11 Motivating Employees This may sound soft and mushy, but happy people are better for business. They are more creative and productive, they build environments where success is more likely, and you have a much better chance of keeping your best players. —Shelly Lazarus, CEO, Ogilvy & Mather Worldwide

Learning Objectives Identify the relationship between motivation and performance. Describe content theories of motivation. Describe process theories of motivation. Explain when financial incentives are likely to motivate employees. Describe pay plans using financial incentives. Discuss the pros and cons of keeping pay information secret. Identify ways supervisors can motivate their employees. See text page: 288

How Does Motivation Work? Motivation + Ability = Performance Familiarity with the best-known theories can help supervisors think of ways to motivate employees. None of the theories are perfect, but all give supervisors some guidance. See Learning Objective 1: Identify the relationship between motivation and performance. See text page: 290

Content Theories Content theories focus on the content of the motivators. Three researchers whose content theories of motivation are widely used: Abraham Maslow David McClelland Frederick Herzberg See Learning Objective 2: Describe content theories of motivation. See text page: 290

Maslow’s Hierarchy of Needs See Learning Objective 2: Describe content theories of motivation. See text page: 291

Share of 945 U.S. Companies Offering Flexible Work Options See Learning Objective 2: Describe content theories of motivation. See text page: 293

McClelland’s Achievement-Power-Affiliation Theory The need for achievement – the desire to do something better than it has been done before. The need for power – the desire to control, influence, or be responsible for other people. The need for affiliation – the desire to maintain close and friendly personal relationships. See Learning Objective 2: Describe content theories of motivation. See text page: 293

Herzberg’s Two-Factor Theory Hygiene Factors Company policy and administration Supervision Relationship with supervisor Relationship with peers Working conditions Salary and benefits Relationship with subordinates Motivating Factors Opportunity for achievement Opportunity for recognition Work itself Responsibility Advancement Personal growth See Learning Objective 2: Describe content theories of motivation. See text page: 295

Process Theories Process theories look at the process of motivation instead of specific motivators. Two major process theories: Vroom’s expectancy-valency theory Skinner’s reinforcement theory See Learning Objective 3: Describe process theories of motivation. See text page: 295

Vroom’s Expectancy- Valence Theory Victor Vroom decided that the degree to which people are motivated to act in a certain way depends on two things: Valence – the value a person places on the outcome of a particular behavior. Expectancy – the perceived probability that the behavior will lead to the outcome. See Learning Objective 3: Describe process theories of motivation. See text pages: 295-296 Strength of Motivation = Perceived Value of Outcome x Perceived Probability of Outcome Resulting

Skinner’s Reinforcement Theory The reinforcement theory maintains that people’s behavior is influenced largely by the consequences of their past behavior. Reinforcement theory implies that supervisors can encourage or discourage a particular kind of behavior by the way they respond to the behavior. Reinforcement Punishment See Learning Objective 3: Describe process theories of motivation. See text page: 296

Motivation Theories and the Law Federal laws set requirements for overtime pay, rest breaks, health insurance for retirees, and many other areas. The Family and Medical Leave Act can pose a significant challenge to planning and scheduling because of an employee’s leave. See Learning Objective 3: Describe process theories of motivation. See text page: 297

Money as a Motivator When money motivates Money motivates people when it meets their needs. Pay plans using financial incentives Piecework system Production bonus system Commissions Payments for suggestions See Learning Objective 4: Explain when financial incentives are likely to motivate employees. See text pages: 298-300

Group Incentive Plans Profit-sharing plan Gainsharing Under this kind of plan, the company sets aside a share of its profits earned during a given period and divides these profits among the employees. Gainsharing The company encourages employees to participate in making suggestions and decisions about improving the way the company or work group operates. As performance improves, employees receive a share of the greater earnings. Group incentive plan A financial incentive plan that rewards a team of workers for meeting or exceeding an objective. See Learning Objective 5: Describe pay plans using financial incentives. See text page: 300

Secrecy of Wage and Salary Information In private (nongovernment) organizations, employees generally do not know one another’s earnings. Government employees’ earnings are public information. In private organizations, a typical compromise between maintaining privacy and sharing information is for the organization to publish pay ranges so employees know what they can potentially expect to earn. See Learning Objective 6: Discuss the pros and cons of keeping pay information secret. See text page: 301

How Supervisors Can Motivate Making work interesting Job rotation Job enlargement Job enrichment Having high expectations Pygmalion effect Providing rewards that are valued The content theories of motivation indicate that a variety of rewards may motivate, but that not all employees will value the same rewards at the same time See Learning Objective 7: Identify ways supervisors can motivate their employees. See text pages: 302-304

How Supervisors Can Motivate (continued) Relating rewards to performance The rewards a supervisor uses should be linked to employee performance. Rewards are most likely to motivate employees when the employees view them as achievable. Treating employees as individuals A supervisor who wishes to succeed at motivating has to remember that employees will respond in varying ways. When a particular type of motivation does not seem to work with an employee, a supervisor should try some other motivator to see if it better matches the employee’s needs. See Learning Objective 7: Identify ways supervisors can motivate their employees. See text pages: 304-305

Job Characteristics Rated Important by U.S. Workers See Learning Objective 7: Identify ways supervisors can motivate their employees. See text page: 306

How Supervisors Can Motivate (continued) Encouraging employee participation Employees tend to feel more committed when they can contribute to decisions and solutions. Asking subordinates for their advice about how tasks should be accomplished is another way to increase their involvement. Providing feedback Part of a supervisor’s job is to give employees feedback about their performance. Praise is an important kind of feedback. See Learning Objective 7: Identify ways supervisors can motivate their employees. See text pages: 306-307

Summary To perform well, employees must be motivated. Content theories of motivation attempt to identify what motivates people. Maslow’s hierarchy of needs McClelland’s achievement-power-affiliation theory Herzberg’s two-factor theory Process theories explain how motivation works through its process. Money motivates people when it meets their needs. See text pages: 307-308

Summary (continued) The way a pay plan is structured can influence the degree to which employees are motivated to perform well. Some pay plans offer bonuses, commissions, or other kinds of pay for meeting or exceeding objectives. Supervisors can motivate employees by making work interesting, having high expectations of employees, providing rewards that are valued, relating rewards to performance, treating employees as individuals, encouraging employee participation, and providing feedback, including praise. By publishing pay ranges, employees do not know how much specific individuals earn, but the ranges show what they can expect to earn if they get a raise, promotion, or transfer to another position. See text page: 308