1. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Applied Motivation Practices C H A P T E R 6

2. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Rewarding Employees at IKEA IKEA held a special bonus in which the Scandinavian home furnishings company pledged an entire day’s sales revenue to employees. The day doubled previous sales records and awarded each employee $1,800. Courtesy of IKEA

3. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Money and employee needs  affects several needs, not just existence needs Money and attitudes  Money ethic -- not evil, represents success, should be budgeted carefully Money and self-identity  Influences our self-perceptions  Evidence that men more than women identify with money The Meaning of Money © Corel Corp.

4. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Membership and seniority Job status Competencies Performance Types of Rewards in the Workplace © Corel Corp.

5. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Membership/Seniority Based Rewards Fixed wages, seniority increases Advantages  guaranteed wages may attract job applicants  seniority-based rewards reduce turnover Disadvantages  doesn’t motivate job performance  discourages poor performers from leaving  may act as golden handcuffs

6. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Job Status-Based Rewards Includes job evaluation and status perks Advantages:  job evaluation tries to maintain pay equity  motivates competition for promotions Disadvantages:  employees exaggerate duties, hoard resources  creates psychological distance across hierarchy  Inconsistent with flatter organizations

7. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Competency-Based Rewards Pay increases with competencies acquired or demonstrated Skill-based pay  Pay increases with skill modules learned Advantages  More flexible work force, better quality, consistent with employability Disadvantages  Potentially subjective, higher training costs

8. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Organizationalrewards Stock ownershipStock ownership Stock optionsStock options Profit sharingProfit sharing Teamrewards GainsharingGainsharing BonusesBonuses Performance-Based Rewards Individualrewards Piece ratePiece rate CommissionsCommissions RoyaltiesRoyalties Merit payMerit pay

9. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Rewards at Steel Dynamics Steel Dynamics remains competitive by applying team and organizational rewards. Along with handing out profit sharing bonuses, the company rewards production staff for achieving production targets and reducing input costs (gainsharing). Courtesy of Steel Dynamics Inc.

10. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Team and Organizational Rewards Gainsharing plans  based on cost reductions and increased labor efficiency ESOPs  employees own company stock Stock options  right to purchase company shares at a future date at a predetermined price Profit sharing  employees receive share of profits Courtesy of Steel Dynamics Inc.

11. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Problems with Performance Rewards Shift attention away from motivation job itself to extrinsic rewards Create a psychological distance with reward giver Discourage risk taking Used as quick fixes

12. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Improving Reward Effectiveness Link rewards to performance Ensure rewards are relevant Team rewards for interdependent jobs Ensure rewards are valued Beware of unintended consequences © Corel Corp.

13. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Job Design Assigning tasks to a job, including the interdependency of those tasks with other jobs Technology influences, but does not determine, job design Employability affects job design © Photodisc. With permission.

14. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e AdvantagesDisadvantages Evaluating Job Specialization Less time changing tasks Lower training costs Job mastered quickly Better person-job matching Job boredom Discontentment pay Lower quality Lower motivation

15. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e WorkmotivationGrowthsatisfactionGeneralsatisfactionWorkeffectiveness Job Characteristics Model Feedback from job Knowledge of results Skill variety Task identity Task significance Meaningfulness AutonomyResponsibility Individualdifferences CriticalPsychologicalStates Core Job CharacteristicsOutcomes

16. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Job Enlargement Job Rotation Job 1 Operate Camera Job 2 Operate Sound Job 3 Report Story Job 1 Operate Camera Operate Sound Report Story Job 2 Operate Camera Operate Sound Report Story Job 3 Operate Camera Operate Sound Report Story Job Rotation vs. Job Enlargement

17. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Job Enrichment Strategies Empowering employees  giving employees more autonomy  feeling of control and self-efficacy Forming natural work units  completing an entire task  assigning employees to specific clients Establishing client relationships  employees put in direct contact with clients © Photodisc. With permission.

18. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Obstacles to Job Design Difficult to accurately measure job characteristics Resistance to change  skilled workers  labor union leaders  supervisors Problem finding optimal level of enrichment and specialization

19. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Self-Leadership The process of influencing oneself to establish the self-direction and self-motivation needed to performance task Includes concepts/practices from:  Goal setting  Social learning theory  Sports psychology

20. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Elements of Self-Leadership Personal Goal Setting ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-MonitoringSelf-Reinforce-ment Personal goal setting  Employees set their own goals  Apply effective goal setting practices

21. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Personal Goal Setting Elements of Self-Leadership DesigningNaturalRewardsSelf-MonitoringSelf-Reinforce-mentConstructiveThoughtPatterns Positive self-talk  Talking to ourselves about thoughts/actions  Potentially increases self-efficacy Mental imagery  Mentally practicing a task  Visualizing successful task completion

22. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e DesigningNaturalRewards Elements of Self-Leadership ConstructiveThoughtPatternsSelf-MonitoringSelf-Reinforce-ment Finding ways to make the job itself more motivating  eg. altering the way the task is accomplished Personal Goal Setting

23. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Elements of Self-Leadership ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-Reinforce-mentPersonal Goal Setting Self-Monitoring Keeping track of your progress toward the self-set goal  Looking for naturally-occurring feedback  Designing artificial feedback

24. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Self-Reinforce-ment Elements of Self-Leadership ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-Monitoring “Taking” a reinforcer only after completing a self-set goal  eg. Watching a movie after writing two more sections of a report  eg. Starting a fun task after completing a task that you don’t like Personal Goal Setting

25. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Applied Motivation Practices C H A P T E R 6