Chapter 13Motivating and

Rewarding Employee Performance

McGraw-Hill/IrwinPrinciples of Management

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Learning Objectives

1. Diagram and summarize the MARS model.

2. Describe four-drive theory and explain how these drives influence motivation and behavior.

3. Describe the characteristics of effective goal setting and feedback.

4. Diagram the expectancy theory model and discuss its practical implications for motivating employees.

5. Discuss the advantages and disadvantages of the four reward objectives.

6. Discuss ways to measure employee performance more accurately.

7. Summarize the equity theory model, including how people try to reduce feelings of inequity.

8. Diagram the job characteristics model of job design.

9. Define empowerment and identify strategies to support empowerment.

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Employee Engagement

• Employees emotional and rational motivation- Their perceived ability to perform the job- Their clear understanding of the organization’s vision- Their belief that they have been given the resources to

get the job done

• It encompasses the four main factors that contribute to employee performance

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Motivation: True or False?

• I can motivate people• Fear is a damn good motivator• I know what motivates me, so I know what

motivates my employees• Increased job satisfaction means increased job

performance

Source: Managementhelp.org

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MARS Model

Ability

Employee behavior and

results

Motivation (effort)

*Direction *Intensity

*Persistence

Role Perceptions

Situational factors

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Ability & Role Perceptions

• Ability – consists of both the natural aptitudes and learned capabilities required to successfully complete a task

- Important factor of employee development

• Role perceptions – they understand the specifics, importance, and preferred behaviors of the tasks. Ways to improve is through job description and ongoing coaching

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Managing Employee Motivation

1. Drives and needs

Employee behavior and

results

Motivation (effort)

*Direction *Intensity

*Persistence

2. Goals, expectations, and feedback

3. Extrinsic and intrinsic

rewards

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Maslow’s Needs Hierarchy

Self-actualization

Esteem

Belongingness

Safety

Physiological

Challenging tasks, freedom to try new ideas

Job status, recognition, mastering the job

Human interaction, being accepted as a team member

Job security, employee benefits, safe workplace

Work hours, nourishments, air quality, temperature

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Called in Sick?

0

510

1520

2530

3540

4550

Need a break Illness in family Errands

Workers who took a sick daywhen not sick

Source: USA Today Snapshots

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Question

Money is a powerful motivator. If an organization wants to be motivate employees, all its managers need to do is give them more money. Do you agree? Explain.

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Management Implications of Maslow’s Theory

1. Employees have different needs at different times

2. Employees have several interdependent needs, not just one dominant need

3. At some point, most employees want to achieve their full potential (self-actualization)

4. Employee needs are influenced by values and norms

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Learned Needs Theory

Need for Achievement

(nAch)

Need for Affiliation

(nAff)

Need for Power (nPow)

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Four-Drive Theory Motivation

Drive to acquire

Drive to bond

Drive to learn

Drive to defend

Mental skill set resolves competing

drive demands

Goal-directing choice and effort

Social norms

Personal values

Past experience

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Goal Setting

• The process of motivating employees and clarifying their role perceptions by establishing performance objectives

• A goal is a desirable future state that an organization or person attempts to realize

• Goal setting improves role perceptions and consequently clarifies the direction of employee effort

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Question

Raj, a new manager at Telcom International, in his first meeting at the company told his employees that the sales goals were significantly enhanced for this year and he expects all of his employees to buckle down and work hard to meet the goals. Raj’s instructions violates which of the aspects of effective goal-setting?

a. Precise and measurableb. Equitablec. Expectancy-orientedd. Timely

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Expectancy Theory of Motivation

Effort

Outcome 1 + or -

Outcome 1 + or -

Outcome 1 + or -

Performance

E-to-P expectancy (probability that

effort will result in a specific level of

performance)

P-to-O expectancy (probability that performance will result in specific

outcomes)

Outcome valence (the outcome’s positive or negative value to the

employee)

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Rewards

• Extrinsic Rewards – anything received from another person that the recipient values and is contingent on his or her behavior or results

- Paychecks, performance bonuses, praise, and other forms of recognition

• Intrinsic Rewards – a positive emotional experience resulting directly and naturally from the individual’s behavior or results

- Learning a new task, feeling of accomplishment, etc.

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Motivation Through Extrinsic Rewards

Membership & seniority-based rewards

Nonfinancial rewards

Job status-based rewards Improving performance appraisals

Competency-based rewards Rewards employees equitably

Performance-based rewards

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How to Accurately Evaluate Employee Performance?

1. Use more objective measures of performance

2. Use anchored performance appraisal instruments

3. Use multiple sources of performance information

4. Use performance appraisal training

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Best Practices at Nucor

• Pay for performance – On average two-thirds of a Nucor steelworker’s pay is based on a production bonus

• Listen to the frontline – According to the Execs, almost all of the best ideas come from the factory floor

• Push-down authority – minimizing layers of management

• Protect your culture –compatibility of culture with its egalitarian philosophy and team spirit is a big focus of its acquisition research

Source: Business Week, May 1, 2006

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Correcting Inequity Feelings

• Change Inputs

• Change Outcomes

• Change Perceptions

• Leave the Situation

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Job Characteristics Model

Critical psychological states

Meaningfulness

Responsibility

Knowledge of results

Individual differences *Knowledge and skill *Context satisfaction

*Growth need strength

Core job characteristics

Skill variety Task identity

Task significance

Autonomy

Feedback from job

Outcomes

Work motivation

Growth satisfaction

General Satisfaction

Work effectiveness

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Core Job Characteristics

• Skill variety – the use of different skills and talents to complete a variety of work activities

• Task identity – the degree to which a job requires completion of a whole or identifiable piece of work

• Task significance – the degree to which the job affects the organization and society

• Autonomy – provide freedom, independence, and discretion in scheduling work and procedures

• Job feedback – the degree to which employees can tell how well they are doing

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Job enrichment

• A job design practice in which employees are given more responsibility for scheduling, coordinating, and planning their own work

- Combine highly interdependent tasks into one job

- Establishing client relationships- Give employees more autonomy over

their work

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Loyal vs. Trapped?

28

29

30

31

32

33

34

Loyal High risk Trapped

Workers

Source: CIO, October 1, 2003

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Empowerment

• A psychological concept represented by four dimensions:

- Self-determination – they have freedom, interdependence, and discretion over their work activities

- Meaning – they care about their work and believe that what they do is important

- Competence – their ability to perform the work well and have a capability to grow with new challenges

- Impact – Active participants in the organization; that is, their decisions and actions influence the company’s success

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Inspiring Employees

• Don’t ask for worker input – use it.• Tell your people you care about them.• Show employees what they are learning• Support people when they make a mistake.• Set clear goals and celebrate accomplishments.

Source: Business Week, May 1, 2006