Principles of Management

Management and Motivation

Motivation
The force that moves people to initiate, direct, and sustain behaviour and action. The psychological forces acting on an individual that determine:
Directionpossible behaviors the individual could engage in Efforthow hard the individual will work Persistencewhether the individual will keep trying or give up

Explains why people behave the way they do in organizations

The Motivation Process

Need A perceived deficiency. Intrinsic Rewards Internally experienced rewards that result directly from a persons behaviour Extrinsic Rewards Rewards that are provided by others as a consequence of a particular behaviour Intrinsically Motivated Behavior
Behavior that is performed for its own sake.
The source of the motivation that comes from actually engaging in the behavior. The sense of accomplishment and achievement derived from doing the work itself

Extrinsically Motivated Behavior

Behavior that is performed to acquire material or social rewards or to avoid punishment.
The source of the motivation is the consequences of the behavior and not the behavior itself.

The Motivation Framework

Need or deficiency

Search for ways to satisfy need

Choice of behavior to satisfy need

Determination of future needs and search/choice for satisfaction

Evaluation of need satisfaction

Outcomes and Inputs

Outcome
Anything a person gets from a job or an organization
Pay, job security, autonomy, accomplishment

Input
Anything a person contributes to his or her job or organization
Time, effort, skills, knowledge, work behaviors

The Motivation Equation

Theories of Motivation
Need
A requirement for survival and well-being.

Need Theories
Theories of motivation that focus on what needs people are trying to satisfy at work and what outcomes will satisfy those needs. Basic premise is that people are motivated to obtain outcomes at work to satisfy their needs.
Managers must determine what needs a worker wants satisfied and ensure that a person receives the outcomes when performing well.

Theories of motivation that focus on the needs that cause people to act in certain ways. Maslows hierarchy of needs:
Physiological needs Safety needs Social needs Esteem needs Self actualization needs

Theories of Motivation
Expectancy Theory
Motivation will be high when workers believe:
High levels of effort will lead to high performance. High performance will lead to the attainment of desired outcomes.

Motivation is highest when expectancy, instrumentality, and valence levels are high. If one of the values is low, motivation will be low.
Workers do not believe they can perform well. Workers do not believe that performance and rewards are closely linked. Workers do not value the rewards offered for performance.

Expectancy, Instrumentality, and Valence

Expectancy Theory

Alderfers ERG Theory

Needs
HighestHighest-level needs

Description
SelfSelf-development, creative work

Examples
Continually improve skills

Growth

Relatedness

Interpersonal relations, feelings

Good relations, accurate feedback

LowestLowest-level needs

Existence

Food, water, clothing, and shelter

Adequate pay for necessities

After lower level needs satisfied, person seeks higher needs. When unable to satisfy higher needs, lower needs motivation is raised.

Two-Factor Theory
Presented by Fredrik Herzberg A need theory arguing that job dissatisfaction and lack of motivation are derived from factors separate from those that affect satisfaction and motivation. Focuses on outcomes that lead to higher motivation and job satisfaction, and those outcomes that can prevent dissatisfaction.
Motivator needs relate to the nature of the work itself autonomy, responsibility, interesting work. Hygiene needs are related to the physical and psychological context of the workcomfortable work environment, pay, job security.
Unsatisfied hygiene needs create dissatisfaction; satisfaction of hygiene needs does not lead to motivation or job satisfaction.

McClellands Acquired-Needs Theory

A need theory suggesting that needs are acquired or learned through life and that some people are more oriented to certain needs than to other needs. Need for Achievement
A strong need to perform challenging tasks well and meet personal standards for excellence

Need for Affiliation

A concern for good interpersonal relations, being liked, and getting along

Need for Power

A desire to control or influence others

Equity Theory
Suggested by J. Stacy Adams A process theory suggesting that people are motivated to seek equitable treatment compared with others in similar situations. Focuses on peoples perceptions of the fairness (or lack of fairness) of their work outcomes in proportion to their work inputs.
A relative outcome to input ratio comparison to oneself or to another person (referent) perceived as similar to oneself. Equity exists when a person perceives that their outcome/input ratio to be equal to the referents ratio.
If the referent receives more outcomes, they should also give more inputs to achieve equity.

Equity Theory
Inequity exists when workers outcome/input ratio is not equal to referent.
Underpayment inequity: ratio is less than the referent.
Workers feel they are not getting the outcomes they should for their inputs.

Overpayment inequity: ratio is higher than the referent.

Workers feel they are getting more outcomes than they should for their inputs.

Restoring Equity: Inequity creates tension in workers causing them to attempt to restore equity.
In underpayment, workers may reduce input levels to correct (rebalance) the ratio or seek a raise. In overpayment, workers may change the referent person and readjust their ratio perception. If inequity persists, workers will often choose to leave the organization.

Goal Setting Theory

Focuses on identifying the types of goals that are effective in producing high levels of motivation and explaining why goals have these effects. Considers how managers can ensure that workers focus their inputs in the direction of high performance and the achievement of organizational goals. Goal
What a person is trying to accomplish.

Characteristics of Motivating Goals

Specific and not vague in providing direction Difficult but not impossible to attain Accepted and committed to by workers Feedback on goal attainment is important.

Goals point out what is important to the firm.

Workers should be encouraged to develop action plans to attain goals.

Goal Setting Theory

Goal difficulty

Goal acceptance

Organizational support

Intrinsic Rewards

Goal-Directed Effort

Performance

Satisfaction

Goal specificity

Goal commitment

Individual abilities and traits

Extrinsic Rewards

Operant Conditioning Theory

Operant Conditioning
People learn to perform behaviors that lead to desired consequences and learn not to perform behaviors that lead to undesired consequences. Linking specific behaviors to the attainment of specific outcomes can motivate high performance and prevent behaviors that detract from organizational effectiveness.

Positive Reinforcement
Getting desired outcomes for performing needed work behaviors
Positive reinforcers: Pay, praises, or promotions

Negative Reinforcement
Eliminating undesired outcomes once the desired behavior occurs
Negative reinforcers: criticisms, pay cuts, suspension

Operant Conditioning Theory

Extinction
Curtailing the performance of a dysfunctional behavior by eliminating whatever is reinforcing it.
Behavior is not rewarded and over time, the worker stops performing it.

Punishment
Administering an undesired/negative consequence to immediately stop a dysfunctional behavior.
Manager administers an undesired consequence to worker (verbal reprimand, demotion, pay cut).

Organizational Behaviour Modification

The systematic application of operant conditioning techniques to organizationally functional behaviors and discourage dysfunctional behaviors. Improves productivity, attendance, punctuality and other behaviors that are specific, objective and countable.

Steps in Organizational Behavior Modification

Social Learning Theory

A theory that takes into account how learning and motivation are influenced by peoples thoughts and beliefs and their observations of other peoples behavior. Vicarious Learning (Observational Learning)
Learning that occurs when a learner is motivated to perform a behavior by watching another person perform and be rewarded.
People are motivated to imitate models who are highly competent, expert, receive attractive reinforcers, and are friendly or approachable.

Social Learning Theory

Self-Reinforcement
Any desired or attractive outcome or award that a person can give himself or herself for good performance.
The self-management of behavior

Self-efficacy
A persons belief about his or her ability to perform a behavior successfully.
Influences motivation both when managers provide reinforcement and when workers themselves provide it.

Pay and Motivation

Pay as a Motivator
Expectancy: Instrumentality, the association between performance and outcomes, must be high for motivation to be high. Need Theory: pay is used to satisfy many needs. Equity Theory: pay is given in relation to inputs. Goal Setting Theory: pay is linked to attainment of goals. Learning Theory: outcomes (pay), is distributed upon performance of functional behaviors.

Merit Pay and Performance

Merit Pay Plan
A compensation plan that bases pay on based on individual, group and/or organization performance. Individual plan: when individual performance (sales) can accurately measured. Group plan: when group that works closely together is measured and rewarded as a group. Organization plan: when group or individual outcomes not easily measured.

Piece-rate Pay
Employees pay is based on the number of units that the employee produces.

Commission Pay
Employees pay is based on a percentage of sales that the employee makes.

Organization-based Merit Plans

Scanlon planfocuses on reduced expenses or cutting costs Profit sharingemployees receive a share of an organizations profits

Gainsharing
The Scanlon Plan is the oldest and most widely used type of gainsharing plan. It's based on the historical ratio of labour cost to sales value of production. And, because it rewards labour savings, it is most appropriate for companies that have a "high touch labour" content. The Rucker Plan is based on the premise that the ratio of labour costs to production value (actual net sales plus or minus inventory changes, minus outside purchased materials and services) is historically stable in the manufacturing industry. This principle became the underlying precept of the Rucker Plan, which tracks the value added to a product as a measure of productivity. Because this plan utilizes a multicost formula, it's most appropriate for organizations that want to improve other variables, such as scrap reduction or energy consumption, in addition to labour. Improshare measures changes in the relationship between outputs and the time (input) required to produce them. This plan is minimally affected by changes in sales volume, technology and capital equipment, product mix, or price and wage increases. It's the easiest of the gainsharing plans to understand and install. Custom plans are used to customize components of a gainsharing plan to support a unique aspect of an organization's environment. Typically, these plans modify either the "textbook descriptions" of the bonus formula or the employee- involvement system.