CH-5 Theories of Work Motivation – Organizational Behaviour: Understanding and Managing Life at Work: Book Guide

CHAPTER 5 THEORIES OF WORK MOTIVATION SAMPLE ANSWERS TO DISCUSSION QUESTIONS 1. Many millionaires continue to work long, hard hours, sometimes even beyond the usual age of retirement. Use the ideas developed in the chapter to speculate about the reasons for this motivational pattern. Is the acquisition of wealth still a motivator for these individuals? Answer: Clearly, the wealth for which millionaires continue to work is not sought to fulfill basic needs (Maslow’s physiological and safety or Alderfer’s existence). For millionaires, these needs are already well satisfied. A certain proportion of such persons may continue to seek money per se to influence others (power). Most millionaires, however, probably continue to work because of the intrinsic satisfaction derived from the acquisition process itself. Money is simply tangible feedback for a job well done, and its symbolic properties are more important than its fiscal properties. For these people, the acquisition process itself, rather than the wealth, is the stimulus that motivates them to continue to work. 2. Discuss a time when you were highly motivated to perform well (at work, at school, in a sports contest) but performed poorly in spite of your high motivation. How do you know that your motivation was really high? What factors interfered with good performance? What did you learn from this experience? Answer: High motivation is signaled by high effort, persistent effort over time, and a concerted attempt to direct one’s effort to achieve a particular goal (effort, persistence, and direction). High motivation may not be converted into good performance due to low general cognitive ability, emotional intelligence, personality traits, inadequate task understanding, or bad luck. Thus, not all highly motivated persons will be good performers. When individuals perform poorly despite high motivation, they ideally search for the inhibiting factor and attempt to correct it through education, training, or discussion with experts such as superiors, teachers, or coaches. 3. Use Maslow’s hierarchy of needs and Alderfer’s ERG theory to explain why assembly line workers and executive vice-presidents might be susceptible to different forms of motivation. Answer: According to Maslow and Alderfer, vice-presidents would most likely have their basic or lower-order needs satisfied (physiological and safety, or existence). This is less likely the case with lower status assembly line workers. Accordingly, vice-presidents would be more susceptible to motivation through factors that fulfill their higher order needs (esteem and self-actualization, or growth). Special recognition and challenging tasks would have this effect. Assembly line workers would more likely be motivated through money, money surrogates, safety, and job security. 4. Colleen is high in need for achievement, Eugene is high in need for power, and Max is high in need for affiliation. They are thinking about starting a business partnership. To maximize the motivation of each, what business should they go into, and who should assume which roles or jobs? Answer: The business should be anything that will capitalize on their diverse needs by providing separate roles that correspond to their personalities. How about an executive recruitment agency? Eugene can be general manager, Colleen can sell the service to businesses, and Max can interview job candidates. 5. Reconsider the case of Tony Angelas, which was used to illustrate expectancy theory. Imagine that you are Tony’s boss and you think that he can be motivated to perform at a high level. Suppose you cannot modify second-level outcomes or their valences, but you can affect expectancies and instrumentalities. What would you do to motivate Tony? Prove that you have succeeded by recalculating the force equations to demonstrate that Tony will now perform at a high level. Answer: The boss can attempt to increase Tony’s expectancy that he can perform at a high level or he can increase the instrumentality of high performance for obtaining a promotion or pay raise. (He could also attempt both strategies simultaneously.) First, assume that the boss attempts to raise Tony’s expectancy of high performance by pointing out certain cost savings that Tony could implement in the store chain and suggesting how these savings might be realized. If this raises Tony’s expectancy of high performance from .3 to .5, the force product for high performance is now .5 × 5.1 = 2.55. This is larger than the product for average performance (1.70), and Tony could be expected to direct his efforts toward high performance. Alternatively, suppose the boss guarantees Tony a pay raise if he performs at a high level in the future. The instrumentality of high performance is now 1.0 × 5+ .3 × 7 = 7.1. The valence of average performance remains at 1.70. Multiplying these valences by their respective expectancies, we again find that Tony should now attempt to perform at a high level. 6. Debate the following statements: Of all the motivational theories we discussed in this chapter, goal setting theory is the simplest to implement. Goal setting is no more than doing what a good manager should be doing anyway. Answer: Compared to need theories, expectancy theory, and equity theory, the basic form of goal setting is simple to implement. It does not require knowledge of individual needs, equity perceptions, or expectancies and instrumentalities nor does it require radical policy and structural changes. However, more complex goal setting programs that are implemented throughout an organization are not so simple to implement. They require much time and commitment from all involved parties. Although good managers and supervisors should employ goal setting, there is evidence that they often fail to do so. Employees often report substantial role ambiguity that suggests an absence of clear performance goals and priorities. Furthermore, the type of goal that should be set will depend on the nature of the task. Learning goals will be more effective when employees are performing novel or complex tasks. On such tasks, high performance goals might be harmful. When a task is straightforward, a specific high performance goal will be most motivational. Thus, while managers should employ goal setting, goal setting theory is not as simple as it might appear. The manager also needs to understand the difference between proximal and distal goals and know when it is best to focus on one or the other or both. 7. What are the implications of goal orientation for motivating a group of employees? When would it be best to set a learning goal versus a performance goal? When would it be best to set a proximal goal versus a distal goal? Describe a situation in which it would be best to set a learning goal and a situation in which it would be best to set a performance goal. Describe a situation when it would be best to set a proximal goal and a situation in which it would be best to set a distal goal. Answer: It is first worth noting that although goal orientation is considered to be a stable individual difference, there is also evidence that it can be manipulated. When it comes to motivating employees, the most appropriate goal to set will depend on the task. Learning goals are particularly important for learning to perform a new or complex task since individuals need to focus on learning and understanding the task, as well as how to use task strategies to accomplish the task. Focusing on performance outcomes will be detrimental to learning, understanding, and the development of task strategies. Learning goals are also important for complex tasks that require individuals to focus on the process of doing a task rather than focusing just on outcomes. For more routine tasks in which employees have a good understanding of how to perform the task, a performance goal is most likely to be motivational and lead to higher performance. Students should understand the value of a learning goal when they are learning to do something for the first time, and that if all they are thinking about is how well they do and how they will look in front of others, they are probably not going to learn the task and this will be detrimental to their performance. Thus, students should describe situations where employees are learning to perform a novel or complex task that will benefit the most from a learning goal. For a high performance goal, they should describe a routine or straightforward task in which employees have considerable experience performing. A distal goal is a long-term or end-goal, such as achieving a certain level of sales performance. A proximal goal is a short-term or sub-goal that is instrumental for achieving a distal goal. Proximal goals are most effective for novel and complex tasks. Distal goals can have a negative effect on such tasks unless they are accompanied with proximal goals. Thus, it is best to set a distal goal for tasks that are routine or that an individual has experience performing. When the task is novel or complex, it is best to set proximal goals which can be accompanied by distal goals. Thus, students should describe a new, difficult, or complex task for when it would be best to set a proximal goal. They should describe a simple, routine, or familiar task as best for setting a distal goal. 8. Critique the following assertion: People are basically the same. Thus, the motivation theories discussed in the chapter apply equally around the globe. Answer: Everywhere, people are sensitive to reward contingencies and issues of fairness or equity. However, what is considered rewarding and what is considered fair may vary greatly across cultures and this requires tailoring of motivational systems. Further, people’s needs vary and so will the things that they desire to satisfy them. While goals tend to be motivational across cultures, cultural differences will dictate the nature of the goal (e.g., individual versus group) as well as the goal setting process and the manner in which goals should be set (e.g., participative versus assigned). 9. Describe self-determination theory and provide an example of when your motivation was controlled and when it was autonomous. What factors contributed to your autonomous and controlled motivation and what effect did it have on your performance? Answer: Self-determination theory (SDT) has to do with whether motivation is autonomous or controlled. Autonomous motivation occurs when people are motivated by intrinsic factors and are in control of their motivation. Controlled motivation occurs when people are motivated to obtain a desired consequence or extrinsic reward and their motivation is controlled externally. For controlled motivation, students should give examples in which they were motivated by an extrinsic reward (such as money). For autonomous motivation, they should give an example in which they were motivated by intrinsic factors such as the feeling of achievement, accomplishment, and challenge that was a direct result of working on a task. Students should explain the effect that their autonomous and controlled motivation had on their motivation and their performance. Ask them to explain any differences in their level of motivation and their performance. It is worth noting that autonomous motivation has been found to facilitate performance so you might ask students if this was the case for them and if so why. You might probe students about how long they were motivated and the long-term effect on their performance. For controlled motivation students might have been initially highly motivated but overtime less so as they see that they are externally controlled. Those with autonomous motivation might be more motivated over the long-term and also perform better. 10. What is the relationship between cognitive ability and emotional intelligence with job performance? When would emotional intelligence be most important for a person’s job performance? When is cognitive ability especially important for job performance? Answer: Much has been made about the importance of emotional intelligence over the last several years and students might get the impression that it is just as important as cognitive ability when it comes to job performance. However, this is not necessarily the case. As noted in the chapter, cognitive ability is a strong predictor of job performance in most jobs, especially those at higher levels that are more complex. Further, one study noted in the chapter found that emotional intelligence is most strongly related to job performance when individuals have low levels of cognitive ability. This suggests a compensatory model which basically says that when job performance is not attained through cognitive ability, it can be attained through emotional intelligence. Thus, while both cognitive ability and emotional intelligence are related to job performance, emotional intelligence is most strongly related to job performance for participants with low cognitive ability. To put it another way, for individuals who are high on cognitive ability, emotional intelligence is not as important for their job performance. It is also important to point out that emotional intelligence will be more important for jobs that require people to use their emotions and involve a high degree of emotional labour. Thus, jobs vary in terms of the need for emotional intelligence so emotional intelligence will be more important for job performance in those jobs where it is an important factor in the performance of the job. Naturally, in those jobs where emotions and emotional labour are not important, cognitive ability will be more important for job performance especially for complex jobs. Finally, it is worth pointing out that a recent meta-analysis on emotional intelligence found that EI predicted job performance above and beyond cognitive ability and the Big Fiver personality variables. This, it would seem that a higher EI is important for job performance over and above a person’s cognitive ability. SAMPLE ANSWERS TO INTEGRATIVE DISCUSSION QUESTIONS 1. With respect to the cross-cultural dimensions of values described in Chapter 4 (i.e., work centrality, power distance, uncertainty avoidance, masculinity/femininity, individualism/collectivism, and long-term/short-term orientation), discuss the implications of each value for exporting the work motivation theories discussed in this chapter across cultures. Based on your analysis, how useful are the theories described in this chapter for understanding and managing motivation across cultures? What are the implications? Answer: To some extent, all of the theories considered in the chapter can be applied across cultures. The key is understanding cultural differences and knowing how to tailor the need theories to specific cultures. Let’s consider the cross-cultural values. First, different cultures value work differently. People for whom work is a central life interest tend to work longer hours. In cultures with high work centrality, individuals might be motivated to fulfill higher-order needs. In cultures with low work centrality, individuals might only be motivated to fulfill basic physiological needs. Power distance is the extent to which an unequal distribution of power is accepted by society members. In small power distance cultures, inequality is minimized, superiors are accessible, and power differences are downplayed. In large power distance societies, inequality is accepted as natural, superiors are inaccessible, and power differences are highlighted. Therefore, what is considered to be equitable in high and low power distance cultures will differ. Inequity might not be as motivational in cultures that value large power distance. Uncertainty avoidance is the extent to which people are uncomfortable with uncertain and ambiguous situations. Strong uncertainty avoidance cultures stress rules and regulations, hard work, conformity, and security. Cultures with weak uncertainty avoidance are less concerned with rules, conformity, and security, and hard work is not seen as a virtue. Thus, in countries that value uncertainty avoidance, clear goals along with strong expectancies and instrumentalities might be more motivational since individuals do not like uncertainty. More masculine cultures clearly differentiate gender roles, support the dominance of men, and stress economic performance. More feminine cultures accept fluid gender roles, stress sexual equality, and stress quality of life. Thus, concerns about equity will likely differ between masculine and feminine cultures. Individualistic cultures stress independence, individual initiative and privacy. Collective cultures favour interdependence and loyalty to family or clan. Thus, goals need to focus on individuals in individualistic cultures and the collective or group in collectivist cultures. Cultures with a long-term orientation tend to stress persistence, perseverance, thrift, and close attention to status differences. Cultures with a short-term orientation stress personal steadiness and stability, face-saving, and social niceties. Thus, motivational theories that focus on persistence such as goal setting and expectancy theory might be most effective in cultures with a long-term orientation. In summary, when applying motivation theories across cultures, one has to understand the effect of cultural values on: 1. People’s needs and those needs they seek to fulfill; 2. How important equity is and what type of equity is valued; 3. The extent to which people need to know what is expected of them (expectancy) and what they will receive in return for what they do (instrumentality); and 4. What types of goals people value and will be most motivational (e.g., individual or group goals). 2. Consider the basic characteristics of motivation in relation to operant learning theory and social cognitive theory. What are the implications of operant learning theory and social cognitive theory for motivation, and how do they compare to the theories of work motivation described in this chapter? Answer: Motivation is the extent to which persistent effort is directed toward a goal. These basic characteristics, persistence, effort, and goals, are all relevant in terms of operant learning theory and social cognitive theory. Students may think that these theories only apply to learning. Thus, it is helpful to demonstrate that they also have implications for motivation. For example, to the extent that some form of reward or positive reinforcement is contingent on certain behaviours, individuals will be motivated to perform the behaviour. That is, they will devote considerable effort and persist towards achieving a goal if it is reinforced. In terms of social cognitive theory, there are motivational implications that stem from observation, self-efficacy, and self-regulation. For example, people will be motivated to imitate the behaviour of others if they observe a connection between the behaviour and positive consequences. High self-efficacy is motivational because people with high self-efficacy are more likely to persist in the pursuit of a goal. Finally, self-regulation is motivational to the extent that people set goals (goal setting theory) and reward themselves for goal accomplishment. In terms of the motivation theories described in the chapter, self-efficacy is similar to the expectancy component in expectancy theory; positive reinforcement is similar to instrumentality in expectancy theory; and self-regulation involves both goal setting and rewards or positive reinforcement. SAMPLE ANSWER TO ON-THE-JOB CHALLENGE QUESTION: EMPLOYEE TIME THEFT Why are employees motivated to steal from their organization? Use the theories of motivation discussed in the chapter to answer this question. What can organizations do to prevent employee time theft? Consider the implications of each theory of motivation for preventing all forms of employee theft. Answer: The first theory that seems relevant for this issue and in fact any situation where employee theft is involved is equity theory. According to equity theory, motivation stems from a comparison of the inputs one invests in a job and the outcomes one receives in comparison with the inputs and outcomes of another person or group. That is, workers compare their own job inputs and outcomes with those of other individuals or groups. Inequity occurs when these ratios are unequal. When inequity exists people may adopt a number of tactics to reduce inequity such as perceptual distortion of one’s own inputs or outcomes, perceptual distortion of the inputs or outcomes of the comparison person or group, choose another comparison person or group, alter one’s inputs or outcomes, or leave the exchange relationship. Based on equity theory, employees are motivated to steal in order to reduce inequity. In effect, what they are doing is increasing the outcomes they receive from the organization by stealing. Equity theory suggests that perceived underpayment will have negative consequences for the organization and stealing is one of them. Therefore, to prevent employee time theft according to equity theory, managers need to understand that feelings about equity stem from a perceptual social comparison process in which the worker “controls the equation”—that is, employees decide what are considered relevant inputs, outcomes, and comparison persons, and management must be sensitive to these decisions and the importance of employee perceptions about equity and inequity and correct misperceptions of the inputs and outcomes of comparison persons. They should also try to ensure that the outputs employees receive are comparable to similar jobs in other organizations and across their own organization. Need theory can also be considered as relevant for this question. If employees are not able to fulfill their needs from their job, then time theft and stealing might provide them the additional means of doing so. Therefore, organizations need to be aware of employee needs and provide them with incentives that will enable them to fulfill at least their lower level needs. Expectancy theory can also be used to explain employee motivation to steal time and material things. If any of the links are weak (low expectancy, low instrumentality, or low valence of second-level outcomes), then stealing might be a way for employees to deal with their inability to obtain desired rewards from their job. Thus, organizations should ensure that all of the linkages in the theory are strong such that employees can perform at a level that will lead to desired outcomes. If they can’t, then the motivation to steal will be greater. With respect to time theft in particular, it might also be a means for employees to derive greater intrinsic rewards from a job that is otherwise not very interesting or intrinsically motivation. Therefore, providing employees with intrinsic motivators through work that is challenging might be an effective means to curtail time theft. EXTRA ESSAY QUESTIONS 1. What is motivation? Answer: Motivation is the psychological process that initiates, directs, and sustains behavior towards achieving a goal. It encompasses the internal and external factors that stimulate individuals to take action and persist in their efforts. 2. Compare and contrast the need theories of Maslow, Alderfer, and McClelland. Answer: • Maslow's Hierarchy of Needs: • Proposes a five-level hierarchy of needs: physiological, safety, social (belongingness), esteem, and self-actualization. • Individuals must satisfy lower-level needs before they can address higher-level needs. • Needs are arranged in a strict order of priority. • Alderfer's ERG Theory: • Simplifies Maslow's hierarchy into three categories: Existence (physiological and safety), Relatedness (social), and Growth (esteem and self-actualization). • Unlike Maslow, ERG theory allows for the possibility of regression when higher-level needs are unmet, enabling individuals to refocus on lower-level needs. • McClelland's Theory of Needs: • Focuses on three specific needs: Achievement (nAch), Power (nPow), and Affiliation (nAff). • These needs are not hierarchical; individuals may be motivated by one or more simultaneously. • Emphasizes learned needs and the influence of culture and life experiences. Comparison: • Maslow and Alderfer both propose a hierarchical structure, but Alderfer’s model is more flexible. • McClelland differs by focusing on three distinct, non-hierarchical needs and considers cultural and experiential factors. 3. Why do people work? Why do some people work harder than others? Answer: People work to fulfill a range of needs, including financial security, personal fulfillment, social interaction, and professional growth. Some people work harder than others due to differences in intrinsic motivation, personal values, goals, perceived rewards, work environment, and individual differences in personality and life circumstances. 4. Distinguish between extrinsic and intrinsic motivation. How are they related in terms of their effect on performance? What do they have to do with autonomous and controlled motivation? Answer: • Extrinsic Motivation: Driven by external rewards, such as money, recognition, or avoiding punishment. • Intrinsic Motivation: Driven by internal rewards, such as personal satisfaction, interest, and enjoyment of the work itself. Relation to Performance: • Both types of motivation can enhance performance, but intrinsic motivation often leads to more sustained and satisfying engagement. Autonomous vs. Controlled Motivation: • Autonomous Motivation: Involves intrinsic motivation and self-determined extrinsic motivation, where individuals feel they have choice and control. • Controlled Motivation: Involves extrinsic motivation driven by external pressures or demands. 5. Outline the managerial implications of the need theories. Answer: • Managers should recognize and address the diverse needs of employees. • Providing opportunities for personal growth, creating a safe and supportive work environment, and fostering a sense of belonging can help meet employees' needs. • Understanding individual differences in needs can help managers tailor their motivational strategies. 6. What is expectancy theory? Is the theory a realistic one? Answer: Expectancy theory posits that individuals are motivated to act in certain ways based on their expectations of the outcomes. It consists of three components: • Expectancy: The belief that effort will lead to performance. • Instrumentality: The belief that performance will lead to a certain outcome. • Valence: The value placed on the outcome. Realism: The theory is realistic as it accounts for individual differences and emphasizes the cognitive processes involved in motivation. However, it assumes that individuals are rational and have clear expectations, which may not always be the case. 7. What can an individual do when perceived inequity exists? Answer: • Change Inputs: Alter effort, time, or commitment. • Change Outcomes: Seek increased compensation or recognition. • Change Perceptions: Reevaluate the situation and adjust perceptions of fairness. • Leave the Situation: Exit the job or relationship causing the inequity. • Change Comparison: Shift the person or standard used as a benchmark for comparison. 8. How can goal setting be motivational? Answer: • Clarity: Specific goals provide clear direction and focus. • Challenge: Challenging goals encourage effort and persistence. • Commitment: Increases dedication to achieving the goal. • Feedback: Provides information on progress, helping to adjust efforts. • Task Complexity: Ensures goals are attainable and appropriately challenging. 9. What is the difference between a learning goal orientation, a performance-avoid goal orientation, and a performance-prove goal orientation? What kind of goal do you prefer and why? What is the difference between a proximal and a distal goal? Answer: • Learning Goal Orientation: Focuses on developing competence and mastering new skills. Preferred for personal growth and adaptability. • Performance-Avoid Goal Orientation: Aims to avoid negative judgments and failures. • Performance-Prove Goal Orientation: Seeks to demonstrate competence and gain positive judgments. Proximal vs. Distal Goals: • Proximal Goals: Short-term objectives that are closer in time. • Distal Goals: Long-term objectives that are further away in time. 10. Explain how the theories of work motivation are related. Answer: Theories of work motivation are interconnected, often addressing different aspects of the motivational process. For example, need theories focus on the content of motivation, expectancy theory on cognitive processes, and goal-setting theory on the structure of goals. Together, they provide a comprehensive understanding of what motivates individuals. 11. What is the difference between cognitive ability and emotional intelligence and what role do they play in the motivation – performance relationship? Answer: • Cognitive Ability: Refers to mental capacities, such as reasoning, problem-solving, and decision-making. It is crucial for job performance in tasks requiring intellectual effort. • Emotional Intelligence: Involves recognizing, understanding, and managing emotions in oneself and others. It plays a significant role in interpersonal relationships, communication, and leadership. Role in Motivation-Performance Relationship: Cognitive ability influences task performance, while emotional intelligence affects the management of emotions, which can impact motivation, job satisfaction, and overall effectiveness. TEACHING NOTES FOR WHAT IS YOUR GOAL ORIENTATION? EXPERIENTIAL EXERCISE This Goal Orientation scale was designed and validated by Zweig and Webster (2004). In a series of four studies with over 900 participants, they demonstrated the reliability, validity, and factor structure of a new tri-dimensional measure of goal orientation. Their findings indicate that goal orientation should be partitioned into three distinct factors. Students should be asked to complete the Goal Orientation scale prior to class. They can score and interpret their results by following the directions provided in the text on page 183. Given the link between goal orientation and performance, students are likely to be very interested in their score and what it means. For the discussion questions in the text, students should focus on the following: 1. Students should first identify their goal orientation scores. Based on their scores, they should identify their primary goal orientation. Group members can compare their scores and identify differences in goal orientation between members of the group. Answer: Students should begin by identifying their goal orientation scores using a predetermined scale (such as GPA or percentage) for their academic performance. They should determine their primary goal orientation based on their scores and compare these with group members to identify differences. This process will help highlight varying motivations and approaches to goals within the group. 2. Students should consider if there is a relationship between goal orientation and grade average (academic performance) and what goal orientation is important for grades and job performance. To facilitate this, you might have students submit their primary goal orientation and grade average (be sure to indicate the scale so that they are the same GPA or percentage for example) and then you can compare the average grade for each of the three goal orientations. A discussion should focus on whether or not goal orientation is related to and important for one’s grade average and the reasons for this. As indicated in the text, a learning goal orientation has been found to be related to learning as well as academic, task, and job performance while a performance-avoid orientation is negatively related to learning and lower task and job performance. A performance-prove orientation is not related to learning or performance. Answer: Students should explore whether their goal orientation correlates with their academic performance. They can do this by submitting their primary goal orientation and grade average, ensuring a standardized scale for comparison. The discussion can then focus on whether specific goal orientations, such as learning, performance-prove, or performance-avoid, are related to grade averages and job performance. • Learning Goal Orientation: Positively related to learning, academic, task, and job performance. • Performance-Prove Orientation: Typically not related to learning or performance. • Performance-Avoid Orientation: Negatively related to learning and tends to lower task and job performance. This exploration helps students understand the impact of goal orientation on their academic and job outcomes. 3. Students should consider the type of goal they will set for themselves in the future, especially now that they know what their primary goal orientation is. Students should indicate when it would be best for them to set a learning goal versus a performance goal and how it can affect their academic and job performance. Answer: Students should consider setting goals based on their primary goal orientation. They should identify situations where it would be more beneficial to set a learning goal versus a performance goal. For instance, a learning goal may be more appropriate for skill development and mastery, while a performance goal may be more relevant in competitive or evaluative situations. Understanding the context and their orientation can help students set goals that enhance academic and job performance. 4. Now that students have learned about their goal orientation, they should consider how they can use this knowledge in the future to improve their academic and job performance. Ask students what they should do and if they need to try and change their goal orientation. Students should try to understand that they might want to set learning goals in certain situations and that always having a performance-prove or performance-avoid goal can be detrimental to their academic and job performance. Answer: With insights into their goal orientation, students should consider how to leverage this knowledge for future improvement. They might need to adjust their goal orientation, such as shifting from a performance-avoid to a learning orientation, to improve their academic and job performance. Setting appropriate goals, such as learning goals, can foster a growth mindset and contribute to long-term success. 5. In concluding the exercise, ask students to describe what they have learned about themselves and how knowledge of their goal orientation can help them to set goals in the future that can have a positive effect on their learning and performance. Answer: In the final step, students should reflect on what they have learned about themselves and how their goal orientation can influence their future goal setting and performance. They should articulate specific strategies or changes they plan to implement to enhance their learning and performance. This reflection will help them internalize the exercise and apply the knowledge gained to real-world situations. This approach provides a comprehensive understanding of how goal orientation influences performance and offers practical steps for leveraging this knowledge to improve academic and job outcomes. To help students better understand the meaning of goal orientation and the three kinds of goal orientation, class discussion might revolve around the following issues: 1. What is a goal orientation and what are the different goal orientations? Answer: Goal orientation refers to an individual's disposition or mindset towards achieving objectives and how they approach learning and performance-related tasks. The three primary goal orientations are: • Learning Goal Orientation: Focuses on developing competence by acquiring new skills and mastering new situations. Individuals with this orientation seek challenges and view effort as a path to improvement. • Performance-Prove Goal Orientation: Aims to demonstrate competence and gain favorable judgments. People with this orientation are motivated by showing their abilities to others and proving their worth. • Performance-Avoid Goal Orientation: Centers on avoiding negative judgments and minimizing the risk of failure. Individuals with this orientation may avoid challenges and are primarily motivated by not looking incompetent. 2. How is goal orientation relevant for motivation and performance? Answer: Goal orientation is crucial because it shapes how individuals approach tasks, respond to challenges, and persist in the face of difficulties. • Learning Goal Orientation: Encourages intrinsic motivation, persistence, and a focus on mastery, leading to continuous improvement and higher performance in learning and work. • Performance-Prove Goal Orientation: Can lead to high performance in evaluative contexts where demonstrating competence is valued. However, it may also cause stress and anxiety if the individual is overly focused on proving their abilities. • Performance-Avoid Goal Orientation: Often results in avoidance behaviors, lower effort, and a fear of failure, which can hinder performance and personal growth. 3. How might your goal orientation score influence your grades? Answer: A student's goal orientation score can significantly impact their academic performance: • High Learning Goal Orientation: Likely to lead to better grades due to a focus on understanding and mastering the material. • High Performance-Prove Goal Orientation: May result in good grades if the student is motivated to perform well in assessments. However, this orientation might also cause anxiety and hinder deep learning. • High Performance-Avoid Goal Orientation: May lead to lower grades due to avoidance of challenging tasks and a focus on not failing rather than excelling. 4. How might your goal orientation influence your job performance and career? Answer: • Learning Goal Orientation: Can lead to continuous skill development, adaptability, and long-term career growth. Individuals with this orientation are likely to seek new challenges and opportunities for professional development. • Performance-Prove Goal Orientation: May drive individuals to excel in competitive and evaluative environments. However, they may also experience stress and be less open to constructive criticism. • Performance-Avoid Goal Orientation: Can result in conservative career choices, reluctance to take on new challenges, and limited career advancement due to a focus on avoiding failure. 5. Is it important for people to know about their goal orientation? Why? Answer: Understanding one's goal orientation is crucial for several reasons: • Self-awareness: It helps individuals recognize their motivations and how they approach tasks and challenges. • Personal Development: By understanding their orientation, individuals can identify areas for growth and development, such as shifting from a performance-avoid to a learning orientation. • Career Planning: Knowledge of goal orientation can inform career decisions, helping individuals choose paths aligned with their strengths and preferences. • Performance Improvement: Awareness of goal orientation can lead to better strategies for task management and overcoming obstacles, leading to improved academic and job performance. TEACHING NOTES FOR MAYFIELD DEPARTMENT STORES CASE INCIDENT 1. According to need theories of motivation and goal setting theory, will this program be motivational? Explain your answer. Answer: From a need theory perspective, the motivational effects of the program might be limited. This is because the reward may not be something that will fulfill the needs of some of the employees. It might be motivational for employees who like to travel, and in particular, would like to go to Mexico. For employees who are not interested in a trip to Mexico, the program will not be motivational at all. In terms of goal setting, there are no clear goals. Employees only know that if their department has the highest sales for at least one month, they will have a chance to win the trip. However, it is not clear what “highest” actually means in terms of sales figures. Thus, from a goal setting perspective, the program does not provide employees with specific goals or any goals for that matter. What is required is some idea of what “high” means in terms of sales. Then each department can set individual and department goals. 2. Discuss the motivational potential of the program according to expectancy theory and equity theory. Will the program motivate the sales staff and improve sales? Answer: From an expectancy theory perspective, it is unlikely that the program will motivate sales staff and improve sales. This is evident by looking at each component of the theory. First, it is not clear if employees will have a high expectancy that they can achieve a high level of sales. This is because it is unclear exactly what “high” actually means in terms of a sales figure, and more importantly, the focus is on department sales. Thus, while an individual might be able to improve his or her sales, it might not make a difference if the department as a whole does not perform at a high level. Furthermore, there are factors beyond employees’ control that will also impact their sales such as the economy and the type of goods in their department. Some departments will have higher sales regardless of anything an employee does. The instrumentality component will also be low. That is, the probability that high sales will result in the trip to Mexico is relatively low. This is because department sales must be higher than the other departments to be entered into the draw (thus an improvement in sales might not be enough if other departments do even better), and even if you do have the highest sales and are entered into the draw, you have a relatively low chance of winning the trip to Mexico because only three names will be drawn. Thus, there is a relatively low probability that high sales will result in a trip to Mexico. Finally, the valence of a trip to Mexico might not be attractive to all of the employees. To the extent it is not attractive they are unlikely to be motivated to improve their sales. This combined with the low instrumentality and low expectancy, means that the program is not likely to improve motivation or sales. In terms of equity theory, the program is not likely to be motivational. To begin with, because the basis of the program is department sales, all members of a department will or will not have their names entered into the draw regardless of individual performance or inputs. To make matters worse, only three people can win the trip and winning has no connection to one’s actual inputs. As a result, many employees are likely to experience inequity. In fact, given that only three employees will win, there will be many more employees who perceive inequity given that every employee who does not win is likely to question the inputs of those who do win and perceive their own inputs as similar if not greater. Thus, from an equity theory perspective, the program is not likely to be motivational or to improve sales and might actually make things worse. Individual employees will see no merit in increasing their own inputs and might actually lower them. 3. How would you change the program to make it more effective for motivating employees? Use expectancy theory, equity theory, and goal setting theory to support your plan to make the program more effective. Answer: The program would be more effective simply be adhering to the theories of motivation. In terms of the valence of second-level outcomes of expectancy theory, the incentive should be something that would be appealing and highly valent to employees. This may or may not be a trip to Mexico. Second, there should be specific and challenging goals for sales levels per department. This might be based on each department’s prior sales in order not to disadvantage those departments whose sales are always lower as a function of the items they sell. This would also ensure that the expectancy component of expectancy theory is high. Third, the instrumentality component of expectancy theory should be high such that there is a high probability that the attainment of the sales goal (first-level outcome) will result in the second-level outcome. Finally, since sales are made at the department level and communication and coordination among co-workers is important, the program should focus on department sales rather than individual sales. This would avoid infighting and conflict among co-workers within a department and encourage teamwork. Thus, if a department achieves their goal, then all members of the department are entitled to the prize not just a select few. The best way to ensure equity is for all members of the department with the highest sales to receive the prize and not just a select few that are randomly chosen. TEACHING NOTES FOR DATATRONIC CASE STUDY 1. What factors do you think contribute to the performance of the employees at DATATRONIC? Refer to Exhibit 5.1 to explain your answer. Answer: Given the nature of the work (e.g., data input) which is fairly routine and basic, motivation is likely to be a key factor for the performance of the employees at DATATRONIC. The tasks are easy to understand and perform. Cognitive ability is not very important for the performance of this job. Given that the tasks do not involve emotional labour, emotional intelligence is also not that important for job performance. As for personality, some of the Big 5 factors such as conscientiousness are probably related to performance. That is, more conscientious employees will be more likely to meet deadlines and probably make fewer errors. However, for the most part this is a job where motivation is likely to be an important contributor to employees’ job performance. 2. Consider the needs of the employees at DATATRONIC. What is most likely to motivate them? How important are intrinsic and extrinsic motivators? Is their motivation autonomous or controlled? Answer: The employees at DATATRONIC are students who are working part time to earn some extra money. The needs of these employees are primarily physiological/existence and money is most likely to satisfy their needs and motivate them. Clearly, what matters the most to these workers is extrinsic rewards. Intrinsic rewards are not likely to be as important or important at all given their need to fulfill their physiological or existence needs. They are there primarily for the money. Given that it is the money that motivates them to be there in the first place, their motivation is controlled. It is becomes even more controlled with George’s close supervision and the threats of being fired if they fail to meet project deadlines. 3. Discuss the motivational strategies being used at DATATRONIC. What are employees motivated to do? How do the theories of motivation help us understand employees’ motivation and performance and the effectiveness of motivational strategies? Answer: The motivational strategies used at DATATRONIC are not every effective. The pay is minimum wage and that simply motivates people to show up for work. As for the motivational strategies to get people to actually work once they are there, they are not very effective. Let’s consider each of the strategies and what the motivational theories say about them: George’s close supervision: All this does is prevent workers from talking to each other and socializing. It upsets workers to be so closely watched which does not seem warranted. This is more extrinsic and controlled motivation. It motivated the workers to stop socializing but many projects were still not being completed on time. List of employees completed projects. This was an attempt to keep track and monitor each employee’s performance. It is another example of extrinsic and controlled motivation. This strategy also included the threat of being fired if more than one project per month was not completed by the deadline. This was upsetting to employees who needed the extra money and now faced the threat of losing it. This was perceived by employees as unfair because some projects were more demanding and some deadlines were unreasonable. With this strategy, the best employees could hope for is not to be fired. However, this strategy did result in more projects being completed on time as employees were motivated to avoid being late for fear of being fired. The motivation to meet the deadline resulted in an increase in mistakes and errors. Thus, the focus on getting projects completed on time resulted in a decrease in the quality of completed projects. And the increased time needed to correct the mistakes just meant that projects continued to be completed after the deadline. Following this strategy, some of DATATRONIC’s best employees quit. Increase pay above minimum wage to new hires. This was useful for motivating students to work at DATATRONIC. However, it was not fair for current employees who were quick to react to the perceived inequity. From an equity theory perspective, it is obvious how this motivated existing employees to quit. After all, their tenure in the organization and experience was greater than new hires who were now receiving greater outcomes as a result of the increase in pay for new hires. Not surprisingly, experienced employees threatened to quit if they did not receive a pay increase. Three-pronged strategy. The final three-pronged strategy was to first increase the pay of those employees who had threatened to quit to what new hires were being paid. In terms of motivation, all this does is motivate the experienced workers to stay on the job and not quit. It does not address the need to motivate workers to meet deadlines and complete projects without errors. However, the inequity will now be even greater for experienced employees who did not threaten to quit and did not receive the increase. Now they receive lower pay than new hires as well as co-workers with the same experience. Thus, there is now a group of experienced employees who will perceive their outcomes as lower than new hires as well as other experienced co-workers even though their inputs are greater than new hires and the same as the higher-paid experienced employees. The second component of this strategy was to offer a $100 bonus at the end of every month to the employee who performs best on completion of projects on time and in terms of quality. This is the first strategy that has been employed to actually motivate the workers to complete their projects on time and without mistakes by offering a consequence that fulfills employees’ needs and is highly valent (i.e., money). The problem is that only one worker per month will receive the bonus. This means that even if an employee shows an improvement and meets most deadlines and has few mistakes, he/she might not get the bonus. Thus, from an expectancy theory perspective, the instrumentality is very weak because the probability of a first level outcome (meeting deadlines and few mistakes) resulting in a second level outcome (bonus) is not very high. The third component of the strategy is to make employees correct their mistakes on their own time without pay. This is another example of controlled motivation. From a need theory perspective, none of these strategies is motivational (except for the $100 bonus but you have to compete with others to get it) because they do not provide an incentive or a way for employees to fulfill their needs. In fact, the only thing that employees can bank on is not getting fired if they meet their project deadlines or not have to correct errors on their own time without pay. In terms of expectancy theory, employees get minimum wage for coming to work (except for new hires and some experienced workers who now get more than minimum wage) but cannot do any better than that regardless of how well they perform unless they the get the monthly bonus but as indicated above, the instrumentality linkage for this is weak because only one employee a month can get it. Thus, in terms of expectancy theory, there is not a strong link between level of performance and a desirable second-level outcome (instrumentality). It is also possible that some employees are unable to meet some of the deadlines thereby making the expectancy linkage low. And in terms of equity theory, employees get the same minimum wage regardless of how well they perform and new hires and some experienced workers are being paid more than experienced workers who did not threaten to quit. Although the deadlines and few mistakes can be seen as specific goals, they are enforced in what has become a negative work climate where there is little support from management. Thus, employees are not likely to be very committed to these goals which at best only results in not being fired. Thus, the theories of motivation all suggest that the motivational strategies are ineffective for motivating employees at DATATRONIC. Furthermore, there is no reason for employees to work faster or better to meet deadlines or improve the quality of their work as their pay, which is the most desired and highly valent incentive given their needs, will not change. It would seem that employees are at best, motivated to show up for work and just do what they have to do to get paid and not fired. 4. Using the theories of motivation, what advice would you give George and Rolin on how to motivate employees at DATATRONIC? Be sure to refer to the need theories and the process theories of motivation. Answer: For starters, George and Rolin need to understand the importance of money as a motivator for their employees who are primarily interested in fulfilling their basic physiological/existence needs and who will consider money to be highly valent. Second, there needs to be a strong connection (i.e., instrumentality) between meeting deadlines and work quality (few mistakes and errors) and pay. In other words, employees should receive additional pay for meeting project deadlines and for the quality of their work. Thus, rather than threatening to fire people who do not meet deadlines, they should provide a bonus for meeting deadlines and for quality work and this should be available to all employees. George and Rolin should also understand the importance of fairness and pay equity. Clearly, new hires should not be paid more than experienced employees. If they want to pay new hires above the minimum wage then they should pay experienced employees more. A good approach might be to increase the hourly pay at certain periods of tenure so that the longer one has been working at DATATRONIC then the higher will be their hourly pay. This will help to create greater perceptions of equity. In addition, to the extent that the procedures for rewarding projects that meet deadlines and are of high quality are fair and employees who do meet their deadlines and whose work is without errors receive more outcomes, then this should also create greater perceptions of equity. Finally, the goal setting process with respect to meeting deadlines and work quality might be formalized such that specific goals are set for each project with respect to the deadline and work quality. It might be a good idea to use participation to set these goals especially given the current state of affairs in which some employees believe that the deadlines and work demands are not always reasonable. If employees participate in setting goals they will be more committed to them. Goals will then become motivational and also increase the expectancy component of expectancy theory. Thus, all of the motivational theories can be used to explain to George and Rolin how to motivate their employees: need theories: focus on providing additional pay; expectancy theory: instrumentality should be high such that if one achieves a first level outcome (deadline and work quality) there is a high probability of getting more money; equity theory: hourly wage should be based on tenure at DATATRONIC (note that it could also vary according to the work that an employee does; for example, an employee whose job is mostly to do advanced statistics might be paid more than an employee who just inputs data); goal setting theory: use participation with employees for each project to set a goal for project completion time and work quality and provide feedback on each project. 5. What would you do to motivate DATATRONIC employees? Be specific in terms of how to motivate them to complete projects on time, to complete projects without errors, and to continue to work at DATATRONIC. Justify your answers using the theories of motivation. Answer: Students’ answers are likely to vary and it might be interesting to hear the various ideas they have about this and how they relate to it. Whatever they suggest, it is important that their suggestions are based on the motivation theories and that they can explain their strategy from a theoretical perspective. In addition, they should be clear about what it is that they are focusing on when it comes to motivating employees. In other words, they need to be clear about what they are motivating employees to do and how they would motivate them to do whatever it is they want them to do. As indicated in the answer to question 5, to motivate employees to complete projects on time and without errors one can ensure that the linkages in expectancy theory are strong such that employees are capable of achieving the first level outcomes expected of them (deadline and work quality), and that there is a high probably that the first level outcome will result in additional pay (instrumentality). Setting specific goals for the deadline and quality of each project will also be motivational and even more so if meeting the goal results in extra pay. Both of these suggestions might also help to retain employees given the opportunity to earn extra money by meeting first level outcomes/goals. An additional strategy aimed at retaining employees is to increase the hourly pay with tenure at DATATRONIC. In other words, employees will be motivated to stay if they their hourly pay increases with greater tenure at DATATRONIC (perhaps every 4 or 6 months depending on when employees tend to quit.) Thus, the use of pay as a motivator can be made contingent on the outcome that one wants to achieve be it project deadlines, work quality, and/or retention. To effectively motivate DATATRONIC employees, it's essential to consider various motivational theories and apply them to the specific goals of completing projects on time, minimizing errors, and encouraging long-term commitment to the company. Here's a comprehensive plan based on these goals, with justifications grounded in motivation theories: 1. Motivating Employees to Complete Projects on Time a. Goal Setting Theory: • Specific and Challenging Goals: Set clear, specific, and challenging deadlines for each project phase. Ensure that these deadlines are realistic but require a reasonable stretch, which can enhance motivation and focus. • Feedback Mechanisms: Implement regular check-ins and feedback sessions to monitor progress and adjust goals as needed. Timely feedback keeps employees on track and motivated. b. Expectancy Theory: • Clarify Expectations and Rewards: Clearly outline the expectations for completing projects on time and the rewards associated with meeting deadlines, such as bonuses or public recognition. • Increase Expectancy: Provide necessary resources, training, and support to ensure that employees feel confident in their ability to meet deadlines. 2. Motivating Employees to Complete Projects Without Errors a. Quality Incentives: • Incentive Systems: Implement a quality-based incentive system where bonuses or rewards are tied to error-free work. This can be linked to individual or team performance, encouraging meticulousness. b. Self-Determination Theory: • Autonomy: Give employees some autonomy in how they approach their work, which can lead to increased intrinsic motivation and ownership of the project's quality. • Competence: Offer continuous training and development opportunities to improve skills and reduce errors. This helps employees feel competent and capable, increasing their intrinsic motivation to perform well. c. Organizational Support: • Provide Adequate Resources: Ensure employees have access to the tools and resources needed to minimize errors, such as up-to-date software, reliable hardware, and sufficient staffing. 3. Motivating Employees to Continue Working at DATATRONIC a. Equity Theory: • Fair Compensation: Ensure that salaries and benefits are competitive with the industry standard and reflect the employees' contributions. Fairness in compensation can reduce turnover and increase job satisfaction. • Recognition and Rewards: Recognize employees' efforts and achievements publicly. Recognition can be monetary (bonuses, raises) or non-monetary (awards, acknowledgments). b. Affective Commitment: • Foster a Positive Organizational Culture: Create a supportive and inclusive work environment where employees feel valued and connected to the company's mission. Strong interpersonal relationships and a sense of belonging can increase emotional attachment to the organization. c. Career Development: • Career Pathways: Provide clear career development pathways and opportunities for advancement. Offer mentorship programs and regular career counseling to help employees see a future within the company. • Training and Development: Invest in continuous training and development, allowing employees to acquire new skills and take on more challenging roles. d. Work-Life Balance: • Flexible Work Arrangements: Offer flexible work hours, remote work options, and other work-life balance initiatives. This can improve job satisfaction and reduce burnout, encouraging long-term commitment. Justification Using Theories of Motivation 1. Goal Setting Theory emphasizes the importance of specific, challenging goals and feedback, which directly applies to setting deadlines and quality standards. 2. Expectancy Theory suggests that motivation is based on the expectation of desired outcomes, making it crucial to clarify expectations and rewards. 3. Self-Determination Theory focuses on intrinsic motivation, highlighting the importance of autonomy, competence, and relatedness. Providing autonomy, training, and a supportive environment aligns with this theory. 4. Equity Theory stresses the importance of perceived fairness in rewards, which can affect employee retention and satisfaction. 5. Affective Commitment relates to employees' emotional attachment to their organization, which can be fostered through a positive work culture and career development opportunities. By combining these theories and approaches, DATATRONIC can create a comprehensive motivational strategy that addresses timely project completion, error reduction, and employee retention. ADDITIONAL CASE STUDY: LINCOLN ELECTRIC COMPANY On the surface, the Lincoln Electric Company might look like a motivational disaster. The firm, located near Cleveland, Ohio, offers employees no paid sick days and no paid holidays. Lincoln employees have to pay their own health insurance and overtime work and unexpected job reassignments are mandatory. If older workers lower their productivity, they receive less pay. Management does not take seniority into account in promotions. Lincoln managers receive no executive “perks”—no cars, no executive dining room, no club memberships, no management seminars, and no reserved parking. Despite these apparently draconian policies, Lincoln has become something of a mecca for visiting managers (from Ford, GM, TRW, 3M, Motorola, and McDonnell Douglas), who flock to Cleveland to learn something about motivation. Lincoln is the world’s largest producer of arc welding equipment, and it also makes electric motors. The firm has turned a handsome profit every quarter for over 50 years and has not laid anyone off for over 40 years. In 1995, the company celebrated its centennial year by posting record sales of $1.03 billion. Employee turnover is extremely low, and Lincoln workers are estimated to be roughly twice as productive as other manufacturing workers. This productivity is an important key to Lincoln’s success because it is not dealing in high-tech products, and it does not compete strongly on price. What is the secret to Lincoln’s motivational success? In a word, money. Lots of it. In addition to its leadership position in the manufacture of arc welding equipment, Lincoln Electric is also known for its innovative incentive system. Lincoln Electric offers what some say are the best paid factory jobs in the world. At the core of the system is an intricate piece-rate pay plan that rewards workers for what they produce and a merit-based profit-sharing plan that provides a yearly bonus. This bonus, which can approach 100 percent of regular earnings, is also allocated on merit to managers and staff. Each employee is regularly evaluated by his or her immediate supervisor on a number of dimensions (e.g., quality and cooperation). The size of the bonus pool is based on the company’s economic performance. In other words, the more profitable the company the larger will be the dollar pool from which the bonuses are paid. The total bonus received by each employee is based on his or her evaluation. As a result, there is a direct connection between an employee’s performance and the bonus paid out to that employee at the end of the year. Employees who do better than average receive a higher bonus and those who do worse than average receive a lower bonus. Year end bonuses normally range from 60 to 150 percent of regular salary. The average production worker has earned $45,000 in recent years, with some earning well over $85,000! If workers think up a way to increase productivity, the company does not adjust the piece-rate to cap potential wages. Also, they cannot work themselves out of a job, since Lincoln has a no-layoff policy. Effectively, this amounts to lifetime employment. Employees are guaranteed 30 hours a week, and work is shared instead of laying people off. Employees are so keen to get working that the company enforces a policy prohibiting them from coming in too early. The company is also known for having fewer supervisors per worker than most organizations, with a ratio of 1:100. Training programs are frequently available on all aspects of business and factory life including communication skills, teamwork programs, and math courses. When the company had its first big hiring in years, it received 27,000 applications. Life at Lincoln, however, is not for everyone. Some managers would resent the lack of perks. Some new production workers cannot take the fast pace and quit shortly after hiring. In fact, out of the 27,000 applications, 2,000 were eventually hired, but over 1,000 left in the first 90 days. Many never even apply because of Lincoln’s non-union status. In recent years, Lincoln Electric has expanded internationally. And although the company’s arc welding equipment is used in the same way everywhere, this has not been the case for the company’s motivational system. According to Donald Hastings, Chairman Emeritus and former CEO, “In many cases we didn’t truly understand the cultures of those countries we expanded. For example, we had an incentive program that was based on the belief that everybody in the world would be willing to work a little harder to enhance their lives and their families and their incomes. It was an erroneous assumption. It simply didn’t work in Germany, for example. Ten years from now, it might, because Germans are changing their thought patterns, getting away from a completely socialized economy where the quality of life is much more important than the monetary returns. But for now, they don’t really want to put in the extra time and effort that Americans, Canadians, and Australians do.” Although Lincoln Electric still sells their products in Germany, the manufacturing operation has been closed down. Sources: Hodgetts, R.M. (1997, Winter). A conversation with Donald F. Hastings of the Lincoln Electric Company. Organizational Dynamics, pp. 68–74; 60 Minutes, Lincoln Electric Company, 1993; Epstein, G. (1989, October). Inspire your team. Success, p. 12; Perry, N.J. (1988, December 19). Here come richer, riskier pay plans. Fortune, 50–58; Sharplin, A. D. (1990). Lincoln Electric Company, 1989. In A. A. Thompson, Jr., & A. J. Strickland, III. Strategic management: Concepts and cases. Homewood, IL: BPI/Irwin. 1. Describe the practices that Lincoln Electric uses to motivate employees. What are some of the consequences of these practices for employees and the company? Answer: • Piece-Rate Pay Plan: Employees are paid based on their output, directly linking pay to productivity. • Merit-Based Profit-Sharing Plan: Bonuses are distributed based on individual performance and the company’s profitability, often ranging from 60% to 150% of regular salary. • No Perks for Managers: Equality in terms of benefits, with managers receiving no special perks like cars, dining rooms, or club memberships. • No Layoff Policy: Guaranteed employment with a minimum of 30 hours per week, providing job security. • Low Supervisory Ratio: Fewer supervisors per worker, promoting autonomy. • Training Programs: Ongoing training in various skills, including communication and teamwork. Consequences: • High Productivity: Employees are motivated to work harder due to the direct link between effort and pay. • High Earnings Potential: Potential for high earnings through bonuses and piece-rate pay. • Job Security: The no-layoff policy provides a strong sense of security, encouraging loyalty. • Low Employee Turnover: Despite the lack of perks and the demanding work environment, employee turnover is low, indicating strong retention for those who fit the culture. • Challenging Work Environment: Some employees may find the pace and expectations challenging, leading to early exits. 2. Discuss the motivational system at Lincoln Electric, using each of the need theories of motivation. What does each theory say about the motivational practices at Lincoln Electric and which theory works best for explaining employees’ motivation? Answer: Motivational System Analysis Using Need Theories: • Maslow’s Hierarchy of Needs: • Physiological & Safety Needs: Met through high earnings and job security. • Social Needs: Low emphasis due to the competitive environment and lack of team-building perks. • Esteem Needs: Fulfilled through recognition in pay and bonuses based on performance. • Self-Actualization Needs: Training programs and the opportunity for innovation satisfy the need for personal growth. • Herzberg’s Two-Factor Theory: • Hygiene Factors: Job security, good pay, and company policies act as hygiene factors that prevent dissatisfaction. • Motivators: Achievement, recognition, and responsibility are emphasized through the incentive system. • McClelland’s Theory of Needs: • Need for Achievement: Strongly emphasized through the performance-based pay system. • Need for Affiliation: Less emphasized, given the competitive nature of the work environment. • Need for Power: Fulfilled to some extent through autonomy and the ability to influence one’s pay. Best Explaining Theory: McClelland’s Theory of Needs may best explain Lincoln’s success, as the high achievement drive aligns with the incentive system. 3. Consider the motivational system at Lincoln Electric in terms of the process theories of motivation. What does each theory say about the company’s motivational practices? In other words, can we understand the system and its effectiveness in terms of expectancy theory, equity theory, and goal setting theory? Answer: Motivational System Analysis Using Process Theories: • Expectancy Theory: • Expectancy: Employees believe that their efforts will lead to high performance (given the piece-rate system). • Instrumentality: High, as there is a clear link between performance and rewards (bonuses and pay). • Valence: The potential for high earnings and job security are highly valued outcomes. • Equity Theory: • Employees are likely to perceive the system as fair due to the merit-based pay and bonuses. Discrepancies in pay are attributed to performance, not seniority or favoritism. • Goal Setting Theory: • The piece-rate system and performance evaluations provide clear, challenging, and specific goals, which are effective motivators. 4. Some have said that the methods of motivation used at Lincoln Electric should be used by all organizations to motivate their employees. Do you believe this to be true? Explain your reasoning.Applicability to Other Organizations: Answer: While the motivational system at Lincoln Electric is highly effective, it may not suit all organizations due to its demanding nature and strong focus on monetary rewards. It might work best in environments where performance can be easily measured and employees are motivated by financial incentives. 5. Comment on the cross-cultural limitations of Lincoln Electric’s motivational system. How do the theories of work motivation help us to understand why the company’s incentive program did not work in Germany but does work in North America and Australia? What does this tell us about the cross-cultural limitations of the theories of motivation?Cross-Cultural Limitations: Answer: The incentive program may not work in cultures that value work-life balance over financial gain. In Germany, for instance, cultural norms prioritize quality of life, leading to resistance against extra work for monetary rewards. This reflects the limitations of motivational theories like Expectancy and Goal Setting, which may not universally apply across cultures. 6. What can other organizations learn about motivation from Lincoln Electric? What do you recommend that organizations do to motivate employees based on your knowledge of the Lincoln Electric motivational system and on your understanding of motivation? Answer: Lessons for Other Organizations: Organizations can learn the importance of aligning rewards with performance, providing job security, and offering opportunities for skill development. However, they must also consider cultural differences and individual employee needs when designing motivational systems. Recommendations: • Tailor Incentive Programs: Design incentive programs that align with both the company’s goals and employees' values. • Foster Fairness and Transparency: Ensure that performance evaluations and rewards are perceived as fair and transparent. • Supportive Work Environment: Balance high performance expectations with a supportive work environment that considers employee well-being. TEACHING NOTES FOR LINCOLN ELECTRIC CASE 1. Describe the practices that Lincoln Electric uses to motivate employees. What are some of the consequences of these practices for employees and the company? Answer: The motivational practices at Lincoln Electric include a piece-rate pay plan that rewards workers for what they produce, a merit-based profit-sharing plan that provides a yearly bonus, a no-layoff policy that amounts to life-time employment, and a guaranteed 30 hours a week of work. The consequences for employees have been higher than average pay making them among the best paid factory workers in the world. For the company, the consequences of these practices include a handsome profit every quarter for over 50 years, productivity that is twice that of other manufacturing workers, and extremely low turnover. 2. Discuss the motivational system at Lincoln Electric, using each of the need theories of motivation. What does each theory say about the motivational practices at Lincoln Electric and which theory works best for explaining employees’ motivation? Answer: According to need theories, people’s needs motivate them to obtain incentives that will satisfy their needs. Thus, employees are motivated to behave in a certain way in order to obtain the incentives required to fulfill their needs. Maslow’s Hierarchy of Needs posits that the lowest-level unsatisfied need has the greatest motivating potential and that once it has been satisfied, it will no longer be motivational, and the next highest-level need in the hierarchy will then become motivational. Thus, according to Maslow, employees at Lincoln Electric should not be motivated so much by money once they have fulfilled their physiological needs (although money also has symbolic value and can fulfill self-esteem needs). However, employees at Lincoln Electric continue to be motivated by money which is inconsistent with the main propositions of Maslow’s theory. ERG theory also posits that once lower-level needs are gratified, higher-level need satisfaction is desired. However, it also allows for the possibility that the less higher-level needs are gratified, the more lower-level need satisfaction is desired. This seems to better represent the motivation of employees at Lincoln Electric than does Maslow’s more rigid and lock-step hierarchy. That is, employees at Lincoln Electric are not likely to be fulfilling higher-level needs and they continue to be motivated by money and the satisfaction of lower-level needs. Finally, it would seem that in terms of McClelland’s Theory of Needs, employees at Lincoln Electric would have a high need for achievement. They have personal responsibility for their outcomes; they can pursue moderately difficult goals in order to produce more units and make more money; and they get feedback in that for every quality unit produced they get paid. Need for affiliation and need for power are less likely to be fulfilled then need for achievement. Thus, persons with a high need for achievement are more likely to be motivated and perform well at Lincoln Electric. 3. Consider the motivational system at Lincoln Electric in terms of the process theories of motivation. What does each theory say about the company’s motivational practices? In other words, can we understand the system and its effectiveness in terms of expectancy theory, equity theory, and goal setting theory? Answer: The process theories work especially well in explaining the effectiveness of the motivational system at Lincoln Electric. In terms of expectancy theory, workers have control over what they do and what they will produce each day. This, combined with the fact training programs in numerous areas are frequently available, means that the expectancy component of expectancy theory is high. In other words, workers believe they can achieve high levels of productivity. In addition, because pay is based on what you produce, the instrumentality component is also high. In other words, there is a high probability that if you achieve a particular first-level outcome, it will lead to a second-level outcome which in this case is money, something that is obviously highly-valent to Lincoln Electric employees. Equity theory also works well because there is a perfect relation between inputs and outcomes. Employees get paid (outcome) for every unit produced (input). Therefore, grater inputs result in greater outcomes for everybody. As a result, the equity ratios should be equal. Finally, because employees get paid for what they produce, they can set very specific and challenging goals for what they want to produce. Thus, all three process theories do a good job in explaining the effectiveness of the motivational system at Lincoln Electric. Incidentally, this also applies to the merit-based profit sharing plan which allocates bonuses based on an evaluation system. Thus, how well you perform is directly related to the bonus you receive. This means that instrumentality should be strong and equity ratios should be equal. 4. Some have said that the methods of motivation used at Lincoln Electric should be used by all organizations to motivate their employees. Do you believe this to be true? Explain your reasoning. Answer: It is tempting to see the success of Lincoln Electric’s motivational system and simply assume that it can be generalized to other organizations. What people are probably thinking when they say that all organizations should do what Lincoln Electric does is that pay should be tied to performance. However, the actual piece-rate system at Lincoln Electric would not work so well for jobs that do not result in objective performance outcomes. In addition, it is important to realize that the employees at Lincoln Electric are motivated by money, something that you cannot assume to be the case for all employees. Many employees today want more than money from their jobs. Thus, the motivational system at Lincoln Electric works not only because it links pay to performance, but because of the employees and the type of work they do. Further, the merit-based profit sharing system works because Lincoln Electric has consistently made a profit and employees can receive significant lump sum bonuses. 5. Comment on the cross-cultural limitations of Lincoln Electric’s motivational system. How do the theories of work motivation help us to understand why the company’s incentive program did not work in Germany but does work in North America and Australia? What does this tell us about the cross-cultural limitations of the theories of motivation? Answer: The fact that Lincoln’s motivational system did not work in Germany is a good example of how the effectiveness of motivational practices are culture-bound. The system has been effective in North America and Australia. The limitations probably have more to do with differences in needs than anything to do with equity, expectancy, or goals. In North America and Australia, employees are motivated by money which fulfills important needs. Thus, money is highly valent and employees are willing to work hard to make more of it. In Germany, however, the quality of life is more important than money. As a result, employees in Germany are not motivated to make more money and work harder at the expense of the quality of their life. As noted by the former CEO of Lincoln, “…we had an incentive program that was based on the belief that everybody in the world would be willing to work a little harder to enhance their lives and their families and their incomes. It was an erroneous assumption.” He goes on to note that the quality of life in Germany is much more important than money. Interestingly, what happened in Germany appears to be consistent with Maslow’s theory. That is, once employees fulfilled their physiological needs, they were no longer motivated to work harder to obtain more money. It is also worth noting that cultures differ in the extent to which they value achievement as it is defined in North America. The German employees at Lincoln Electric might not have the same high need for achievement and the desire to fulfill it by working harder and making more money. In terms of expectancy theory, the mistake that Lincoln made was assuming that money would be as highly valent to German employees as it is to employees in North America. 6. What can other organizations learn about motivation from Lincoln Electric? What do you recommend that organizations do to motivate employees based on your knowledge of the Lincoln Electric motivational system and on your understanding of motivation? Answer: There are a number of things that organizations can learn from Lincoln Electric about motivating employees. First, it is important to understand employees’ needs and what they consider to be highly valent in terms of second-level outcomes. Employees are motivated to obtain incentives that fulfill their needs and are attractive. Second, employees should be capable of performing at high levels and provided with the resources and training to improve their performance (high expectancy). Third, there should be a strong and clear link between performance and second-level outcomes (instrumentality). That is, pay and other incentives should be tied to performance. Fourth, the provision of pay and rewards should be equitable such that employee inputs and outcomes are equitable when compared to others. Fifth, goals are motivational and employees should be able to set goals themselves or with their supervisor, that are specific and challenging and are accompanied with feedback. In general, the motivational system at Lincoln Electric demonstrates that pay for performance systems can be effective for motivating employees, increasing productivity and profits, and lowering turnover. What is critical to their success is a performance evaluation system that is used to measure employees’ performance, and a fair and equitable system that ensures that pay is strongly tied to a person’s performance. Thus, it is recommended that other organizations tie pay or other incentives that are attractive to employees to performance, and use a valid system of measurement to evaluate employees’ performance. Finally, it is important for organizations to understand the importance of fit and balance with respect to motivational practices. The practices should fit the organization’s culture and strategy, and they should be balanced in that they enable employees and the organization to achieve their goals. Effective motivational practices have to be tailored to employees’ needs, the task, characteristics of the organization, and the desired motivational outcomes. At Lincoln Electric, the motivational system works because money is motivational to employees; the task enables employees to produce as little or as much as they want; the organization’s culture and strategy supports productivity and profits; and goal of employees and the organization is to maximize productivity. Solution Manual for Organizational Behaviour: Understanding and Managing Life at Work Gary Johns, Alan M. Saks 9780133347500, 9780133951622