Prepared by Cheryl Dowell, Algonquin College, and Greg Cole, Saint Mary’s University

Chapter 3 Copyright © 2014 by Nelson Education Ltd. 3-2

1.Identify the three main types of reward problems that can afflict organizations. 2.Define the three key employee behaviours desired by employers. 3.Identify three key job attitudes and explain their roles in determining employee behaviour. 4.Describe the causes and consequences of reward dissatisfaction. 5.Explain how to generate membership behaviour. 3-3 Copyright © 2014 by Nelson Education Ltd.

6.Explain how to generate membership behaviour. 7.Outline the process through which task behaviour is motivated. 8.Explain how to generate organizational citizenship behaviour. 9.Discuss the role that managerial strategy plays in determining the type of employee attitudes and behaviour needed by an organization. 10.Describe the implications of the behavioural framework for designing effective reward systems. 3-4 Copyright © 2014 by Nelson Education Ltd.

Failure to produce desired behaviour Production of desired behaviour and undesirable consequences Production of reward dissatisfaction 3-5 Copyright © 2014 by Nelson Education Ltd.

1.Membership behaviour occurs when employees decide to join and remain with a firm. 2.Task behaviour occurs when employees perform the specific tasks that have been assigned to them. 3.Organizational citizenship behaviour occurs when employees voluntarily undertake special behaviours beneficial to the organization that go beyond simple membership. 3-6 Copyright © 2014 by Nelson Education Ltd.

1.Job satisfaction, the attitude one holds toward one’s job and workplace, either positive or negative 2.Work motivation, the attitude one holds toward good job performance, either positive or negative. Essentially, it is the strength of an employee’s desire to perform his or her job duties well. 3.Organizational identification consists of three interrelated elements: a sense of shared goals and values with the organization, a sense of membership or belongingness, and an intention to remain a member of the organization. 3-7 Copyright © 2014 by Nelson Education Ltd.

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Equity theory: employees’ base perceptions of equity (fairness) on a comparison of their contributions/rewards ratio to the ratios of others perceived as being similar 3-11 Copyright © 2014 by Nelson Education Ltd.

Employees experience dissatisfaction with pay when: 3-12 Copyright © 2014 by Nelson Education Ltd. 1 there is a discrepancy between the outcome they want and what they actually receive. 2 they see that a comparison “other” receives more than they do. 3 past experience has led them to expect more than they now receive 4 future expectancies for achieving better outcomes are low. 5 they feel that they are entitled to more. 6 they absolve themselves of personal responsibility for the lack of better outcomes.

Distributive justice Procedural justice 3-13 Copyright © 2014 by Nelson Education Ltd.

consistentprocedures are applied uniformly to different jobs and time periods free of biaspersonal interests do not enter into application of the procedures flexiblethere must be procedures for employees to appeal pay system decisions accurateapplication of procedures must be based on factual information ethicalaccepted moral principles must guide application of the procedures representativeall affected employees must have an opportunity to express their concerns, which are given serious consideration by the organization Procedural Justice: The Pay System Must Be … Copyright © 2014 by Nelson Education Ltd. 3-14

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Copyright © 2014 by Nelson Education Ltd Find more rewarding jobAcquire illicit rewards Demand higher pay / unionize Increase effort / performanceDemand improved job duties

Copyright © 2014 by Nelson Education Ltd Demand reduced job dutiesReduce effort / performanceIncreased absenteeismFind less demanding job

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Job satisfaction Organizational identification Job attitudes 3-19 Copyright © 2014 by Nelson Education Ltd.

Affective commitment, attachment to an organization based on positive feelings toward the organization Continuance commitment, attachment to an organization based on perceived lack of better alternatives Research shows no relationship between continuance commitment and affective commitment or between continuance commitment and job satisfaction. However, affective commitment and job satisfaction are related Copyright © 2014 by Nelson Education Ltd.

Content TheoriesProcess Theories  theories that focus on understanding motivation by identifying underlying human needs  theories that focus on understanding motivation by determining the process humans use to make choices about the specific actions they will take 3-21 Copyright © 2014 by Nelson Education Ltd.

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Job content Job context 3-23 Copyright © 2014 by Nelson Education Ltd. Hygienes Motivators Extrinsic Intrinsic

Task identitythe extent to which a worker performs a complete cycle of job activities Task significancethe perceived importance or social value of a given task Skill varietythe variety of skills required for task completion Job autonomythe degree of freedom workers have in deciding how to perform their jobs Job feedbackthe extent to which the job itself provides feedback on worker performance Job enrichmentthe process of redesigning jobs to incorporate more of the five core dimensions of intrinsically satisfying work 3-24 Copyright © 2014 by Nelson Education Ltd.

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Positive reinforcement takes place when a reward follows a valued behaviour. Negative reinforcement takes place when an undesirable consequence occurs whenever the valued behaviour does not occur Copyright © 2014 by Nelson Education Ltd. A behaviour will be repeated if valued outcomes flow from that behaviour or if performing the behaviour reduces undesirable outcomes.

1. Is the task worth doing? Do the rewards exceed the costs? Is net valence positive? 2. Will I actually receive the rewards if I accomplish the task? Is the instrumentality clear? 3. Will I actually be able to accomplish the task if I exert the effort ? Is my expectancy strong? 3-28 Copyright © 2014 by Nelson Education Ltd.

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Attribution theory: theory of motivation arguing that humans often act without understanding their motives for their behaviour and afterward attempt to attribute motives for their actions Economic theory: assumes that people are motivated only by extrinsic (economic) rewards, and they will always seek to maximize these rewards while minimizing their contributions to the organization 3-30 Copyright © 2014 by Nelson Education Ltd.

Agency theory: Agents (employees) will pursue their own self-interests rather than the interests of their principals (employers) unless they are closely monitored or their interests are aligned with the interests of their principals. Noncash employee recognition program: a program that provides noncash rewards to employees in recognition of employee accomplishments or actions that are valued by the organization 3-31 Copyright © 2014 by Nelson Education Ltd.

Shared organizational goals Feelings of membership 3-32 Copyright © 2014 by Nelson Education Ltd.

Security Trust Concern 3-33 Copyright © 2014 by Nelson Education Ltd.

Task Membership Organizational citizenship Define the necessary employee behaviour Personal competencies Values Characteristics Determine the necessary employee attributes Demographic characteristics Identify salient employee needs Tangible, physical Psychological and opportunity Ensure a positive reward valence 3-34 Copyright © 2014 by Nelson Education Ltd.

1.Discuss the three main types of reward problems. Have you ever encountered any of these problems? 2.Discuss how employee job attitudes serve as the link between reward systems and employee job behaviour. 3.Discuss how reward systems can be used to generate task behaviour, membership behaviour, and citizenship behaviour Copyright © 2014 by Nelson Education Ltd.