1. Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CHAPTER 10 Motivating Employees

2. LEARNING OBJECTIVES 10-2 1. Explain Taylor’s theory of scientific management. 2. Describe the Hawthorne studies and their significance to management. 3. Identify the levels of Maslow’s hierarchy of needs and apply them to employee motivation. 4. Distinguish between the motivators and hygiene factors identified by Herzberg. 5. Differentiate among Theory X, Theory Y, and Theory Z.

3. LEARNING OBJECTIVES 10-3 6. Explain the key principles of goal-setting, expectancy, reinforcement, and equity theories. 7. Show how managers put motivation theories into action through such strategies as job enrichment, open communication, and job recognition. 8. Show how managers personalize motivation strategies to appeal to employees across the globe and across generations.

4. DAVID NOVAK Yum Brands 10-4 One of the largest food companies, a restaurant is opened every 14 hours. Novak stresses the importance of his team of employees worldwide. He is committed to growing the company by boosting employee morale.

5. NAME that COMPANY 10-5 Job enlargement combines a series of tasks into one challenging and interesting assignment. This home appliance manufacturer redesigned its washing machine production process so that employees could assemble an entire water pump instead of just adding one part. Name that company!

6. INTRINSIC REWARDS Intrinsic Rewards -- Personal satisfaction you feel when you perform well and complete goals. 10-6 Examples of Intrinsic Rewards:  Pride in your performance  Sense of achievement

7. EXTRINSIC REWARDS 10-7 Extrinsic Rewards -- Something given as a recognition of good work. Kinds of Extrinsic Rewards:  Pay Raises  Promotions  Awards

8. FRINGE BENEFITS Perks Offered to Employees at Top 50 Employers Source: Bloomberg BusinessWeek, www.businessweek.com, accessed November 2014.www.businessweek.com 10-8

9. TAYLOR’S SCIENTIFIC MANAGEMENT 10-9 LO 10-1 Scientific Management -- Studying workers to find the most efficient ways of doing things and then teaching people those techniques. Three Key Elements to Increase Productivity 1. Time 2. Methods of Work 3. Rules of Work

10. TAYLOR’S FOUR KEY PRINCIPLES 10-10 LO 10-1 1. Study how a job is performed. Gather time & motion information. Check different methods. 2. Codify the best method into rules. 3. Choose workers whose skill matches the rules. 4. Establish a fair level of performance and pay.

11. TIME-MOTION STUDIES 10-11 LO 10-1 Time-Motion Studies -- Studies of which tasks must be performed to complete a job and the time needed to do each task. Led to the development of the Principle of Motion Economy -- Every job can be broken down into a series of elementary motions; developed by Frank and Lillian Gilbreth.

12. ARE YOU STRESSED? Warnings of Employee Stress 10-12 LO 10-1 Negative attitudes about work Drops in productivity Chronic lateness Absenteeism Careless with details Unable to work with others Withdrawal from co-workers Easily upset or angered

13. TAYLOR and UPS UPS drivers work under strict rules and work requirements.UPS 10-13 LO 10-1 How to get out of their trucks:  Right foot first How fast to walk:  3 ft per second How to hold their keys:  Teeth up, third finger

14. HAWTHORNE STUDIES: PURPOSE AND RESULTS Researchers studied worker efficiency under different levels of light. Productivity increased regardless of light condition. 10-14 LO 10-2 Researchers decided it was a human or psychological factor at play. Hawthorne Effect -- People act differently when they know they are being studied.

15. MASLOW’S THEORY of MOTIVATION 10-15 LO 10-3 Hierarchy of Needs -- Theory of motivation based on unmet human needs from basic physiological needs to safety, social and esteem needs to self-actualization needs. Needs that have already been met do not motivate. If a need is filled, another higher-level need emerges.

16. MASLOW’S HIERARCHY of NEEDS 10-16 LO 10-2

17. HERZBERG’S MOTIVATING FACTORS Herzberg’s research centered on two questions: 10-17 LO 10-4  What factors controlled by managers are most effective in increasing worker motivation?  How do workers rank job-related factors in order of importance related to motivation?

18. JOB CONTENT 10-18 LO 10-4 Herzberg found job content factors were most important to workers – workers like to feel they contribute to the company. Motivators -- Job factors that cause employees to be productive and that give them satisfaction.

19. JOB ENVIRONMENT Job environment factors maintained satisfaction, but did not motivate employees. 10-19 LO 10-4 Hygiene Factors -- Job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased.

20. HERZBERG’S MOTIVATORS and HYGIENE FACTORS 10-20 LO 10-4

21. COMPARISON of the THEORIES of MASLOW and HERZBERG 10-21 LO 10-4

22. REIGNITE EMPLOYEES’ DRIVE Simple Ways to Reinvigorate Work Life 10-22 Source: Fast Company, www.fastcompany.com, accessed November 2014.www.fastcompany.com Photo Credit: Nels Highberg LO 10-4 1. Don’t work alone all the time; partners or teams make work more efficient and fun. 2. Redecorate your space to get away from the same- old, same-old. 3. Don’t complain; think of things to celebrate.

23. TEST PREP 10-23 What are the similarities and differences between Taylor’s time-motion studies and Mayo’s Hawthorne studies? How did Mayo’s findings influence scientific management? Draw a diagram of Maslow’s hierarchy of needs. Label and describe the parts. Explain the distinction between what Herzberg called motivators and hygiene factors.

24. THEORY X and THEORY Y 10-24 LO 10-5 Douglas McGregor proposed managers had two different sets of assumptions concerning workers. Their attitudes about motivating workers were tied to these assumptions. McGregor called them Theory X and Theory Y.

25. ASSUMPTIONS of THEORY X MANAGERS 10-25 LO 10-5 Workers dislike work and seek to avoid it. Workers must be forced or threatened with punishment to get them to perform. Workers prefer to be directed and avoid responsibility. Primary motivators are fear and punishment.

26. ASSUMPTIONS of THEORY Y MANAGERS 10-26 LO 10-5 People like work, it’s a part of life. Workers seek goals to which they are committed. Commitment to goals depends on perceived rewards. People can use creativity to solve problems. Intellectual capacity is only partially realized. People are motivated by a variety of rewards.

27. THEORY Z William Ouchi researched cultural differences between the U.S. (Type A) and Japan (Type J). Type J committed to the organization and group. 10-27 LO 10-5 Type A focused on the individual. Theory Z is the hybrid approach of Types A and J.

28. THEORY Z 10-28 LO 10-5

29. THEORY COMPARISIONS 10-29 LO 10-5

30. GOAL-SETTING THEORY 10-30 LO 10-6 Goal-Setting Theory -- Setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions.

31. APPLYING GOAL-SETTING THEORY 10-31 LO 10-6 Management by Objectives (MBO) -- Involves a cycle of discussion, review and evaluation of objectives among top and middle-level managers, supervisors and employees. Managers formulate goals in cooperation with everyone in the organization. Need to monitor results and reward achievement.

32. WHAT is MBO? 10-32 LO 10-6 Set organizational objectives Link objectives to employee’s goals Monitor Reward performance Evaluate performance Source: Bloomberg Business Week, accessed November 2014.

33. ORGANIZATIONS USING MBO 10-33 LO 10-6 Toyota Motor Company Emerson Electric Company U.S. Department of Defense

34. EXPECTANCY THEORY in MOTIVATION 10-34 LO 10-6 Expectancy Theory -- The amount of effort employees exert on a specific task depends on their expectations of the outcome. Employees ask:  Can I accomplish the task?  What’s my reward?  Is the reward worth the effort? Expectations can vary from person to person.

35. EXPECTANCY THEORY 10-35 LO 10-6

36. NADLER & LAWLER’S MODIFICATION 10-36 LO 10-6 Researchers Nadler and Lawler modified expectancy theory and suggested five steps for managers: 1. Determine what rewards employees value. 2. Determine workers’ performance standard. 3. Make sure performance standards are attainable. 4. Tie rewards to performance. 5. Be sure employees feel rewards are adequate.

37. USING REINFORCEMENT THEORY 10-37 LO 10-6 Reinforcement Theory -- Positive and negative reinforcers motivate a person to behave in certain ways. Positive reinforcement includes praise, pay increases and recognition. Negative reinforcement occurs when people work to escape punishment (reprimands, reduced pay, and layoff or firing). Extinction is a way of trying to stop behavior by not responding to it.

38. EQUITY THEORY 10-38 LO 10-6 Equity Theory -- Employees try to maintain equity between inputs and outputs compared to others in similar positions. Workers often base perception of their outcomes on a specific person or group. Perceived inequities can lead to reduced quality and productivity, absenteeism, even resignation.

39. TEST PREP 10-39 Briefly explain the managerial attitudes behind Theories X, Y and Z. Explain goal-setting theory. Evaluate expectancy theory. When could expectancy theory apply to your efforts or lack of effort? Explain the principles of equity theory.

40. ENRICHING JOBS Job Enrichment -- A motivational strategy that emphasizes motivating the worker through the job itself. 10-40 LO 10-7 Based on Herzberg’s motivators, such as responsibility, achievement and recognition.

41. MOTIVATION on a BUDGET Tactics of Today’s HR Managers Source: Wall Street Journal, March 1, 2010. 10-41 LO 10-7

42. KEY CHARACTERISTICS of WORK 1. Skill Variety 2. Task Identity 3. Task Significance 4. Autonomy 5. Feedback 10-42 LO 10-7

43. TYPES of JOB ENRICHMENT 10-43 LO 10-7 Job Enlargement -- A job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment. Job Rotation -- A job enrichment strategy that involves moving employees from one job to another.

44. ENRICHMENT by WAY of FLEXIBILITY Source: Entrepreneur, www.entrepreneur.com, accessed November 2014.www.entrepreneur.com 10-44 LO 10-7 60% of employees think they can be productive and efficient outside of the office. 66% of employees would take a lower-paying job if it came with more flexibility. 59% of employees say their company doesn’t have a formal out-of-office work policy.

45. USING OPEN COMMUNICATION 10-45 LO 10-7 Create a culture that rewards listening. Train managers to listen. Use effective questioning techniques. Remove barriers to open communication. Ask employees what’s important to them.

46. WHEN is SOCIAL MEDIA TOO SOCIAL? 10-46 Sites like Facebook are banned in 20% of workplaces. Some argue this is a bad idea because: 1. It alienates younger employees. 2. It suggests businesses don’t trust employees. 3. It can make employees feel disengaged. 4. It takes away an element of relaxation.

47. WHEN TOO MUCH is TOO MUCH 24/7 Access Isn’t Always a Good Thing 10-47 Schedule correspondence:  Don’t check email whenever it arrives, schedule times to check. Pick one task:  Having too much open at once takes attention away from singular tasks. Don’t answer the phone:  Don’t be afraid of voicemail. Maintain human contact:  Don’t look at your computer or phone while someone is at your desk. Keep attention (and respect!) on them. Source: Entrepreneur, www.entrepreneur.com, accessed November 2014.www.entrepreneur.com

48. RECOGNIZING GOOD WORK 10-48 LO 10-7 Raises are not the only ways to recognize an employee’s performance. Recognition can also include:  Paid time off  Flexible scheduling  Work from home opportunities  Paid child or elder care  Stock options or profit sharing  Company awards  Company events or teams

49. WORK WELL with OTHERS Keys for Productive Teamwork 10-49 LO 10-7 Have a common understanding of your task. Clarify roles and responsibilities. Set rules. Get to know each other. Communicate openly and often.

50. WHAT’S GOOD for YOU Most Positive Remedies for Employee Moral 10-50 LO 10-7

51. WHAT’S BAD for YOU Most Negative Actions for Employee Morale 10-51 LO 10-7

52. GOING UP AGAINST the HEAVYWEIGHTS 10-52 Sparta Systems employees play video games during breaks. Bigcommerce offers bootcamps with a trainer. Zoosk allows employees to bring dogs to work. Shift Communications has recess

53. MOTIVATING EMPLOYEES ACROSS the GLOBE Low-Context cultures believe relationship building distracts from tasks. 10-53 LO 10-8 Cultural differences make worker motivation a challenging task for global managers. High-Context cultures require relationships and group trust before performance.

54. BEYOND JUST KNOWING CROSS-CULTURE DIFFERENCES 10-54 A better understanding of cultures helps managers increase customer satisfaction and loyalty. It is more than just knowing other languages, it’s knowing what’s proper. IBM works closely with many different people before entering new markets.

55. MOTIVATING ACROSS the GENERATIONS 10-55 LO 10-8 Baby Boomers (1946 – 1964)  Experienced great economic prosperity, job security, optimism about their future Generation X (1965 – 1980)  Raised in dual-career families, attended day care, feeling of insecurity about jobs Generation Y or Millennials (1980 – 1995)  Raised by indulgent parents, used to many comforts like computers and cell phones

56. UPCOMING GENERATIONS in the WORKPLACE 10-56 LO 10-8 Generation Z (1996 – 2009)  Grew up post 9/11, in the wake of the Great Recession and amid many reports of school violence Generation Alpha (after 2010)

57. GENERATION X in the WORKPLACE 10-57 LO 10-8 Desire economic security but focus more on career security than job security. Good motivators as managers due to emphasis on results rather than work hours. Tend to be flexible and good at collaboration and consensus building. Very effective at giving employee feedback and praise.

58. MILLENNIALS and the WORKPLACE 10-58 LO 10-8 Tend to be impatient, skeptical, blunt and expressive. Are tech-savvy and able to grasp new concepts. Able to multi-task and are efficient. Highlight a strong sense of commitment. Place a high value on work-life balance. Fun and stimulation are key job requirements.

59. COMMUNICATION ACROSS the GENERATIONS 10-59 LO 10-8 Baby Boomers (1946 – 1964)  Prefer meetings and conference calls. Generation X (1965 – 1980)  Prefer email and will choose meetings only if there are no other options. Generation Y or Millennials (1980 – 1995)  Prefer to use technology to communicate, particularly through social media.

60. The BEST COMPANIES for WORKERS Source: Fortune, www.fortune.com, accessed November 2014.www.fortune.com 10-60 LO 10-8

61. TEST PREP 10-61 What are several steps firms can take to increase internal communications and thus motivation? What problems may emerge when firms try to implement participative management? Why is it important to adjust motivational styles to individual employees? Are there any general principles of motivation that today’s managers should follow?