griffin ch10

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ManagingEmployee

Motivation andPerformance

Chapter 10


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Copyright Houghton Mifflin Company. All rights reserved. 10 | 2

Learning Objectives

After studying this chapter, you should be able to:1. Characterize the nature of motivation.2. Identify and describe the major content perspectives

on motivation.

3. Identify and describe the major process perspectiveson motivation.

4. Describe reinforcement perspectives on motivation.5. Identify and describe popular motivational strategies.

6. Describe the role of organizational reward systems inmotivation.


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Chapter Outline

The Nature of Motivation Content Perspectives on Motivation

The Need Hierarchy Approach The Two-Factor Theory Individual Human Needs

Process Perspectives on Motivation Expectancy Theory

Equity Theory Goal-Setting Theory


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Chapter Outline (contd)

Reinforcement Perspectives on Motivation Kinds of Reinforcement in Organizations Providing Reinforcement in Organizations

Popular Motivational Strategies Empowerment and Participation Alternative Forms of Work Arrangements

Using Reward Systems to Motivate Performance

Merit Reward Systems Incentive Reward Systems Team and Group Incentive Reward Systems Executive Compensation

New Approaches to Performance-based Rewards


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The Nature of Motivation

Motivation The set of forces that cause people to behave in

certain ways. The goal of managers is to maximize desired

behaviors and minimize undesirable behaviors. Determinants of Individual Performance

Motivation The desire to do the job.

Ability The capability to do the job.

Work environment The resources needed to do the job.


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Figure 10.1 The Motivation Framework


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Content Perspectives on Motivation

Content Perspectives Focus on needs and deficiencies of individuals Are approaches to motivation that try to answer the

question, What factors in the workplace motivate

people? Content Perspectives of Motivation

Maslows Hierarchy of Needs Herzbergs Two-Factor Theory

McClellands Achievement, Power, and AffiliationNeeds



The Need HierarchyApproach (Maslow)

People must, in a hierarchical order, satisfy fiveneeds: Physiological needs for basic survival and biological

function.

Security needs for a safe physical and emotionalenvironment.

Belongingness needs for love and affection. Esteem needs for positive self-image/self-respect

and recognition and respect from others. Self-actualization needs for realizing ones potentialfor personal growth and development.



Figure 10.2 MaslowsHierarchy of Needs



The Need Hierarchy Approach

Weaknesses of Maslows Theory Five levels of need are not always present. Ordering or importance of needs is not always the

same.

Cultural differences produce differences in needcategories and hierarchical orderings.



The Two-Factor Theory (Herzberg)

An individuals satisfaction and dissatisfaction isinfluenced by two independent sets of factorsmotivation factors and hygiene factors.

Theory assumes that job satisfaction and jobdissatisfaction are on two distinct continuums: Motivational factors (work content) are on a

continuum that ranges from satisfaction to nosatisfaction.

Hygiene factors (work environment) are on aseparate continuum that ranges from dissatisfactionto no dissatisfaction.



Figure 10.3 The Two-Factor Theory of Motivation



The Two-Factor Theory (Herzberg) (contd)

Motivation becomes a two-stage process: Ensuring that the hygiene factors are not deficient

and not blocking motivation. Providing employees the opportunity to experience

increase motivational factors through the use of jobenrichment and the redesign of jobs. Criticisms of the Two-Factor Theory

Interview findings are subject to different

explanations. Sample population was not representative. Subsequent research has not upheld theory.



Process Perspectives on Motivation

Process Perspectives Focus on why people choose certain behavioral

options to satisfy their needs and how they evaluatetheir satisfaction after they have attained their goals.

Process Perspectives of Motivation Expectancy Theory Porter-Lawler Extension of Expectancy Theory Equity Theory

Goal-Setting Theory



Expectancy Theory

Motivation depends on how much we wantsomething and how likely we are to get it.

Theory assumes that: Behavior is determined by a combination of personal

and environmental forces. People make decisions about their own behavior in

organizations. Different people have different types of needs,

desires, and goals. People choose among alternatives of behaviors in

selecting one that that leads to a desired outcome.



Expectancy Theory (contd)

Model of Motivation Suggests that motivation leads to effort when

combined with ability and environmental factors;effort results in performance; performance, in turn,

leads to various outcomes that have value (valence)to employees.


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Elements of Expectancy Theory

Effort-to-Performance Expectancy The individuals perception of the probability that

effort will lead to a high level of performance. Performance-to-Outcome Expectancy

The individuals perception of the probability thatperformance will lead to a specific outcome or consequence or reward in an organizational setting.



Elements of Expectancy Theory (contd)

Outcomes (Consequences) and Valences Valence is an index of how much an individual values

a particular outcome. It is also the attractiveness of the outcome to the individual.

Attractive outcomes have positive valences andunattractive outcomes have negative valences. Outcomes to which an individual is indifferent have

zero valences.



Elements of Expectancy Theory (contd)

For individual motivated behavior (effort) tooccur: Effort-to-performance expectancy (the belief that

effort will lead to high performance) must be greater

than zero. Performance-to-outcome expectancy (performance

will result in certain outcomes) must be greater thanzero.

The sum of the valences must be greater than zerothe outcome/reward must have value to theindividual.



Porter-Lawler Extensionof Expectancy Theory

Assumptions: If performance in an organization results in equitable

and fair rewards, people will be more satisfied. High performance can lead to rewards and high

satisfaction. Types of Rewards:

Extrinsic rewards Outcomes set and awarded by external parties

(e.g., pay and promotions). Intrinsic rewards

Outcomes that are internal to the individual (e.g.,self-esteem and feelings of accomplishment).


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Figure 10.5 Porter-Lawler Extension of Expectancy Theory


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Equity Theory

Assumptions: People are motivated to seek social equity in the

rewards they receive for performance. Equity is an individuals belief that the treatment he or

she receives should be fair relative to the treatmentreceived by others. Individuals view the value of rewards (outcomes) and

inputs of effort as ratios and make subjectivecomparisons of themselves to other people:

Outcomes (self)

Inputs (self)=

Outcomes (other)

Inputs (other)

Outcomes (self)

Inputs (self)=

Outcomes (other)

Inputs (other)


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Equity Theory (contd)

Conditions of and reactions to equitycomparisons: Feeling equitably rewarded.

Maintain performance and accept comparison asfair estimate.

Feeling under-rewardedtry to reduce inequity. Change inputs by trying harder or slacking off. Change outcomes by demanding a raise.

Distort the ratios by altering perceptions of self or of others.

Leave situation by quitting the job. Change comparisons by choosing another object

person.


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Goal-Setting Theory

Assumptions Behavior is a result of conscious

goals and intentions. Setting goals influences the

behavior of people inorganizations. Characteristics of Goals

Goal difficulty

Extent to which a goal is challengingand requires effort. People work harder to achieve more

difficult goals. Goals should be difficult but

attainable.


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Figure 10.6 The ExpandedGoal-Setting Theory of Motivation


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Reinforcement Perspectiveson Motivation

Reinforcement Theory Focuses on the role of rewards as they cause

behavior to change or remain the same over time. Assumes that:

Behavior that results in rewarding consequencesis likely to be repeated, whereas behavior thatresults in punishing consequences is less likely tobe repeated.


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Kinds of Reinforcementin Organizations

Positive Reinforcement Strengthens behavior with rewards or positive outcomes after a

desired behavior is performed. Avoidance

Strengthens behavior by avoiding unpleasant consequences thatwould result if the behavior is not performed.

Punishment Weakens undesired behavior by using negative outcomes or

unpleasant consequences when the behavior is performed.

Extinction Weakens undesired behavior by simply ignoring or not reinforcingthat behavior.


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Providing Reinforcementin Organizations

Schedules for Applying Reinforcement

Fixed interval Reinforcement applied at fixed timeintervals, regardless of behavior.

Variable interval Reinforcement applied at variable timeintervals.

Fixed ratio Reinforcement applied after a fixednumber of behaviors, regardless of time.

Variable ratio Reinforcement applied after a variablenumber of behaviors, regardless of time.


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Providing Reinforcementin Organizations (contd)

Behavior Modification (OB Mod) A method for applying the basic elements of

reinforcement theory in an organizational setting. Specific behaviors are tied to specific forms of

reinforcement.

SpecificBehavior

SpecificReinforcement


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Popular Motivational Strategies

Empowerment and Participation Empowerment

The process of enabling workers to set their ownwork goals, make decisions, and solve problems

within their sphere of influence. Participation

The process of giving employees a voice inmaking decisions about their work.

Areas of Participation for Employees Making decisions about their jobs. Making decisions about administrative matters. Participating in decision making about broader

issues of product quality.


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New Forms of Working Arrangements

Variable Work Schedules

Compressed workschedule

Working a full forty-hour week in lessthan the traditional five days.

Nine-eighty schedule Working one full week (five days)and one compressed week (four days), yielding one off-work dayevery other week.

Flexible work schedules

(flextime)

Allowing employees to select, within

broad parameters, the hours they willwork.

Job sharing When two part-time employeesshare one full-time job.


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Using Reward Systemsto Motivate Performance

Organizational Reward System The formal and informal mechanisms by which

employee performance is defined, evaluated, andrewarded.

Performance-based rewards have the greatestimpact on motivation and higher-levels of performance.

Rewards align employee self-interests with theorganizations interests.

Rewards foster behaviors desired byorganizations.


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Effects of OrganizationalRewards on Employees

Attitudes Behaviors Motivation Satisfaction is influenced

by how much is receivedand how much the personthinks should have beenreceived.

Satisfaction is affected bycomparison with others.

The rewards of others areoften misperceived.

Overall job satisfaction is

affected by employeesatisfaction with intrinsicand extrinsic rewards.

Extrinsic rewards affectemployee satisfaction andreduce turnover.

Rewards influence

patterns of attendanceand absenteeism.

Employees tend to workharder for rewards basedon performance.

Employees will workharder when performancewill be measured.

Employees will work

harder if performance isclosely followed byrewards.


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Merit Reward Systems

Merit Pay Concept Pay is awarded to employees on the basis of the

relative value of their contributions to theorganization.

Merit Pay Plans Compensation plans that formally base at least some

portion of compensation on merit. Provide employees with annual salary increases

depending on their overall job performance.


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Incentive Reward Systems

Monetary Incentives Piece-rate incentive plan

A reward system wherein the organization paysan employee a certain amount of money for every

unit she or he produces. Sales commissions plan The percentage of an employees sales to

customers that is paid to an employee as areward for selling the firms products or services.

Nonmonetary Incentives Immediate and one-time rewards

Days off, additional paid vacation time, andspecial perks.


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Team and GroupIncentive Reward Systems

Gainsharing Sharing the cost savings that result from productivity

improvements. Scanlon Plan

Similar to gainsharing, but the distribution of gains istilted toward the employees and is spread across theorganization.

Profit Sharing Plans

Provide an organization-wide incentive in the form of an annual bonus to all employees based oncorporate profits.


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Executive Compensation

Standard Forms of Executive Compensation Base salary is the guaranteed portion of an

executives compensation. Bonuses paid for performance of the organization.

Special Forms of Executive Compensation Stock options allow executives to purchase company

stock at a predetermined price. If the current stock price is above the

predetermined price, the executive profits fromexercising the option. If the current stock price is below the

predetermined price, the option has no value.


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Criticisms of Executive Compensation

Levels of executive compensation are perceivedas inordinately large.

Compensation levels for executives do notreflect the performance of their firms.

The earnings gap between the typical employeeand the CEO is enormous.

Executive stock options represent potentiallyhuge liabilities for companies, yet do not appear on their financial statements as such.


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