Motivating Employees

This may sound soft and mushy, but happy people are better for business. They are more creative and productive, they build environments where success is more likely, and you have a much better chance of keeping your best players.

—Shelly Lazarus, CEO,

Ogilvy & Mather Worldwide

Chapter 11

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Learning Objectives

1. Identify the relationship between motivation and performance.

2. Describe content theories of motivation.

3. Describe process theories of motivation.

4. Explain when financial incentives are likely to motivate employees.

5. Describe pay plans using financial incentives.

6. Discuss the pros and cons of keeping pay information secret.

7. Identify ways supervisors can motivate their employees.

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Motivation

• Motivation – Giving people incentives that cause them to

act in desired ways

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How Does Motivation Work?

• Familiarity with the best-known theories can help supervisors think of ways to motivate employees.

• None are perfect, but all give supervisors some guidance.

Motivation + Ability = Performance

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Content Theories

• Content theories focus on the content of the motivators.

• Three researchers whose content theories of motivation are widely used:– Abraham Maslow– David McClelland– Frederick Herzberg

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Content Theories

• Psychologist Abraham Maslow assumed that people are motivated by unmet needs.

• When a person’s need for something is not met, the person feels driven, or motivated, to meet that need.

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Maslow’s Hierarchy of Needs

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Maslow’s Hierarchy of Needs

• Maslow’s hierarchy has shortcomings.

• Critics have noted that the theory is based on clinical work with neurotic patients and was not tested much for relevance to the work setting.

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Maslow’s Hierarchy of Needs

• However, the popularity of Maslow’s theory implies that it can be helpful in offering suggestions about what motivates people

• Applied to a work situation, Maslow’s theory means the supervisor must be aware of the current needs of particular employees.

11-9

Maslow’s Hierarchy of Needs

• Flextime– A policy that grants employees some leeway

in choosing which 8 hours a day or which 40 hours a week to work

• Job sharing– An arrangement in which two part-time

employees share the duties of one full-time job

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Share of 945 U.S. Companies Offering Flexible Work Options

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McClelland’s Achievement-Power-Affiliation Theory

• Need for achievement – the desire to do something better than it has

been done before.

• Need for power – the desire to control, influence, or be

responsible for other people.

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McClelland’s Achievement-Power-Affiliation Theory

• Need for affiliation – the desire to maintain close and friendly

personal relationships.

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Herzberg’s Two-Factor Theory

• Frederick Herzberg’s research led to the conclusion that employee satisfaction and dissatisfaction stem from different sources.

• Dissatisfaction results from the absence of hygiene factors

• In contrast, satisfaction results from the presence of motivating factors

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Herzberg’s Two-Factor Theory

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Process Theories

• Process theories look at the process of motivation instead of specific motivators.

• Two major process theories:– Vroom’s expectancy-valence theory– Skinner’s reinforcement theory

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Vroom’s Expectancy-Valence Theory

Vroom decided that the degree to which people are motivated to act in a certain way depends on three things:

• Valence

• Expectancy

• Instrumentality

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Vroom’s Expectancy-Valence Theory

• Valence – the value a person places on the outcome of

a particular behavior

• Expectancy – the perceived likelihood that the behavior will

lead to the outcome.

• Instrumentality – the perceived probability that the promised

reward will actually be received.

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Skinner’s Reinforcement Theory

• Reinforcement theory maintains that people’s behavior is influenced largely by the consequences of their past behavior.

• It implies that supervisors can encourage or discourage a particular kind of behavior by the way they respond to the behavior

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Skinner’s Reinforcement Theory

• Reinforcement– A desired consequence or the ending of a

negative consequence, either of which is given in response to a desirable behavior

• Punishment– An unpleasant consequence given in

response to undesirable behavior

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Skinner’s Reinforcement Theory

• Behavior modification– The use of reinforcement theory to motivate

people to behave in a certain way

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Motivation Theories and the Law

• Federal laws set requirements for overtime pay, rest breaks, health insurance for retirees, and many other areas.

• The Family and Medical Leave Act can pose a significant challenge to planning and scheduling because of an employee’s leave.

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Money as a Motivator

• Extrinsic reward– Recognition or compensation that is

extraneous to the task accomplished

• Intrinsic reward– Personal satisfaction that comes directly from

performing a task

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Money as a Motivator

• Money motivates people when it meets their needs.

• If money is to work as a motivator, employees must believe they are able to achieve the financial rewards the organization offers.

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Money as a Motivator

• Pay plans using financial incentives– Piecework system– Production bonus system– Commissions– Payments for suggestions

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Group Incentive Plans

• Group incentive plan– A financial incentive plan that rewards a team

of workers for meeting or exceeding an objective.

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Group Incentive Plans

• Profit-sharing plan– a company sets aside a share of its profits

earned during a given period and divides these profits among the employees.

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Group Incentive Plans

• Gainsharing – A group incentive plan in which the

organization encourages employees to participate in making suggestions and decisions, then rewards the group with a share of improved earnings

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Secrecy of Wage and Salary Information

• In private organizations, a typical compromise between maintaining privacy and sharing information is for the organization to publish pay ranges so employees know what they can potentially expect to earn.

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How Supervisors Can Motivate

• Theory X– the view that people dislike work and must be

coerced to perform

• Theory Y– the view that work is a natural activity and that

people will work hard and creatively to achieve objectives to which they are committed

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How Supervisors Can Motivate

• Theory Z– A set of management attitudes that

emphasizes employee participation in all aspects of decision making

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Ways Supervisors Can MotivateEmployees

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Making Work Interesting

• Job rotation– Moving employees from job to job to give

them more variety

• Job enlargement– An effort to make a job more interesting by

adding more duties to it

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Making Work Interesting

• Job enrichment– The incorporation

of motivating factors into a job––in particular, giving the employee more responsibility and recognition

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Having High Expectations

• Pygmalion effect– The direct relationship between expectations

and performance; high expectations lead to high performance

11-35

Job Characteristics Rated Important by U.S. Workers

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