mno chapter 12 - motivating employees

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Chapter 12: Motivating Employees Motivation: What it is, why is it important People are mainly motivated to fulfill their needs, wants Thus they do what they do What is motivation? Defined as the psychological processes that arouse and direct goal-directed behavior It is mainly inferred from one’s behavior Motivation is the result of multiple personal and contextual factors

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MNO1001 Management and Organisation, NUS Business School


Chapter 12: Motivating EmployeesMotivation: What it is, why is it important People are mainly motivated to fulfill their needs, wants Thus they do what they do

What is motivation? Defined as the psychological processes that arouse and direct goal-directed behavior It is mainly inferred from ones behavior Motivation is the result of multiple personal and contextual factors

Rewards are of 2 types: intrinsic and extrinsic: managers can use both to encourage better work performance


Satisfaction in performing the task itself

The satisfaction, such as feeling of accomplishment, that a person receives from performing the particular task itself

Payoff from pleasing oneself Satisfaction in the payoff from others Payoff, eg money, that a person receives from others for performing a particular task

Why is motivation important? : Motivate people to: 1) Join your organization: Instill talented prospective workers to work for you 2) Stay with your organization: Retain good people 3) Show up for work: Prevent absenteeism and lateness 4) Be engaged while at your organization: Engaged workers produce higher quality work and better customer service 5) Do extra for the organization The 4 major perspectives on motivation: overview

1) Content 2) Process 3) Job design 4) Reinforcement

Content perspectives Also known as need-based perspectives Theories that emphasize the needs that motivate people Needs are defined as physiological or psychological deficiencies that arouse behavior In addition to McGregors theory X/Theory Y, content perspectives include 4 theories: 1) Maslows hierarchy of needs theory 2) Alderfers ERG theory 3) McClellands acquired needs theory 4) Herzbergs 2 factor theoryMaslows hierarchy of needs -Needs are never completely satisfied-Our actions are aimed at fulfilling the deprived needs, the needs that remain unsatisfied at any point in time - From bottom to top:

1) Physiological needs: Food, clothing, shelter, comfort, self-preservation 2) Safety needs: Physical safety and emotional security, so that a person is concerned with avoiding violence and threats 3) Love needs: Look for love, friendship and affection 4) Esteem needs: Self-respect, status, reputation, recognition, self-confidence 5) Self actualization needs: self-fulfillment- the need to develop ones fullest potential, to become the best one is capable of being

Using Maslows theory to motivate employees: -Should try to meet employees level 1 and 2 needs so employees wont be constantly preoccupied with them - Then, give employees a chance to fulfill their high level needs that also advance the goals of the organization

Alderfers ERG theory: existence, relatedness, and growth

Developed by Clayton Alderfer: ERG theory assumes that 3 basic needs influence behavior: existence, relatedness and growth From lowest to highest: 1) Existence needs: Desire for physiological and material well being 2) Relatedness needs: Desire to have meaningful relationships with people who are significant to us 3) Growth needs: Desire to growth as human beings and to use our abilities to their fullest potential

Alderfer held that if our higher level needs are frustrated, we will seek more intensely to fulfill our lower level needs Frustration-regression component

Using ERG theory to motivate employees: Lobbying bosses for better pay and benefits. Consistent with the findings that individual and cultural differences influence our need states. People are motivated by different needs at different times in their lives Managers should customize their reward and recognition programs to meet varying needs

McClellands Acquired Needs Theory: achievement, affiliation and power Developed by David McClelland Acquired needs theory: 3 needs: achievement, affiliation, and power are major motives determining peoples behavior in the workplace We are not born with our needs, rather we learn them from the culture- from our life experiences 3 needs: 1) Need for achievement: I need to excel at tasks 2) Need for affiliation: I need close relationships 3) Need for power: I need to control others 2 forms of the need for power: 1) Negative kind: Need for personal power, expressed in the desire to dominate others, manipulating people for your own gratification 2) Positive kind: Desire for institutional power, the need to solve problems that further organizational goals Using acquired needs theory to motivate employees: Need for achievement: Do work that pays for performance, challenging but achievable goals, individual responsibility for results. Tend to advance in fields requiring creativity and individual skills

Need for power: Enjoy being in control of people and events, and being recognized for this responsibility.

Need for affiliation: Seek social approval and satisfying personal relationships Prefer sales, provides for personal relationships and social approval

Herzbergs 2 factor theory: from dissatisfying factors to satisfying factors

Frederick Herzbergs 2 factor theory Work satisfaction and dissatisfaction arise from 2 different factors- work satisfaction from motivating factors, and work dissatisfaction from hygiene factors

Hygiene factors vs motivating factors Using 2 factor theory to motivate employees

-Basic lesson: First eliminate dissatisfaction (hygiene factors), making sure that working conditions, pay levels, and company policies are reasonable. -Then concentrate on spurring motivation by providing opportunities for achievement, recognition, responsibility and personal growth (motivating factors)

Process perspectives

Concerned with the thought processes by which people decide how to act 3 theories:

1) Equity theory 2) Expectancy theory 3) Goal-setting theory

Equity theory Focuses on employee perceptions as to how fairly they think they are being treated compared with others J. Stacey Adams Based on the idea that employees are motivated to see fairness in the rewards they expect for task performance Employees are motivated to resolve feelings of injustice

The elements of equity theory: comparing your inputs and outputs with those of others

Key elements: inputs, outputs (rewards), and comparisons

Inputs Time, effort, training, experience, intelligence, creativity, seniority, status, and so on

Outputs or rewardsRewards that people receive from an organization: pay, benefits, praise, recognition, bonuses, promotions, status prerequisites

Comparison People compare the ratio of their own outcomes

Using equity theory to motivate employees Employees who feel that they are being underrewarded will respond to the perceived inequity in one or more negative ways Eg, reduce inputs or rewards they receive, distorting the inequity, changing the object of comparison, or leaving the situation Contrast: Employees who think they are treated fairly are more likely to support organizational change, more apt to cooperate in group settings, less apt to turn to arbitration and courts

3 practical lessons:

Employee perceptions are what count No matter how fair managers think the organisations policies, procedures, and reward system are, each employees perception of those factors is what counts Thus, managers should provide positive recognition about employee behavior and performance Explain reasons behind decisions

Employee participation helps Allow employees to participate in important decisions

Having an appeal process helps Promotes the belief that the management treats them fairly Promotes job satisfaction, commitment, and citizenship behavior Reduce absenteeism and turnover

Expectancy theory: how much do you want and how likely are you to get it?

By Victor Vroom Expectancy theory suggests that people are motivated by 2 things: 1) How much they want something 2) How likely they think they are going to get it Assuming they have choices, people will make the choice that promises them the greatest reward, if they think they can get it The 3 elements: Expectancy, instrumentality, valence

What determines how willing you are to work hard at tasks important to the success of the organization? You will do what you can do when you want to Your motivation involves the relationship between your effort, your performance, and the desirability of the outcomes

Expectancy - Will I be able to perform at the desired level on a task? - Expectancy is the belief that a particular level of effort will lead to a particular level of performance - Effort-to-performance expectancy

Instrumentability-What outcome will I receive if I perform at this level? - Instrumentability is the expectation that successful performance of the task will lead to the outcome desired

Valence - How much do I want the outcome? - Valence is value, the importance a worker assigns to the possible outcome or reward - For your motivation to be high, must be high on expectancy, instrumentality, and valence

Using expectancy theory to motivate employees

Problem: it is complex When attempting to motivate employees, managers should ask the following questions: 1) What rewards do employees value? Need to know your employees, understand what rewards they value, eg pay raises

2) What are the job objectives and the performance level you desire? Need to determine what performance level or behavior you want you can tell your employees what to do to attain rewards

3) Are the rewards linked to performance? Employees must be aware that X level of performance within Y period of time will result in Z kinds of rewards Must use combination of individual and team-based rewards

4) Do employees believe you will deliver the right rewards for the right performance? Employees must believe that you have the power, the ability and the will to give them the rewards you promise, for the performance you request

Goal setting theory: objectives should be specific and challenging but achievable Suggests that employees can be motivated by goals that are specific and challenging but achievable Edwin Locke and Gary Latham Goal setting has 4 motivational mechanisms Goal: defined as an objective that a person is trying to accomplish through his or her efforts To result n high motivation and performance, goals must have a number of characteristics:

1) Goals should be specific

EG, quantitative Boost revenues by 25%

2) Goals should be challenging but achievable

Should be tailored to fit individual abilities and training Do not set them so low such that lots of people can achieve them Nor set so high that most people give up Difficult goals higher performance (when employees are committed) Difficult goals Low performance (when employees uncommitted)

3) Goals should be linked to action plans

Outlines the activities or tasks that need to be accomplished in order to obtain a goal

4) Goals need not be set jointly to be effective Does not matter whether the goals are set by managers, employees, or by both, to be effective Managers should use a contingency approach Employees should be encouraged to develop their own action plans, fostering stronger goal commitment

5) Feedback enhances goal attainment Lets employees know if they are on or off course Provides them with performance standards Gives them the motivation they need to adjust efforts

Goals should be SMART: Specific, Measurable, Attainable, Results-oriented, and have Target dates

Job design: 1) the division of an organisations work among its employees and 2) the application of motivational theories to jobs to increase satisfaction and performance

1) Traditional approach to job design: Fitting people to jobs 2) Modern way: Fitting jobs to people (based on the assumption that people will gradually adapt to any work situation)

Job simplification: The process of reducing the number of tasks a worker performs

Enables a worker to focus on doing more of the same task, thus increasing employee efficiency and productivity Especially useful in designing jobs for mentally disadvantaged workers However, simplified, repetitive jobs lead to job dissatisfaction, poor mental health, and a low sense of accomplishment and personal growth

Fitting jobs to people

Based on the assumption that people are underutilized at work, and they want more variety, challenges, and responsibility (Herzbergs theory) One of the reasons for the popularity of work teams in the United States The main challenge for managers How can we make the work most compatible with the worker so as to produce both higher performance and high job satisfaction? 2 techniques: 1) job enlargement 2) job enrichment

Job enlargement Putting more variety into a job Consists of increasing the number of tasks in a job to increase variety and motivation Proponents: Job enlargement can improve employee satisfaction, motivation and quality of production Research: will not have a significant and lasting positive effect on job performance

Job enrichment Putting more responsibility and other motivating factors into a job The practical application of Frederick Herzbergs 2 factor motivator hygiene theory of job satisfaction Consists of building into a job such motivating factors as responsibility, achievement, recognition, stimulating work, and advancement However, instead of the job-enlargement technique of simply giving employees additional tasks of similar difficulty (horizontal loading), employees take on chores that would normally be performed by their supervisors

Job characteristics model: 5 job attributes for better work outcomes Developed by J. Richard Hackman and Greg Oldham Outgrowth of job enrichment Consists of 1) 5 core job characteristics that affect 2) 3 psychological states of an employee that in turn affect 3) Work outcomes the employees motivation, performance, and satisfaction

5 Job characteristicsSkill variety Skill variety: Describes the extent to which a job requires a person to use a wide range of different skills and abilities

Task identity Describes the extent to which a job requires a worker to perform all the tasks needed to complete the job from beginning to the end

Task significance Describes the extent to which a job affects the lives of other people, whether inside or outside the organization

Autonomy Describes the extent to which a job allows an employee to make choices about scheduling different tasks and deciding how to perform them

Feedback Describes the extent to which workers receive clear, direct information about how well they are performing the job

How the model works: 5 core characteristics affect a workers motivation Affect 3 critical psychological states: meaningfulness of work, responsibility for results, and knowledge of results These positive psychological states fuel high motivation, high performance, high satisfaction and low absenteeism and turnover Contingency factors: Refers to the degree to which a person wants personal and psychological development Job design works when employees are motivated: Need 3 attributes 1) Necessary knowledge and skill 2) Desire for personal growth 3) Context satisfactions (Right physical working conditions, pay, supervision) Applying the job characteristics model

1) Diagnose the work environment to see whether a problem exists Developed by Hackman and Oldham -Self-report instrument for managers to use (job diagnostic survey) - Will indicate whether an individuals so-called motivating potential score (MPS the amount of internal work motivation associated with a specific job- is high or low

2) Determine whether job redesign is appropriate If a persons MPS score is low, an attempt should be made to determine which of the core job characteristics is causing the problem Most likely to work in a participative environment in which employees have the necessary knowledge and skills

3) Consider how to redesign the job Try to increase the core job characteristics that are lower than national norms

Reinforcement perspectives on motivation Reinforcement perspective: pioneered by Edward L Thorndike and B.F. Skinner Concerned with how the consequences of a certain behavior affect that behavior in future Skinner: Father of operant conditioning (process of controlling behavior by manipulating its consequences) Operant conditioning: rests on Thorndikes Law of effect (behavior that results in a pleasant outcome is likely to be repeated and vice versa) Reinforcement theory (attempts to explain behavior change by suggesting that behavior with positive consequences tend to be repeated, whereas behavior with negative consequences tends not to be repeated) Use reinforcement theory to change human behavior behavior modification 4 types of reinforcement: positive, negative, extinction, and punishment Reinforcement: anything that causes a given behavior to be repeated or inhibited Positive reinforcement Strengthens behavior The use of positive consequences to strengthen a particular behavior (rewarding successful performance)

Negative reinforcement Also strengthens behavior By withdrawing something negative (by stop nagging)

Extinction Weakens behavior by ignoring it or making sure it is not reinforced

Punishment Weakens behavior By presenting something negative or withdrawing something positive

Using reinforcement to motivate employees

Positive reinforcement1) Reward only desirable behavior 2) Give rewards as soon as possible 3) Be clear about what behavior is desired (communicate to employees) 4) Have different rewards and recognize individual differences

Negative reinforcement1) Punish only undesirable behavior (when frequently shown) Otherwise they may view you as a tyrannical boss 2) Give reprimands or disciplinary actions as soon as possible3) Be clear about what behavior is undesirable 4) Administer punishment in private 5) Combine punishment and positive reinforcement

Using compensations and other rewards to motivate Is money the best motivator? The Great Place to Work Institute has determined that great employers have 3 traits in common: employee trust in management, pride in the company, and camaraderie with colleagues Motivation and compensation A wage or salary gives an employee little incentive to work hard Incentive compensation plans try to do so, although no single plan will boost the performance of all employees

Characteristics of the best incentive compensation plans 1) Rewards must be linked to performance and be measurable 2) The rewards must satisfy individual needs 3) The rewards must be agreed on by managers and employees 4) The rewards must be believable and achievable by employees Popular incentive compensation plans pay for performance, bonuses, profit sharing, gainsharing, stock options, and pay for knowledge

Pay for performance Also known as merit pay Bases pay on ones results Payment according to a piece rate, in which employees are paid according to how much output they produce (Farm workers picking fruits and vegetables) Sales commissions (Sales representatives are paid a percentage of the earnings the company made from their sales)

Bonuses Cash awards given to employees who achieve specific performance objectives

Profit sharing The distribution to employees of a percentage of the companys profits

Gain sharing The distribution of savings or gains to groups of employees who reduced costs and increased measurable productivity

Stock options With stock options, certain employees are given the right to buy stock at a future date for a discounted price The motivator here is that employees holding the stock options will supposedly work hard to make the companys stock rise so that they can obtain it at a cheaper price

Pay for knowledge AKA skill-based pay Pay for knowledge ties employee pay to the number of job-relevant skills or academic degrees they earn

Non-monetary ways of motivating employees

The need for work-life balance Attaining a balance between personal life and career

The need to expand skills The young feel that getting a job will help them gain skills that will enable them to earn a decent living in the future

The need to matter Workers want to be with an organization that allows them to feel that they matter They want to commit to their profession or fellow team members rather than have to profess a blind loyalty to the corporation

Another example: Flexible workplace (Part time work, flextime, compressed workweek, job sharing, and telecommuting)

Other examples: Treat employees well

Thoughtfulness: the value of being nice Employers spend too little time showing workers they matter Being nice means reducing criticism, becoming more effusive in praise, writing thank-you notes to employees for exceptional performance

Work-life benefits Used by employers to increase productivity and commitment by removing certain barriers that make it hard for people to strike a balance between their work and personal lives Includes helping employees with day care costs, or even establishing on-site centres, domestic-partner benefits, job-protected leave for new parents, and provision of technology such as mobile phones and laptops to enable parents to work at home

Surroundings The cubicle stifles creativity and morale of many workers The bias of modern-day designers for open spaces and neural colours is leading to employee compalints that their workplaces are too noisy or too bland

Skill-building and educational opportunities Learning opportunities can take 2 forms Managers can see that workers are matched with coworkers from whom they can learn, allowing them, for instance, to shadow workers in other jobs or be in interdepartmental task forces

Sabbaticals Macdonalds offers sabbaticals to long time employees, giving a month to a year of paid time off in which to travel, learn and pursue personal projects Enable employees to recharge themselves Also to cement their loyalty to the organization