Leading People & Organizations

Motivation – September 16, 2019

Texas Evening MBA – Fall 2019

Dr. Stephanie Murphy
 Case Discussion
The Ritz-Carlton Hotel Company

1. What is Ritz-Carlton's business strategy?

2. How is quality defined/measured by Ritz Carlton's customers? How is quality

defined/measured within Ritz-Carlton?

3. What does the Ritz-Carlton do to ensure that employees can deliver on all these
service problems?

4. How can service organizations meet the challenges of maintaining service quality and
consistency while balancing human capital needs/desires?
 1- Never or almost never true of you

What Motivates You? 2- Sometimes true of you

3- Often true of you
4- Always or almost always true of you

1. I am not that concerned about what other people think of me.

2. I prefer having someone set clear goals for me in my work.
3. The more difficult the problem, the more I enjoy trying to solve it.
4. I am keenly aware of the goals I have for getting increased compensation and rewards.
5. I want my work to provide me with opportunities for increasing my knowledge and skills.
6. To me, success means doing better than other people.
7. I prefer to figure things out for myself.
8. No matter what the outcome of a project, I am satisfied if I feel I gained a new experience.
9. I enjoy relatively simple, straightforward tasks.
10. I am keenly aware of the monetary goals I have for myself.
11. Curiosity is the driving force behind much of what I do.
12. I'm less concerned with what work I do than what I get for it.
13. I enjoy tackling problems that are completely new to me.
14. I prefer work I know I can do well over work that stretches my abilities.
15. I'm concerned about how other people are going to react to my ideas.
 1- Never or almost never true of you

What Motivates You? 2- Sometimes true of you

3- Often true of you
4- Always or almost always true of you

16. I seldom think about compensation and rewards.

17. I'm more comfortable when I get to set my own goals.
18. I believe there is no point in doing a good job if nobody else knows about it.
19. I am strongly motivated by the amount of money I can earn.
20. It is important for me to be able to do what I most enjoy.
21. I prefer working on projects with clearly specified procedures.
22. As long as I can do what I enjoy, I'm not that concerned about exactly what
compensation or rewards I can earn.
23. I enjoy doing work that is so absorbing that I forget about everything else.
24. I am strongly motivated by the recognition I can earn from other people.
25. I have to feel that I'm earning something for what I do.
26. I enjoy trying to solve complex problems.
27. It is important for me to have an outlet for self-expression.
28. I want to find out how good I really can be at my work.
29. I want other people to find out how good I really can be at my work.
30. What matters most to me is enjoying what I do.
 1- Never or almost never true of you

What Motivates You? 2- Sometimes true of you

3- Often true of you
4- Always or almost always true of you

Intrinsic = Enjoyment + Challenge

7, 8, 17, 20, 23 3, 5, 9, 11, 13
27, 28, 30 14, 26

Extrinsic = Outwards + Compensation

1, 2, 6, 12, 15, 4, 10, 16, 19,
18, 21, 24, 25, 22
29
Source: Amabile, T. M, Hill, K. G., Hennessey, B. A., & Tighe, E. M. (1994). The work preference inventory: Assessing intrinsic and extrinsic motivational
orientations. Journal of Personality and Social Psychology, 66, 956, Table 1.
 Motivation

Motivation: the desire to achieve a goal or a certain

performance level, leading to goal-directed behavior

Intrinsic Motivation Extrinsic Motivation

motivation caused by motivation caused by
positive feelings the desire to attain
associated with doing specific outcomes
well on a task/job
Theories of Motivation: Needs Theory
Needs-based Theories of Motivation
Motivation- Hierarchy of
Hygiene Theory Needs
(Herzberg) (Maslow)

Acquired Needs
ERG Theory
Theory
(Alderfer)
(McClelland)
Theories of Motivation: Needs Theory

Motivation-Hygiene Theory (Herzberg)

 Theories of Motivation: Needs Theory

Abraham Maslow’s Hierarchy of Needs

General Examples Organizational Examples

Self-fulfillment Self-actualization Challenging Job

Status Esteem Job Title

Work relations
Friendship Belonging
Stability Benefits; job security
Safety

Shelter Physiological Wages

Based on needs satisfaction

 Theories of Motivation: Needs Theory

ERG Theory (Aldefer)

Organizational Examples
Self-actualization Challenging Job
Growth
Esteem Job Title

Relatedness Belonging Work relations

Benefits; job security

Safety
Existence
Physiological Wages

Based on needs satisfaction

Theories of Motivation: Needs Theory
Acquired Need Theory (McClelland)
Theories of Motivation: Process Models

Process Models of Motivation

Equity Expectancy Reinforcement

Theory Theory Theory
 Theories of Motivation: Process Models

Equity Theory

Person Comparison to Others

Outcomes Outcomes
Equity =
Inputs Inputs
Negative Outcomes Outcomes
<
Inequity Inputs Inputs
Positive Outcomes Outcomes
>
Inequity Inputs Inputs
 Theories of Motivation: Process Models

Equity Theory: Strategies for Resolution of Inequity

• Alter your outcomes

• Alter your inputs
• Alter the comparison other’s outcomes
• Alter the comparison other’s inputs
• Change who is used as a comparison other
• Rationalize the inequity
• Leave the organizational situation
Theories of Motivation: Process Models

Expectancy Theory
Theories of Motivation: Process Models

Expectancy Theory
Ways to influence expectancy, instrumentality, and valence
Theories of Motivation: Process Models

Reinforcement Theory
 Theories of Motivation: Process Models

Goal-Setting Theory

• Practical
• Significantly improves performance
• Rated most important by OB scholars
• Pros: Energizes, provides direction,
challenges, helps think outside the box
• Cons: learning decreases, adaptability
declines, single-mindedness develops,
ethical problems increase
Theories of Motivation: Process Models

Justice Theory

Distributive justice refers to the degree to which

the outcomes received from the organization are
perceived to be fair.
Procedural justice refers to the degree to which fair
decision-making procedures are used to arrive at a
decision.
Interactional justice refers to the degree to which
people are treated with respect, kindness, and
dignity in interpersonal interactions.
 Case Discussion
A Zero Wage Increase Again?
1. What outcomes does Mark seem to want to achieve by addressing wages/rewards?

2. What outcomes might be expected in the following two scenarios: (a) Mark uses the
process improvement savings to give a three percent wage increase to all employees;
(b) Mark uses the money currently available in the budget to give raises to Aaron,
Simon, and Wesley only.

3. As a consultant to Mark, would you advise him to give a raise to all, to none, or to the
deserving minority? Why? How would you mitigate against possible repercussions?

4. What reward system would you design to improve the behavior of employees like
Anne, Marie, and Dougie.
Ten Practical Tips to Effectively Shape Job Behavior

1) Accommodate the process of behavioral change.

2) Define new behavior patterns specifically.
3) Give individuals feedback on their performance.
4) Reinforce behavior as quickly as possible.
5) Use powerful reinforcement.
6) Use a continuous reinforcement schedule (for new behaviors)
7) Use a variable reinforcement schedule for maintenance
8) Motivate right behavior (i.e. Reward teamwork -- not competition).
9) Make all rewards contingent on performance.
10)Never take good performance for granted.
 Motivating Employees Through Job Design

▪ Job Design Changing the content and/or process of a specific

job to increase job satisfaction and performance
▪ Job Enlargement putting more variety into a job – Horizontal
Loading
▪ Job Rotation moving employees from one specialized job to
another
▪ Job Enrichment adding more responsibility and decision
authority to a job – Vertical Loading
Lincoln Electric
SAS: The Original Happiness Machine
 Battle of the Incentives

Effective motivation systems can be very different, but will often have
key conceptual similarities
1. Culture of Trust
2. Open Communication
3. Respect from fellow employees
4. Transparency to career-paths
5. Freedom on the hours they work
6. Programmers get to “own” the work they produce as long as they are employees of the firm.
7. Components of compensation system reinforce one another
8. Compensation system has clear links to company strategy
9. Strong influences from founders/leaders
Both Lincoln and SAS are successful because they have clear links between the types of
incentives used and their strategic goals for production/performance.
 Battle of the Incentives

Myths about Pay

1. Labor rates and labor costs are the same thing
2. You can lower labor costs by cutting labor rates
3. Labor costs are a significant proportion of total costs
4. Low labor costs are a potent competitive strategy
5. Individual incentive pay improves performance
6. People work for money primarily
 Key Takeaways

• Money is powerful, but must match overall strategy of the

company
• The various components of incentive should reinforce one
another and be consistent
• Trust between management and employees is essential