of comparison other are considered Chapter 6 of the textbook). Job evaluation forms a job
when deciding how much money employees should hierarchy by systematically evaluating the worth of
receive. These comparison others correspond to each job. Jobs are placed in higher pay grades if they
employee equity, internal equity, and external equity. require more skill, effort, and responsibility, and
involve harsher working conditions. Although
Employee Equity. Employee equity refers to a imperfect, job evaluation helps firms to estimate
person’s equity feelings when the comparison other is whether nurses, for instance, are fairly paid compared
in the same job within the same organization. One to, say, technicians.
strategy for maintaining employee equity is to establish
a fixed pay policy whereby everyone in the job receives External Equity. External equity refers to a person’s
the same wage rate. This may be effective if everyone equity feelings when the comparison other is in other
contributes equally, but inequities exist otherwise. organizations. For example, an accountant might
An alternative is to establish a range of pay for each compare her salary and benefits with a friend working
job, with each employee’s pay level within that range in the same position at another firm. Organizations try
based on seniority or performance appraisal ratings. A to maintain external equity through salary surveys.
third strategy is to pay employees based completely on Their ultimate objective is to provide competitive
their sales volume or production output with no monetary rewards to attract new employees while
minimum or maximum limits. Each of these methods preventing labor costs from escalating out of hand.
is used in industry and government, but none provides
a perfect solution. Source: T.A. Mahoney, “Understanding Comparable
Worth: A Societal and Political Perspective,” Research
Internal Equity. Employees also compare themselves in Organizational Behaviour, 9 (1987), pp. 209-245.
with coworkers in different jobs within the
organization. For example, nurses might feel inequity
because they receive the same salary as the hospital’s
SUPPLEMENTAL LECTURE: QUANTIFYING
EXPECTANCY THEORY
Using expectancy theory, we can quantify the relative Finally, let’s suppose that your E>P expectancy for
likelihood that an effort level will be exerted. Basically, completing 10 requests on time is only .4 whereas the
we need to learn three things: (1) the valence of salient likelihood of completing 5 requests on time is .9. In
outcomes, (2) P>O expectancies with respect to those other words, there is only a 40 percent chance that you
outcomes for specific performance levels, and (3) E>P could possibly complete 10 requests on time whereas
expectancies with respect to those performance levels there is a 90 percent chance of completing 5 requests
and a particular effort level. on time.
An example will help clarify how expectancy theory The exhibit on the next page illustrates the
may be quantified. Suppose that valence ranges from quantification of expectancy theory in this situation.
-1 to +1 and that you value a quarterly bonus (+.7) and, Effort motivation is calculated as:
to a lesser extent, a day off with pay (+.3). Further
suppose that you dislike making mistakes in your work M = [E>P] * [(P>O) * V]
(-.4).
Performance is a complex concept with numerous
.132 = .4 * [(1 * .3)+(.5 * .7)+(.8 * -.4)]
levels and dimensions. For the sake of simplicity, we
shall consider only one dimension (quantity -- number
of customer requests completed on time) and two .270 = .9 * [(.2 * .3)+(.4 * .7)+(.1 * -.4)]
specific levels (5 and 10 customer requests completed). Based on these calculations, we can see that you are
Let’s suppose you believe that completing 10 requests motivated to achieve the lower performance goal (5
on time will definitely result in a day off with pay requests completed on time). Notice that the composite
(1.0), a good probability of a quarterly bonus (.5) but valence of the higher and lower performance goals are
also a strong chance that you will make mistakes (.8). almost identical (.33 versus .30). However, the
In contrast, completing only 5 customer requests is equation tilts in favour of the lower performance goal
expected to result in a low probability of a day off with because the E>P expectancy is much higher.
pay (.2) a slightly lower quarterly bonus (.4) but also
hardly any chance that you will make mistakes (.1).

Effort E—>P P—>O


Motivation Expectancy Expectancy Valence

10 Requests 1.0 Day Off .3


Higher .4 Completed
.132 Effort on Time
.5 Bonus .7
.8 Mistakes –.4

5 Requests .2 Day Off .3


Lower Completed
.27 .9 on Time
.4 Bonus .7
Effort
.1 Mistakes –.4
VIDEO SUGGESTIONS
Along with the video cases for this part of the textbook, the following videos and films generally relate to one or more
topics in this chapter. These programs may be available at your college/university or rented from the distributor. Please
contact your film librarian to determine the availability of these programs at your institution. This list was compiled
from library holdings of several universities. Due to the variety of video material, this is not a comprehensive list. Nor
can we say that all of the programs below are suitable for your class.

The X Factor: Managing and Motivating enthusiasm to turn around team motivation; identifying
Generation X. (1998, 22 min., CorVision Media and and using complimentary strengths in a team. In this
WGBY-TV). This program, featuring Gen-X video described as "motivational," "extremely
consultant Bruce Tulgan, introduces Generation X: inspirational," and "a dynamic stab in the arm," Tara
who they are, how they view the world of work, and VanDerveer shows us that whether it be in basketball
which factors shaped their perspective. It discusses or business, a successful team is born of strengthening
seven management principles and how they are individual qualities and focusing them on a singular
effectively used in recruiting, motivating, and retaining goal.
Generation X employees.
Motivating and Rewarding Employees. (1997, 66
Re-Energizing the Mature Organization: Designing min., National Press Publications). Management
the Organization for the Future. (1997, 54 min., consultant and author Bob Nelson shows managers
Stanford Alumni Assoc.) Part of the Stanford executive how to spark enthusiasm in their employees and build
briefings, this program highlights: explains how to an atmosphere of loyalty and trust where productivity
implement effective change; outlines organizations of flourishes. This program is based on Nelson’s best-
the future; examines way to re-energize people. By selling book, 1001 Ways to Reward Employees.
describing the organization of the future, Dr. Robert
Zawacki discusses how to re-energize and motivate Even Eagles Need a Push. (199?, 24 min., VHS). In
people to compete in the 90s. He shares his experiences this video, consultant David McNally shows viewers
with transforming organizations; specifically, how to how to enthusiastically commit to new levels of
design organizations which view 'time' as a achievement and excellence. He describes five qualities
competitive advantage and how to manufacture quality of a confident, empowered employee.
products with self-directed teams. The Unorganized Manager: Part 3 -- Divine
Mobilizing Commitment in Your Organization. Intervention. (1995?, 20 min., Video Arts). This
(1997, 46 min., Stanford Alumni Assoc.) Part of the humorous video program outlines goal setting for team
Stanford executive briefings, this video program members. St Peter (John Cleese) recalls Richard to
highlights: practical applications of mobilization; The Pearly Gates for an annual check-up. Here, he
empowering employees towards innovation; realizing discovers that Richard’s management style still leaves
the corporate benefits of shared commitment. Jennifer a lot to be desired. Despite having learned to organize
Kenny offers a reinterpretation of current and himself (from Parts 1 and 2 of this program), Richard
historical business breakdowns seeing them instead as is failing to organize his team. St Peter then explains
the result of lacking commitment, trust, and that Richard needs to set standards for his team
coordination. She outlines a new model where these members, measurable either by quality, quantity, cost
principles are the cornerstone of all business processes or time. In this way both Richard and his managers
and can be applied to leverage the learning of others can know how they are doing. Richard’s final lesson is
and gain their commitment to a shared future. to agree targets with individual team members in order
to help them develop and realize their potential, or to
Coaching a Winning Team (1997, 55 min., Stanford bring their performance back on track.
Alumni Association). Part of the Stanford executive
briefings series, this video program highlights: Motivation and Goal Setting. (1995, 62 min.,
building credibility and consensus in a vision; using Business Advantage). This program explains how to
discover start-up strategies to goal-setting; self- Motivating Others. (1992, 25 min., American
motivation solutions, how to build productivity Management Association). The abstract of this
boosters into every plan you make; concrete steps you program says that it demonstrates a concrete set of
can take; the most crucial qualities to help set realistic guidelines to help managers elicit superior
goals; how to avoid time-wasting and stay focused. performance from their employees.

Coaching to Develop Motivation. (1995, 11 min., Ash Motivation, Myths and Realities. (1985, 20 min.,
Quarry Productions). This program demonstrates a VHS) Management expert Saul Gellerman discusses
coaching technique for ensuring that people take ways to motivate employees to greater productivity and
responsibility for motivating themselves. It offers creativity.
practical examples of the use of the 'question style' of
coaching, and will help the coach to ask the right It’s Not Just the Money. (1976, 30 min., 3/4 inch).
questions, use silence effectively, and push for detail. Discusses management techniques which motivate
employees better than money. Part of the Ontario
Goals and Goal Setting. (1994, 19 min., Crisp Educational Communications Authority’s
Publications). Shows the value of a common purpose “Understanding Behaviour in Organizations” series.
in improving teamwork and productivity. Explains the
difference between goals, missions and objectives, the Building Commitment and Motivation. (1982, 30
setting of priorities, and creating goals with min., VHS). An employee who is enthused and
measurable results. committed is a valuable asset. This program discusses
how to build this enthusiasm and motivation.
The Best of Motives. (1994, ?? min., Video Arts). This
British comedy/drama illustrates the "six skills of Focusing on the Human Side. (1990, 22 min., VHS)
motivation" that are essential to effective management. Five keys to help supervisors relate more effectively to
The protagonist learns to provide information, their employees are making people feel more motivated
feedback, and recognition, and begins to involve, and satisfied.
empower, and listen to the people he supervises. The Managing Motivation, (1981, 10 min., VHS). The
result is higher production, improved quality, and Expectancy Theory. Shows how providing rewards,
substantial rewards. The first part of this two-part creating expectations of success and maintaining open
program is called Nobody ever tells us. Part two is communication can increase employee motivation and
called Nobody ever asks us. productivity.
Keep Reaching II. (199?, 23 min., VHS). This Giving Positive Feedback. (1985, 6 min., VHS).
program is designed to help employees master 10 steps Demonstrates simple techniques for improving
to help motivate themselves. Based on the “circle of feedback to employees that can increase efficiency and
motivation” theory developed by Joe Batten. Includes productivity.
elements of goal setting.
The Self-motivated Achiever. (1967, 28 min., 16
Goal Setting. (1993, 38 min. on 2 videos, mm.). David C. McClelland discusses the problem of
VideoLearning & More Corp.). This two-part video identifying individuals with a high need for
looks at the differences between people who succeed achievement and how to deal with them within an
and those who fail or don't even try and shows the organization. Of assistance in providing the manager
importance of goal setting techniques. Part one with an understanding of motivating others towards
includes Realizing your potential (19 min.). Part two achievement.
is called Setting and achieving goals (19 min.).
NOTES