1. BA 101 Introduction to Business
10. Employee Motivation, Workforce Trends, and Labor Relations

2. What Is Motivation? Needs Actions Outcomes
Both common sense and formal research suggest that motivated employees are a key to success in every business. In fact, making sure that employees are motivated is one of the most important challenges facing every manager.
Motivation is the combination of forces that moves individuals to take certain actions and avoid others in pursuit of individual objectives. The notion of movement is vital here; motivational strategies have little value if they don't translate into action that helps the business enterprise. As you'll see in the following section, a diverse range of theories has attempted to explain motivation. However, every theory or motivational approach needs to consider three key steps:
Need. The employee senses a need of some sort, from the basic need to enough earn money to buy food to a need for recognition or self-respect.
Action. To fulfill the need, the employee engages in actions or behaviors that he or she believes will result in the need being satisfied.
Outcome. The employee observes the outcome of the action (sometimes called the reward) and determines whether the effort was worthwhile. Actions that result in positive outcomes are likely to be repeated; those that result in negative outcomes are less likely to be repeated.
These three steps are an extremely simplified look at the complex issue of motivation, but even from this simple model you can start to grasp the challenges involved. For instance, what if two or more needs conflict, leading to incompatible actions? It's hard to balance the need to relax and have fun with the need to generate enough money to pay the rent. Or what if an employee's need for recognition motivates him or her to work hard in the hopes of getting a promotion, but thanks to a tough economy, the company isn't growing and can't offer the promotion?
Outcomes

3. Workforce Motivation Monetary Rewards Fair Treatment Satisfying Work
Work-Life Balance
Before moving into specific theories, it's important to consider the role of money as a motivator, since it's a central issue for most employees. Money obviously plays a critical role in most everyone's work life, but it is not the ultimate motivator for many people because money often can't compensate for the lack of other satisfying factors. In other words, it's important, but not enough to truly motivate people toward peak performance. Today, employees also expect to be treated fairly and want the opportunity to pursue satisfying work. They want to balance their careers and their family lives.
“There’s an increasing interest in people finding meaning in their lives and in their work,” notes Don Kuhn, the executive director of the International University Consortium for Executive Education. “People are no longer content with income alone. They are looking for personal satisfaction. They want to be part of something they can believe in, something that confers meaning on their work and on their lives. They want to be motivated.”

4. Theories of Motivation
Frederick W. Taylor
Maslow’s Hierarchy of Needs
Herzberg’s Two-Factor Theory
Theory X, Theory Y, and Theory Z
Equity Theory
Expectancy Theory
Motivation has been a topic of interest to managers and researchers for more than a hundred years. A number of theories have evolved over the years, some that describe what motivates people and others that describe how they go about fulfilling their needs. No single theory offers a complete and proven picture of the motivation puzzle, but each can offer some perspective.
The next seven slides will examine this list of theories, item by item.

5. Frederick W. Taylor Monetary Rewards Scientific Management Personal
Productivity
Scientific
Management
Frederick W. Taylor was a machinist and engineer from Philadelphia who became interested in employee efficiency and motivation late in the nineteenth century. Taylor developed scientific management, an approach that sought to improve employee efficiency through the scientific study of work. In Taylor’s view, people were motivated almost exclusively by money, so he set up pay systems that rewarded employees when they were productive.
Although money has always been a powerful motivator, scientific management fails to take into account other motivational elements, such as opportunities for personal satisfaction or individual initiative.

6. Maslow’s Hierarchy Five Need Categories
Self-Esteem Needs
Social Needs
Safety Needs
Physiological Needs
Self-
Actualization
Maslow’s
Hierarchy
Five Need
Categories
In 1943 psychologist Abraham Maslow proposed the theory that behavior is determined by a variety of needs. He organized these needs into five categories and then arranged the categories in a hierarchy.
The most basic needs are at the bottom of this hierarchy, and the more advanced needs are toward the top. In Maslow’s hierarchy, all of the requirements for basic survival-food, clothing, shelter, and the like-fall into the category of physiological needs. These basic needs must be satisfied before the person can consider higher-level needs such as safety needs, social needs (the need to give and receive love and to feel a sense of belonging), and esteem needs (the need for a sense of self-worth and integrity). At the top of Maslow’s hierarchy is self-actualization—the need to become everything one can become.
Although Maslow’s hierarchy is a convenient way to classify human needs, it would be a mistake to view it as a rigid sequence.

7. Herzberg’s Two-Factor Theory
Highly
Satisfied
Motivation
Achievement
Recognition
Responsibility
Work itself
Personal growth
Area of
Satisfaction
Motivators Influence
Satisfaction Level
Neither Satisfied
Nor Dissatisfied
Hygiene Factors
Working conditions
Pay and security
Company policies
Supervisors
Interpersonal relationships
Frederick Herzberg asked workers to describe situations in which they felt either good or bad about their jobs. His findings are called motivation-hygiene theory.
What Herzberg called hygiene factors are associated with dissatisfying experiences. The potential sources of dissatisfaction include working conditions, company policies, and job security. Management can lessen worker dissatisfaction by improving hygiene factors that concern employees, but such improvements seldom influence satisfaction. On the other hand, managers can help employees feel more motivated and, ultimately, more satisfied by paying attention to motivators such as achievement, recognition, responsibility, and other personally rewarding factors.
Herzberg’s theory is related to Maslow’s hierarchy of needs: The motivators closely resemble the higher-level needs, and the hygiene factors resemble the lower-level needs.
Area of
Dissatisfaction
Hygiene Factors
Influence Satisfaction
Highly
Dissatisfied

8. McGregor’s Assumptions
Theory X Employees
Theory Y Employees
Dislike work
Motivated by threats
Avoid responsibilities
Value security
Enjoy work
Committed to goals
Accept responsibilities
Have mental potential
In the 1960s, psychologist Douglas McGregor identified two radically different sets of assumptions that underlie most management thinking. He classified these sets of assumptions as Theory X and Theory Y.
According to McGregor, Theory X-oriented managers believe that employees dislike work and can be motivated only by the fear of losing their jobs or by extrinsic rewards such as money, promotions, and tenure. This management style emphasizes physiological and safety needs and tends to ignore the higher-level needs.In contrast, Theory Y-oriented managers believe that employees like work and can be motivated by working for goals that promote creativity or for causes they believe in. Thus, Theory Y-oriented managers seek to motivate employees through intrinsic rewards.
The assumptions behind Theory X emphasize authority; the assumptions behind Theory Y emphasize growth and self-direction.

9. Ouchi’s Theory Z Informal Control with Formal Measurements
Slow Evaluation
and Promotion
Moderate Degree
of Career
Specialization
Holistic Concern
for the Individual
Consensus-Based
Decision Making
Long-Term
Employment
Individual
Responsibility
In the 1980s, when U.S. businesses began to feel a strong competitive threat from Japanese companies, William Ouchi proposed another approach to motivation that was based on his comparative study of Japanese and U.S. management practices. His Theory Z merged the best of both systems, as expressed in seven principles: long-term employment, consensus-based decision making, individual responsibility, slow evaluation and promotion, informal control with formal measurements, a moderate degree of career specialization, and a holistic concern for the individual.

10. Equity Theory Ratio Employee’s Comparison* Perception Outcomes A
Inputs A
Outcomes B
Inputs B
< =
>
Inequity (Under-Rewarded)
Equity
Inequity (Over-Rewarded)
Equity theory contributes to the understanding of motivation by suggesting that employee satisfaction depends on the perceived ratio of inputs to outputs. If you work side by side with someone, doing the same job and giving the same amount of effort, only to learn that your colleague earns more money, would you satisfied in your work and motivated to continue working hard? You perceive a state of inequity, so you probably won't be happy with the situation. In response, you might ask for a raise, decide not to work as hard, try to change perceptions of your efforts or their outcomes, or simply quit and find a new job; any one of these steps could bring your perceived input/output ratio back into balance.
*Where A is the employee, and B is a relevant other or referent.

11. Expectancy Theory Quality of effort put forth depends on. . .
…expectations of
…and expectations of
…attractiveness of
rewards relative to
Expectancy theory, considered by many experts to offer the best available explanation of employee motivation, links an employee's efforts with the outcome he or she expects from that effort. Like equity theory, expectancy theory focuses less on the specific forces that motivate employees and more on the process they follow to seek satisfaction in their jobs. Expectancy theory expands on earlier theories in several important ways, including linking effort to performance and linking rewards to individual goals. The effort employees will put forth depends on the following:
Their expectations about their own ability to perform
Their expectations about the rewards that the organization will give in response to that performance
The attractiveness of those rewards relative to their individual goals.
Individual
Effort
Individual
Performance
Organizational
Rewards
Individual
Goals

12. Workplace Motivation Strategies
Setting
Goals
Reinforcing
Behavior
The range of motivational decisions managers face is almost endless, from redesigning jobs to make them more interesting to offering recognition programs for high achievers. Whether it's a basic award program for salespeople or an entirely new way to structure the workforce, though, all motivational strategies need to consider two critical aspects: setting goals and reinforcing behavior.

13. Management by Objectives
Setting Goals 1
Planning Action 2
Implementing Plans
Successful motivation requires action. To be successful, that action needs to be directed toward a meaningful goal. Accordingly, goal-setting theory suggests the idea that goals can motivate employees.
The process of setting goals is often embodied in the technique known as management by objectives (MBO), a company wide process that empowers employees and involves them in goal setting and decision making. This process consists of four steps: setting goals, planning actions, implementing plans, and reviewing performance. Because employees at all levels are involved in all four steps, they learn more about company objectives and feel that they are an important part of the company-wide team. Furthermore, they understand how even their small job function contributes to the organization’s long-term success.
One of the key elements of MBO is a collaborative goal-setting process. Together, a manager and employee define the employee’s goals, the responsibilities for achieving those goals, and the means of evaluating individual and group performance so that the employee’s activities are directly linked to achieving the organization’s long-term goals. Jointly setting clear and challenging—but achievable—goals can encourage employees to reach higher levels of performance. 3
Reviewing Performance 4

14. Reinforcement Theory Behavior Modification Negative Reinforcement
Positive
Employees in the workplace, like human beings in all aspects of life, tend to repeat behaviors that create positive outcomes. Reinforcement theory suggests that managers can motivate employees by controlling or changing their actions through behavior modification. Managers systematically encourage those actions that are desirable by providing pleasant consequences and discourage those that are not by providing unpleasant consequences.
Positive reinforcement offers pleasant consequences (such as a gift, praise, public recognition, bonus, dinner, or trip) for completing or repeating a desired action. Experts recommend the use of positive reinforcement because it emphasizes the desired behavior rather than the unwanted behavior. By contrast, negative reinforcement allows people to avoid unpleasant consequences by behaving in the desired way. For example, fear of losing a job (unpleasant consequences) may move an employee to finish a project on time (desired behavior). Such negative motivation, however, is much less effective than encouraging an individual’s own sense of direction, creativity, and pride in doing a good job.
Avoid Unpleasant
Consequences
Obtain Pleasant
Consequences

15. Work-Life Balance Job Enrichment Job Redesign Reduces Specialization
Restructures
Work
The concerns over workloads is one of the factors behind the growing interest in work-life balance, the idea that employees, managers, and entrepreneurs need to balance the competing demands of their professional and personal lives.
Regardless of how realistic balance may or may not be, many companies are trying to make it easier for employees to juggle multiple responsibilities with on-site daycare facilities, flexible work schedules, and other options designed to improve quality of work life (QWL).
Two common ways of improving QWL are through job enrichment, which reduces specialization and makes work more meaningful by expanding each job’s responsibilities, and job redesign, which restructures work to provide a better fit between employees’ skills and their jobs.
Expands
Responsibilities
Coordinates
Skills and Jobs

16. Workforce Diversity Issues
Immigration
Gender
Age
Race
Diversity is simply a fact of life for all companies. Some of the most important diversity issues today include the immigration and globalization of the workforce, the aging of the U.S. workforce, gender and race issues, and religion in the workplace.
For many companies, both large and small, managing the workforce is now an international challenge. This international, intercultural nature of the workforce yields a number of important benefits, including cost advantages, specialized talents, and local market knowledge, but it often gives managers a more complex employee base to supervise and motivate.
Reversing a long-term trend toward earlier and earlier retirement, employment rates among older workers have recently increased. Many employers are happy to hire older workers, too, citing their greater flexibility in work hours and pay, lower rates of absenteeism, lower turnover rate, and ability to train younger workers. Economists cite a number of reasons: rising health-care costs (complicated by the number of employers who’ve canceled insurance coverage for their retired employees), reductions in company pension plans, individual retirement savings that took a beating during the post-dot-com stock market decline, and the desire to stay active longer.
The statistical picture of men and women in the workforce is complex. However, three general themes are clear. First, both year to year and over the course of their careers, women earn less on average than men. Second, even in occupations that have traditionally been served primarily by women, such as teaching and nursing, women still earn less than men on average. Third, the higher up you go in most corporations, the fewer women you’ll find in positions of authority.
In many respects, the element of race in the diversity picture presents the same concerns as gender: equal pay for equal work, access to promotional opportunities, and ways to break through the glass ceiling. However, while the ratio of men and women in the workforce remains fairly stable year to year, the ethnic composition of the United States has been on a long-term trend of greater and greater diversity. Unfortunately, as with average wages between women and men, disparity still exists between minority households and white households.
The effort to accommodate employees’ life interests on a broader scale has led a number of companies to address the issue of religion in the workplace. On the one hand, some employees feel they should be able to express their beliefs in the workplace and not be forced to “check their faith at the door” when they come to work. On the other hand, companies want to avoid situations in which openly expressed religious differences might cause friction between employees or distract employees from their responsibilities.
Religion
Globalization

17. Alternative Work Arrangements
Flextime
Telecommuting
Job Sharing
Flexible Career Paths
To meet today’s staffing and demographic challenges, many companies are adopting alternative work arrangements to better accommodate the needs of employees—and to reduce costs in many cases. Four of the most popular arrangements are flextime, telecommuting, job sharing, and flexible career paths.
An increasingly important alternative work arrangement, flextime is a scheduling system that allows employees to choose their own hours within certain limits. Related to flexible schedules is telecommuting—working from home or another location using computers and telecommunications equipment to stay in touch with the employer’s offices. Job sharing, which lets two employees share a single full-time job and split the salary and benefits, has been slowly gaining acceptance as a way to work part-time in a full-time position.
Perhaps the most challenging of all alternative work arrangements are situations in which employees want to leave the workforce for an extended period of time to return to school, work for a charity, raise children, or pursue other interests—with the intention of returning to work at some point in the future.
In the past, stepping out of the workforce for several years or more usually meant a significant blow to one’s career. However, the pressure to accommodate such moves is now coming from multiple angles: Companies that have invested in developing star employees want them back, many women who leave to raise children want to regain their career momentum when they return to work, and today’s generation of new fathers frequently want to spend more time with their young children, even if that means putting their careers on hold for a while.

18. Working With Labor Unions
Wages and Benefits
Working Conditions
Job Security
Although they work toward common goals in most cases, managers and employees do face an inherent conflict over resources: managers, as representatives of company ownership, want to minimize the costs of operating the business, whereas employees want to maximize salaries and ensure good benefits and safe, pleasant working conditions. If employees believe they are not being treated fairly or don't have a voice in how the company is run, one option they can consider is joining labor unions, organizations that seek to protect employee interests by negotiating with employers for better wages and benefits, improved working conditions, and increased job security.
Unions have played an important and lasting role in U.S. employee-management relations and are largely responsible for the establishment of worker’s compensation, child-labor laws, overtime rules, minimum-wage laws, severance pay, and more. Employees are most likely to turn to unions if they are deeply dissatisfied with their current job conditions, if they believe that unionization can be helpful in improving those conditions, and if they are willing to overlook negative stereotypes that have surrounded unions in recent years.