part iv: managing employees introduction to business 3e 10 copyright © 2004 south-western. all...

Copyright © 2004 South-Western. All rights reserved.

Part IV: Managing EmployeesPart IV: Managing Employees

Jeff MaduraIntroduction to

Business 3e

Introduction to Business 3e

1010Motivating Motivating EmployeesEmployeesMotivating Motivating EmployeesEmployees

Copyright © 2004 South-Western. All rights reserved. 10–2

Learning GoalsLearning Goals•Describe the theories on motivation.

•Describe how firms can enhance job satisfaction and thereby enhance motivation.


Managing EmployeesManaging Employees


Motivating EmployeesMotivating Employees


Theories on MotivationTheories on Motivation•Motivation of employees is influenced by job satisfaction–the degree to which employees are satisfied with their jobs– Employees who are satisfied with their jobs

are more motivated.– Managers can motivate employees by

ensuring job satisfaction.


Hawthorne StudiesHawthorne Studies• In 1920s, researchers studied workers in a Western Electric plant:– Attempted to identify how working conditions

affected workers’ level of productivity. Increases in lighting and decreases in

lighting both improved productivity Shorter breaks and longer breaks both

increased productivity

– Concluded that any changes in conditions that reflect increased attention toward employees increased productivity.


Summary of the Hawthorne Summary of the Hawthorne Studies Studies

Exhibit 10.1


Maslow’s Hierarchy of Maslow’s Hierarchy of NeedsNeeds

• Maslow believed people rank their needs into five categories– Physiological: basic requirements for survival– Safety: job security and safe working conditions– Social: need to be part of a group– Esteem: respect, prestige, recognition– Self-actualization: need to fully reach one’s potential

• Once people achieve a given category of needs, they become motivated to reach the next category.


Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

Exhibit 10.2


Herzberg’s Job Satisfaction Herzberg’s Job Satisfaction StudyStudy

• Identified work-related factors that made employees feel dissatisfied with their jobs:– Hygiene factors that can fulfill basic needs

and prevent job dissatisfaction Working conditions, supervision, salary, job security,

status

– Motivational factors that can lead to job satisfaction and motivate employees Achievement, responsibility, recognition,

advancement, growth


Summary of Herzberg’s Job Satisfaction Summary of Herzberg’s Job Satisfaction StudyStudy

Exhibit 10.3


McGregor’s Theory X McGregor’s Theory X and Theory Yand Theory Y

•Each theory represents supervisors’ possible perception of workers– The way supervisors view employees can

influence how they treat employees.– Treatment of employees influences their job

satisfaction and motivation.


Theory X and Theory YTheory X and Theory Y

Employees dislike work and Employees dislike work and job responsibilities and will job responsibilities and will

avoid work if possibleavoid work if possible

Employees are willing to Employees are willing to work and prefer more work and prefer more

responsibilityresponsibility

Theory X

Theory Y

Supervisors cannot delegate responsibilities

Supervisors should Supervisors should delegate responsibilities, delegate responsibilities,

which will satisfy and which will satisfy and motivate employeesmotivate employees

Supervisors’ View of Employees Implications

Exhibit 10.4


Theory ZTheory Z•Based on the Japanese management style of allowing all employees to participate in decision making– Participation can increase job satisfaction

because it gives employees responsibility.– Uses less specialized job descriptions.– Helps employees develop varied skills and

have a more flexible career path.


Expectancy TheoryExpectancy Theory•Employee’s efforts are most influenced by the expected outcome (reward) for those efforts:– When goals are achievable and offer

desirable rewards.– Employees have a strong belief that they

have a chance to earn the reward.

•Motivating rewards are difficult to offer when output cannot be measured easily.


Equity TheoryEquity Theory• Compensation should be equitable, or in proportion to each employee’s contribution– If employees believe that they are under

compensated, they may request greater compensation–a raise.

– If their compensation is not increased, employees may reduce their contribution–quitting.

– Employees become dissatisfied with their jobs if they feel that they are not equitably compensated.

– Supervisors may prevent job dissatisfaction by attempting to provide equitable compensation.


Example of Equity TheoryExample of Equity Theory

Exhibit 10.5


Reinforcement TheoryReinforcement Theory•Reinforcement influences behavior:

– Positive reinforcement Motivates employees by providing rewards for high

performance The more employees appreciate this form of

reinforcement, the more they will be motivated to continue high performance.

– Negative reinforcement Motivating employees by encouraging them to

behave in a manner that avoids unfavorable consequences.


Summary of Reinforcement Summary of Reinforcement TheoryTheory

Exhibit 10.6


Motivational GuidelinesMotivational Guidelines• If employees’ job satisfaction increases, they may become more productive– General conclusions

To prevent job dissatisfaction, supervisors should ensure that employees are compensated for their contributions.

Even though well compensated, employees may not be very satisfied if other needs (social, responsibility, self-esteem needs) are not fulfilled.

Employees may be motivated if they believe it is possible to achieve a performance level that will result in a desirable reward.


business onlinebusiness online ee -- businessbusiness


Enhancing Job Satisfaction Enhancing Job Satisfaction and Motivationand Motivation

• Job enrichment programs– Designed to increase the job satisfaction of

employees by increase their autonomy.

•Adequate compensation program– Merit system– Across-the-board system– Incentive plans


Developing a Proper Compensation Developing a Proper Compensation PlanPlan

•Guidelines for compensation plans that motivate employees:– Align the compensation plan with business

goals.– Align compensation with specific employee

goals.– Establish achievable goals for employees.– Allow employee input in the compensation

plan.


Impact of New Employee Impact of New Employee Compensation Policy on the Stock Compensation Policy on the Stock

Price of PaychexPrice of Paychex

Exhibit 10.8


Enhancing Job Satisfaction Enhancing Job Satisfaction and Motivation (cont’d)and Motivation (cont’d)

•Flexible work schedule (flextime)– Compressed work weeks that compress the

work load into fewer days per week.– Job sharing by two or more persons who

share a particular work schedules.


Employee Involvement Employee Involvement ProgramsPrograms

• Job enlargement– A program to expand (enlarge) the jobs

assigned to employees

• Job enrichment– Increasing the variety of job tasks and the

autonomy of employees

• Job rotation– Allowing employees to periodically rotate

(switch) their job assignment


Small Business SurveySmall Business Survey

Do Employees Want More Influence in Business Decisions?


EmpowermentEmpowerment

•Empowerment and participative management– Allowing employees the power to make more

decisions– Management by objectives (MBO)

• Teamwork– Open-book management

Employee education Empowerment Compensation


Methods Used to Enhance Job Methods Used to Enhance Job SatisfactionSatisfaction

Exhibit 10.9


Methods Used to Enhance Job Methods Used to Enhance Job SatisfactionSatisfaction

Exhibit 10.10


Chapter SummaryChapter Summary• Hawthorne studies suggest that employees are

more motivated when they receive more attention.

• Maslow’s theory suggests that employees are satisfied by different needs depending on their position in the hierarchy.

• Herzberg’s theory suggests that the factors that prevent job dissatisfaction are different from the factors that enhance satisfaction.

• McGregor’s Theories X and Y suggest that supervisors treat employees differently depending on their beliefs about employees.


Chapter SummaryChapter Summary• Theory Z suggests that employees are more

satisfied and motivated when they are involved in decision making

• Expectancy theory suggests that employees are more motivated if compensation is aligned with goals that are achievable and offer some reward

• Equity theory suggests that employees are more motivated if their compensation is aligned with their relative contribution to the firm’s total output

• Reinforcement theory suggests that employees are more motivated to perform well if they are rewarded for high performance

part iv: managing employees introduction to business 3e 10 copyright © 2004 south-western. all...

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