Chapter 10 MOTIVATION

Chapter 10
Motivating and Rewarding Employees
Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Fifth Canadian Edition Copyright 2008 Pearson Education Canada
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LEARNING OUTLINE
Follow this Learning Outline as you read and study this chapter
What Is Motivation?
Define motivation Explain motivation as a need-satisfying process
Early Theories of Motivation

Describe the five levels in Maslows hierarchy and how Maslows hierarchy can be used in motivational efforts Discuss how Theory X and Theory Y managers approach motivation Describe Herzbergs motivation-hygiene theory Explain Herzbergs views of satisfaction and dissatisfaction
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LEARNING OUTLINE (contd)

Contemporary Theories of Motivation

Describe the job characteristics model as a way to design motivating jobs Discuss the motivation implications of equity theory Explain the three key variables in expectancy theory and their role in motivation
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LEARNING OUTLINE (contd)

Current Issues in Motivation

Discuss the need for flexibility with a diverse workforce Discuss the challenges managers face in motivating individuals from diverse cultures, minimum wage employees, and professional and technical employees Describe the role of money, employee recognition, pay-forperformance, and stock option programs
Describe how flexible work, job sharing, and telecommuting are part of work-life programs
Suggestions For Motivating Employees

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What Is Motivation?
Motivation The processes that account for an individuals willingness to exert high levels of effort to reach organizational goals, conditioned by the efforts ability to satisfy some individual need
Effort: a measure of intensity or drive Direction: toward organizational goals Need: personalized reason to exert effort Motivation works best when individual needs are compatible with organizational goals
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Motivation
Defined as the psychological forces within a person that determine:
1) direction of behaviour in an organization; 2) the effort or how hard people work; 3) the persistence displayed in meeting goals.

Intrinsic Motivation: behaviour performed for its own sake.
Motivation comes from performing the work.
Extrinsic Motivation: behaviour performed to acquire rewards.
Motivation source is the consequence of an action.
Outcomes and Inputs
Regardless of the source of motivation, people seek outcomes.
Outcome: anything a person gets from a job.

Examples include pay, autonomy, accomplishment.
Organizations hire workers to obtain inputs:
Input: anything a person contributes to their job.

Examples include skills, knowledge, work behaviour.
Managers thus use outcomes to motivate workers to provide inputs.
The Motivation Equation
The Motivation Process (Exhibit 10-1)

Unsatisfied Need
Search Behaviour Reduction of Tension Satisfied Need
Tension
Drives

McGregors Theory X and Theory Y
Theory X
Employees have little ambition, dislike work, avoid responsibility, and require close supervision
Theory Y
Employees can exercise self-direction, desire responsibility, and like to work
Motivation is maximized by participative decision making, interesting jobs, and good group relations
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Little Ambition
Theory X Employees
Dislike Work
Avoid Responsibility
Self-Directed
Theory Y Employees
Enjoy Work
Accept Responsibility
Theory X 1. People are lazy.
Theory Y 1. People are energetic.
2. People lack ambition and dislike responsibility.

3. People are self-centered/ selfish. 4. People resist change. 5. People are gullible and not very bright.
2. People are ambitious and seek responsibility.

3. People can be selfless.
4. People want to contribute to business growth and change.

5. People are intelligent
Figure 11.1: A comparison of McGregors theory X and theory Y Assumptions about Human Nature Prepared by Dr. Nguyen Huu Than
Important Theories of Motivation

Needs Theories of Motivation
Maslows Hierarchy of needs
Process Theories of Motivation

Vrooms Expectancy Theory
Herzbergs 2 Factor Theory
Goal Setting Theory
Hackman and Oldhams Job Characteristics Model
Adams Equity Theory
Reinforcement Theory
Needs Theory
People are motivated to obtain outcomes at work to satisfy their needs. A need is a requirement for survival and well being. To motivate a person:
1) Managers must determine what needs worker wants satisfied. 2) Ensure that a person receives the outcomes when performing well.
Several needs theories exist.

Maslows Hierarchy of Needs. Herzbergs Motivator-Hygiene Theory
Early Theories Of Motivation

Hierarchy of needs theory (Maslow)
There is a hierarchy of five human needs; as each need becomes satisfied, the next need becomes dominant. Physiological: food, drink, shelter, sex Safety: physical safety Social: affiliation with others, affection, friendship Esteem: Internal (self-respect, autonomy, and achievement); External (status, recognition, and attention) Self-actualization: personal growth and fulfillment
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Copyright 2005 Prentice Hall, Inc. All rights reserved.

Maslows Hierarchy of Needs Theory Needs were categorized as five levels
Individuals must satisfy lower-order needs before they can satisfy higher order needs Satisfied needs will no longer motivate Motivating a person depends on knowing at what level that person is on the hierarchy
Hierarchy of needs
Lower-order (external): physiological, safety Higher-order (internal): social, esteem, self-actualization
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Exhibit 10.2 Maslows Hierarchy of Needs
SelfActualization
Esteem Social
Safety
Physiological
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Maslows Hierarchy of Needs

Need Level
SelfActualization Esteem
(Adapted)
Description
Realize ones full potential Feel good about oneself Social interaction, love Security, stability Food, water, shelter
Examples
Use abilities to the fullest Promotions & recognition Interpersonal relations, parties
Belongingness
Safety
Job security, health insurance

Basic pay level to buy items
Physiological
Lower level needs must be satisfied before higher needs are addressed.
Herzberg's Motivation-Hygiene Theory

Maslow saw motivation as operating across a single continuum from physiological needs to self-actualization needs. The Herzberg theory proposes that there are in reality two significantly different classes of factors and thus two different continuums. One class, referred to as hygiene factors, operates across a continuum ranging from dissatisfaction to no dissatisfaction.
Early Theories of Motivation (contd)

Herzbergs Motivation-Hygiene Theory
Job satisfaction and job dissatisfaction are created by different factors
Hygiene factors: extrinsic (environmental) factors that create job dissatisfaction Motivators: intrinsic (psychological) factors that create job satisfaction
Attempted to explain why job satisfaction does not result in increased performance
The opposite of satisfaction is not dissatisfaction, but rather no satisfaction
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Herzbergs Motivation-Hygiene Theory
Exhibit 10.3 Herzbergs Motivation-Hygiene Theory

Motivators Achievement Recognition Work Itself Responsibility Advancement Growth Hygiene Factors Supervision Company Policy Relationship with Supervisor Working Conditions Salary Relationship with Peers Personal Life Relationship with Subordinates Status Security Neutral Extremely Dissatisfied
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Extremely Satisfied
Dissatisfaction
No Dissatisfaction
No Job Satisfaction
Job Satisfaction
Hygiene Factors (Needs)
Motivation Factors (Needs)
Environment
Pay Status Security Working conditions Fringe benefits Policies and administration practices Interpersonal relations
The Job
Meaningful and challenging work Recognition for accomplishment Feeling of achievement Increased responsibility Opportunities for growth and advancement The Job itself
Figure 10. 4: Motivation and Hygiene Factors (p. 147)
Exhibit 10.4 Contrasting Views of SatisfactionDissatisfaction

Traditional View Satisfied Herzbergs View Motivators Satisfaction No Satisfaction Hygiene Factors No Dissatisfaction Dissatisfaction Dissatisfied
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Maslows Hierarchy
Self-Actualization Needs
Realizing ones potential growth using creative talents
Herzbergs Motivators
Achievement Work itself Recognition Responsibility Opportunity for Growth and Advancement
Esteem Needs
Achievement recognition and status
Social Needs
Love, belonging, affiliation, acceptance
Herzbergs Hygiene Factors

Interpersonal Relations Company Policies and Administative Practices Working Conditions Supervision Status Job Security Pay Benefits
Safety Needs
Protection against danger, freedom from fear, security
Physiological Needs
Survival needs, air, water, clothing, shelter, and sex
Figure 11.3: Maslow and Herzberg Related (p. 149)
Contemporary Theories Of Motivation

McClellands Theory of Needs
There are three acquired needs that motivate work performance
Need for achievement (nAch) Need for power (nPow) Need for affiliation (nAff)
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The ThreeNeeds Theory

Achievement (aAch) Affiliation (nAff)
Power (nPow)

Three-needs theory (McClelland)
The needs for achievement, power, and affiliation are major motives in work
Need for achievement (nAch): the drive to excel, to achieve in relation to a set of standards, to strive to succeed. Need for power (nPow): The need to make others behave in a way that
they would not have behaved otherwise.

Need for affiliation (nAff): The desire for friendly and close interpersonal relationships.
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Expectancy Theory (Vroom)

A comprehensive theory of motivation that an individual tends to act in a certain way, in the expectation that the act will be followed by given outcome, and according to the attractiveness of that outcome to the individual.
The extent to which individuals are motivated to perform to get a reward of value to them is based on their belief that their performance will result in the reward they want.
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Expectancy Theory (contd)

Emphasizes self interest in the alignment of rewards with employee wants.
Addresses why employees view certain outcomes (rewards) as attractive or unattractive. Emphasizes the connections among expected behaviors, rewards, and organizational goals. Is concerned with individual perceptions and the provision of feedback.
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Expectancy Theory
Individual Effort 1 Individual Performance 2 Organizational Rewards
1. Effort-performance relationship
2. Performance-rewards relationship
3. Attractiveness relationship
Figure 10.10: Simplitied Expectation Theory (289)
Individual Goals
Expectancy Theories of Motivation (pp. 153-154)

Victor Vroom developed an approach to motivation known as expectancy theory that attempts to explain behavior in terms of an individuals goals and choices and the expectations of achieving these goals. It assumes that people can determine which outcomes they prefer and make realistic estimates of the chances of obtaining them. The key concepts of the expectancy theory are that motivation depends on: Expectancy - an individual's perception of the chances or probability that a particular outcome will
occur as a result of certain behavior.
Valence - the value an individual places on a specific outcome. Expectancy theory can be stated mathematically as follows:
Motivation = Expectancy X Valence.
Both factors must be present before a high level of motivation can occur. In other
words, a high expectancy or a high valence alone will not ensure motivation. For
example, if an employee had a low expectancy (perceived little chance) of
receiving a pay increase but placed a high value on money, the employee would
not be highly motivated to work hard to obtain the increase.
P Expectancy
0 Expectancy
Valence What value do I place on the potential outcomes
What is the probability that I can perform at the required level if I try?
What is the probability that my good performance will lead to desired outcomes?
Effort
Performance
Outcomes (e.g., bonus, praise, feelings of accomplishments)
Figure 11.5: Basic Components of Expectancy Theory Source: Kathryn M. Bartol and David C. Martin, Management (New York: McGraw-Hill, Inc.,1994) p. 386.
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Contemporary Theories of Motivation (contd)

Expectancy Theory
Individuals act based on the expectation that a given outcome will follow and whether that outcome is attractive Key to the theory is understanding and managing employee goals and the linkages among and between effort, performance, and rewards
Effort: employee abilities and training/development Performance: valid appraisal systems Rewards (goals): understanding employee needs
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Exhibit 9.8 Simplified Expectancy Model

Individual Effort A Individual Performance B Organizational Rewards C Individual Goals
A = Effort-performance linkage B = Performance-reward linkage C = Attractiveness of reward
9-36
Expectancy Relationships (Linkages)

Effortperformance
The perceived probability that exerting a given amount of effort will lead to performance
Performancereward
The belief that performing at a particular level will lead to the attainment of a desired outcome
Attractiveness
The importance placed on the potential outcome or reward that can be achieved on the job.
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Expectancy Relationships
Expectancy (effort-performance linkage)
The perceived probability that an individuals effort will result in a certain level of performance
Instrumentality
The perception that a particular level of performance will result in attaining a desired outcome (reward)
Valence
The attractiveness/importance of the performance reward (outcome) to the individual
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Exhibit 9.9 Steps to Increasing Motivation

Improving Expectancy Improving Instrumentality Improving Valence
Improve the ability of the individual to perform
Increase the individuals belief that performance will lead to reward
Make sure that the reward is meaningful to the individual
Make sure employees have skills for the task. Provide training. Assign reasonable tasks and goals.
Observe and recognize performance. Deliver rewards as promised. Indicate to employees how previous good performance led to greater rewards.
Ask employees what rewards they value. Give rewards that are valued.
9-39
(contd)
Equity theory (Adams)
Employees perceive what they get from a job situation
(outcomes) in relation to what they put into it (inputs) and then compare their input-outcome ratio with the inputoutcome ratios of relevant others.
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Equity Theory
Proposes that employees perceive what they get from a job situation (outcomes) in relation to what they put in (inputs) and then compare their inputs-outcomes ratio with the inputsoutcomes ratios of relevant others
If the ratios are perceived as equal then a state of equity (fairness) exists If the ratios are perceived as unequal, inequity exists and the person feels under- or over-rewarded When inequities occur, employees will attempt to do something to rebalance the ratios (seek justice)
9-41

Equity Theory (contd)
Employee responses to perceived inequities:
Distort own or others ratios Induce others to change their own inputs or outcomes Change own inputs (increase or decrease efforts) or outcomes (seek greater rewards) Choose a different comparison (referent) other (person, systems, or self) Quit their job
Employees are concerned with both the absolute and relative nature of organizational rewards
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Equity Theory
Perceived Ratio Comparison*
Outcomes A Inputs A Outcomes A Inputs A = < Outcomes B Inputs B Outcomes B Inputs B > Equity
Employees Assessment
Inequity (Under-Rewarded)
Outcomes A
Inputs A
*Where
Outcomes B
Inputs B
Inequity (Over-Rewarded)
A is the employee, and B is a relevant other or referent.
Contemporary Theories Of Motivation:
Equity Theory (contd)

Referent
In equity theory, the other persons, the systems, or the personal experiences against which individuals compare themselves to assess equity. The choice of a particular set of referents is related to the information available about referents as well as to the perceived relevance.
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Exhibit 9.7 Equity Theory

Ratio of Output to Input
Person 1 Inequity, under-rewarded Person 2
Person 1 s Perception
Person 1 Equity Person 2
Person 1 Inequity, over-rewarded Person 2

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Equity Theory
When employees perceive an inequity they may:
Distort either their own or others inputs or outcomes. Behave so as to induce others to change their inputs or outcomes. Behave so as to change their own inputs or outcomes. Choose a different comparison referent. Quit their job.
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Contemporary Theories of Motivation

Behaviour is influence by consequences Reinforcers are consequences that, when given immediately following a behaviour, increases the
probability that the behaviour will be repeated

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Reinforcement theory looks at the relationship between behaviour and its consequences.
Positive Reinforcement: people get desired outcomes when they perform needed work behaviours.
Positive reinforcers: pay raises, promotions.
Negative Reinforcement: manager eliminates undesired outcomes once the desired behaviour occurs.
Worker performs to avoid an undesired outcome (Work harder or you are fired).
In both types of reinforcement, managers must be careful to link the right behaviours by workers to what the organization needs.
Extinction: used when workers are performing behaviour detrimental to the firm.
Manager does not reward the behaviour and over time, the worker will stop performing it.
Punishment: used when the manager does not control the reward the worker receives (perhaps it is outside the job).
Manager administers an undesired consequence to worker (verbal reprimands to pay cuts). Punishment can lead to unexpected side-effects such as resentment, and should be used sparingly.

Job Characteristics Model (JCM)
A framework for designing motivating jobs Five primary job characteristics:
Skill variety: how many skills and talents are needed? Task identity: does the job produce a complete work? Task significance: how important is the job?
Autonomy: how much independence does the jobholder have?

Feedback: do workers know how well they are doing?
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Job Design And Motivation

Job characteristics model (JCM)
Hackman and Oldhams job description model:
The five core job dimensions are skill variety, task identity, task significance, autonomy, and feedback.
Internal rewards are obtained when:

An employee learns (knowledge of results) through (feedback) that he or she personally (experienced responsibility through autonomy of work) has performed well on a task that he or she cares about (experienced meaningfulness through skill variety, task identity, and/or task significance). 1051
Exhibit 9.5 Job Characteristics Model

Core Job Dimensions Critical Psychological States Experienced meaningfulness of the work Personal and Work Outcomes High Internal Work Motivation High-Quality Work Performance High Satisfaction with the Work Low Absenteeism and Turnover
Skill Variety
Task Identity Task Significance
Autonomy
Experienced responsibility for outcomes of the work
Feedback
Knowledge of the actual results of the work activities
Source: J.R. Hackman and J.L. Suttle (eds.). Improving Life at Work (Glenview, IL: Scott, Foresman, 1977). With permission of the authors.
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Core Job Dimensions

Skill variety
The degree to which the job requires a variety of activities so the worker can use a number of different skills and talents
Task identity
The degree to which the job requires completion of a whole and identifiable piece of work
Task significance
The degree to which the job affects the lives or work of other people
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Core Job Dimensions (contd)

Autonomy
The degree to which the job provides freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out
Feedback
The degree to which carrying out the work activities required by the job results in the individuals obtaining direct and clear information about the effectiveness of his or her performance
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Exhibit 9.6 Guidelines for Job Redesign

Suggested Action Combine tasks Form natural work units Establish client relationships Load v ertically Open f eedback channels
Source: J.R. Hackman and J.L. Suttle (eds.). Improving Life at Work (Glenview, IL: Scott, Foresman, 1977). With permission of the authors.
Core Job Dimension Skill v ariety Task identity Task signif icance Autonomy Feedback
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Current Issues in Motivation

Motivating a Diverse Workforce
Motivating a diverse workforce through flexibility:
Men desire more autonomy than do women Women desire learning opportunities, flexible work schedules, and good interpersonal relations Interesting work ranks high in importance to almost all employees
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Motivating a Diverse Workforce

Flexibility
Not everyone sees their job the same way- what motivates me may not motivate you
Recognize differences
People are Different
Accommodate
Cultural Differences
Current Issues in Motivation (contd)

Motivating Minimum-Wage Employees
Employee recognition programs Provision of sincere praise Empowerment
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Motivating Professionals and Technical Workers

Characteristics of professionals:
Strong and long-term commitment to their field of expertise Loyalty is to their profession, not to the employer Have the need to regularly update their knowledge Dont define their workweek as 8:00 am to 5:00 pm Motivated by job challenges and organizational support of their work
Motivating Professional and Technical Employees

New assignments Challenges Autonomy Training and educational opportunities Recognition Simplify non-work life

Designing Effective Rewards Programs The role of money
Money is normally not an employees top priority
Employee recognition programs

Giving personal attention and expressing interest, approval, and appreciation for a job well done
Pay-for-performance
Variable compensation plans that reward employees on the basis of their performance:
Piece rates, wage incentives, profit-sharing, and lump-sum bonuses
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Compensation Alternatives
Broad-banding
Pre-set pay level, based on the degree to which competencies exist and allow an employee to contribute to the organization.
Competency-based compensation
A program that pays and rewards employees on the basis of skills, knowledge, or behaviors they possess
Stock options
A program that allows employees to purchase company stock at a fixed price and profit when company performance increases its stock value.
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Competency-Based Compensation
Skills
Knowledge
Abilities
Behaviour
i.e.: leadership, decision making, problem solving, etc.

Stock option programs
Using financial instruments (in lieu of monetary compensation) that give employees the right to purchase shares of company stock at a set (option) price Options have value if the stock price rises above the option price; they become worthless if the stock price falls below the option price
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Pay-for-Performance
Piece rate
Gainsharing
Wage-incentive
Profit-sharing
Bonuses

Improving Work-Life Balance
Compressed workweek
Longer daily hours, but fewer days
Flexible work hours (flextime)

Specific weekly hours with varying arrival, departure, lunch and break times around certain core hours during which all employees must be present
Job Sharing
Two or more people split a full-time job
Telecommuting
Employees work from home using computer links
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Entrepreneurs and Motivation

Motivation for entrepreneurs is critical
Gradual process Job redesign Delegation
Employee empowerment is key motivational tool
Employee Empowerment: How Entrepreneurs Motivate Employees

Giving employees power by:
Allowing them to complete the whole job. Having employees work together across departments and functions in the organization. Using participative decision making in which employees provide input into decisions. Delegating decisions and duties, turning over the responsibility for carrying them out to employees. Redesigning their jobs so they have discretion over the way they do their work.
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Additional Suggestions for Motivating Employees

_ Recognize individuals differences
_ Match people to jobs _ Use goals and make it attainable _ Use recognition
Further Suggestions for Motivating Employees

_ Individualize rewards
_ Link rewards to performance _ Check the system for equity _ Dont ignore money

Chapter 10 MOTIVATION

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Chapter 10 MOTIVATION

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Chapter 10

Motivating and Rewarding Employees

Early Theories of Motivation

LEARNING OUTLINE (contd)

Contemporary Theories of Motivation

LEARNING OUTLINE (contd)

Current Issues in Motivation

Suggestions For Motivating Employees

Intrinsic Motivation: behaviour performed for its own sake.

Motivation comes from performing the work.

Extrinsic Motivation: behaviour performed to acquire rewards.

Motivation source is the consequence of an action.

Outcomes and Inputs

Regardless of the source of motivation, people seek outcomes.

Outcome: anything a person gets from a job.

Organizations hire workers to obtain inputs:

Input: anything a person contributes to their job.

Managers thus use outcomes to motivate workers to provide inputs.

The Motivation Equation

The Motivation Process (Exhibit 10-1)

Search Behaviour Reduction of Tension Satisfied Need

Early Theories of Motivation

Theory X 1. People are lazy.

Theory Y 1. People are energetic.

2. People lack ambition and dislike responsibility.

2. People are ambitious and seek responsibility.

4. People want to contribute to business growth and change.

Important Theories of Motivation

Process Theories of Motivation

Herzbergs 2 Factor Theory

Goal Setting Theory

Hackman and Oldhams Job Characteristics Model

Adams Equity Theory

Several needs theories exist.

Maslows Hierarchy of Needs. Herzbergs Motivator-Hygiene Theory

Early Theories Of Motivation

Early Theories of Motivation

Exhibit 10.2 Maslows Hierarchy of Needs

Maslows Hierarchy of Needs

Job security, health insurance

Herzberg's Motivation-Hygiene Theory

Early Theories of Motivation (contd)

Herzbergs Motivation-Hygiene Theory

Exhibit 10.3 Herzbergs Motivation-Hygiene Theory

Hygiene Factors (Needs)

Motivation Factors (Needs)

Figure 10. 4: Motivation and Hygiene Factors (p. 147)

Exhibit 10.4 Contrasting Views of SatisfactionDissatisfaction

Herzbergs Hygiene Factors

Figure 11.3: Maslow and Herzberg Related (p. 149)

Contemporary Theories Of Motivation

The ThreeNeeds Theory

Contemporary Theories Of Motivation

they would not have behaved otherwise.

Expectancy Theory (Vroom)

Expectancy Theory (contd)

Expectancy Theories of Motivation (pp. 153-154)

occur as a result of certain behavior.

Motivation = Expectancy X Valence.

Valence What value do I place on the potential outcomes

Outcomes (e.g., bonus, praise, feelings of accomplishments)

Contemporary Theories of Motivation (contd)

Exhibit 9.8 Simplified Expectancy Model

A = Effort-performance linkage B = Performance-reward linkage C = Attractiveness of reward