Note: Slides Adapted from Source

Warren Buffet

1) Warren bought his first share at age 11 and he now regrets that he started too late!

2) He bought a small farm at age 14 with savings from delivering newspapers.

3) He still lives in the same small 3 bedroom house in mid-town Omaha, that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.

4) He drives his own car everywhere and does not have a driver or security people around him.

5) He never travels by private jet, although he owns the world's largest private jet company.

6) His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis.

7) Warren Buffet has given his CEO's only two rules.

Rule number 1: Do not lose any of your share holder's money.

Rule number 2: Do not forget rule number 1.

8) He does not socialize with the high society crowd. His past time after he gets home is to make himself some pop corn and watch television.

9) Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.

10) Warren Buffet does not carry a cell phone, nor has a computer on his desk.

11) His advice to young people: Stay away from credit cards and invest in yourself

Motivation

Any influence that triggers, directs or maintains behavior

Processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal.

Common Characteristics

Motivation is typified as an

individual phenomenon

Motivation is usually

described as intentional

Motivation is multi-faceted

The purpose is to predict

behavior

Why study motivation?

Improve productivity and efficiency

Retain talents in the organization

Improve allocation of resources

Social and moral responsibility

Content vs Process Motivation Theories

Content theories explain why people have different needs at

different times

Process theories describe the processes through which needs

are translated into behavior

Alderfer’sERG Theory

Maslow’sNeed Hierarchy

Content Theories of Motivation

Self-Actualization

EsteemEsteem

BelongingnessBelongingness

SafetySafety

PhysiologicalPhysiological

Growth

RelatednessRelatedness

ExistenceExistence

Herzberg’sTheory

Motivators

HygienesHygienes

Need forAchievement

Need forNeed forPowerPower

Need forNeed forAffiliationAffiliation

McClelland’sLearned Needs

Practical Implications

People have different needs at different times

Offer employees a choice of rewards -- a flexible reward system

Do not rely too heavily on financial rewards they mainly address lower level needs

1. Maslow’s Hierarchy

Each individual has needs, or feelings of deficiency that drive their behavior

Once a need is satisfied, then it is no longer motivating

Needs are in a hierarchy that an individual moves up as they satisfy levels of needs

Maslow’s Hierarchy

Self-Actualization

Esteem

Affiliation

Security

Physiological

2. Alderfer’s ERG

Consolidates Maslow’s hierarchy into 3 categories

Existence-physiological and security

Relatedness-affiliation

Growth-esteem and self-actualization

ERG Model of Motivation

Frustration-Regression Satisfaction-Progression

Growth Needs

Relatedness Needs

Existence Needs

Frustration-Regression

Differs from Maslow’s Hierarchy

When unable to satisfy upper level needs, the individual will revert to satisfying lower level needs

Interesting point from research....growth stimulates growth

3. McClelland’s Learned Needs Needs are acquired through interaction with

environment

Not a hierarchy, but degrees of each type of need or motive

Types of Needs

N Ach-motive to meet some standard of excellence or to compete

N Aff-motive to develop and maintain close and meaningful relationships

N Pow-desire to influence and control others and the environment

4. Herzberg’s Two Factor Theory Some variable prevent job dissatisfaction and some

variables produce motivation Hygiene factors-basic needs that will prevent

dissatisfaction light, temperature, pay, parking

Motivators when present cause high levels of motivation interesting work, advancement, growth, etc.

Herzberg’s Two Factor Theory

High High MotivationMotivation

HighHighHygienesHygienes

LowLow HighHighMotivatorsMotivators

LowLow

Low MotivationLow Motivation

DissatisfactionDissatisfaction

Low DissatisfactionLow Dissatisfaction

Process Theories

Reinforcement Theory

Expectancy

Equity

Goal Setting

1. Reinforcement Theory

Behaviors are functions of consequences that they produce

If a behavior is followed by a pleasant experience it will be repeated

In order to change behaviors the consequences must be changed

Types of Reinforcement

Positive Reinforcement:

Rewards

Types of Reinforcement

Punishment

Application of a negative outcome

Types of Reinforcement

Removal of negative outcomes when behavior is performed

Types of Reinforcement

Extinction

Absence of reinforcement (removal of positive reinforcement)

Types of Rewards

Extrinsic-external rewards such as money,

fringe benefits, job security

Intrinsic-internal satisfaction outcomes from

doing work

Satisfaction-employee’s attitude about work

situations

2. Expectancy Theory

Combines goal setting and reinforcement

theories

Three questions drive motivation With effort can I perform?

With performance, will I be rewarded?

Do I value the rewards?

Two Factors

a. The strength of his preference for a

certain outcome

b. His expectation that that outcome will in fact result from a certain behavior.

Formula

Expectation(that doing x will

result in Y)

xValence

(strength of preference for

outcome Y)

Valence(strength of

preference for outcome Y)

Force or strength of motivation

to do X=

3. Equity Theory

Individuals try to find a balance between

their inputs and outputs relative to a referent

other

However, a referent other is not always

present

Results of Inequity

Equity-I am being treated fairly

Under-rewarded-will look to increase rewards,

or decrease inputs to match rewards

Over-rewarded-will change referent to match

cognitions or increase inputs

Leaving and distortion

4. Goal Setting Theory

Assignment of specific, results oriented,

moderately difficult goals, combined with

adequate feedback will provide motivation to

work

Employee participation in goal setting

Receive rewards

Provide competencies necessary for

achievement

HighHigh

Tas

k P

erfo

rman

ceT

ask

Per

form

ance

LowLow ModerateModerate ChallengingChallenging ImpossibleImpossible

Area ofArea ofOptimalOptimal

GoalGoalDifficultyDifficulty

Effect of Goal Difficulty on Performance

Goal Difficulty

Social Character and

Personality Dimensions

Maccoby’s Social Character Type Theory

Types Dominant Values

Description

Expert Mastery, control, autonomy

You approach your work as an expert. Whatever your job, you want to provide high quality work and to exercise your skill and competence

Helper Caring for people, relatedness, sociability

You approach your work as a helper. You want to help people

Defender Dignity, power, self-esteem, protection

You approach your work as a defender. You want to defend against those who do not respect the law, who do harm, or who undermine the values essential to a good organization.

Innovator Competition, glory, creating, experimenting

You approach your work as an innovator who knows how to play the game of business. You want to win by making the organization more successful

Self-developer Balancing mastery and play, knowledge and fun

You approach your work as the means to a self-fulfilling life. You want your work to further your own development.

New Generation’s Work Needs Clear management commitments on

responsibilities and rewards

Opportunities for expression, challenge and

development

Teamwork combined with individual growth

Fair and meaningful rewards

Reasons, information, to be included, to know why

Big Five

Trait Motivation

Openness Seek out the unfamiliar and look for complexity

Conscientiousness Achievement through social conformity

Extraversion Change, variety in lives, challenge and are easily bored

Agreeableness Sociable behavior and helping others

Neuroticism May motivate individual toward success in work situation

End