1. BA105-1: Organizational Behavior Professor Jim Lincoln Week 10: Lecture Motivation and Job Design

2. 2 Agenda Today –Theories of motivation –Job design for motivation Thursday –Lecture windup; questions –Discuss NUMMI NUMMI video Adler paper –Discuss motivation issues in People Express –Go over exam

3. 3 Rank-order (#1-#8) the following as to their importance to you as motivators in your job: Benefits Worthwhile Praise Pay Learning Security Feels good Skills An experiment

4. 4 Now rank-order (#1-#8) the following as to their importance for others’ motivations ( imagine you were being paid for the accuracy of your predictions): Benefits Worthwhile Praise Pay Learning Security Feels good Skills An experiment

5. 5 Actual rank-order (#1-#8) of these factors based on a study by Heath (2000): Self-RatingOthers’ Rating 1Learning 2Skills 3Feel Good 4Pay 5Worthwhile 6Praise 7Benefits 8Security 1 Pay 2 Skills 3 Security 4 Benefits 5 Feel Good 6 Learning 7 Worthwhile 8 Praise What are the implications of these differences? The importance of intrinsic & extrinsic rewards

6. 6 Choose Between: Job A: A moderately interest- ing and enjoyable job with high pay Job B: An extremely interes- ting and enjoyable job with only average pay Predicted % who Prefer A Actual % who Prefer A Sample Size United States 68381713 Canada 54332253 Sweden 4281100 Finland 4324678 MBAs 6245140 How important is money?

7. 7 Theories of extrinsic motivation (What are the managerial implications?) Homo economicus (Taylor, Theory X, principal/agent) M=f(R) –People are rational but selfish, opportunistic, & risk- and effort- averse. They need strong incentives & close monitoring Expectancy/path-goal (Vroom) M = E(R i ) =  (p i )R i –People are rational and goal-directed. They map paths to the attainment of rewards. Extrinsic rewards motivate only when the perceived probability of attainment is high Learning theory (Skinner) –People are not rational or goal-directed. Random behavior that is rewarded is reinforced. Behavior that is punished is extinguished Equity theory: M = f(R s /E s - R o /E o ) –People benchmark the value of their extrinsic rewards on those of others. Perceived inequity may be motivating or demotivating

8. 8 Theory X and Theory Y Douglas MacGregor: The Human Side of Enterprise, 1960 Theory X 1. People are motivated only by economic gain 2. People resist effort; tend to “soldier” on the job 3. People need clear, simple tasks and strong direction 4. People are selfish, individualistic, “look out for number one” Theory Y 1. People are motivated by many nonfinancial rewards 2. People find meaning and value in work 3. People need challenge, variety, feedback, closure in work 4. People are highly social and sensitive to group norms

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10. 10 The pain of inequity Sitting on his back porch, with a view of a lake, his black Mercedes parked in the driveway, John Mariotti ponders the unfairness of life. "I see people I know couldn't carry my briefcase walking away with failure packages bigger than my net worth," says Mr. Mariotti, 57 years old, a former executive and now a Knoxville, Tenn., consultant who made more than $150,000 last year. Most people don't begrudge Bill Gates his billions. What seems to be more unnerving to high-wage earners is the belief that many of the new super-rich have stumbled into their wealth by being at the right place at the right time -- or, even more infuriatingly, have succeeded after failing at careers in law, medicine or big corporations. WSJ 8/3/1998

11. 11 Theories of intrinsic motivation (What are the managerial implications?) Theory Y (McGregor, Marx) –People find meaning & fulfillment through work (intrinsic rewards) Motivation/hygiene (Herzberg) –Extrinsic rewards reduce dissatisfaction; intrinsic rewards motivate Hierarchy of needs (Maslow) –People have needs that both intrinsic and extrinsic rewards fulfill. Intrinsic rewards motivate only after a sufficient level of extrinsic reward is attained Cognitive dissonance (Festinger) –People as rationalizers: need consistency in cognitions & behavior Too much extrinsic reward makes work less intrinsically rewarding Too little extrinsic reward makes work more intrinsically rewarding

12. 12 Herzberg: motivation - hygiene

13. 13 Conference Board survey of 5000 workers in 2004 shows declining job satisfaction in US Half of U.S. workers are happy with their jobs –Down from 59 percent in 1995 Declines found for all types of workers but magnitude varied by age and income –Biggest drops: earning $25,000 to $35,000 and between 35 to 44. –Workers 65 and older were most satisfied “The long-term drop in job satisfaction has been driven by rapid changes in technology, employers' push for productivity and shifting expectations among workers,” said Lynn Franco, director of the group's Consumer Research Center. –Highest satisfaction with work commutes and coworker relationships. –High dissatisfaction with their companies' bonus plans, promotion policies, health plans and pension benefits. –And only about one in three said they are satisfied with their pay.

14. MASLOW’S NEEDS HIERARCHY APPLIED TO JOB DESIGN Pay/benefits Job security Friends at work Challenging work Recognition, respect

15. 15 What exactly is motivating about money? “Status is of great importance in all human relationships. The greatest incentive that money has, usually, is that it is a symbol of success... The resulting status is the real incentive. Money can be an incentive to the miser only.” John F. Lincoln, CEO Lincoln Electric

16. 16 Dilbert on cognitive dissonance

17. 17 What makes a job intrinsically rewarding? Leadership –inspiring vision and charisma Culture and community –identification, commitment, respect Job tasks

18. 18 What attributes of job tasks are intrinsically rewarding? –Variety –Identity –Challenge & risk –Significance –Feedback –Contextual information (other processes; company finances) –Discretion –Responsibility –Personal growth –Social integration

19. 19 Classical job design (Taylorism): Efficiency & reliability through standardization and control Narrow scope Simple, repetitive tasks Rigid rules & specs Close, top-down supervision Low autonomy Low skill Fixed pay (by job or time) or individual incentive pay Long job ladders Efficiency at the expense of motivation!

20. 20 Job redesign for motivation Classical (Taylorist) job design Job rotation –cross-train; pay for job skills Job enlargement (horizontal loading). Pull in: –support tasks –upstream and downstream production tasks Job enrichment (vertical loading). Pull down: –Authority, accountability, responsibility Switch to teams –Off-line problem-solving –On-line self-managing Industrial democracy –European supervisory boards; works councils; Saturn; People Express Low- Scope and Empowerment-High

21. 21 What does the NUMMI case say about job redesign?

22. 22 Managers ignore at their peril our tendency to seek intrinsic rationales for work activities. Human motivation has complex causes that may work in contradictory ways Managers need to think about those channels in designing job and reward systems Be clear about your own motivational assumptions before you begin designing job and reward systems. The theories of motivation managers carry in their heads can become self-fulfilling prophecies Efficiency and motivation are not contradictory goals in job design Takeaways