This Document Contains Chapters 9 to 10 CHAPTER 9 Attracting and Retaining the Best Employees 9.1 A WORD FROM THE AUTHORS In this chapter, our discussion is organized around three major phases of human resources management (HRM): the acquisition, maintenance, and development of human resources in an organization. Before exploring those phases in more detail, we note the (sometimes overlapping) roles of line managers and staff specialists in HRM. Also, we discuss cultural or workplace diversity in human resources management. Then we closely examine the three phases of HRM. Acquisition of personnel begins with human resources planning, which is based on forecasts of personnel supply and demand and on systematic job analysis. Recruiting, selection, and orientation complete this phase. In the next section, we address the issues of employee compensation and benefits, including a number of pertinent definitions. In discussing the final phase, we distinguish between employee training and management development, and we present several methods for evaluating employee performance. Finally, we examine the implications of recent legislation on today’s HRM practices. 9.2 TRANSITION GUIDE New in Chapter 9: Attracting and Retaining the Best Employees • A new Inside Business feature describes how companies are using LinkedIn for recruitment. • A new example about how GE has many HR managers all over the world has been added to the section “Responsibility for HRM.” • The Sustaining the Planet feature, “Are You Looking for a Green Collar Job?,” has been deleted. • A new example about how eSkill offers customizable skills assessment and training software has been added to the “Forecasting Human Resources Supply” section. • A new example about how the U.S. Postal Service must cut its workforce has been added to the section “Matching Supply with Demand.” • Updated statistics have been included in the section “Cultural Diversity in Human Resources.” • A new Going for Success feature, “What Does a Chief Diversity Officer Do?,” describes how companies use a CDO. • An example about how HRTMS has created a project to craft new job descriptions has been added to the “Job Analysis” section. • New examples about how companies are using the Internet to conduct job searches have been added to the section “External Recruiting.” • The Career Success feature, “What Can a Career Coach Do for You?,” has been deleted. • Updated statistics regarding CEOs have been included in the “Internal Recruiting” section. • The Going for Success feature, “Salesforce.com Uses Social Networking to Recruit,” has been deleted. • A new Career Success feature, “Click Here to Be Tested,” describes how companies are testing skills, attitudes, and personality before hiring. • The Spotlight feature, “When Should a Job Candidate Ask About Salary?,” has been deleted. • A new example about how companies are using video conferencing software has been added to the “Interviews” section. • Table 9.2 has been updated with new interview questions. • Updated statistics have been added to the section “Compensation Decisions.” • A new example about how Wisconsin is trying to pass a law that ensures all workers receive equal pay for comparable worth has been added to the section “Comparable Worth.” • A new example about how GE employees are involved in profit-sharing plans has been added to the “Profit-Sharing” section. • Updated statistics and examples have been included in the section “Employee Benefits.” • A new Social Media feature, “Nuts About Southwest,” describes how the company effectively uses social media. • New statistics have been included in the “Equal Pay Act” section. • Updated statistics have been added to the “Americans with Disabilities Act” section. • A new Return to Inside Business about LinkedIn is provided at the end of the chapter. • A new Case 9.2 describes how LinkedIn has become an important networking tool for companies and job candidates. • The Building Skills for Career Success section contains a new Social Media Exercise. • The Exploring the Internet feature in Building Skills for Career Success has been deleted. 9.3 QUICK REFERENCE GUIDE Instructor Resource Location Transition Guide IM, p. 304 Learning Objectives Textbook, p. 244; IM, p. 307 Brief Chapter Outline IM, pp. 307–308 Comprehensive Lecture Outline IM, pp. 308–320 Going for Success What Does a Chief Diversity Officer Do? Textbook, p. 250 Career Success Click Here to Be Tested Textbook, p. 255 Social Media Nuts About Southwest Textbook, p. 261 At Issue: Is this ad within the federal guidelines for employment practices? IM, p. 315 Inside Business Companies and Job Candidates Get LinkedIn Textbook, p. 245 Return to Inside Business Textbook, p. 267 Questions and Suggested Answers, IM, p. 321 Marginal Key Terms List Textbook, p. 268 Review Questions Textbook, pp. 268–269 Questions and Suggested Answers, IM, pp. 321–323 Discussion Questions Textbook, p. 269 Questions and Suggested Answers, IM, pp. 323–324 Video Case 9.1 (Whirlpool’s Award-Winning Diversity Program Is Facilitated Through Employee Network) and Questions Textbook, p. 269 Questions and Suggested Answers, IM, pp. 324–325 Case 9.2 (High Tech Recruiting Is a No-Brainer at Intel) and Questions Textbook, pp. 269–270 Questions and Suggested Answers, IM, pp. 325–326 Building Skills for Career Success Textbook, pp. 270–271 Suggested Answers, IM, pp. 326–329 IM Quiz I & Quiz II IM, pp. 330–332 Answers, IM, p. 332 Classroom Exercises IM, pp. 333–334 9.4 LEARNING OBJECTIVES After studying this chapter, students should be able to: 1. Describe the major components of human resources management. 2. Identify the steps in human resources planning. 3. Describe cultural diversity and understand some of the challenges and opportunities associated with it. 4. Explain the objectives and uses of job analysis. 5. Describe the processes of recruiting, employee selection, and orientation. 6. Discuss the primary elements of employee compensation and benefits. 7. Explain the purposes and techniques of employee training and development. 8. Discuss performance appraisal techniques and performance feedback. 9. Outline the major legislation affecting human resources management. 9.5 BRIEF CHAPTER OUTLINE I. Human Resources Management: An Overview A. HRM Activities B. Responsibility for HRM II. Human Resources Planning A. Forecasting Human Resources Demand B. Forecasting Human Resources Supply C. Matching Supply with Demand III. Cultural Diversity in Human Resources IV. Job Analysis V. Recruiting, Selection, and Orientation A. Recruiting 1. External Recruiting 2. Internal Recruiting B. Selection 1. Employment Applications 2. Employment Tests 3. Interviews 4. References 5. Assessment Centers C. Orientation VI. Compensation and Benefits A. Compensation Decisions 1. Wage Level 2. Wage Structure 3. Individual Wages B. Comparable Worth C. Types of Compensation 1. Hourly Wage 2. Weekly or Monthly Salary 3. Commissions 4. Incentive Payments 5. Lump-Sum Salary Increases 6. Profit-Sharing D. Employee Benefits 1. Types of Benefits 2. Flexible Benefit Plans VII. Training and Development A. Analysis of Training Needs B. Training and Development Methods C. Evaluation of Training and Development VIII. Performance Appraisal A. Common Evaluation Techniques 1. Objective Methods 2. Judgmental Methods 3. Avoiding Appraisal Errors B. Performance Feedback IX. The Legal Environment of HRM A. National Labor Relations Act and Labor–Management Relations Act B. Fair Labor Standards Act C. Equal Pay Act D. Civil Rights Acts E. Age Discrimination in Employment Act F. Occupational Safety and Health Act G. Employee Retirement Income Security Act H. Affirmative Action I. Americans with Disabilities Act 9.6 COMPREHENSIVE LECTURE OUTLINE I. HUMAN RESOURCES MANAGEMENT: AN OVERVIEW. Human resources management (HRM) consists of all the activities involved in acquiring, maintaining, and developing an organization’s human resources. A. HRM Activities. Each of the three phases of HRM—acquiring, maintaining, and developing human resources—consists of a number of related activities. 1. Acquisition includes five separate activities. a) Human resources planning—determining the firm’s future human resource needs b) Job analysis—determining the exact nature of positions to be filled c) Recruiting—attracting people to apply for positions in the firm d) Selection—choosing and hiring the most qualified applicants e) Orientation—acquainting new employees with the firm 2. Maintaining human resources consists primarily of encouraging employees to remain with the firm and to work effectively. Typical activities emphasize employee relations, compensation, and benefits to reward employee effort. 3. The development phase of HRM is concerned with improving employees’ skills and expanding their capabilities. There are two important activities in this phase. a) Training and development—teaching employees new skills, new jobs, and more effective ways of doing their present jobs b) Performance appraisal—assessing employees’ current and potential performance levels B. Responsibility for HRM. In general, human resources management is a shared responsibility of line managers and staff HRM specialists. 1. In very small organizations, the owner handles all or most HRM activities. 2. As the firm grows, a human resources manager is hired to take over most of the staff responsibilities. 3. As growth continues, additional staff positions are added as needed. 4. In large firms, HRM activities tend to be very highly specialized. a) Human resources planning and job analysis are usually done by staff specialists, with input from line managers. b) Recruiting and selection are generally handled by staff experts, although line managers are involved in the actual hiring decisions. c) Orientation programs are usually devised by staff specialists, and the orientation itself is carried out by both staff specialists and line managers. d) Compensation systems (including benefits) are most often developed and administered by the HRM staff. However, line managers recommend pay increases and promotions. e) Training and development activities are the joint responsibility of staff and line managers. f) Performance appraisal is the job of the line manager, although HRM personnel often design the firm’s appraisal system. II. HUMAN RESOURCES PLANNING. Human resources planning is the development of strategies to meet the firm’s future human resources needs. A. Forecasting Human Resources Demand. Forecasts of the demand for human resources in an organization should be based on as much relevant information as available. 1. The firm’s overall strategic plan will provide information about future business ventures, new products, and projected expansions or contractions of particular product lines. 2. This and other information should be used to determine both the number of employees who will be required and their qualifications, including skills, experience, and knowledge. B. Forecasting Human Resources Supply. The human resources supply forecast must take into account both the present workforce and any changes or movements that may occur within it. Two techniques for forecasting human resources supply are useful. 1. A replacement chart is a list of the key personnel, along with possible replacements within the firm. 2. A skills inventory is a computerized data bank containing information on the skills and experience of all present employees. C. Matching Supply with Demand. Once they have forecasts of both the demand for personnel and the firm’s supply of personnel, planners can devise a course of action for matching the two. 1. When demand is forecast to be greater than supply, plans must be made to recruit and select new employees. The timing of these actions depends on the types of positions to be filled. 2. When supply is forecast to be greater than demand, the firm must take steps to reduce the size of its workforce. Several methods are available. a) When the oversupply is expected to be temporary, some employees may be laid off—dismissed from the workforce until they are needed again. b) Attrition, perhaps the most humane method, is the normal reduction in the workforce that occurs when employees leave the firm. c) Early retirement is another option. d) As a last resort, unneeded employees may simply be fired. III. CULTURAL DIVERSITY IN HUMAN RESOURCES. As a larger number of women, minorities, and immigrants are entering the U.S. workforce, the workplace is growing more diverse. It is estimated that African Americans and Hispanics make up about 12 percent and 15 percent of U.S. workers, respectively. Women represent approximately 47 percent of all persons in the U.S. workforce. Cultural (or workplace) diversity refers to the differences among people in a workforce due to race, ethnicity, and gender. This diversity is forcing managers to learn to supervise and motivate people with a broader range of value systems. Although cultural diversity presents a challenge, managers should view it as an opportunity rather than a limitation. When properly managed, cultural diversity can provide advantages for an organization. Table 9.1 shows several competitive advantages that creative management of cultural diversity can offer. Because cultural diversity produces both challenges and advantages, it is important for an organization’s employees to know how to cope with it. As with many organizational goals, a diversity program will be successful only if it is systematic and ongoing and has a strong, sustained commitment from top leadership. Teaching Tip: Use the “Diversity” group exercise here. It will take approximately 20 minutes. IV. JOB ANALYSIS. Job analysis is a systematic procedure for studying jobs to determine their various elements and requirements. The job analysis for a particular position typically consists of two parts. The first is a job description, a list of the elements that make up a particular job. (See Figure 9.1.) The second part is a job specification, a list of the qualifications required to perform a particular job. Teaching Tip: Ask students to take five minutes individually with a partner to draw up a job description for the perfect professor. V. RECRUITING, SELECTION, AND ORIENTATION. In an organization with jobs waiting to be filled, HRM personnel need to perform two actions: (1) find candidates for those jobs and (2) match the right candidate with each job. A. Recruiting. Recruiting is the process of attracting qualified job applicants. One goal of recruiting is to attract the “right number” of applicants. Recruiters may seek applicants outside the firm, within the firm, or both. Teaching Tip: Ask students to identify the pros and cons of hiring within the firm versus hiring from the outside. 1. External Recruiting. External recruiting is the attempt to attract job applicants from outside the organization. a) Among the means available for external recruiting are using online employment organizations, advertising in newspapers, recruiting on college campuses and in union hiring halls, using employment agencies, soliciting recommendations from present employees, and conducting “open houses.” b) Clearly, it is best to match the recruiting means with the kind of applicant being sought. Technology is helping the matching process. c) The primary advantage of external recruiting is that it enables the firm to bring in people with new perspectives and varied business backgrounds. d) Disadvantages of external recruiting are that it is often expensive and may provoke resentment among present employees. 2. Internal Recruiting. Internal recruiting means considering present employees as applicants for available positions. a) Generally, current employees are considered for promotion to higher-level positions. b) Employees may also be considered for transfer from one position to another at the same level. c) Promoting from within provides strong motivation for current employees and helps the firm retain quality personnel. The practice of job posting, or informing current employees of upcoming openings, may be a company policy or a union contract requirement. d) The primary disadvantage of internal recruiting is that promoting a current employee leaves another position to be filled. B. Selection. Selection is the process of gathering information about applicants for a position and then using that information to choose the most appropriate applicant. 1. Employment Applications. Employment applications are useful in collecting factual information on a candidate’s education, work experience, and personal history. (See Figure 9.2.) a) The data obtained from applications are usually used to identify candidates who are worthy of further scrutiny and to familiarize interviewers with applicants’ backgrounds. b) Many job candidates submit résumés to prospective employers, and some firms require them. A résumé is a one- or two-page summary of the candidate’s background and qualifications. 2. Employment Tests. Tests that are given to job candidates usually focus on aptitudes, skills, abilities, or knowledge relevant to the jobs that are to be performed. a) Occasionally, companies use general intelligence or personality tests, but these are seldom helpful in predicting specific job performance. b) Improved technology has brought down substantially the costs of administering such tests. 3. Interviews. The employment interview is perhaps the most widely used selection technique. a) Job candidates are usually interviewed by at least one member of the HRM staff and by the person for whom they will be working. b) Interviews provide an opportunity for the applicant and the firm to learn more about each other. c) Unfortunately, interviewing may be the stage at which discrimination enters the selection process. d) Some of these problems can be solved through better interviewer training and the use of structured interviews. A structured interview is one in which the interviewer is given a prepared set of job-related questions to ask. 4. References. A job candidate is generally asked to furnish the names of references—people who can verify background information and provide personal evaluations of the candidate. 5. Assessment Centers. An assessment center is used primarily to select current employees for promotion to higher-level positions. C. Orientation. Once all the available information about job candidates has been collected and analyzed, a job offer is extended. 1. Soon after a candidate joins the firm, he or she goes through the firm’s orientation program. Orientation is the process of acquainting new employees with the organization. 2. Orientation topics range from such basic items as the location of the company cafeteria to such concerns as various career paths within the firm. VI. COMPENSATION AND BENEFITS. An effective employee reward system must perform four functions. • Enable employees to satisfy their basic needs. • Provide rewards comparable to those offered by other firms. • Be distributed fairly within the organization. • Recognize that different people have different needs. The firm’s compensation system can be structured to meet the first three of these requirements. The fourth is more difficult; it must take into account the many differences among people. A. Compensation Decisions. Compensation is the payment that employees receive in return for their labor. The firm’s compensation system—the policies and strategies that determine employee compensation—must be designed to provide for employee needs while keeping labor costs within reasonable limits. 1. Wage Level. Management must first position the firm’s general pay level relative to pay levels of comparable firms. a) In other words, will the firm pay its employees less than, more than, or about the same as similar organizations? b) To determine what the average is, the firm may use wage surveys. A wage survey is a collection of data on prevailing wage rates within an industry or a geographic area. 2. Wage Structure. Next, management must decide on relative pay levels for all the positions within the firm. a) The wage structure is almost always developed on the basis of a job evaluation. b) Job evaluation is the process of determining the relative worth of the various jobs within a firm. c) A number of techniques may be used to evaluate jobs. (1) The simplest is to rank all the jobs within the firm according to their value to the firm. (2) A more frequently used method is based on a job analysis. 3. Individual Wages. The specific payments that individuals will receive must be determined. Two wage decisions come into play here. a) First, the employee’s initial rate must be established. b) Later, the employee may be given pay increases based on seniority and performance. B. Comparable Worth. There is growing concern that one reason women in the workforce are paid less than men is that a certain proportion of women occupy female-dominated jobs—nurses, secretaries, and medical records analysts—that require education, skills, and training equal to higher-paid positions but are undervalued by our economic system. 1. Comparable worth is a concept that seeks equal compensation for jobs requiring about the same level of education, training, and skills. 2. Critics of comparable worth argue that the market has determined the worth of these jobs and that laws should not be enacted to tamper with the pricing mechanism of the market. They also point out that artificially inflating salaries for female-dominated occupations encourages women to keep these jobs rather than seek out higher-paying jobs. C. Types of Compensation 1. Hourly Wage. An hourly wage is a specific amount of money paid for each hour of work. People who earn wages are paid their hourly wage for the first 40 hours worked in any week. They are then paid one and one-half times their hourly wage for time worked in excess of 40 hours. 2. Weekly or Monthly Salary. A salary is a specific amount of money paid for an employee’s work during a set calendar period, regardless of the actual number of hours worked. 3. Commissions. A commission is a payment that is some percentage of sales revenue. 4. Incentive Payments. An incentive payment is a payment in addition to wages, salary, or commissions. 5. Lump-Sum Salary Increases. A lump-sum salary increase allows employees to take pay raises in one lump sum. 6. Profit-Sharing. Profit-sharing is the distribution of a percentage of the firm’s profit among its employees. D. Employee Benefits. An employee benefit is a reward in addition to regular compensation that is provided indirectly to employees. Employee benefits consist mainly of services (such as insurance) that are paid for partially or totally by employers and employee expenses (such as college tuition) that are reimbursed by employers. 1. Types of Benefits. Employee benefits take a variety of forms. a) Pay for time not worked covers such things as vacation time, holidays, and sick leave. b) Insurance packages may include health, life, and dental insurance. c) The costs of pension and retirement programs may be borne entirely by the firm or shared with the employee. d) Some benefits are required by law. For example, employers must maintain workers’ compensation insurance. Also, employers must pay for unemployment insurance and must contribute to each employee’s federal Social Security account. e) Other benefits provided by employers include tuition-reimbursement plans, credit unions, child care, company cafeterias, various recreational facilities, and stock option plans. Teaching Tip: Working individually or with partners, ask students to develop a list of potential benefits that could be offered to employees. Encourage creativity. Such things as pet insurance and trips to China for inexpensive plastic surgery could be real options for some people. 2. Flexible Benefit Plans. Through a flexible benefit plan, an employee receives a predetermined amount of benefit dollars and is allowed to allocate these dollars to various categories of benefits that best fit his or her individual needs. a) Some flexible benefit plans offer a broad array of benefit options, including health care, dental care, life insurance, accidental death and dismemberment coverage, long-term disability, vacation, retirement savings, and dependent care. b) Although the costs of administering flexible benefit plans are high, they more specifically meet employees’ needs. c) Organizations that offer flexible plans with many options may be perceived as being attractive to both current and prospective employees. VII. TRAINING AND DEVELOPMENT. Employee training is the process of teaching operations and technical employees how to do their present jobs more effectively and efficiently. Management development is the process of preparing managers and other professionals to assume increased responsibility in both present and future positions. A. Analysis of Training Needs 1. Managers must determine whether or not training is needed and, if so, what types of training needs exist. 2. Training might focus on business ethics, product information, or customer service. 3. Because training is expensive, organizations are extremely careful to correctly determine their training needs. B. Training and Development Methods. Various methods are available for employee training and management development. 1. On-the-job methods—The trainee learns by doing the work under the supervision of an experienced employee. 2. Simulations—The work situation is simulated in a separate area so that learning takes place away from the day-to-day pressures of work. 3. Classroom teaching and lectures. 4. Conferences and seminars—Experts and learners meet to discuss problems and exchange ideas. 5. Role playing—Participants act out the roles of others in the organization for a better understanding of these roles. C. Evaluation of Training and Development. To ensure that training and development are cost effective, the managers responsible should evaluate these efforts periodically. Teaching Tip: Ask students what training methods have worked best for them. Follow up with a discussion of whether the methods that work for them also work for their parents, who grew up with less technology than most young people have today. 1. The starting point for this evaluation is a set of verifiable objectives that are developed before the training is undertaken. 2. All objectives should clearly specify what is expected and how training results may be measured or verified. 3. The results of training evaluations should be made known to all those involved in the program—including trainees and upper management. VIII. PERFORMANCE APPRAISAL. Performance appraisal is the evaluation of employees’ current and potential levels of performance to allow managers to make objective human resources decisions. Performance appraisal has three main objectives. First, it allows a manager to let subordinates know how well they are doing and how they can do better in the future. Second, it provides an effective basis for distributing rewards such as pay raises and promotions. And third, it helps the organization monitor its employee selection, training, and development activities. (See Figure 9.3.) A. Common Evaluation Techniques. The various techniques and methods for appraising employee performance are either objective or judgmental in nature. 1. Objective Methods. Objective methods use some measurable quantity as the basis for assessing performance. a) Typical measures include units of output, dollar volumes of sales, number of defective products, and number of insurance claims processed. b) It may be necessary to adjust the measures for the work environment because of circumstances beyond the control of the employee. For example, the distance between sales calls must be taken into account when measuring the performance of two salespeople. 2. Judgmental Methods. Judgmental appraisal methods are used much more frequently than objective methods. They require that the manager judge or estimate the employee’s performance level. a) Rating scales are the most popular judgmental appraisal technique. b) A rating scale consists of a number of statements. Each employee is rated on the degree to which he or she is described by each statement. c) The ratings on all the statements are added to obtain the employee’s total evaluation. 3. Avoiding Appraisal Errors. Managers must be cautious if they are to avoid making mistakes when appraising employees. a) It is common to overuse one portion of an evaluation instrument, thus overemphasizing some issues and underemphasizing others. b) A manager must guard against allowing an employee’s poor performance on one activity to influence his or her judgment of that subordinate’s work on other activities. c) Allowing recent performance to be overemphasized distorts an employee’s performance evaluation. d) A manager must guard against discrimination on the basis of race, age, gender, religion, national origin, or sexual orientation. Teaching Tip: You may wish to use the “On the Spot Feedback!” exercise here (five minutes) as a means of demonstrating informal feedback. This could also lead to a discussion of the difficulty of providing honest yet helpful feedback. B. Performance Feedback. No matter which appraisal technique is used, the results should be discussed with the employee soon after the evaluation is completed. The information provided to an employee in such discussions is called a performance feedback interview. The three major approaches to performance feedback interviews are tell-and-sell, tell-and-listen, and problem-solving. 1. In a tell-and-sell feedback interview, the employee is told how good or bad his or her performance has been and is persuaded to accept this evaluation. Because the employee has no input, this type of interview can result in defensiveness, resentment, and frustration on the employee’s part. 2. With the tell-and-listen interview, the supervisor tells the employee what has been right and wrong with the employee’s performance and then gives the employee an opportunity to respond. The employee may react immediately to the supervisor’s statements or may be allowed to respond with a full self-appraisal that challenges the supervisor’s assessment. 3. The problem-solving approach allows employees to evaluate their own performance and set their own goals for future performance. Supervisors act more as colleagues than as judges, offering noncritical comments and advice. This type of feedback is more likely to result in employee acceptance and commitment to goals. 4. An appraisal approach which has become popular is called a 360-degree evaluation. A 360-degree evaluation collects anonymous reviews about an employee from his or her peers, subordinates, and supervisors and then compiles these reviews into a feedback report that is given to the employee. 5. Many managers find it difficult to discuss the negative aspects of an appraisal. However, only through tactful, honest communication can the results of an appraisal be fully utilized. Teaching Tip: Use the “Working and Playing Well with Others!” group exercise here. The exercise takes approximately 10 to 15 minutes. IX. THE LEGAL ENVIRONMENT OF HRM. The major federal laws affecting HRM are described in Table 9.3. A. National Labor Relations Act and Labor–Management Relations Act. These laws are concerned with dealings between business firms and labor unions. We discuss labor–management relations and these two acts in detail in Chapter 11. B. Fair Labor Standards Act. This act, originally passed in 1938 and amended many times, applies primarily to wages. It establishes such things as minimum wages and overtime pay rates. C. Equal Pay Act. This law, passed in 1963, overlaps somewhat with Title VII of the Civil Rights Act. The Equal Pay Act specifies that men and women who are doing equal jobs must be paid the same wage. 1. Equal jobs are jobs that demand equal effort, skill, and responsibility and that are performed under the same conditions. 2. Differences in pay are legal if they can be attributed to differences in seniority, qualifications, or performance. D. Civil Rights Acts. Title VII of the Civil Rights Act of 1964 applies directly to selection and promotion. 1. It forbids organizations with 15 or more employees to discriminate in those areas on the basis of sex, race, color, religion, or national origin. 2. The purpose of Title VII is to ensure that employers make personnel decisions on the basis of employee qualifications only. 3. The Equal Employment Opportunity Commission (EEOC) enforces Title VII. E. Age Discrimination in Employment Act. This act was passed in 1967 and amended in 1986. 1. The act is concerned only with discrimination based on age in companies with 20 or more employees. 2. In particular, it outlaws personnel practices that discriminate against people aged 40 years or older. 3. No federal law forbids discrimination against people younger than 40, but several states have adopted age-discrimination laws that apply to various age groups. 4. Also outlawed are company policies that require employees to retire based on a mandatory retirement age. F. Occupational Safety and Health Act. This law, passed in 1970, is concerned mainly with issues of employee health and safety. The Occupational Safety and Health Administration (OSHA) was created to enforce this act. G. Employee Retirement Income Security Act. This act was passed in 1974 to protect the retirement benefits of employees. 1. The law does not require that firms provide a retirement plan. 2. The law does specify that if a retirement plan is provided, it must be managed in such a way that the interests of employees are protected. 3. It also provides federal insurance for retirement plans that go bankrupt. H. Affirmative Action. A series of executive orders, issued by the president of the United States, established the requirement for affirmative action in personnel practices. 1. This requirement applies to all employers with 50 or more employees holding federal contracts in excess of $50,000. a) These employers must actively encourage job applications from members of minority groups. b) They also must hire qualified employees from minority groups that are not fully represented in their organizations. 2. Many firms that do not hold government contracts voluntarily take part in this affirmative action program. I. Americans with Disabilities Act. The Americans with Disabilities Act (ADA) prohibits discrimination against qualified individuals with disabilities in all employment practices including job application procedures, hiring, firing, advancement, and training. 1. ADA also safeguards individuals with less visible conditions such as heart disease, cancer, AIDS, epilepsy, and emotional illness. 2. Employers are required to provide employees with reasonable accommodation. a) Examples of reasonable accommodation include making existing facilities accessible to and useable by people confined to wheelchairs. b) Reasonable accommodation might also require restructuring a job, acquiring or modifying equipment, or other changes in the workplace. CHAPTER 10 Motivating and Satisfying Employees and Teams 10.1 A WORD FROM THE AUTHORS This chapter deals with human motivation in the work environment and lays the foundation for the following chapter on union–management relations. To place the study of human motivation in its historical context, we examine earlier views of worker motivation and productivity, including scientific management (Frederick W. Taylor), the Hawthorne Studies (Elton Mayo), Maslow’s hierarchy of needs, Herzberg’s motivation–hygiene theory, Theory X, Theory Y, Theory Z, and reinforcement theory. Next, we examine three contemporary views on motivation: equity theory, expectancy theory, and goal-setting theory. Also, we explain several techniques for increasing employee motivation, including management by objectives, job enrichment, behavior modification, flextime, part-time work and job sharing, telecommuting, employee empowerment, and employee stock ownership. Finally, we discuss teams and teamwork. In this section, we look at the types of teams, team development, team cohesiveness and conflict, and the benefits and limitations of teams. 10.2 TRANSITION GUIDE New in Chapter 10: Motivating and Satisfying Employees and Teams • A new Inside Business feature describes REI’s efforts to motivate and satisfy its employees. • Table 10.1, “The Ten Best Companies to Work For,” has been deleted. • The “What is Motivation?” section lists the top ten best companies to work for on Fortune’s “Top 100 Companies to Work For” list. • The Sustaining the Planet feature, “Good Green Fun,” has been deleted. • A new Going for Success feature, “The Gamification of Motivation,” describes how companies are using video games as motivational tools. • The Spotlight feature, “How Does Your Employer Motivate Workers?,” has been deleted. • A new Career Success feature, “Are You Ready for Frequent Feedback?,” describes how companies give performance feedback to their employees. • The Entrepreneurial Success feature, “Employee Empowerment Powers Bonobos’ Growth,” has been deleted. • A new example about how Ernst &Young has implemented flextime for its employees has been added to the “Flextime” section. • New examples about how retailers have good benefits packages for part-time workers have been added to the section “Part-Time Work and Job Sharing.” • A new Sustaining the Planet feature, “Cash for Conservation?,” describes how Genentech offers money to employees for carpooling and helping the environment. • New statistics have been added to the “Telecommuting” section. • A new example about how SAP Developer Network provides information to employees has been added to the section “Employee Empowerment.” • Updated statistics and examples are included in the section “Employee Ownership.” • A new example about how Kotter International believes in using teams of volunteers to help in problem solving has been added to the “What Is a Team?” section. • A new example about Ford Motor Company using cross-functional teams has been added to the section “Types of Teams.” • The Going for Success feature, “Paid Volunteerism Is Good for Everybody!,” has been deleted. • A new Return to Inside Business about REI is provided at the end of the chapter. • A new Case 10.2 about The Container Store’s caring culture has been included at the end of the chapter. • The Building Skills for Career Success section contains a new Social Media Exercise. • The Exploring the Internet feature in Building Skills for Career Success has been deleted. 10.3 QUICK REFERENCE GUIDE Instructor Resource Location Transition Guide IM, p. 339 Learning Objectives Textbook, p. 273; IM, p. 342 Brief Chapter Outline IM, pp. 342–343 Comprehensive Lecture Outline IM, pp. 343–355 At Issue: Is money or recognition more effective for motivating employees? IM, p. 351 Going for Success The Gamification of Motivation Textbook, p. 283 Career Success Are You Ready for Frequent Feedback? Textbook, p. 287 Sustaining the Planet Cash for Conservation? Textbook, p. 290 Inside Business REI Remains True to Its Roots Textbook, p. 274 Return to Inside Business Textbook, p. 296 Questions and Suggested Answers, IM, p. 356 Marginal Key Terms List Textbook, p. 297 Review Questions Textbook, pp. 297–298 Questions and Suggested Answers, IM, pp. 356–359 Discussion Questions Textbook, p. 298 Questions and Suggested Answers, IM, pp. 359–360 Video Case 10.1 (At L.L.Bean, Everyone Is Family) and Questions Textbook, p. 298 Questions and Suggested Answers, IM, pp. 360–361 Case 10.2 (Culture of Caring Pays Off at The Container Store) and Questions Textbook, p. 299 Questions and Suggested Answers, IM, p. 361 Building Skills for Career Success Textbook, pp. 299–300 Suggested Answers, IM, pp. 362–364 IM Quiz I & Quiz II IM, pp. 365–367 Answers, IM, p. 367 Classroom Exercises IM, pp. 368–370 10.4 LEARNING OBJECTIVES After studying this chapter, students should be able to: 1. Explain what motivation is. 2. Understand some major historical perspectives on motivation. 3. Describe three contemporary views of motivation: equity theory, expectancy theory, and goal-setting theory. 4. Explain several techniques for increasing employee motivation. 5. Understand the types, development, and uses of teams. 10.5 BRIEF CHAPTER OUTLINE X. What Is Motivation? XI. Historical Perspectives on Motivation A. Scientific Management B. The Hawthorne Studies C. Maslow’s Hierarchy of Needs D. Herzberg’s Motivation–Hygiene Theory 1. Satisfaction and Dissatisfaction 2. Using Herzberg’s Motivation–Hygiene Theory E. Theory X and Theory Y F. Theory Z G. Reinforcement Theory XII. Contemporary Views on Motivation A. Equity Theory B. Expectancy Theory C. Goal-Setting Theory XIII. Key Motivation Techniques A. Management by Objectives B. Job Enrichment C. Behavior Modification D. Flextime E. Part-Time Work and Job Sharing F. Telecommuting G. Employee Empowerment H. Employee Ownership V. Teams and Teamwork A What Is a Team? B. Types of Teams 1. Problem-Solving Teams 2. Self-Managed Work Teams 3. Cross-Functional Teams 4. Virtual Teams C. Developing and Using Effective Teams 1. Forming 2. Storming 3. Norming 4. Performing 5. Adjourning D. Roles Within a Team E. Team Cohesiveness F. Team Conflict and How to Resolve It G. Benefits and Limitations of Teams 10.6 COMPREHENSIVE LECTURE OUTLINE I. WHAT IS MOTIVATION? Most often, motivation is the term used to explain people’s behavior. Successful athletes are said to be highly motivated. A student who avoids work is said to be unmotivated. Motivation is the individual, internal process that energizes, directs, and sustains behavior. It is a personal “force” that causes one to behave in a particular way. Teaching Tip: Motivation is linked to goal achievement. Ask students to think about the times they were truly motivated to work hard. What was the “goal” at the end of the hard work—driver’s license, diploma, etc.? Follow up with a question about whether there was ever a time when they were asked to work hard and did not. What was the difference between the two situations? You may wish to refer back to their answers as you discuss the various motivation theories. Morale is the employee’s feeling toward the job, superiors, and the firm itself. High morale results mainly from the satisfaction of needs on the job or as a result of the job and leads to dedication and loyalty as well as to the desire to do a job well. Low morale can lead to shoddy work, absenteeism, and high rates of turnover. Motivation, morale, and the satisfaction of employees’ needs are thus intertwined. II. HISTORICAL PERSPECTIVES ON MOTIVATION A. Scientific Management. Toward the end of the nineteenth century, Frederick W. Taylor became interested in improving the efficiency of individual workers. 1. Taylor’s interest stemmed from his own experiences in manufacturing plants. 2. His research eventually led to scientific management, the application of scientific principles to management of work and workers. a) One of Taylor’s first jobs was with Midvale Steel Company. While there, he developed a strong distaste for waste and inefficiency. b) Workers at Midvale “soldiered,” or worked slowly, because they feared if they worked faster, they would run out of work and lose their jobs. 3. Taylor later left Midvale and spent several years at Bethlehem Steel. There, he made his most significant contribution. In particular, he suggested that each job should be broken down into separate tasks. His other recommendations included the following: a) Management should determine the best way to perform the tasks. b) Management should determine the job output to expect when the tasks were performed properly. c) Management should carefully choose the best person for each job and train that person to do the job properly. d) Finally, management should cooperate with workers to ensure that all jobs are performed as planned. 4. Taylor also developed the idea that most people work only to earn money. a) He reasoned that pay should be tied directly to output: The more a person produces, the more he or she should be paid. b) This concept gave rise to the piece-rate system, under which employees are paid a certain amount for each unit of output they produce. c) Under Taylor’s piece-rate system, each employee was assigned an output quota. Those exceeding the quota were paid a higher per-unit rate for all units they produced. (See Figure 10.1.) 5. Taylor’s system was put into practice at Bethlehem Steel, and the results were dramatic. 6. Taylor’s ideas were revolutionary and had a profound impact on management practice. However, his view of motivation was overly simplistic and narrow, inasmuch as people work for a variety of reasons other than pay. Teaching Tip: Piece work has taken a new form in the Internet age. As work and projects are outsourced, home workers and others often work on a “piece” or project basis. Workers are hired to do a project and are paid for that project. On occasion, bonuses are given for exceeding expectations. Ask students if they know of any such examples. B. The Hawthorne Studies. Between 1927 and 1932, two experiments were conducted by Elton Mayo at the Hawthorne plant of Western Electric Company in Chicago. 1. The original objective of these studies, now referred to as the Hawthorne Studies, was to determine the effects of the work environment on employee productivity. 2. In the first set of experiments, lighting in the workplace was varied for one group of workers but not for a second group. Then the productivity of both groups was measured to determine the effect of the variations in light. a) Productivity increased for both groups. b) For the group whose lighting was varied, productivity remained high until the light was reduced to the level of moonlight. Teaching Tip: Enter the class early and dim the lights perceptibly but not to darkness. Say nothing as you proceed with the lecture. Ten minutes into the lecture, have a student (previously designated) lower the lights to dim. Say nothing and continue. After five minutes, ask the students what effect the dimming had. Most of them will say it made them more alert to the environment. You may wish to do this prior to discussing the Hawthorne Studies. 3. The second set of experiments focused on the effectiveness of the piece-rate system in increasing the output of groups of workers. a) Researchers expected that output would increase because faster workers would put pressure on slower workers to produce more. b) However, output remained constant, no matter what “standard” rates management set. 4. The researchers concluded that human factors were responsible for the results of the two experiments. a) In the lighting experiments, researchers had given both groups of workers a sense of involvement in their jobs merely by asking them to participate in the research. b) In the piece-rate experiments, each group of workers informally set the acceptable rate of output for the group. To gain the social acceptance of the group, each worker had to produce at that rate. Slower or faster workers were pressured to maintain the group’s pace. 5. The Hawthorne Studies demonstrated that such human factors are at least as important as pay rates are to motivation. C. Maslow’s Hierarchy of Needs. The concept of a hierarchy of needs was advanced by Abraham Maslow, a psychologist. A need is a personal requirement. Maslow assumed that humans are “wanting” beings who seek to fulfill a variety of needs. He assumed that these needs can be arranged according to their importance in a sequence known as Maslow’s hierarchy of needs. (See Figure 10.2.) 1. At the most basic level are physiological needs, the things we require to survive. These needs include food and water, clothing, shelter, and sleep. 2. At the next level are safety needs, the things we require for physical and emotional security. They may be satisfied through job security, health insurance, pension plans, and safe working conditions. 3. Next are the social needs, the human requirements for love, affection, and a sense of belonging. To an extent, these needs can be satisfied through the work environment and the informal organization. But they also include relationships beyond the workplace. 4. Esteem needs include the need for respect and recognition (the esteem of others) as well as a sense of accomplishment and worth (self-esteem). These needs may be satisfied through personal accomplishment, promotion to more responsible jobs, various honors and awards, and other forms of recognition. 5. At the uppermost level are self-actualization needs, the needs to grow and develop as people and to become all that we are capable of being. These are the most difficult needs to satisfy, and the means of satisfying them tend to vary with the individual. 6. Maslow suggested that people work to satisfy their physiological needs first, their safety needs next, and so on, up the “needs ladder.” a) In general, people are motivated by the needs at the lowest (most important) level that remains unsatisfied. b) However, needs at one level do not have to be completely satisfied before needs at the next-higher level come into play. c) Maslow’s hierarchy of needs provides a useful way of viewing employee motivation and a guide for management. American business has largely been able to satisfy workers’ basic needs, but the higher-order needs present more of a problem. D. Herzberg’s Motivation-Hygiene Theory. In the late 1950s, Frederick Herzberg interviewed approximately 200 accountants and engineers in Pittsburgh. He asked them to think of a time when they had felt especially good about their jobs and their work. Then he asked them to describe the factor or factors that had caused them to feel that way. Next, he did the same regarding a time when they had felt especially bad about their work. Herzberg found that feeling good and feeling bad resulted from entirely different sets of factors. (See Figure 10.3.) 1. Satisfaction and Dissatisfaction. Herzberg’s interviews convinced him that satisfaction and dissatisfaction may be different dimensions altogether. a) The idea that satisfaction and dissatisfaction are separate and distinct dimensions is referred to as the motivation-hygiene theory. Teaching Tip: Use the “Discovering Your Needs” activity here. The purpose of the activity is to relate Maslow’s hierarchical needs system to each student individually. The entire exercise including discussion will take approximately 40 minutes. b) The job factors that Herzberg found most frequently associated with satisfaction are achievement, recognition, responsibility, advancement, growth, and the work itself. These factors are generally referred to as motivation factors because their presence increases motivation. However, their absence does not necessarily result in feelings of dissatisfaction. c) Job factors cited as causing dissatisfaction are supervision, working conditions, interpersonal relationships, pay, job security, and company policies and administration. These hygiene factors reduce dissatisfaction when they are present to an acceptable degree. However, they do not necessarily result in high levels of motivation. Teaching Tip: Ask students about the times they have experienced the greatest satisfaction and dissatisfaction at work. What contributed to each? Can they identify any consistent motivators in their work experience? Are there any consistent hygiene factors that create difficulty? 2. Using Herzberg’s Motivation–Hygiene Theory. Herzberg provides explicit guidelines for using the motivation–hygiene theory of employee motivation. a) He suggests that the hygiene factors must be present to ensure that a worker can function comfortably. But he warns that a state of no dissatisfaction never exists. b) Managers should make hygiene as good as possible but should then expect only short-term improvement in motivation. c) Managers must work to provide the motivation factors, which will presumably enhance motivation and long-term effort. d) Employee pay has more effect than is explained by Herzberg’s theory. E. Theory X and Theory Y. The concepts of Theory X and Theory Y were advanced by Douglas McGregor in his book, The Human Side of Enterprise. They are, in reality, sets of assumptions that underlie management’s attitudes and beliefs regarding worker behavior. 1. Theory X is a concept of employee motivation generally consistent with Taylor’s scientific management. The basic assumptions of Theory X include the following: a) People dislike work and try to avoid it. b) Because people dislike work, managers must coerce, control, and frequently threaten employees to achieve organizational goals. c) People generally must be led because they have little ambition and will not seek responsibility. They are concerned mainly with security. 2. Theory Y is a concept of employee motivation generally consistent with the ideas of the human relations movement. The basic assumptions of Theory Y include the following: a) People do not naturally dislike work. In fact, work is an important part of their lives. b) People will work toward goals to which they are committed. c) People become committed to goals when it is clear that accomplishing the goal will bring personal rewards. d) People often seek out and willingly accept responsibility. e) Employees have the ability to help accomplish organizational goals. f) Organizations generally do not make full use of their human resources. 3. McGregor argued that most managers behave in accordance with Theory X. But he maintained that Theory Y is more appropriate and effective as a guide for managerial action. (See Table 10.1.) Teaching Tip: Ask students to work with two or three of their neighbors to develop a short list of local and national businesses where employees might be better motivated by Theory Y assumptions than Theory X assumptions. After several minutes, ask them to look at their lists and determine what factors put some companies on the X list and others on the Y list. Are there specific characteristics, such as education required and/or the work itself, which appear to be determining factors? F. Theory Z. William Ouchi, a management professor at UCLA, studied business practices in American and Japanese firms. 1. In Japan, Ouchi found what he calls “type J” firms. They are characterized by the following: a) Lifetime employment for employees b) Collective (or group) decision making c) Collective responsibility for the outcomes of decisions d) Slow evaluation and promotion e) Implied control mechanisms f) Nonspecialized career paths g) A holistic concern for employees as people 2. American industry is dominated by what Ouchi calls “type A” firms. These firms are characterized by the following: a) Short-term employment b) Individual decision making c) Individual responsibility for the outcomes of decisions d) Rapid evaluation and promotion e) Explicit control mechanisms f) Specialized career paths g) A segmented concern for employees only as employees 3. A few very successful American firms represent a blend of the type J and type A patterns. These “type Z” organizations emphasize the following: a) Long-term employment b) Collective decision making c) Individual responsibility for the outcomes of decisions d) Slow evaluation and promotion e) Informal control along with some formalized measures f) Moderately specialized career paths g) A holistic concern for employees 4. Theory Z is the belief that some middle ground between Ouchi’s type A and type J practices is best for American business. (See Figure 10.4.) G. Reinforcement Theory. Reinforcement theory is based on the premise that behavior that is rewarded is likely to be repeated, whereas behavior that has been punished is less likely to recur. 1. A reinforcement is an action that follows directly from a particular behavior. Reinforcements can take a variety of forms and can be used in a number of different ways. a) A positive reinforcement strengthens desired behavior by providing a reward. b) A negative reinforcement strengthens desired behavior by eliminating an undesirable task or situation. c) Punishment is an undesired consequence of undesirable behavior. d) Managers who rely on extinction hope to eliminate undesirable behavior by ignoring it. Teaching Tip: Ask students how various professors and teachers have reinforced positive behaviors in the classroom and how they may have used extinction or negative reinforcement to eliminate negative ones. 2. The effectiveness of reinforcement depends on which type is used and how it is timed. a) Generally, positive reinforcement is considered the most effective action, and it is recommended when the manager has a choice. b) Continual, repetitious reinforcement can become tedious for both managers and employees, especially when the same behavior is being reinforced over and over in the same way. III. CONTEMPORARY VIEWS ON MOTIVATION. In recent years, managers have begun to explore three other models that take a more dynamic view of motivation: equity theory, expectancy theory, and goal-setting theory. A. Equity Theory. The equity theory of motivation is based on the premise that people are motivated to obtain and preserve equitable treatment for themselves. 1. As used here, “equity” refers to the distribution of rewards in direct proportion to the contribution of each employee to the organization. 2. Everyone need not receive the same rewards, but the rewards should be in accordance with individual contributions. 3. According to the theory, we tend to implement the idea of equity as follows: a) First, we develop an input-to-outcome ratio. Inputs are the things we contribute to the organization. Outcomes are the things we get from the organization. b) Next, we compare this ratio with what we perceive as the input-to-outcome ratio for some other person, called the “comparison other.” c) If the two ratios are roughly the same, we feel that the organization is treating us equitably and are motivated to leave things as they are. d) If our ratio is the lower of the two, we feel under-rewarded and are motivated to change things. We may: (1) Decrease our own inputs by not working so hard. (2) Try to increase our total outcomes by asking for a raise. (3) Try to get the comparison other to increase some inputs or receive decreased outcomes. (4) Leave the work situation. (5) Do a new comparison with a different comparison other. 4. Equity theory is most relevant to pay as an outcome. Teaching Tip: Ask students to think about times when they felt that co-workers or other students were unfairly rewarded. How did that make them feel? Also, were there times when they felt that their own work was not appreciated fully, relative to others? B. Expectancy Theory. Expectancy theory, developed by Victor Vroom, is a very complex model of motivation that is based on a simple assumption. According to expectancy theory, motivation depends on how much we want something and on how likely we are to get it. (See Figure 10.5.) 1. Consider three sales representatives who are candidates for promotion to one sales manager’s job. a) Bill has had a very good sales year and always gets good performance evaluations. He isn’t sure he wants the job because it requires a great deal of travel, long working hours, and much stress and pressure. b) Paul wants the job, but he doesn’t think he has much chance of getting it. He has had a terrible sales year and gets only mediocre performance evaluations from his present boss. c) Susan wants the job as much as Paul, and she thinks she has a good chance of getting it. Her sales have improved significantly this past year, and her evaluations are the best in the company. d) Expectancy theory would predict that Bill and Paul are not very motivated to seek the promotion. Susan is very motivated to seek the promotion because she wants it and thinks she can get it. 2. Expectancy theory is complex because each action we take is likely to lead to several different outcomes, some that we may want and others that we may not want. For example, if people work hard and put in a lot of extra hours, several things may happen. a) They may get a pay raise. b) They may be promoted. c) They may gain valuable new job skills. d) They may have less time to spend with their families. e) They may have to cut back on their social life. 3. Expectancy theory is difficult to apply, but it does provide several useful guidelines for managers. It suggests that managers must recognize the following: a) Employees work for a variety of reasons. b) These reasons, or expected outcomes, may change over time. c) It is necessary to clearly show employees how they can attain the outcomes they desire. C. Goal-Setting Theory. Goal-setting theory suggests that employees are motivated to achieve goals they establish together with managers. 1. Employee rewards should be tied to goal achievement. 2. There are several advantages of using goal-setting theory. a) It allows managers to design rewards that fit employee needs. b) It clarifies expectations. c) It maintains equity. d) It provides reinforcement. 3. The major benefit of this theory is that it provides a good understanding of the goal the employee is to achieve and the rewards that will accrue to the employee if the goal is accomplished. IV. KEY MOTIVATION TECHNIQUES A. Management by Objectives. Management by objectives (MBO) is a motivation process in which managers and employees collaborate in setting goals. 1. The primary purpose of MBO is to clarify the roles that the employees are expected to play in reaching the organization’s goals. MBO allows subordinates to participate in goal setting and in performance evaluation. 2. Most MBO programs consist of five steps. a) The first step is to secure the acceptance of top management. b) Next, preliminary goals must be established. c) In the third step, the manager and employee establish goals and decide what resources the employee will need to accomplish those goals. d) Fourth, the manager and each employee meet periodically to review the employee’s progress. e) The fifth step is evaluation. 3. Like many other management methods, MBO has advantages and disadvantages. a) MBO can motivate employees by involving them in the MBO process. Also, communication is improved within the firm. b) A major problem with MBO is that it does not work unless the process begins at the top of the organization. In some cases, MBO results in excessive paperwork. Finally, some managers have difficulty sitting down and working out goals with their employees. B. Job Enrichment. Job enrichment is an attempt to provide workers with variety in their tasks. It gives them some responsibility for, and control over, their jobs. 1. Job enlargement, which means expanding a worker’s assignments to include additional but similar tasks, can lead to job enrichment. 2. Job redesign is a type of job enrichment in which work is restructured in ways that cultivate the worker-job match. C. Behavior Modification. Behavior modification is the use of a systematic program of reinforcement to encourage desirable behavior. Specific steps include the following: 1. The target behavior—the behavior that is to be changed—is identified. 2. Existing levels of this behavior are then measured. 3. Next, managers provide positive reinforcement. 4. Finally, levels of the target behavior are measured again, to determine whether the desired changes have been achieved. Teaching Tip: Put students into groups and ask them to develop a brief outline of a program to encourage employees of a restaurant to arrive on time for work and to eliminate all tardiness. D. Flextime. Flextime is a system in which employees choose their own work hours within certain limits set by employers. Typically, the firm establishes two bands of time: 1. Core time is when all employees must be at work. 2. Flexible time is the time employees may choose whether to be at work. E. Part-Time Work and Job Sharing 1. Part-time work is permanent employment in which individuals work less than a standard work week. 2. Job sharing is an arrangement whereby two people share one full-time position. a) For the workers, job sharing provides the security of a permanent job along with the flexibility of a part-time job. b) For firms, job sharing provides an opportunity to attract highly skilled employees who might not be available on a full-time basis. c) Job sharing is difficult if tasks aren’t easily divisible. F. Telecommuting. A growing number of companies allow telecommuting—working at home all of the time or for a portion of the work week. 1. Companies that allow telecommuting experience several benefits including increased productivity, lower real estate and travel costs, reduced employee absenteeism and turnover, increased work/life balance and improved morale, and access to additional labor pools. 2. Reported disadvantages of telecommuting include feelings of isolation, putting in longer hours, and being distracted by family responsibilities. G. Employee Empowerment. Empowerment means giving employees greater involvement in their jobs and in the operations of the organization by increasing their participation in decision making. 1. For empowerment to work effectively, management must be involved and perform the following functions: a) Set expectations. b) Communicate standards. c) Institute periodic evaluations. d) Guarantee follow-up. 2. Advantages of employee empowerment include increased job satisfaction, improved job performance, higher quality output, increased organizational commitment, lower turnover, and reduced sick leave. 3. Obstacles to empowerment can include resistance by management, distrust of management by workers, insufficient training, and poor communication between management and employees. H. Employee Ownership. Some organizations have discovered the effectiveness of motivating employees by letting them own the company. 1. Employee ownership directly rewards employees for success. When the company benefits from increased sales or lower costs, employees benefit directly. 2. Employee stock ownership plans (ESOPs) have been shown to provide considerable employee incentive and increase employee involvement. 3. In the United States today, about 13.7 million employees participate in 11,400 ESOPs and stock bonus plans. V. TEAMS AND TEAMWORK A. What Is a Team? A large number of companies use teams to increase their employees’ productivity. In a business organization, a team is a group of workers functioning together as a unit to complete a common goal or purpose. B. Types of Teams. There are several types of teams within businesses that function in specific ways to achieve different purposes. 1. Problem-Solving Teams. A problem-solving team is a group of knowledgeable employees brought together to tackle a specific problem. 2. Self-Managed Work Teams. One of the ways in which organizations are increasing employee motivation is through the use of self-managed teams, which are groups of employees with the authority and skills to manage themselves. Advantages and disadvantages of self-managed teams are outlined in Figure 10.6. 3. Cross-Functional Teams. A cross-functional team is a group of individuals with varying expertise, specialties, and skills that are brought together to achieve a common task. 4. Virtual Teams. A virtual team is comprised of members who are geographically dispersed but communicate electronically. Teaching Tip: Use the “Who Are We?” team activity here. The purpose of the activity is to help students understand how much strength and ability are represented by a good team. It takes no more than 15 minutes. C. Developing and Using Effective Teams. As a team matures, it may pass through five common stages of development. (See Figure 10.7.) 1. Forming. During this stage, the team is introduced and begins developing a social dynamic. Through interaction, team members will learn acceptable behaviors, how to relate to each other, and the ground rules. 2. Storming. While developing the team’s goals and objectives, the team will work on developing ideas, formulating plans, and establishing a broad-ranging agenda. 3. Norming. This is when a team begins to stabilize, roles become more defined, and an identified leader emerges. 4. Performing. During this stage, the group achieves its full potential. The team works in harmony under the established roles to accomplish the necessary goals. 5. Adjourning. Depending on the type of team, the final stages of teams could occur. During this phase, the team disbands to move onto new assignments or moves to the next project that affects their department. D. Roles Within a Team. The four roles within teams are task specialist, socioemotional, dual, and nonparticipant. E. Team Cohesiveness. For a team to be successful, members must learn how to resolve and manage conflict so the team can work cohesively to accomplish goals. F. Team Conflict and How to Resolve It 1. Team conflict occurs from a disagreement and if handled properly can work to improve the team. 2. If conflict turns hostile, compromises can help create a middle ground where both parties derive a satisfaction that their side is heard. 3. It is always best to address conflict to prevent growth of the conflict. G. Benefits and Limitations of Teams 1. Teamwork can reduce turnover and costs through increased job satisfaction and a harmonious work environment. It can also increase production, quality, and customer service. 2. If the team cannot resolve conflict, productivity can be decreased. The formation of teams can be stressful and time consuming. Instructor Manual for Business William M. Pride, Robert J. Hughes, Jack R. Kapoor 9781133595854, 9780538478083, 9781285095158, 9781285555485, 9781133936671, 9781305037083
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