Chapter 4, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 4-1 Copyright © 2007 Pearson Education Canada Chapter

Chapter 4, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 4-1Copyright © 2007 Pearson Education Canada

Chapter 5

Motivation in Action


From Theory to Practice: The Role of Money

• Money is the most commonly used reward in organizations.– Money certainly helps some needs get met.

• But, money is not all employees’ top priority.– Many emphasize relationships in the workplace.


Creating Effective Reward Systems – Employee Recognition

• Employee recognition programs use multiple sources and recognizes both individual and group accomplishments.

• In contrast to most other motivators, recognizing an employee’s superior performance often costs little or no money.


Variable-Pay Programs (aka Pay-for-Performance)

• A portion of an employee’s pay is based on some individual and/or organizational measure of performance.– Individual-based

• Piece-rate wages, bonuses

– Group-based• Gainsharing

– Organizational-based• Profit sharing• Employee stock ownership plans (ESOPs)


Challenges to Pay-for-Performance Programs • What constitutes performance and how is it measured?• Other barriers:

– Rate of inflation raises– Salary scales keyed to competitors– Traditional compensation systems– Appraisal practices that inflate evaluations and

expectations• The challenges for pay-for-performance programs can

be affected by how and where they are implemented.– Teamwork– Unions– Public Sector Employees

• Ethical Considerations


Research Findings

• Linking variable-pay programs and expectancy theory:– Variable-pay programs seem to be consistent

with expectancy theory predictions.

– Employees are motivated when there is a perceived strong relationship between performance and rewards.


Motivating Beyond Productivity

• Commissions beyond sales– Customer satisfaction and/or sales team outcomes, such as

meeting revenue or profit targets.

• Leadership effectiveness– Employee satisfaction, or how the manager handles his or

her employees.

• New goals– All employees who contribute to specific organizational

goals, such as customer satisfaction, cycle time, or quality measures.


Rewards for Other Types of Performance

• Knowledge workers in teams– Performance of knowledge workers and/or professional

employees who work on teams.

• Competency and/or skills– Abstract knowledge or competencies—for example,

knowledge of technology, the international business context, customer service, or social skills.

• Skill-based – Pay is based on how many skills an employee has, or how

many jobs he or she can do.


Comparing Various Pay ProgramsApproach Strengths Weaknesses

Variable pay

• Motivates for performance.

• Cost-effective.

• Makes a clear link between organizational goals and individual rewards.

• Individuals do not always have control over factors that affect productivity.

• Earnings vary from year to year.

• Can cause unhealthy competition among employees.

Team-based pay

• Encourages individuals to work together effectively.

• Promotes goal of team-based work.

• Difficult to evaluate team performance sometimes.

• Equity problems could arise if all members paid equally.

Skill-based pay

• Increases the skill levels of employees.

• Increases the flexibility of the workforce.

• Can reduce the number of employees needed.

• Employers may end up paying for unneeded skills.

• Employees may not be able to learn some skills, and thus feel demotivated.


Caveat Emptor: Apply Motivation Theories Wisely

• Motivation Theories Are Culture-Bound– Canada and US rely on extrinsic rewards more

than other countries.

– Japan and Germany rarely use individual incentives.

• Japan emphasizes group rewards.

– China is more likely to give bonuses to everyone.


Reward Preferences in Different Countries

GLOBE/Hofstede

Cultural Dimension Reward Preference Examples

High uncertainty avoidance Certainty in compensation systems: Greece, Portugal, Japan

•Seniority-based pay

•Skill-based pay

Individualism Compensation based on individual performanceAustralia, United Kingdom,

•Pay for performance United States

•Individual incentives

•Stock options

Humane orientation Social benefits and programs: Sweden, Norway, the Netherlands

(Hofstede's quality-of-life •Flexible benefitsdimension) • Workplace child-care

programs•Career-break programs•Maternity leave programs


Beware the Signals That Are Sent By Rewards

• Often reward systems do not reflect organizational goals:– Individuals are stuck in old patterns of rewards and

recognition.• Stick to rewarding things that can be easily measured.

– Organizations don’t look at the big picture.• Subunits compete with each other.

– Management and shareholders focus on short-term results.


We hope for:

• Teamwork and collaboration

• Innovative thinking and risk taking

• Development of people skills]

• Employee involvement and empowerment

• High achievement

• Long-term growth

• Commitment to total quality see

• Candor

But we reward:

• The best individual team members

• Proven methods and no mistakes

• Technical achievements and accomplishments

• Tight control over operations, resources

• Another year’s efforts

• Quarterly earnings

• Shipment on schedule, even with defects

• Reporting good news

Management Reward Follies


Can We Just Eliminate Rewards?

• Alfie Kohn suggests that organizations should focus less on rewards, more on creating motivating environments:– Abolish Incentives.

– Re-evaluate Evaluation.

– Create Conditions for Authentic Motivation.

– Encourage Collaboration.

– Enhance Content.

– Provide Choice.


Job Redesign• Job Rotation

– The periodic shifting of a worker from one task to another.– Reduces boredom and increases motivation through diversifying the

employee’s activities.• Job Enlargement

– The horizontal expansion of jobs.– Attacks the lack of diversity in overspecialized jobs; does little to

instill challenge or meaningfulness to a worker’s activities. • Job Enrichment

– The vertical expansion of jobs.• Employee does a complete activity.

– Expands the employee’s freedom and independence, increases responsibility, and provides feedback.


Job Characteristic Model - JCM• JCM is a model that identifies five core job dimensions

and their relationship to personal and work outcomes.Core Job Dimensions – Skill variety– Task identity– Task significance– Autonomy– FeedbackCritical Psychological States– Experienced meaningfulness– Experienced responsibility for outcomes– Knowledge of the actual results


Examples of High and Low Job Characteristics

Skill VarietyHigh variety – The owner-operator of a garage who does electrical repair, rebuilds engines, does body work,

and interacts with customersLow variety – A body shop worker who sprays paint eight hours a day

Task IdentityHigh identity – A cabinet maker who designs a piece of furniture, selects the wood, builds the object, and

finishes it to perfection Low identity – A worker in a furniture factory who operates a lathe solely to make table legs

Task SignificanceHigh significance – Nursing the sick in a hospital intensive care unitLow significance – Sweeping hospital floors

AutonomyHigh autonomy – A telephone installer who schedules his or her own work for the day, makes visits without

supervision, and decides on the most effective techniques for a particular installationLow autonomy – A telephone operator who must handle calls as they come according to a routine, highly

specified procedure

FeedbackHigh feedback – An electronics factory worker who assembles a radio and then tests it to determine if it

operates properlyLow feedback – An electronics factory worker who assembles a radio and then routes it to a quality control

inspector who tests it for proper operation and makes needed adjustments


Exhibit 5-7 The Job Characteristics Model

Core jobdimensions

Personal and work outcomes

Skill varietyTask identityTask significance

Experiencedmeaningfulnessof the work

High internalwork motivation

Autonomy

Experiencedresponsibilityfor outcomesof the work

High-qualitywork performance

FeedbackKnowledge of theactual results ofthe work activities

High satisfactionwith the work

Low absenteeismand turnover

Employee growth-need strength

Criticalpsychological states


Creating More Flexible Workplaces

• Compressed Workweek

• Flextime

• Job Sharing

• Telecommuting


From Concepts to Skills: Designing Enriched Jobs

• Combine tasks.• This increases skill variety and task identity.

• Create natural work units.• This increases employee “ownership” of the work and improves the

likelihood that employees will view their work as meaningful and important.

• Establish client relationships.• This increases skill variety, autonomy, and feedback for the employee.

• Expand jobs vertically.• This seeks to partially close the gap between the “doing” and the

“controlling” aspects of the job.

• Open feedback channels.

Documents

Chapter 4, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 4-1 Copyright © 2007 Pearson Education Canada Chapter