Chapter 16

Motivating

Employees

Presentation NotesGroup 6

Group Members

Khurram Raheel Akbar

Yasir Mehmood

Hammad Naeem

Noor Alam Khan

Wajahat

PPT slides of this chapter is also available 0346-9405559

MOTIVATING EMPLOYEES

The process by which persons' efforts are energized, directed and sustained

towards attaining goals.

Motivating and rewarding employees is one of the most important, and one of the

challenging activity that managers do. Effective managers who want their

employees are motivated and to tailor their motivational practices to satisfy the

needs and wants of those employees.

Generally speaking: Motivation involves many efforts exerted towards a goal.

Key elements are important to this definition (energy, direction and persistence).

a) The energy: is a measure of intensity, that how motivated employee puts

more effort and work hard.

Quality of the effort also lies under intensity.

High levels of efforts are unless without proper direction that helps

organization in achieving its goals.

b. A direction: that guides organization and its employees towards achieving

its motives in the best ways (Best utilization of resources with minimum waste,

which leads to high level of productivity).

c. persistence Dimension: prolong and sustain forth efforts to achieve those

goals.

Motivating high level of employee is an important organizational concern and

managers keep looking for answers. For instance, a recent Gallup poll found that

large majority of US employees –some 73%-are not engaged with their work. As the

researchers stated, “These employees are essentially checked out. They are sleep

walking through their work day, putting time, but not energy or passion into

their work”

It is no wonder then that both practicing managers and academic researchers want to

understand and explain employee motivation.

Motivation Process

– “the willingness to exert high levels of effort to reach organizational goals, conditioned by the effort’s ability to satisfy some individual needs.

• effort - a measure of intensity or drive• goals - effort should be directed toward, and consistent with,

organizational goals• needs - motivation is a need-satisfying process

Conclusion:

Motivation is a important as energy or passion in professional work of

employees, so it is better to passionate, guide and prolong motivation instead of

sleepwalking through their working and putting time of the employees in their jobs.

In this chapter we are going to first look at early motivation theories and then

several contemporary theories. We will finish by looking at some current motivation

issues and some practical suggestion, manager can use in motivating employees.

Early theories of Motivation

We are being with three early theories of motivation, that, although questionable in

term of validity, are probably the most widely known approaches to employee

motivation These theories are HERBERG'S two factor theory, MCGREGOR'S

theories X and Y, and MASLOW'S theory of needs.

Although more valid explanations of motivation have been developed, you should

know these early theories because of following two reasons.

1. They represent the foundation from which contemporary motivation theories

were developed

2. Practicing managers continue to use these theories to explain employee

motivation.

1. MASLOW'S HIERARCHY OF NEEDS THEORY

The first motivation theory we are going to look at address employee motivation.

The best known theory of motivation is probably ABRHAM MASLOW'S

HIERARCHY OF NEEDS THEORY. Maslow was a psychologist who proposed

that with every person is a hierarchy of five needs.

physiological Needs: A person's needs for food, drink shelter, physical

satisfactions (Marriage, physical etc)

Safety Needs : A person's needs for Security and protection from physical

and emotional harm, as well as assurance that physical need will continue to

be met.

Social Needs: A person's needs for affection (love), belongingness

(relationship), acceptance (social needs) and friendship.

Esteem needs : A persons' needs for internal factors like self respect,

autonomy (Freedom) and achievements (set goals). And external esteemed

factors such as, status, recognition, and attention.

Self actualization needs : A persons' needs to become what he or she is

capable of becoming (potential and self-sufficient)

Maslow's Hierarchy of needs.

HOW DOES MASLOW'S HIERARCHY OF NEEDS THEORY EXPLAIN

MOTIVATION

The theory proposed the followings

1. No need is ever fully satisfied.

2. substantially satisfied needs no longer motivates and individual to satisfy that

needs therefore, if you want to motivate some one, you need to understand

what need level that person is hierarchy and focus on satisfying needs at or

above that level.

CONCLUSION

Managers who used MASLOW'S HIERARCHY OF NEEDS THEORY in

motivating employees attempting to change their organization and management

practices, so that employees need could be satisfied. In addition Maslow separated

the five needs into higher and lower levels

– LOWER-ORDER NEEDS - largely satisfied external needs like: physiological - food, drink, shelter, sexual satisfaction

safety - security and protection from physical and emotional harm

Assurance that physiological needs will be satisfied

– HIGHER-ORDER NEEDS - largely satisfied internal needs like:

social - affection, belongingness, acceptance

esteem - internal factors like self-respect, autonomy external factors like

status, recognition, attention

self-actualization - achieving one’s potential each level in hierarchy

must be satisfied before the next is activated

Once a need is substantially satisfied it no longer motivates behavior theory received

wide recognition

Maslows' need theory received with recognition during 1960s and 70s. The reasons

were that it is logical and easy to comprehend.

2. MC GREGOR'S TEORY X AND THEORY Y

Douglas McGregor best known for proposing two rests of assumptions about human

needs. Theory X and Theory Y. very simply “

Theory X: is a negative view of people that assumes workers have little ambition

dislike work, want avoid responsibility, they are lazy, and need to be closely

controlled to work effectively.

Theory X is a negative view of people.

assumed that lower-order needs dominated

Theory Y:

Theory Y is a positive view that assumes that workers can exercise self-direction, accept and actually seek out responsibility, and consider work to be a natural activity, assumed that higher-order needs dominated, no evidence that either set of assumptions is valid

McGregor's Analysis about Motivation.

The answer is best expressed in the frame work presented by Maslow. Theory X

assumed that lower-order needs dominated indirect while in theory Y assumption

that higher older needs dominated.

According to him Theory Y was more valid than those of Theory X. So

employee's responsibility and accepting motivation.

3. HERZBERG'S TWO FACTOR THEORY

Frederick Herzberg’s two factor theory (also called motivation hygiene theory)

proposes that intrinsic factors are related to job satisfaction and motivation whereas

extrinsic factors are associated with job dissatisfaction.

Herzberg believe that individual attitude towards work determine

success or failure. He ask people for detail descriptions of situations in which they

felt exceptionally good or bad about their jobs. These finding are shown in given

table

Certain characteristics were related to job satisfaction (Factors on the left side of the

table), and other to job dissatisfaction (Factors on the right side of the table) the

extrinsic factors that create job dissatisfaction were called hygiene factors. When

these factors are adequate, people won’t dissatisfy, but they won’t be satisfied

(motivated) either. To motivate people on their jobs, Herzberg suggested

emphasizing motivators, the intrinsic factors that increase jobs satisfaction. Certain

factors were related to job satisfaction, therefore intrinsic termed as

“MOTIVATOR" while on the other hand job dissatisfaction factors were extrinsic

called as HYGIENE factors.

Motivators

Motivators are those factors that increase job satisfaction and motivation.

Hygiene Factors

While hygiene factors are those which eliminate job dissatisfaction but

do not motivate.

Contemporary theories of motivation

The theories and approaches we’re going to look at in this section

represent current explanations of employee motivation. Although these theories may

not be as well known as those we just discussed, they are supported by research.

What are these contemporary motivation approaches? We’re going to look at six:

three needs theory, goal-setting theory, reinforcement theory, designing motivating

jobs, equity theory, and expectancy theory. These theories are evaluated after

research and are listed as under.

Three need theory

Goal-Setting theory

Reinforcement theory

Designing motivating jobs

Equity theory

Expectancy theory

1. Three Need Theory

“The motivation theory that says three acquired (not innate) needs which

are achievement, power, and affiliation, are major motives in work.”

David McClelland and others have proposed the three-need theory. "The

motivation theory that says there acquired (not innate (achievement, power,

affiliation)) needs are major motives in work."

These three needs include the following.

a) Need for achievement (nAch)

b) Need for Power (nPow)

c) Need for affiliation (nAff)

a) Need for achievement (nAch)

It is most researched theory which states that "The derive to excel to

achieve in relation to set of standards, and to strive to succeed"

This means that people have a desire to do something better or more

efficiency than it was done before.

b) Need For Power (nPow)

it has not been researched as extensively as (nAch). The theory states "The need to

make others behave in a way that they would not behave otherwise".

Any way it is closely related to managerial success. The best managers

tend to be high in the (nPow).

c) Need for Affiliation (nAff)

It has not been also reached extensively but as (nPow) it states "the desire for

friendly and close interpersonal relationship."

It is also closely related to managerial success and the best managers tend

to be low in (nAff)

People with a high need for achievement are striving for personal achievement rather than for the trappings and rewards for success. They have a desire to do something better or more efficiently than it’s been before. They prefer jobs that offer personal responsibility for finding solutions to problems, in which they can receive rapid and unambiguous feedback on their performance to tell whether they are improving, and in which they can set moderately challenging goals. They are motivated by and prefer the challenge at working at a problem and accepting personal responsibility for success or failure. Also a high need to achieve doesn’t necessarily lead to being a good manager. The reason high achievers don’t necessarily make good managers is probably because high achievers focus on their own accomplishments while good managers emphasize helping others accomplish their goals.The other two needs, however, we do know that the needs for affiliation and power are closely related to managerial success. The best managers tend to be high in the need for power and low in the need for affiliation.

How do you determine your levels of these needs? All three are typically measured using a projective test (known as the Thematic Apperception Test or TAT), in which respondents react to a set of pictures. Trained interpreters then determine the individual’s levels of nAch, nPow, and nAff from the stories written.

2) Goal Setting Theory

The position that specific goals increase performance and those difficult goals, when

accepted, result in higher performance than do easy goals.

There is substantial research support for goal-setting theory, which says that specific goals increase performance and that difficult goals, when accepted, results in higher performance than do easy goals. What does goal-setting theory tell us?

First, intention to work toward a goal is a major source of job motivation. Studies on goal setting have demonstrated that specific and challenging goals are superior motivating forces. Specific hard goals produce a higher level of output than does the generalized goals of “do your best”. Specificity of the goal itself acts as an internal stimulus.

It is a contradiction that goal-setting theory says that motivation is maximized by difficult goals, whereas achievement motivation by moderately challenging goals? First, goal setting theory deals with people in general. Given that no more than 10 to 20 percent of North Americans are high achievers. Second, conclusion of goal-setting theory applies to those who accept and are committed to the goals. Difficult goals will lead to higher performance only if they are accepted.

We know that people will do better if they get feedback on how well they’re progressing toward their goals because feedback helps identify discrepancies between what they have done and what they want to do; that is, feedback acts to guide behavior. But all feedback isn’t equally effective. Self-generated feedback, where the employee is able to monitor his or her own progress, has shown to be amore powerful motivator than externally generated feedback.

We just assume that difficult and specific goals always lead to higher performance? In addition to feedback, three other factors have been found to influence the goals-performance relationship. These are:

1. Goal commitment:Goal-Setting theory presupposes that an individual is committed to the goal

that is, is determined not to decrease or abandon the goal. Commitment is more likely to occur when goals are made public, when the individual has an internal locus of control, and when the goals are self-set rather then assigned.2. Adequate self-efficacy:

Self-efficacy refers to an individual’s belief that he or she is capable of performing the task. The higher your self-efficacy, the more confidence you have in your ability to succeed in a task. So, in difficult situations, we find that people with low self-efficacy are likely to reduce their effort or give up altogether, whereas those with high self-efficacy will try harder to master the challenge.3. National culture:

Goal-setting theory is culture bound. It’s well adapted to countries like the United States and Canada because its main idea aligns responsibility well with North American cultures.

3. Reinforcement Theory In contrast to goal-setting theory, reinforcement theory says that behavior is a function of its consequences. Although goal-setting theory proposes that an individual’s purposes direct his or her behavior, reinforcement theory argues that behavior is externally caused. What controls behavior are reinforcers; that is, consequences immediately following a behavior that increase the probability that the behavior will be repeated.

Reinforcement theory ignores factors such as goals, expectations, and needs. Instead, it focuses solely on what happens to a person when he or she does something.

Chapter 14 showed how managers use reinforcers to shape behavior. But the concept of reinforcement is also widely believed to explain motivation. People will

most likely engage in desired behaviors if they are rewarded for doing so. These rewards are most effective if they immediately follow a desired behavior; behavior that isn’t rewarded or is punished, is less likely to be repeated.

Using reinforcement theory, manages can influence employees’ behavior by using positive reinforcers to reinforce actions they deem desirable.

4. Designing motivating jobs.

Because managers are primarily interested in how to motivate individuals on the job, we need to look at ways to design motivation jobs. If we look closely at what an organization is and how it works, we will find that it’s composed of thousands of tasks. These tasks are, in turn, aggregated into jobs. We use the term job design to refer to the way tasks are combined to form complete jobs. What are some ways that managers can design motivating jobs?Job enlargement:

The horizontal expansion of a job by increasing jobs scope. The number of different tasks required in a job and the frequency with which these jobs are repeated. For example, a dental hygienist’s job could be enlarged so that in addition to cleaning teeth, he are she is pulling patients files, refilling them when finished, and sanitizing and storing instruments. This type of job design option is called job enlargement.Job enrichment:

The vertical expansion of a job by adding, planning, and evaluating responsibilities. Job enrichment increases job depth, which is the degree of control employees have over there work. In others words, employees are empowered to assume some of the tasks typically done by there managers. Thus the tasks are an enriched job allow workers to do complete activity with increased freedom, independence, and responsibility. These tasks also provide feedback so that individuals can assess and correct there own performance. For example, in an enriched job, a dental hygienist, in addition to cleaning teeth could schedule appointments (planning) and follow up with clients (evaluating).Job Characteristics Model:

A framework for analyzing and designing jobs that identifies five primary job characteristics, their interrelationships, and their impacts on outcome.

According to JCM, any job can be described in terms of five core dimensions, defined as follows.

Skill Variety, the degree to which a job requires a variety of activities so that an employee can use a number of different skills and talents.

Task Identity, the degree to which a job requires completion of a whole and identifiable piece of work.

Task Significance, the degree to which a job has a substantial impact on the lives or work of other people.

Autonomy, the degree to which a job provides substantial freedom, independence, and discretion to the individual in scheduling the work and determining the procedures to be used in carrying it out.

Feedback, the degree to which carrying out work activities required by a job results in the individual’s obtaining direct and clear information about the effectiveness of his or her performance.

The JCM as shown in the figure notice how the first three dimensions that are skill variety, task identity and task significance, combined to create meaningful work. In other words, if these three characteristics exist in a job, we can predict that the person will view his or her job as being important, valuable, and worthwhile. Notice, too, that jobs that possesses autonomy gives the job holder a feeling of personal responsibility for the results and that is a job provides feedback, the employee will know how effectively he or she is performing.

The JCM suggest that employees are likely to be motivated when they learn (knowledge of results through feedback) that they personally (experience responsibility through autonomy of work) perform well on tasks that they care about (experienced meaningfulness through skill variety, task identity or task significance). The more the job is designed around these three dimensions, the greater the employees motivation, performance and satisfaction and the lower his or her absenteeism and likelihood of resigning.

Combine Tasks, managers should put fragmented tasks back together to

form a new, larger module of work (job enlargement) to increase variety

and task identity.

Create Natural Work Units, managers should design tasks that form an

identifiable and meaningful hold to increase employee “Ownership” of

the work and encourage employees to view there work as meaningful

and important rather than as irrelevant and boring.

Establish Client Relationship, the client is the external or internal user

of the product or service that the employee works on. Whenever

possible, managers should establish direct relationships between workers

and there clients to increase skill variety, autonomy and feedback.

Expand Jobs Vertically, vertical expansion (job enrichment) gives

employees responsibilities and controls that work formerly reserved for

managers. It partially closes the gap between the “Doing” and

“Controlling” aspects of the jobs and increases employee autonomy.

Open Feedback Channels, feedback lets employees know how well they are

performing their jobs and whether their performance is improving, deteriorating, or

remaining constant. Ideally, employees should receive performance feedback directly

they do their jobs rather than from managers on an occasional basis.

5) Equity Theory

The theory that an employee compares his or her jobs input-outcome ratios with that

of relevant others and then corrects any inequity.

The term equity is related to the concept of fairness and equitable treatment

compared with others who behave in similar ways. There’s considerable evidence that

employees compare themselves to together and that inequities influence the degree of

effort that employees exert. See table:

If an employee perceives his ratio to be equitable in comparison to those of

relevant others (referents: the persons, systems, or selves against which individuals

compare themselves to assess equity). In other words, he perceives that his situation is

fare-then justice prevails. However, if the ratio is inequitable, he views himself as

under rewarded or over rewarded. When inequities occur, employees attempt to do

something about it. What will employees do when they perceive an inequity?

Equity theory possess that employees might:

Distort either there own or others inputs or outcomes.

Behave in some way to induce others to change their inputs or outcomes.

Behave in some way to change there own inputs or outcomes.

Choose a different comparison person.

Or quit their job.

A review of the research consistently confirms the equity thesis: employee motivation

is influenced significantly by relative reward as well as by absolute reward. Whenever

employees perceive inequity, they will act to correct the situation. The result might be

lower or higher productivity improved or reduced quality of output, increase

absenteeism, or voluntary resignation.

The choice of reference is related to the information available about the

referent as well as to their perceived relevant. Historically, equity theory focused on:

Distributive Justice:

Perceived fairness of the amount and allocation of reward among individuals.

Procedural Justice:

Perceived fairness of the process used to determine the distribution of the

rewards.

6) Expectancy Theory

The theory that an individual intends to act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. It includes three variables or relationships (see figure).

Expectancy or Effort-Performance Linkage is the probability perceived by the individual that exerting a given amount of effort will lead to a certain level of performance.

Instrumentality or Performance-Reward Linkage is the degree to which the individual believes that performing at a particular level is instrumental in attaining a desired outcome.

Valence or Attractiveness of Reward is the importance that the individual places on the potential outcome or reward that can be achieved on the job. Valence considers both the goals and needs of the individual.

The key to expectancy theory is understanding an individual’s goals and linkage between effort and performance, between performance and reward and finally between rewards and individual goal satisfaction. It emphasizes payoffs or rewards. As a result, we have to believe that then rewards in organization are offering align with what the individual wants. Expectancy theory recognizes that there is non universal principle for explaining what motivates individuals and thus stresses that managers understand why employees view certain outcomes as attractive or unattractive. After all, we want to reward individuals with those things they value positively. Also, expectancy theory emphasizes expected behaviors.

Integrating Contemporary Theories of Motivation

We have presented six contemporary motivation theories. You might be tempted to

view them independently, but doing so would be a mistake. Many of the ideas

underlying the theories are complementary, and you'll better understand how to

motivate people if you see how the theories fit together.

In this model we are going to learn how these theories can be integrated to motivate

our employee.

The model that integrates much of what we know about motivation. Its basic

foundation is the expectancy model. Let's work through this model, starting on the

left.

Let start from left

The individual effort box has an arrow leading into it that from individual goals. It

means that these are individual goals for their achievement individual put their effort.

This is consisting with goal setting theory that assumes that specific goal increase

performance and that difficult goals, when accepted higher performance when

accepted result in higher performance than do easy goals.

1. Goal setting theory.

In goal setting theory it is assumed that specific and challenging goals increase

employee’s performance and output.

So in this model we start from left

The individual performance box has an arrow that flows into it from

individual goals. (what will be done)

Individual goal direct behaviour. (how it will be done)

2. Expectancy Theory

The theory that assumes that an individual tends to act in a certain way that is based

on strength of the expectation.

– By following the expectancy theory, there is strong relationship between efforts

and performance, performance and reward, and rewards and satisfaction of

personal goals.

– These relationships also, affect by certain factors

Individual's ability to perform the job Job Design (interesting) Objectives performance evaluation system also increases employee motivation

if it is fair. The performance reward relationship will be strong if the individual perceives

that the reward is performance based rather than seniority, favoritism or some other biased criterion.

The final link in expectancy theory is the reward-goal relationship. It means the when there is proper rewards the employees will be motivated well and again there will be good individual goals.

3. Dominant Need

Need theories come into play at this point. When the individual receives rewards for his high performance if satisfied his dominant needs will consistent with his individual goals.

A clear look at the model also shows that it consider Maslow's hierarchy of needs theories, Equity theories and JCM.

4. Need Theory

In need theory it is assumed that nAch, nAf, and nPow are major motives in work. The high achiever is not motivated by organizational assessment of his or her performance or organizational rewards. They jump from efforts to individual goals for those with a high nAch.

5. Reinforcement Theory.

Individual performance is reinforcing by organizational rewards.

6. Equity Theory.

The rewards should be equal on the basis of performance. (as per the efforts)

7. when there will be

Exhibit 16.11 Integrating Contemporary Theories of Motivation

Current issues in motivation Understanding and predicting employee motivation is one of the most popular area in

management research.

In previous chapter Mr. Hammad and Mr. Yasir introduced several contemporary

theories of motivation.

However employee motivation is influenced by significant workplace issues.

What are these issues?

1. Cross Cultural Challenges

In today's business environment managers automatically assume that

motivational programs that work in one geographic area can also work others.

Most current motivation theories are developed in US and are about Americans. In

America there is individualistic society and quality of life is a cultural characteristics.

For example both goal setting and expectancy theories emphasized goals

accomplishment and individual thoughts.

Now come and look at the motivational theories to see if there is any cross-cultural

transferability.

Uncertainty avoidance of some cultures inverts Maslow’s needs

hierarchy.

Maslow's theory assumes that can be arranged in a hierarchy of importance

In the hierarchy he argues he argues that people need start with physiological level

and then move progressively up in order.

It is also applicable in Pakistan.

It is applicable in American like culture, countries like Japan, mexico where

uncertainty avoidance characteristics are strong, security needs would be on the top of

the hierarchy.

2. The need for achievement is lacking in other cultures.

Pakistan vs America

3. Collectivist cultural view rewards as "Entitlement" to be distributed based on

individual needs not on individual performance.

M&Cs change their rewards system region to region.

4. Cross Cultural Consistencies

Beside cultural differences there are also some cultural consistencies like interesting

work widely desired in all cultures, as is growth, achievement and responsibility

achievement and responsibility.

The recent example of cultural consistencies is that Maslow's theories are now

applying in Japan.

And Theory X and Y are also applied by Habib Bank Ltd in Pakistan.

Motivating Unique Group of Workers

It is never easy to motivate employees! Employees come in organization with

different needs, personalities, skills, abilities, interests, and aptitude. They have

different expectations of their employers and different views are what they think their

employer has a right to except of them.

For example

Some workers get more satisfaction out of their personal interests, they

consider only salary and other monetary reward and not interested in others.

While some workers get more motivation with high level of efforts.

Given these differences how managers can effectively do motivating jobs in today's

work place.

Managers need to understand motivational requirements of different groups.

These groups are.

Diverse Workforce

Professionals

Contingent workers

Low skilled, minimum wage employees.

Now let seed each of the group motivators.

1. Motivating Diverse workforce

Today's organizations are diverse human resource and they are diverse in their desires

and needs. Managers use different variable programs, that are.

a. Through Flexibility

Men desire more autonomy than women

Women desire learning opportunities, flexible work schedules and good

interpersonal relation.

So there should be diverse array of rewards in order to motivate employees' such

employees.

b. Flexible Work /Job Schedules

By recognizing different employee needs organizations have developed different

flexible work arrangements.

c. Flexitime

A scheduling system in which employees are required to work a certain

number of hours per week, but are free with in limits, to vary the hour of weeks.

d. Job sharing

A practice of two or more people split a full time job.

e. Telecommuting

A job approach where employees work at home and linked to workplace using

computer links.

2. Motivating Professionals

There are professionals in organization. For example software engineers, consultants

etc. They vary from general employees in the term of motivation fro general

employees. It is now becoming issue to motivate professionals.

Professionals have different characteristics that separate them fro other employees.

They

Have strong and long term commitment to their field of expertise.

They are loyal to their profession not to the employer.

Have the need to regularly update their knowledge.

Don't define work from 8:00 am to 5:00 pm

Money and promotions are not in their priority.

2. Motivators for professionals

To motivate the professionals managers should

Give them challenging jobs

Provide organizational support of their work.

Update their knowledge regularly.

Don't ignore money and other rewards as well.

3. Motivating Contingent Workers

Organizations have also part time, on contract workers, called contingent workers.

Contingent workers don't have the security or stability that permanent employees

have, and they don't identify with the organization or display the commitment that

other employees do.

Motivators for contingent workers.

There should be opportunity to become permanent for contingent workers.

Provide them training.

Equity in compensation and benefits.

4. Motivating Low-skilled minimum wage employees.

Employee recognition program. (EPR)

Provision of sincere praise for the right reason.

3. Designing appropriate reward programEmployees reward programs play important role in motivating appropriate employee

behavior. There are different programs used by companies to reward their employees.

i. Open Book Management

Open book management is an approach in which organization's financial statements

are shared with all employees. Some 3500 companies use this approach.

The goal of open book management is get employees to think like an owner by

seeing the impact their decisions and actions have on financial results.

ii. Employee Recognition program

Personal attention and expressing interest, approval, and appropriate for a job well

done.

In a survey of wide variety of employees asked what they considered the most

powerful motivator, majority answer was RECOGNITION and RECOGNITION.

iii. 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

iv. 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.

v. Recommendations for Designing Stock Options

From Theory to Practice

Suggestions for Motivating Employees

The following remedial steps can be effective in the theory and practices of

motivating employees.

Recognize Individual Differences – almost every contemporary theory

recognizes that all employees are not identical.

They have different needs, attitudes, personality etc.

Match People to Jobs – employees are carefully matched with the jobs.

i.e High achiever should have jobs that allow them to participate in setting

challenging goals, involve autonomy and feedback

Use Goals – managers should assure that employees have hard specific

goals and feedback on how well they are doing in achieving those goals

Recognize individualdifferences

Ensure that goals

are perceived as

attainable

Check the system

for equity

Individualizerewards

Link rewardsto

performance

Suggestionsfor

MotivatingEmployees

Use goalsDon’t ignore

money

Match peopleto jobs

Ensure that Goals are perceived as Attainable – actually goals are

attainable, employees who see goals as unattainable will reduce their

effort because they will be thinking “Why bother”.

Individualize rewards – every employee have different needs, what

act as a reinforcer for one may not for other. So, manager should use

their knowledge of employee differences to individualize the reward they

control such as pay, promotion, autonomy etc.

Link Rewards to Performance – managers need to make reward

associated with performance.

Check the System for Equity – employee should perceive the

rewards or outcomes are equal to the inputs. Simply seperated rewards

for each job.

Use Recognition – recognize the power of recognition. Using

recognition is a low cost means to reward employees.

Show Care & Concern of Your Employees – employee perform

better for managers who care about them.

Don’t Ignore Money – Creating interesting jobs and providing

opportunities for participation, remember that money is the major reason

why most people work.

Chapter Summary

What is Motivation?

The process by which a person’s efforts are energized, directed, and sustained toward

attaining a goal.

Energy – intensity or drive

Direction – effort channeled in a way that benefits the organization

Persistence – sustained effort to achieve goals

What are the Early Theories of Motivation?

• Maslow’s hierarchy of Needs

Five needs: physiological, safety, social, esteem, & self-actualization.

Person moves up hierarchy as needs are substantially satisfied.

Substantially satisfied need no longer motivates.

• McGregor’s Theory X and Y

Theory X – assumes people don’t like to work, won’t seek out

responsibility, and have to be threatened & coerced to put forth effort.

Theory Y – assumes people like to work, seek out responsibility, and

will exercise self-direction.

• Herzberg’s two-factor Theory

Factors associated with job satisfaction (motivators) were intrinsic.

Factors associated with job dissatisfaction (hygiene) were extrinsic

What are the Contemporary Theories of Motivation?

• Three-Needs Theory – three acquired (not innate) needs.

Need for achievement,

Need for affiliation, and

Need for power.

Goal-setting Theory – specific goals increases performance and difficult

goals, when accepted, result in higher performance than do easy goals.

Intension to work toward a goal is a major source of job

motivation

Specific hard goals produce higher levels of output than

generalized goals

Goal setting (difficult goals) versus need for achievement

(moderately challenging goals)

Participation is probably preferable to assigning goals, but not

always

Feedback guides and motivates behavior – especially self-

generated feedback

Contingencies in goal setting: goal commitment, self-generated

feedback

• Reinforcement Theory – behavior is a function of its consequences

Use positive reinforcers to reinforce desirable behaviors

Ignore undesirable behavior rather than punish it

• Designing Motivating Jobs

Describe the job characteristics, model as a way to design

motivating jobs.

Job Enlargement – horizontally expanding job scope (variety of

task required in a job)

Job Enrichment – vertically expanding job depth (degree of

control)

Jon Characteristic Model – identify 5 primary job dimensions

to motivating jobs (skill variety, task identity, task significance,

autonomy & feedback

• Equity theory - focus on how employees compare there inputs-outcome

ratios to relevant others’ (referents) input-outcome

Perception of inequality will cause distortion of employees, or

other’s input or outcomes

Induce others to change there inputs or outcomes

Change there own input or outcomes

• Expectancy Theory – an individual tends to act in a certain way based on

the expectation that the act will be followed by given outcome and the

attractiveness of that outcomes to the individual.

Effort-performance linkage

Performance-Reward linkage

Attractiveness of Rewards

Current Motivational Issues

Cross-Cultural Challenges

Motivating Unique Groups of Workers

• Motivating a Diverse Workforce

• Motivating Professionals

• Motivating Contingent Workers

• Motivating Low-Skilled, Minimum-Wage Employees

Designing appropriate rewards programs

• Open-Book Management

• Employee Recognition Programs

• Pay-for-performance

• Stock Option Programs

THE END