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This Document Contains Chapters 5 to 6 Instructor’s Manual to Accompany Organizational Behavior 7/e by Steven L. McShane and Mary Ann Von Glinow Chapter 5: Foundations of Employee Motivation Prepared by: Steven L. McShane, The University of Western Australia This Document Contains Chapters 5 to 6 Foundations of Employee Motivation LEARNING OBJECTIVES After reading this chapter, students should be able to: 1. Define employee engagement. 2. Explain the role of human drives and emotions in employee motivation and behavior. 3. Summarize Maslow’s needs hierarchy, McClelland’s learned needs theory, and four-drive theory, and discuss their implications for motivating employees. 4. Discuss the expectancy theory model, including its practical implications. 5. Outline organizational behavior modification (OB Mod) and social cognitive theory, and explain their relevance to employee motivation. 6. Describe the characteristics of effective goal setting and feedback. 7. Summarize equity theory and describe ways to improve procedural justice CHAPTER GLOSSARY balanced scorecard (BSC) -- A goal-setting and reward system that translates the organization’s vision and mission into specific, measurable performance goals related to financial, customer, internal, and learning/ growth (i.e., human capital) processes. distributive justice -- Perceived fairness in the individual’s ratio of outcomes to contributions relative to a comparison other’s ratio of outcomes to contributions. drives -- Hardwired characteristics of the brain (neural states) that correct deficiencies or maintain an internal equilibrium by producing emotions to energize individuals employee engagement -- Individual emotional and cognitive motivation, particularly a focused, intense, persistent, and purposive effort toward work-related goals equity theory -- A theory explaining how people develop perceptions of fairness in the distribution and exchange of resources. expectancy theory -- A motivation theory based on the idea that work effort is directed toward behaviors that people believe will lead to desired outcomes. four-drive theory -- A motivation theory based on the innate drives to acquire, bond, comprehend, and defend that incorporates both emotions and rationality. goal setting -- The process of motivating employees and clarifying their role perceptions by establishing performance objectives. Maslow’s needs hierarchy theory -- A motivation theory of needs arranged in a hierarchy, whereby people are motivated to fulfill a higher need as a lower one becomes gratified motivation -- The forces within a person that affect his or her direction, intensity, and persistence of voluntary behavior multisource (360-degree) feedback -- Information about an employee’s performance collected from a full circle of people, including subordinates, peers, supervisors, and customers. need for achievement (nAch) -- A learned need in which people want to accomplish reasonably challenging goals and desire unambiguous feedback and recognition for their success. need for affiliation (nAff) -- A learned need in which people seek approval from others, conform to their wishes and expectations, and avoid conflict and confrontation. need for power (nPow) -- A learned need in which people want to control environment, including people and material resources, to benefit either themselves (personalized power) or others (socialized power) needs -- Goal-directed forces that people experience organizational behavior modification -- A theory that explains employee behavior in terms of the antecedent conditions and consequences of that behavior. procedural justice -- Perceived fairness of the procedures used to decide the distribution of resources self-reinforcement -- reinforcement that occurs when an employee has control over a reinforcer but doesn’t “take” it until completing a self-set goal. social cognitive theory -- A theory that explains how learning and motivation occur by observing and modeling others as well as by anticipating the consequences of our behavior. strengths-based coaching -- A positive organizational behavior approach to coaching and feedback that focuses on building and leveraging the employee’s strengths rather than trying to correct his or her weaknesses. CHAPTER SUMMARY BY LEARNING OBJECTIVE 5-1 Define employee engagement. Employee engagement is defined as an individual’s emotional and cognitive (rational) motivation, particularly a focused, intense, persistent, and purposive effort toward work-related goals. It is emotional involvement in, commitment to, and satisfaction with the work, as well as a high level of absorption in the work and sense of selfefficacy about performing the work. 5-2 Explain the role of human drives and emotions in employee motivation and behavior. Motivation consists of the forces within a person that affect his or her direction, intensity, and persistence of voluntary behavior in the workplace. Drives (also called primary needs) are neural states that energize individuals to correct deficiencies or maintain an internal equilibrium. They are the “prime movers” of behavior, activating emotions that put us in a state of readiness to act. Needs—goal-directed forces that people experience—are shaped by the individual’s self-concept (including personality and values), social norms, and past experience. 5-3 Summarize Maslow’s needs hierarchy, McClelland’s learned needs theory, and four-drive theory, and discuss their implications for motivating employees. Maslow’s needs hierarchy groups needs into a hierarchy of five levels and states that the lowest needs are initially most important but higher needs become more important as the lower ones are satisfied. Although very popular, the theory lacks research support because it wrongly assumes that everyone has the same hierarchy. The emerging evidence suggests that needs hierarchies vary from one person to the next, according to their personal values. McClelland’s learned needs theory argues that needs can be strengthened through learning. The three needs studied in this respect have been need for achievement, need for power, and need for affiliation. Four-drive theory states that everyone has four innate drives—the drives to acquire, bond, comprehend, and defend. These drives activate emotions that people regulate through a skill set that considers social norms, past experience, and personal values. The main recommendation from four-drive theory is to ensure that individual jobs and workplaces provide a balanced opportunity to fulfill the four drives. 5-4 Discuss the expectancy theory model, including its practical implications. Expectancy theory states that work effort is determined by the perception that effort will result in a particular level of performance (E-to-P expectancy), the perception that a specific behavior or performance level will lead to specific outcomes (P-to-O expectancy), and the valences that the person feels for those outcomes. The E-to-P expectancy increases by improving the employee’s ability and confidence to perform the job. The P-to-O expectancy increases by measuring performance accurately, distributing higher rewards to better performers, and showing employees that rewards are performance-based. Outcome valences increase by finding out what employees want and using these resources as rewards. 5-5 Outline organizational behavior modification (OB Mod) and social cognitive theory and explain their relevance to employee motivation. Organizational behavior modification takes the behaviorist view that the environment teaches people to alter their behavior so that they maximize positive consequences and minimize adverse consequences. Antecedents are environmental stimuli that provoke (not necessarily cause) behavior. Consequences are events following behavior that influence its future occurrence. Consequences include positive reinforcement, punishment, negative reinforcement, and extinction. The schedules of reinforcement also influence behavior. Social cognitive theory states that much learning and motivation occurs by observing and modeling others, as well as by anticipating the consequences of our behavior. It suggests that people typically infer (rather than only directly experience) cause-and- effect relationships, anticipate the consequences of their actions, develop selfefficacy in performing behavior, exercise personal control over their behavior, and reflect on their direct experiences. The theory emphasizes self-regulation of individual behavior, including self-reinforcement, which is the tendency of people to reward and punish themselves as a consequence of their actions. 5-6 Describe the characteristics of effective goal setting and feedback. Goal setting is the process of motivating employees and clarify- ing their role perceptions by establishing performance objectives. Goals are more effective when they are SMARTER (specific, measurable, achievable, relevant, time-framed, exciting, and reviewed). Effective feedback is specific, relevant, timely, credible, and sufficiently frequent. Strengths-based coaching (also known as appreciative coaching) maximizes employee potential by focusing on their strengths rather than weaknesses. Employees usually prefer nonsocial feedback sources to learn about their progress toward goal accomplishment. 5-7 Summarize equity theory and describe ways to improve procedural justice. Organizational justice consists of distributive justice (perceived fairness in the outcomes we receive relative to our contributions and the outcomes and contributions of others) and procedural justice (fairness of the procedures used to decide the distribution of resources). Equity theory has four elements: outcome/input ratio, comparison other, equity evaluation, and consequences of inequity. The theory also explains what people are motivated to do when they feel inequitably treated. Companies need to consider not only equity in the distribution of resources but also fairness in the process of making resource allocation decisions. LECTURE OUTLINE (WITH POWERPOINT® SLIDES) Foundations of Employee Motivation Slide 1 Employee Engagement and Motivation at DHL Express DHL Express, the courier division of Germany’s Deutsche Post, has been building a workforce of highly engaged employees in Africa (shown here) and globally.“Motivated and engaged employees are Employee Engagement and Motivation at DHL Express Slide 2 crucial to the success of any business,” says a DHL Express executive. Motivation Defined The forces within a person that affect the direction, intensity, and persistence of voluntary behavior Motivated employees are willing to exert a particular level of effort Motivation Defined Slide 3 (intensity), for a certain amount of time (persistence), toward a particular goal (direction) Employee Engagement Employee’s emotional and cognitive motivation, particularly a focused, intense, persistent, and purposive effort toward work-related goals. • Focused, intense, persistent, and purposive effort toward work- Employee Engagement related goals Slide 4 • High level of absorption in the work i.e. intense focus • High self-efficacy i.e. belief that you have the ability, role clarity, and resources to get the job done Various reports suggest that engagement has a strong effect on employee and work unit performance Drives and Needs Slide 5 • Neural states that energize individuals ➡ e.g. drive for social interaction, understanding the environment, competence or status, and defending oneself • Generate emotions that put us in a state of readiness • Prime movers of behavior (our motivation originates form drives) • Self-concept, social norms, and past experience amplify or suppress drive-based emotions Drives and Needs Drives (primary needs) are hardwired brain activity that produce emotions to energize individuals to correct deficiencies and maintain an internal equilibrium Drives and Needs (con’t) Needs are goal-directed forces that people experience • We channel emotional forces toward specific goals • Goals formed by self-concept, social norms, and past experience -- Drives and Needs (con’t) Slide 6 guide direction of our effort Maslow’s Needs Hierarchy Theory Most widely known theory of human motivation – physiological, safety, belongingness, esteem, and self-actualization • Two additional categories not in the hierarchy (desire to know and Maslow’s Needs Hierarchy Theory Slide 7 desire for aesthetic beauty) • Lowest unmet need has strongest effect • When lower need is satisfied, next higher need becomes the primary motivator Maslow’s model lacks empirical support • People do not progress through the hierarchy as the theory predicts • Need fulfillment exists for a shorter time than Maslow suggested • people have different hierarchies • Main problem: needs hierarchy is unique to each person and can possibly change over time ➡ Person’s needs hierarchy is shaped by his/her values hierarchy Maslow’s Contribution to Motivation Holistic perspective • Multiple needs should be studied together because they operate together Maslow’s Contribution to Humanistic perspective Motivation Slide 8 • Higher-order needs are influenced by personal and social influences, not just instinct • Therefore, human thoughts (self-concept, social norms, experience) influence motivation Positive perspective • Self-actualization: people are naturally motivated to reach their potential (growth needs) • Foundation of positive organizational behavior ➡ focusing on the positive rather than negative aspects of life will improve organizational success and individual well-being Learned Needs Theory Needs are shaped, amplified or suppressed through self-concept, social norms, and past experience Needs can be “learned” (i.e. strengthened through reinforcement, Learned Needs Theory learning and social conditions) Slide 9 Three Learned Needs Need for achievement (nAch) • High nAch people want to accomplish reasonably challenging goals through their own effort Three Learned Needs • Desire clear feedback and recognition;choose moderate risk tasks; Slide 10 prefer working alone; money is a weak motivator • Low nAch people work better when money is an incentive • Entrepreneurs have high achievement need Need for affiliation (nAff) • Seek approval of others, conform to their wishes and expectations, and avoid conflict and confrontation • Need a relatively low need for affiliation in key decision making positions so choices are not biased by personal need for approval Need for power (nPow) • People want to control their environment including people and material resources • Personalized power – enjoy power for its own sake and use it to advance personal interests • Socialized power – desire power as a means to help others • Effective leaders – have high need for socialized rather than personalized power Four-Drive Theory Motivation theory based on the innate drives to acquire, bond, comprehend, and defend and that incorporates both emotions and rationality Four-Drive TheorySlide 11 Drive to acquire • Drive to seek, take, control, and retain objects and personal experiences • Need for status and recognition; foundation of competition Drive to bond • Drive to form social relationships and mutual caring commitments with others • explains why people form social identities (align self-concept with social groups) Drive to comprehend • Drive to satisfy our curiosity, to know and understand ourselves and our environment • Related to higher order needs of growth and self-actualization Drive to defend • Drive to protect ourselves physically and socially; ‘fight or flight’ response; includes defending our relationships and belief systems • Drive to defend is always reactive (triggered by threat), not proactive Features of Four Drives Innate and universal – everyone has them Independent of each other – no hierarchy of drives Complete set – no drives are excluded from the model How Four Drives Motivate 1. Four drives determine which emotions are automatically tagged to incoming information (emotional markers) 2. Emotions are usually nonconscious, but become conscious How Four Drives experiences when sufficiently strong or conflict Motivate 3. When emotions energize us, our mental skill set transforms this Slide 12 primary motivation into goal-directed choice and effort ➡ mental skill set includes social norms, personal values, and experience Four Drive Theory Implications Provide a balanced opportunity for employees to fulfill all four drives • Best workplaces for employee motivation and well-being help employees fulfill all four drives Four Drive Theory Implications Slide 13 Expectancy Theory of Motivation Based on the idea that work effort toward is directed toward behaviors that people believe will lead to desired outcomes Effort—>Performance (E-to-P) expectancy • Keep fulfillment of all four drives in balance – organizations should avoid too much or too little opportunity to fulfill each drive Expectancy Theory of Motivation Slide 14 • Ranges from 0.0 (no chance) to 1.0 (certainty) Performance—>Outcome (P-to-O) expectancy • Perceived probability that a specific behavior or performance level will lead to a particular outcome • Ranges from 0.0 (no chance) to 1.0 (certainty) Outcome valences • Anticipated satisfaction/dissatisfaction that an individual feels toward an outcome (i.e. anticipated positive/negative emotions) • Positive valence when outcome is consistent with our values; negative valance when outcome opposes values and inhibit need fulfillment • Individual’s perception that his/her effort will result in a particular level of performance Increasing E-to-P and Pto-O Expectancies Slide 15 Expectancy Theory in Practice Increasing E-to-P Expectancies • Assuring employees they have the necessary competencies • Person-job matching • Clear role perceptions and necessary resources • Behavioral modeling and supportive feedback Increasing P-to-O Expectancies • Measure employee performance accurately • Distribute more valued rewards to those with higher performance • Explain how employee’s rewards were based on past performance Increasing Outcome Valences • Distribute rewards that employees value • Individualize rewards • Minimize countervalent outcomes (e.g. peer pressure) Organizational Behavior Modification (OB Mod) Explains employee behavior in terms of the antecedent conditions and consequences of that behavior • Explains how we learn expectancies in expectancy theory A-B-Cs of OB Mod Slide 16 • Focuses on environment, not thoughts A-B-Cs of OB Mod Central objective of behavior modification is to change behavior (B) by managing its antecedents (A) and consequences (C). Antecedents • Events preceding the behavior • Informs employees that a particular action will produce specific consequences – e.g. sound signaling that an email has arrived Behavior • What people say or do – e.g. completing a task requested by a supervisor Consequences • Events following behavior that influences its future occurrence – e.g. positive comment when the employee puts on safety eyewear Four OB Mod Consequences Positive reinforcement • When introduced, increases or maintains the frequency or future probability of a specific behavior Four OB Mod Consequences • e.g. receiving praise after completing a project Slide 17 Punishment • Occurs when a consequence decreases the frequency or future probability of a behavior • e.g. being demoted or ostracized by our co-workers Negative reinforcement • Occurs when the removal or avoidance of a consequence increases or maintains the frequency or future probability of a behavior • e.g. manager stops criticizing employee when substandard performance improves Extinction • Occurs when the target behavior decreases because no consequence follows it • e.g. performance declines when manager stops congratulating employees for their good work Behavior Modification in Practice Everyone uses organizational behavior modification principles in one form or another to influence behavior of others • In every day life e.g. thank people for a job well done • Formal company programs to reduce absenteeism, improve task performance, improve safety etc. Behavior modification problems/limitations include: • Reward inflation – the reinforcer is eventually considered an entitlement • Variable ratio schedule may be viewed as gambling or too random • Ignores relevance of cognitive processes in learning Reinforcing Behavior through Gamification Slide 18 friendly competition and status. Reinforcing Behavior Through Gamification Deloitte Touche Tohmatsu employees earn “badges” for documenting meetings and completing online learning modules. Earned badges are posted on leader boards, which further motivates them through Social Cognitive Theory Learning and motivation occurs by observing and modeling others as well as by anticipating the consequences of our behavior Learning behavior outcomes Social Cognitive Theory • Observing consequences that others experience Slide 19 ➡ e.g. co-worker fired for being rude to a customer • Anticipating consequences in other situations ➡ fire coworker incident affects your P-to-O expectancy about being fired if rude to coworkers Behavior modeling • Observing, imitating, and practicing behavior of others • Increases self-efficacy Self-regulation • People engage in intentional, purposive action • Set their own short and long-term goals, standards of achievement, plan of action, consider alternatives, and anticipate consequences • People engage in self-reinforcement – reinforce behavior by rewarding/punishing themselves with consequences within their control Effective Goal Setting Features Slide 20 Effective Goal Setting Features Apply “SMARTER” goals • Specific – What, how, where, when, and with whom the task needs to be accomplished • Measurable – how much, how well, at what cost • Achievable – challenging, yet accepted (maintain high E-to-P expectancy) • Relevant – within employee’s control • Time-framed – due date and when assessed • Exciting – employee commitment, not just compliance • Reviewed – feedback and recognition on goal progress and accomplishment Goal Setting The process of motivating employees and clarifying their role perceptions by establishing performance objectives Balanced Scorecard Organizational-level goal setting and reward system that translates the organization’s vision and mission into specific, measurable performance goals Balanced Scorecard • Goals usually organized around financial, customer, internal, and Slide 21 learning/growth (i.e. human capital) processes • Goals cascade down to departments and employees – several goals within each process • Goals are often weighted and scored to create a composite measure of success Characteristics of Effective Feedback Slide 22 his or her control 3. Timely – available as soon as possible so employees see a clear association between their actions and consequences 4. Credible – employees more likely to accept feedback from a trustworthy source 5. Sufficiently frequent – considers employee’s knowledge, experience with the task and how long it takes to complete the task (task cycle) e.g. employees working on new tasks should receive more frequent feedback Characteristics of Effective Feedback 1. Specific – connected to the details of the goal (to specific metrics) e.g. “Sales increased by 5% this month” 2. Relevant – relates to the individual’s behavior or outcomes within Strengths-based Coaching Feedback Positive OB approach to coaching and feedback that focuses on building and leveraging the employee’s strengths rather than trying to correct his/her weaknesses Strengths-Based Coaching Feedback Slide 23 Motivational because: • People inherently seek feedback about their strengths, not their flaws – consistent with self-enhancement • Employee’s interests, preferences, and competencies are less flexible than assumed because personality and self-concept become stable in adulthood -- so negative feedback has limited effect on changing behavior and performance Sources of Feedback Social sources -- Feedback directly from others • e.g., boss, customers, multisource • Multisource feedback -- a full circle of people around the employee Source of Feedback ➡ potentially accurate and fair Slide 24 ➡ potentially expensive, time-consuming, ambiguous, inflated, etc. Nonsocial sources -- feedback not conveyed directly by people • e.g. electronic displays at call centers, customer survey results Preferred feedback source: • Use nonsocial feedback for goal progress feedback ➡ considered more accurate than social sources, which tend to delay and distort negative feedback ➡ negative feedback less damaging to self-esteem • Use social sources for conveying positive feedback ➡ Enhances employee’s self-esteem Evaluating Goal Setting and Feedback Goal setting is one of the most respected theories in OB in terms of validity and usefulness Goal setting/feedback limitations: • Focuses employees on a narrow set of measurable performance indicators i.e. “What gets measured, gets done” • Employees motivated to set easy goals when tied to pay (bonus) • Goal setting interferes with learning process in new, complex jobs despite being effective in established jobs Organizational Justice Distributive justice • Perceived fairness in the individual’s ratio of outcomes to contributions compared with a comparison to other’s ratio of Organizational Justice outcomes to contributions Slide 25 Procedural justice • Perceived fairness of the procedures used to decide the distribution of resources Equity Theory Perceptions of equity are explained by equity theory – employees develop perceptions of fairness by comparing their outcome/input ratio to the outcome/input ratio of some other person Equity Theory Slide 26 Elements of Equity Theory Outcome/input ratio • Inputs -- what employee contributes e.g. skill, effort, reputation, performance, experience, hours worked Elements of Equity • Outcomes -- what employee receives e.g. pay, promotions, Theory Slide 27 recognition, interesting jobs, opportunities to improve skills Comparison other • Person/people against whom we compare our ratio • Not easily identifiable – may be someone in the same job, another job, or another company, or a “generalized” comparison other Equity evaluation • Compare outcome/input ratio with the comparison other • Result: Perception of equity, underreward inequity or overreward inequity Correcting Inequity Tension Slide 28 Correcting Inequity Tension – Underreward Inequity 1. Reduce our inputs – e.g. work more slowly, offer fewer suggestions, engage in less organizational citizenship behavior 2. Increase our outcomes – e.g. ask for a pay raise, make unauthorized use of company resources 3. Increase the comparison other’s inputs – e.g. ask the better-paid co-worker to do a larger share of the work 4. Reduce comparison other’s outcomes – e.g. ensuring the co-worker gets less desirable jobs or working conditions 5. Change our perceptions/beliefs i.e. perceptual rather than behavioral – e.g. believe that the co-worker really is doing more such as working longer hours 6. Change the comparison other – e.g. compare yourself more with a friend who works in a similar job than the higher-paid co-worker 7. Leave the field – e.g. move to another department, quit Inequity and Employee Motivation When people believe they are under- or over-rewarded, they experience negative emotions (inequity tension) Procedural Justice Perceived fairness of procedures used to decide the distribution of Higher procedural fairness with: Procedural Justice • Voice – encourage employees to present their perspectives Slide 29 • Unbiased decision maker • Decisions based on complete and accurate information • Applies existing policies consistently • Decision maker listened to all sides • Those who express concerns are treated respectfully • A full explanation of the decision is provided Note: Consequences of Procedure Injustice – withdrawal or aggression Foundations of Employee Motivation Foundations of Employee Motivation Slide 30 Instructor’s Manual to Accompany Organizational Behavior 7/e by Steven L. McShane and Mary Ann Von Glinow Chapter 6: Applied Performance Practices Prepared by: Steven L. McShane, The University of Western Australia Applied Performance Practices LEARNING OBJECTIVES After reading this chapter, students should be able to: 1. Discuss the meaning of money and identify several individual-, team-, and organizational- level performance-based rewards. 2. Describe five ways to improve reward effectiveness. 3. List the advantages and disadvantages of job specialization. 4. Diagram the job characteristics model and describe three ways to improve employee motivation through job design. 5. Define empowerment and identify strategies that support empowerment. 6. Describe the five elements of self-leadership and identify specific personal and work environment influences on self-leadership. CHAPTER GLOSSARY autonomy -- The degree to which a job gives employees the freedom, independence, and discretion to schedule their work and determine the procedures used in completing it. employee stock ownership plan (ESOP) -- A reward system that encourages employees to buy company stock. empowerment -- A psychological concept in which people experience more self- determination, meaning, competence, and impact regarding their role in the organization. gainsharing plan -- A team-based reward that calculates bonuses from the work unit’s cost savings and productivity improvement. job characteristics model -- A job design model that relates the motivational properties of jobs to specific personal and organizational consequences of those properties. job design -- The process of assigning tasks to a job, including the interdependency of those tasks with other jobs. job enlargement -- The practice of adding more tasks to an existing job. job enrichment -- The practice of giving employees more responsibility for scheduling, coordinating, and planning their own work. job evaluation -- Systematically rating the worth of jobs within an organization by measuring the required skill, effort, responsibility, and working conditions. job specialization -- The result of a division of labor, in which work is subdivided into separate jobs assigned to different people. mental imagery -- The process of mentally practicing a task and visualizing its successful completion. motivator-hygiene theory -- Herzberg’s theory stating that employees are primarily motivated by growth and esteem needs, not by lower-level needs. profit-sharing plan -- A reward system that pays bonuses to employees on the basis of the previous year’s level of corporate profits. scientific management -- The practice of systematically partitioning work into its smallest elements and standardizing tasks to achieve maximum efficiency. self-leadership -- The process of influencing oneself to establish the self- direction and self-motivation needed to perform a task. self-talk -- The process of talking to ourselves about our own thoughts or actions. skill variety -- The extent to which employees must use different skills and talents to perform tasks within their jobs. stock options -- A reward system that gives employees the right to purchase company stock at a future date at a predetermined price. task identity -- The degree to which a job requires completion of a whole or an identifiable piece of work. task significance -- The degree to which a job has a substantial impact on the organization and/or larger society. CHAPTER SUMMARY BY LEARNING OBJECTIVE 6-1 Discuss the meaning of money and identify several individual-, team-, and organizational-level performancebased rewards. Money (and other financial rewards) is a fundamental part of the employment relationship, but it also relates to our needs, our emotions, and our self-concept. It is viewed as a symbol of status and prestige, as a source of security, as a source of evil, or as a source of anxiety or feelings of inadequacy. Organizations reward employees for their membership and seniority, job status, competencies, and performance. Membership-based rewards may attract job applicants and seniority-based rewards reduce turnover, but these reward objectives tend to discourage turnover among those with the lowest performance. Rewards based on job status try to maintain internal equity and motivate employees to compete for promotions. However, they tend to encourage a bureaucratic hierarchy, support status differences, and motivate employees to compete and hoard resources. Competency-based rewards are becoming increasingly popular because they encourage skill development. However, they tend to be subjectively measured and can result in higher costs as employees spend more time learning new skills. Awards and bonuses, commissions, and other individual performance-based rewards have existed for centuries and are widely used. Many companies are shifting to team-based rewards such as gainsharing plans and to organizational rewards such as employee stock ownership plans (ESOPs), stock options, and profit sharing. Although ESOPs and stock options create an ownership culture, employees often perceive a weak connection between individual performance and the organizational reward. 6-2 Describe five ways to improve reward effectiveness. Financial rewards have a number of limitations, but reward effectiveness can be improved in several ways. Organizational leaders should ensure that rewards are linked to work performance, rewards are aligned with performance within the employee’s control, team rewards are used where jobs are interdependent, rewards are valued by employees, and rewards have no unintended consequences. 6-3 List the advantages and disadvantages of job specialization. Job design is the process of assigning tasks to a job, including the interdependency of those tasks with other jobs. Job specialization subdivides work into separate jobs for different people. This increases work efficiency, because employees master the tasks quickly, spend less time changing tasks, require less training, and can be matched more closely with the jobs best suited to their skills. However, job specialization may reduce work motivation, create mental health problems, lower product or service quality, and increase costs through discontentment, absenteeism, and turnover. 6-4 Diagram the job characteristics model and describe three ways to improve employee motivation through job design. The job characteristics model is a template for job redesign that specifies core job dimensions, psychological states, and individual differences. The five core job dimensions are skill variety, task identity, task significance, autonomy, and job feedback. Jobs also vary in their required social interaction (task interdependence), predictability of work activities (task variability), and procedural clarity (task analyzability). Contemporary job design strategies try to motivate employees through job rotation, job enlargement, and job enrichment. Organizations introduce job rotation to reduce job boredom, develop a more flexible workforce, and reduce the incidence of repetitive strain injuries. Job enlargement involves increasing the number of tasks within the job. Two ways to enrich jobs are clustering tasks into natural groups and establishing client relationships. 6-5 Define empowerment and identify strategies that support empowerment. Empowerment is a psychological concept represented by four dimensions: self-determination, meaning, competence, and impact, related to the individual’s role in the organization. Individual characteristics seem to have a minor influence on empowerment. Job design is a major influence, particularly autonomy, task identity, task significance, and job feedback. Empowerment is also supported at the organizational level through a learning orientation culture, sufficient information and resources, and corporate leaders who trust employees. 6-6 Describe the five elements of self-leadership and identify specific personal and work environment influences on self-leadership. Self-leadership is the process of influencing oneself to establish the self-direction and self-motivation needed to perform a task. This includes personal goal setting, constructive thought pat- terns, designing natural rewards, self-monitoring, and self- reinforcement. Constructive thought patterns include self-talk and mental imagery. Selftalk occurs in any situation in which a person talks to himself or herself about his or her own thoughts or actions. Mental imagery involves mentally practicing a task and imagining successfully performing it beforehand. People with higher levels of conscientiousness, extroversion, and a positive self-concept are more likely to apply selfleadership strategies. It also increases in workplaces that support empowerment and have high trust between employees and management. LECTURE OUTLINE (WITH POWERPOINT® SLIDES) Applied Performance Practices Slide 1 Applied Performance Practices at Hilcorp Energy Hilcorp Energy Co. has a highly motivated workforce, driven by generous company-wide performance-based financial bonuses (including new cars shown here) and intrinsically motivating jobs. Applied Performance Practices at Hilcorp Energy Slide 2 Meaning of Money at Work Money motivates, more than previously thought Money means different things to different people • Symbol of achievement/success/status Meaning of Money at Work • Reinforcer and motivator Slide 3 • Reflection of performance • Source of enhanced or reduced anxiety Money ethic -- higher when money is perceived as: • not evil • a symbol of achievement, respect, and power • something of value to be budgeted carefully Gender differences • Money is valued more by men than by women • Men view money as a symbol of power/status • Women view money as instrumental (exchanged for things of value) Cultural differences • Higher respect/priority for money in high power distance cultures Membership/Seniority- Based Rewards Slide 4 Advantages • Guaranteed wages may attract job applicants • Seniority-based rewards reduce turnover Disadvantages • Do not directly motivate job performance • Discourages poor performers from leaving voluntarily • May act as “golden handcuffs” – discourage employees from quitting Membership/Seniority-Based Rewards Represent the largest part of most paychecks – “pay for pulse” e.g. fixed wages Job Status-Based Rewards Higher pay for employees in jobs with higher worth or status Job evaluation --measures a job’s skill, effort, responsibility, working Job Status-Based conditions Rewards Slide 5 Job status reward also include more perks in higher status jobs Advantages: • Improve feelings of fairness • Motivates competition for promotions Disadvantages: • Encourages bureaucratic hierarchy • Reinforces status vs. egalitarian workplace culture • Employees may exaggerate duties, hoard resources Competency-Based Rewards Two main types of competency pay 1. Broad competency-based pay bands -- employees increase pay within the band by acquiring and demonstrating more competencies Competency-Based Rewards Slide 6 2. Skill-based pay -- pay increases with number of skill blocks/modules learned e.g. technical skills Advantages • More flexible and multiskilled work force • Better product/service quality; consistent with employability Disadvantages • Competency definitions may be vague/subjective – skill-based plans are more objective • Higher training costs Performance-Based Rewards Individual-level rewards • Bonuses (executives), commissions (sales), piece rate systems (hotel housekeepers) Performance-based Rewards Slide 7 Team Rewards -- typically bonuses to entire team • Gainsharing plans – bonuses based on team’s cost savings and productivity improvement (i.e. share part of cost savings with firm) Organizational Rewards • Employee stock ownership plans (ESOPs) – reward systems that encourage employees to buy company stock • Stock options – the right to purchase company stock at a future date at a predetermined price • Profit-sharing plans – pays bonuses to employees from level of corporate profits Evaluating Organizational Rewards • ESOPs, stock options create an “ownership culture” • Profit-sharing automatically adjusts pay with firm’s prosperity • Problem with organizational rewards ➡ weak connection between individual effort and rewards (low P-to-O expectancy) ➡ ESOPs used as substitute for pension plan, lacks diversification Improving Reward Effectiveness Slide 8 Ensure rewards are relevant • Reward outcomes within employee’s control (“line of sight”) Use team rewards for interdependent jobs • difficult to measure individual performance when jobs interdependent Ensure rewards are valued • Avoid assuming what employees want or that all want the same thing Watch out for unintended consequences • Think through consequences of rewards • Test incentives in a pilot project Improving Reward Effectiveness Link rewards to performance • Higher rewards to those with better performance Unintended Consequences of Rewards at TransSantiago Transit bus drivers in Santiago, Chile, were paid by the number of farepaying passengers. This incentive system motivated drivers to begin their route on time, take shorter breaks and drive efficiently, however, Unintended Consequences of Rewards at TransSantiago Slide 9 unintended results occurred: • Reckless driving to the next passenger waiting area • Cutting off competing buses • Passenger injuries/fatalities because drivers speeded off before passengers were seated • Skipped stops where only one passenger was waiting • Many traffic accidents Job Design Job design -- process of assigning tasks to a job, including the interdependency of those tasks with other jobs Organization's goal – to create jobs that allow work to be performed efficiently Job Design yet employees are motivated and engaged Slide 10 Job Specialization and Scientific Management The result of division of labor in which each job includes a subset of the tasks required to complete the product or service Job Specialization and Scientific management Scientific Management • Advocated by Frederick Winslow Taylor in early 1900s Slide 11 • Mainly about high job specialization and standardization of tasks to achieve maximum efficiency • Taylor also popularized training, goal setting, work incentives Advantages of job specialization • Less time changing activities; lower training costs; jobs mastered quickly; better person-job matching Disadvantages of job specialization • Job boredom; discontentment pay to attract employees resulting in higher costs; reduced work quality; undermines the motivational aspect of jobs Job Characteristics Model Five core job dimensions that produce three psychological states Core job characteristics Job Characteristics • Skill variety – using different skills/talents to perform tasks Model ➡ e.g. sales clerks also stock inventory and change store-front displays Slide 12 • Task identity – completing a whole or identifiable piece of work ➡ e.g. assembling an entire broadband modem rather than just soldering circuitry • Task significance – job’s perceived effect on firm and/or society ➡ e.g. quality of servicing aircraft engines affects passenger safety • Autonomy – freedom, independence and discretion in scheduling the work and determining procedures • Job feedback – direct feedback from job about task performance ➡ e.g. pilots can tell how well they land the plane while performing the task Critical Psychological States • Experienced meaningfulness – believe the work is worthwhile/ important • Experienced responsibility – feel personally accountable • Knowledge of results – information on consequences of work effort Individual Differences • Job dimensions motivate only when employees have skills and knowledge to master job • Model originally also included growth need strength and satisfaction with job context, but mixed support for these contingencies Other Job Characteristics Slide 13 Other Job Characteristics Social characteristics of the job • Required interaction with other people (clients, coworkers, etc) • Task interdependence -- job requires social interaction with coworkers • Feedback from others -- from coworkers, clients, etc Predictability/information processing demands of the job • High task variability -- job has nonroutine work patterns; ➡ different and nonpredictable tasks on one day than another day • High task analyzability -- job can be performed using known procedures and rules. ➡ ready-made “cookbook” to guide most decisions and actions ➡ low task analyzability jobs require employee creativity and judgment Job Rotation at EYE Lighting Int’l Slide 14 Job Rotation at EYE Lighting Int’l Employees at Ohio-based EYE Lighting International practice job rotation. “The employees love it because they don’t get bored in their daily job,” says company president Tom Salpietra. He adds that job rotation also minimizes repetitive strain injuries and “allows us a tremendous amount of flexibility” in work assignments. Job Rotation Slide 15 Job Design Practices That Motivate Job Rotation The practice of moving employees from one job to another Benefits • Minimizes health risks from repetitive strain and heavy lifting • Supports multi-skilling which increases workforce flexibility • Potentially reduces the boredom of highly repetitive jobs Job Enlargement Slide 16 Job Enlargement Adding more tasks to an existing job – increases skill variety Example: Video journalist is an example of an enlarged job • A traditional news team consists of a camera operator, a sound and lighting specialist, and the journalist who writes and reports the story • One video journalist performs all of these tasks planning their work Jon Enrichment Slide 17 Job enrichment strategies: 1. Natural grouping – combining interdependent tasks into one job ➡ e.g. video journalist completes an entire product (a news story) 2. Establishing client relationships – putting employees in direct contact with their clients -- supervisor isn’t a go-between Dimensions of Empowerment Empowerment is a psychological concept with four dimensions: Self determination Dimensions of • Empowered employees feel that they have freedom, independence, Empowerment and discretion over their work activities Slide 18 Meaning • Employees who feel empowered care about their work and believe that what they do is important Competence • Empowered employees are confident about their ability to perform the work well and have a capacity to grow with new challenges (selfefficacy) Impact • Empowered employees view themselves as active participants in the organization – their decisions and actions influence the company’s success Supporting Empowerment Slide 19 Supporting Empowerment Individual factors • Possess competencies, can perform the work, can handle additional decision making demands Job characteristics (job design factors) • Autonomy, task identity, task significance, receive job feedback Organizational factors • Resources and information is accessible, learning orientation culture, employees are trusted Self-Leadership Slide 20 Self-Leadership The process of influencing oneself to establish the self-direction and selfmotivation needed to perform a task Includes concepts/practices from: • Goal setting • Social cognitive theory • Sports psychology – constructive thought processes Elements of Self- Leadership Slide 21 Elements of Self-Leadership 1. Personal Goal Setting • Set goals for your own work effort • Apply effective goal setting practices • Requires a high degree of self-awareness 2. Constructive Thought Patterns • Self-talk – talking to ourselves about our own thoughts or actions ➡ Positive self-talk increases self-efficacy • Mental imagery – two parts (a) mentally practicing a task and anticipating obstacles, and (b) visualizing successful task completion Instructor Manual for Organizational Behavior: Emerging Knowledge, Global Reality Steven McShane, Mary Von Glinow 9780077862589, 9781259280634, 9781259562792, 9780071077989
