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Chapter 5Chapter 5Motivation: Motivation:

From Concepts to ApplicationsFrom Concepts to Applications

Stephen P. Robbins

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ObjectivesObjectives• Identify the four ingredients common to MBO MBO

programsprograms• Outline the five-step problem-solving modelfive-step problem-solving model in OB

Modification• Explain why managers might want to use employee employee

involvement programsinvolvement programs• Contrast participative managementparticipative management with employee

involvement• Explain how ESOPsESOPs can increase employee

motivation• Describe the link between skill-based pay plansskill-based pay plans and

motivation theories

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Emphasizes converting overall

organizational objectives into

specific objectives for individual

units and members that are

tangible, verifiable, and measurable

ManagementManagement

by Objectives (MBO)by Objectives (MBO)

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Overallorganizational

objectives

Divisionalobjectives

Departmentalobjectives

Individualobjectives

Cascading of ObjectivesCascading of Objectives

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Management by ObjectivesManagement by Objectives

Four ingredients common to MBO programs:

1. Goal specificity2. Participative decision making3. Explicit time period4. Performance feedback

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Management by Objectives (MBO)Management by Objectives (MBO)• Organizational objectives translated to specific

objectives for each level (division, department, individual)

• Lower-level managers participate in setting their own goals

• Results in hierarchy of objectives that links one level to the next

• If all individuals achieve goals, organizational objectives will be attained

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The application of reinforcement

theory to individuals in the work

setting using a problem-solving

model, feedback, and positive

reinforcements

Behavior ModificationBehavior Modification

(OB Mod)(OB Mod)

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1Identify

performance-related

behavioralevents

2Measure:

Baseline the frequency

of response

3Identify existing

behavioralcontingencies

through functional analysis

4aDevelop

intervention strategy

4bApply

appropriate strategy

4cMeasure: Chart the frequency

of response after

intervention

Steps in OB ModSteps in OB Mod

4dMaintain

desirable behavior

5Evaluate forperformanceimprovement

YesYes

NoNo

Adapted by permission of the publisher from Adapted by permission of the publisher from PersonnelPersonnel, July-August © 1974. Fred Luthans, , July-August © 1974. Fred Luthans, American Management Association, New York. All rights reserved.American Management Association, New York. All rights reserved.

Problemsolved?

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Using multiple sources to reward

behavior and recognize publicly

both individual and group

accomplishments

Employee Recognition Employee Recognition

ProgramsPrograms

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Employee Recognition ProgramsEmployee Recognition Programs• Rewarding behavior with recognition

immediately leads to its repetitionrepetition• To maximize motivation potential,

publicly communicatepublicly communicate who and why is being recognized

• Recognizing employee’s superior performance often costs littlecosts little

• Suggestion systemsSuggestion systems are widely used recognition devices

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A participative process that uses

the entire capacity of employees

related to decisions that affect

them is designed to encourage

increased commitment to the

organization's success

Employee InvolvementEmployee Involvement

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Employee InvolvementEmployee Involvement• Involve workers in decisions decisions that will affect

them • Increase their autonomyautonomy and control over

their work lives • Include techniquestechniques with a common core

• Employee participation• Participative management• Workplace democracy• Empowerment• Employee ownership

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Forms of compensation where a

portion of an employee’s pay is

based on the measure of

performance either of the

individual, the organization, or

both

Variable-Pay ProgramsVariable-Pay Programs

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Variable-Pay ProgramsVariable-Pay Programs

Four widely used variable-pay programs• Piece-rate wagesPiece-rate wages - fixed sum for each unit

completed• BonusesBonuses - a percent of annual pay based on

company earnings• Profit sharingProfit sharing - based on a formula designed

around company’s profitability• GainsharingGainsharing - formula-based group incentive

plan for improvements in productivity

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Pay levels based on how

many skills employees have

or how many jobs they can do

Skill-Based PaySkill-Based Pay

(Competency-Based Pay)(Competency-Based Pay)

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Skill-Based PaySkill-Based PayAdvantages:Advantages:• Attractive due to flexibility for management• Encourages employees to acquire a range of skills• Facilitates communication and understanding of

others’ jobs• Meets needs of ambitious employees without a

promotion in job title

Disadvantages:Disadvantages:• Topping out - learning all the skills• Skills might become obsolete• Do not address level of performance

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Implications for ManagersImplications for Managers

• Programs designed to increase employee motivation, productivity, and satisfaction are are groundedgrounded on basic motivation theoriesbasic motivation theories

• Six motivation programs described are not not applicableapplicable to every organization or every manager’s needs

• Understanding will help with designing internal designing internal systemssystems to increase employee productivity and satisfaction

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SummarySummary• Identified the four ingredients common to MBO MBO

programsprograms• Outlined the five-step problem-solving modelfive-step problem-solving model in OB

Modification• Explained why managers might want to use employee employee

involvement programsinvolvement programs• Contrasted participative managementparticipative management with employee

involvement• Explained how ESOPsESOPs can increase employee

motivation• Described the link between skill-based pay plansskill-based pay plans and

motivation theories