Motivating and Rewarding Employees Chapter 10 Motivating and Rewarding Employees PowerPoint Presentation by Charlie Cook Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Maslow’s Hierarchy of Needs Source: Motivation and Personality, 2nd ed., by A. H. Maslow, 1970. Reprinted by permission of Prentice Hall, Inc., Upper Saddle River, New Jersey. Copyright © 2004 Prentice Hall, Inc. All rights reserved. EXHIBIT 10.2

Early Theories Of Motivation (cont’d) Theory X (McGregor) The assumption that employees dislike work, are lazy, seek to avoid responsibility, and must be coerced to perform Theory Y The assumption that employees are creative, seek responsibility, and can exercise self-direction Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Early Theories Of Motivation (cont’d) Motivation-Hygiene theory (Herzberg) intrinsic factors are related to job satisfaction and extrinsic factors are related to job dissatisfaction Hygiene factors Factors, such as working conditions and salary, that, when adequate, may eliminate job dissatisfaction but do not necessarily increase job satisfaction Motivators Factors, such as recognition and growth, that increase job satisfaction Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Herzberg’s Motivation-Hygiene Theory Copyright © 2004 Prentice Hall, Inc. All rights reserved. EXHIBIT 10.4

Contemporary Theories Of Motivation Three-needs theory (McClelland) The needs for achievement, power, and affiliation are major motives in work Need for achievement (nAch): the drive to excel, to achieve in relation to a set of standards, to strive to succeed. Need for power (nPow): The need to make others behave in a way that they would not have behaved otherwise. Need for affiliation (nAff): The desire for friendly and close interpersonal relationships. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Contemporary Theories Of Motivation (cont’d) Equity theory (Adams) Employees perceive what they get from a job situation (outcomes) in relation to what they put into it (inputs) and then compare their input-outcome ratio with the input-outcome ratios of relevant others. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Contemporary Theories Of Motivation: Equity Theory (cont’d) Referent In equity theory, the other persons, the systems, or the personal experiences against which individuals compare themselves to assess equity. The choice of a particular set of referents is related to the information available about referents as well as to the perceived relevance. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Equity Theory Relationships EMPLOYEE’S ASSESSMENT Inequity (underrewarded) Equity Inequity (overrewarded) *Person A is the employee, and Person B is a relevant other or referent. Copyright © 2004 Prentice Hall, Inc. All rights reserved. EXHIBIT 10.6

Job Design And Motivation Job characteristics model (JCM) Hackman and Oldham’s job description model: The five core job dimensions are skill variety, task identity, task significance, autonomy, and feedback. Internal rewards are obtained when: An employee learns (knowledge of results) through feedback) that he or she personally (experienced responsibility through autonomy of work) has performed well on a task that he or she cares about (experienced meaningfulness through skill variety, task identity, and/or task significance). Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Core Job Dimensions Skill variety Task identity Task significance The degree to which the job requires a variety of activities so the worker can use a number of different skills and talents Task identity The degree to which the job requires completion of a whole and identifiable piece of work Task significance The degree to which the job affects the lives or work of other people Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Core Job Dimensions (cont’d) Autonomy The degree to which the job provides freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out Feedback The degree to which carrying out the work activities required by the job results in the individual’s obtaining direct and clear information about the effectiveness of his or her performance Copyright © 2004 Prentice Hall, Inc. All rights reserved.

The Job Characteristics Model Source: J. R. Hackman, “Work Design,” in J. R. Hackman and J. L. Suttle, eds., Improving Life at Work (Glenview, IL: Scott, Foresman, 1977), p.129. Copyright © 2004 Prentice Hall, Inc. All rights reserved. EXHIBIT 11.8

Guidelines for Job Redesign Source: J. R. Hackman and J. L. Suttle eds., Improving Life at Work (Glenview. IL: Scott. Foresman. 1977). With permission of the authors. Copyright © 2004 Prentice Hall, Inc. All rights reserved. EXHIBIT 10.9

Expectancy theory (Vroom) A comprehensive theory of motivation that an individual tends to act in a certain way, in the expectation that the act will be followed by given outcome, and according to the attractiveness of that outcome to the individual. The extent to which individuals are motivated to perform to get a reward of value to them is based on their belief that their performance will result in the reward they want. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Expectancy theory (Vroom) Emphasizes self interest in the alignment of rewards with employee wants. Addresses why employees view certain outcomes (rewards) as attractive or unattractive. Emphasizes the connections among expected behaviors, rewards, and organizational goals. Is concerned with individual perceptions and the provision of feedback. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Expectancy Relationships (Linkages) Effort–performance The perceived probability that exerting a given amount of effort will lead to performance Performance–reward The belief that performing at a particular level will lead to the attainment of a desired outcome Attractiveness The importance placed on the potential outcome or reward that can be achieved on the job. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Simplified Expectancy Theory Performance appraisal system Human resources management Training and development Copyright © 2004 Prentice Hall, Inc. All rights reserved. EXHIBIT 10.10

Integrating Theories of Motivation Copyright © 2004 Prentice Hall, Inc. All rights reserved. EXHIBIT 10.11

Motivation and Compensation Pay-for-performance programs Compensation plans such as piece-rate plans, profit sharing, and the like that pay employees on the basis of performance measures not directly related to time spent on the job. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Compensation Alternatives Competency-based compensation A program that pays and rewards employees on the basis of skills, knowledge, or behaviors they possess Broad-banding Pre-set pay level, based on the degree to which competencies exist and allow an employee to contribute to the organization. Stock options A program that allows employees to purchase company stock at a fixed price and profit when company performance increases its stock value. Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Work-Life Balance: Alternative Work Schedules Flextime A scheduling option that allows employees select what their work hours will be within some specified parameters. Job sharing A type part-time work that allows two or more workers to split a traditional 40-hour-a-week job Telecommuting A system of working at home on a computer that is linked to the office Copyright © 2004 Prentice Hall, Inc. All rights reserved.

Employee empowerment: How Entrepreneurs Motivate Employees Giving employees power by: Allowing them to complete the whole job. Having employees work together across departments and functions in the organization. Using participative decision making in which employees provide input into decisions. Delegating decisions and duties, turning over the responsibility for carrying them out to employees. Redesigning their jobs so they have discretion over the way they do their work. The end Copyright © 2004 Prentice Hall, Inc. All rights reserved.