Organizational Behavior BBA & MBA Lecture 192021 Motivation: From Concepts to Application Course Lecturer: Farhan Mir

After studying this chapter, you should be able to: Describe the way in which employees can be motivated by changing their work environment. Compare and contrast the three main ways jobs can be redesigned. Give examples of employee involvement measures and how they can motivate employees. Describe the four major strategic rewards decisions. Demonstrate how the different types of variable-pay programs can increase employee motivation. Describe how the application of motivation theories varies across cultures.

Motivating by Changing the Work Environment: JCM The Job Characteristics Model - jobs are described in terms of five core dimensions: Skill variety Task identity Task significance Autonomy Feedback

The Job Characteristics Model

JCM: Designing Motivational Jobs JCM-designed jobs give internal rewards Individual’s growth needs are moderating factors Motivating jobs must be: Autonomous Provide feedback, and Have at least one of the three meaningfulness factors

How Can Jobs be Redesigned? Job Rotation The periodic shifting of an employee from one task to another Job Enlargement Increasing the number and variety of tasks Job Enrichment Increasing the degree to which the worker controls the planning, execution and evaluation of the work

Guidelines for Enriching a Job Using JCM Enrichment reduces turnover and absenteeism while increasing satisfaction.

Alternate Work Arrangements Flextime Some discretion over when worker starts and leaves Job Sharing Two or more individuals split a traditional job Telecommuting Work remotely at least two days per week

What is a Teleworker? An employee who works remotely, usually from their home, facilitated by collaborative information and communication technologies Also known as: “telecommuter”, “mobile worker”, “virtual worker”, “remote worker” The daily commute to a central place of work is replaced by technology links Can range from a few hours a week to full time May work from a home office, a co-working facility, or in many locations for jobs such as sales and service Key points Teleworkers work for employers of large, medium and small sized companies Teleworkers work from different environments including the main office, a mobile office or a home office Teleworking is possible more than ever today through the broad deployment of technology Teleworkers typically purchase products like ours from an internal on-line purchasing site (after the product has been tested and approved) or from retailers or etailers. In the latter case, the employee is usually reimbursed by the company. Example: 25% of Calisto customers who have returned reg cards so far Source: AeA, “Telework in the information Age”, April 2008

Keys for Successful Telecommuting Identify jobs best suited to distance work. Select responsible employees. Establish employee feedback procedures and performance review methods for evaluation. Establish formalized telecommuting procedures. Begin a formal training program. Keep telecommuters informed and “in the loop.” Recognize when telecommuting isn’t working.

The Way People Work is Changing A brief look at the Teleworking Opportunity

Before

After

“Best Companies” Support Teleworking! Telecommuting & Top U.S. Companies: 84 of the 100 “Best Companies” allow employees to telecommute or work at home These 10 have the highest percentage of telecommuters Company Best companies rank % of "regular" telecommuters Cisco Systems* 06 70% eBay 69 48% Booz Allen Hamilton 81 34% S.C. Johnson & Son 27 32% American Fidelity Assurance 24 30% Shared Technologies 25 26% Principal Financial Group 21 23% Goldman Sachs 09 22% Yahoo 87 20% Qualcomm 08 18% * Estimate: Cisco doesn't formally track this data. Source: “100 Best Companies to Work For”, Fortune Magazine, Feb 2008

If Not Now – When?

Employee Involvement A participative process that uses the input of employees to increase their commitment to the organization’s success Two types: Participative Management Representative Participation

Participative Management Subordinates share a significant degree of decision-making power with superiors Required conditions: Issues must be relevant Employees must be competent and knowledgeable All parties must act in good faith Only a modest influence on productivity, motivation, and job satisfaction

Representative Participation Workers are represented by a small group of employees who participate in decisions affecting personnel Works Councils Board membership Desires to redistribute power within an organization Does not appear to be very motivational

Major strategic rewards decisions: Rewarding Employees Major strategic rewards decisions: What to pay employees How to pay individual employees What benefits to offer How to construct employee recognition programs

1. What to Pay Need to establish a pay structure Balance between: Internal equity – the worth of the job to the organization External equity – the external competitiveness of an organization’s pay relative to pay elsewhere in its industry A strategic decision with trade-offs

2. How to Pay: Variable-Pay Programs Bases a portion of the pay on a given measure of performance Piece-Rate Pay – workers are paid a fixed sum for each unit of production completed Merit-Based Pay – pay is based on individual performance appraisal ratings Bonuses – rewards employees for recent performance Skill-Based Pay – pay is based on skills acquired instead of job title or rank – doesn’t address the level of performance

More Variable Pay Programs Profit-Sharing Plans – organization-wide programs that distribute compensation based on an established formula designed around profitability Gainsharing – compensation based on sharing of gains from improved productivity Employee Stock Ownership Plans (ESOPs) – plans in which employees acquire stock, often at below-market prices While it appears that pay does increase productivity, it seems that not everyone responds positively to variable-pay plans.

3. What Benefit to Offer: Flexible Benefits Each employee creates a benefit package tailored to their own needs and situation Modular plans – predesigned packages to meet the needs of a specific group Core-plus plans – core of essential benefits and menu of options to choose from Flexible spending plans – full choice from menu of options

4. How to Recognize Them: Employee Recognition Programs In addition to pay there are intrinsic rewards Can be as simple as a spontaneous comment Can be formalized in a program Recognition is the most powerful workplace motivator – and the least expensive! Thank you!

Global Implications Do motivational approaches vary by culture? Job Characteristics/Enrichment: may not be the same in collectivist cultures Telecommuting, variable pay, flexible benefits: while all of these seem to be on the increase, not enough research has been done to make any conclusions Employee Involvement: important to modify practices to reflect national culture

Implications for Managers Recognize and allow for individual differences Use specific goals and feedback Allow employees to participate in decisions that affect them Link rewards to performance Check the reward system for equity

Keep in Mind… Most people respond to the intrinsic job characteristics of the JCM It is not clear that employee involvement programs work – use caution! Variable-pay plans can enhance motivation