2.5 Motivation

What motivates employees? Intrinsic motivation Satisfaction derived from working on and completing a task. Extrinsic motivation Satisfaction from external rewards associated with working on task such as pay or other benefits.

F.W. Taylor and Scientific Management This was the first attempt to analyze worker motivation. Early mass production factories used his method. Aim: reduce inefficiency and improve productivity.

F.W. Taylor and Scientific Management Taylor’s Scientific approach: Select workers to perform the task Observe them performing the task and take notes Record the time it takes to do each part of the task Identify the quickest method recorded Train all workers on the quickest method and do not allow changes Supervise workers to ensure the “best way” is always followed and time checks examined Pay workers on the results – “economic man”

F.W. Taylor and Scientific Management What is the “economic man” The idea that man is driven or motivated by money alone! Therefore – motivate workers by pay Do you think this is true?

F.W. Taylor and Scientific Management Taylor’s Approach Relevance Today Economic Man Is pay the only way to motivate employees? Select the right people for the job Is staff selection for the job a current consideration? Observe and record the performance of staff “Time and motion study” Still utilized but done with cooperation of employees. Establish the best method of doing a job – method study Efficiency studies are still used to determine “best practices” Piece-work payment systems Is this a popular method?

Maslow’s Hierarchy of Human Needs Needs start at the lowest level Once a level is reached and satisfied, we will strive for the next level Once a need is satisfied, it will no longer motivate a person to action Self-actualization isn’t achieved by everyone, but everyone can reach their potential Self-Actualization Reaching one’s full potential Esteem Needs Respect from others; status recognition of achievement Social Needs Trust; acceptance; friendship; belonging to a group; Safety Needs Protection from threats; job security; health and safety at work Physical Needs Food; shelter; water; rest

Maslow’s Hierarchy of Human Needs Level of Need Business Conditions Self- Actualization Challenging work that stretches an individual Esteem Needs Recognition for a job well done Social Needs Working in teams or groups Safety Needs Job security Physical Needs Income to meet daily essentials Self-Actualization Esteem Needs Social Needs Safety Needs Physical Needs

Maslow’s Hierarchy of Human Needs Limitations Not everyone has the same needs How do you identify which level your employee’s are on? Money can satisfy other levels than physical needs (social or status) Self-Actualization is not permanent

Herzberg and the “two-factor” Theory Factors that lead to positive feelings about a job (MOTIVATORS) Achievement, recognition, work itself, responsibility, advancement Factors that lead to negative feelings about a job but do not provide motivation. (HYGIENE FACTORS) Company policy & administration, supervision, salary, relationships with others, working conditions

Herzberg and the “two-factor” Theory Job Satisfaction Motivators (intrinsic) Job Dissatisfaction Hygiene Factors (extrinsic) Achievement Company policy and administration Recognition for achievement Supervision The work itself Salary Responsibility Relations with others Advancement Working Conditions

Results of Herzberg’s Theory Herzberg and the “two-factor” Theory Results of Herzberg’s Theory 1. Pay and working conditions can be improved to help remove job dissatisfaction but it will not, on its own, provide motivation to an employee. (Hygiene Factors) 2. Motivators need to be in place for workers to willingly do their best. (Job Enrichment) 3. Higher pay may get the job accomplished but does NOT actually motivate (Movement).

Herzberg and the “two-factor” Theory Motivators Hygiene Factors Achievement Recognition Work itself Responsibility Advancement Motivators have the ability to increase job satisfaction. Company Policy & Administration Supervision Salary Relationships with others Working conditions Hygiene Factors cannot improve job satisfaction on their own but can create job dissatisfaction.

Herzberg and the “two-factor” Theory Today's impact: 1. Team work is now more common 2. Workers tend to be made more responsible for the quality of their work rather than being closely supervised 3. Most firms are looking for ways to improve communication, group meetings with 2-way communication is favored.

Adams and Equity Theory Premise: If workers feel their input/effort is greater than output such as pay, recognition, and security..... They will be demotivated and adjust the imbalance. Once there is a balance, they will respond with positive attitudes.

Daniel Pink Autonomy: Self-direction Mastery: Everyone gets better with practice Purpose: Connecting with a cause larger than oneself These 3 elements create MOTIVATION! Ted Talk: Daniel Pink, 2009 The puzzle of motivation 19 min

Financial Payment Hourly Wage Rate (also called “time based rate”) Wage is determined by an hourly rate X the number of hours worked…usually paid weekly. Security of payment Speed of work completion is NOT rewarded. Slow work could encourage overtime pay.

Financial Payment Piece Rate Wage is determined by number of units produced X a fixed amount Level of payment rate is critical in order to not overpay or under pay the worker. Speed of work is encouraged – quality could suffer. Slow work can be encouraged when a worker reaches a satisfactory wage level.

Financial Payment Salary Flat amount paid regardless of hours worked. Common for management and supervisory staff. Salary level is fixed so companies can budget. Banding is common. Job Grade Salary Band E: Regional Heads $75,000 - $175,000 D: Department Heads $40,000 - $60,000 C: Office Managers $35,000 - $45,000 B: Secretaries $28,000 - $39,000 A: Junior Clerical Staff $25,000 - $32,000

Financial Payment Commission Wage usually determined by percentage of sales. Can be added to a base salary or can be 100% commission Workers may be encouraged to use high-pressure sales tactics. Slow work can be encouraged when a worker reaches a satisfactory wage level. Does not encourage team work.

Financial Payment Performance-Related Pay (PRP) Usually paid out in bonuses in addition to a basic salary. Targets are set and management determines if targets are met. Issues Additional pay does not motivate workers in the long-term (according to Herzberg’s theory). There is no change in the work performed – no motivators for work improvement. The emphasis on individual performance does not encourage team work. Bonuses are often inadequate to improve worker’s efforts. Since management determines if targets are met, claims of favoritism are often made.

Financial Payment Profit-Related Pay Paying workers a portion of the profit made by the company. A worker may be motivated to work harder or be active in cost-saving measures. The reward is not based on an individual effort. Small profits earned may not be worth the “effort”

Financial Payment Employee Share-Ownership Schemes Paying employees with shares of company stock. Establishes workers as part owners of the company. In reality – workers typically sell the stock quickly.

Financial Payment Fringe Benefits (Perks) Non-cash rewards to workers Company car Life Insurance, Disability Insurance, Health Insurance Pension Employee discounts

Non-Financial Motivators Job Enlargement Increasing the scope or amount of work Job Enrichment Increasing the responsibility, decreasing supervision, offer challenging tasks Job Rotation Moving employees among several different jobs with similar levels of difficulty to avoid boredom Team Work Working in groups Delegation Giving work to others to perform

Cultural Impact on Rewards How a culture perceives rewards can have great impact on methods of rewards selected. Performance Orientation: improvement, innovation and strive for excellence Future Orientation: individuals are focused on delaying immediate rewards for future gains; individual incentives work well (Germanic Europe, UK, China; weak in Latin America) Institutional Collectivism: encourage distribution of resources so the group is effective; team and profit sharing work well (Nordic Europe, Germanic Europe; weak in Asia)

Cultural Impact on Fringe Benefits What constitutes a reward or a fringe benefit varies from culture to culture France: Employees appreciate vouchers for gourmet food India: A ticket to Bollywood is popular Asia: Clocks are NOT acceptable. It means management is watching time and you are not putting in the effort desired United States: No cost medical insurance, in most other countries that is provided by the government.

Cultural Impact on Non-financial United States: It is acceptable to recognize employees of the month or recognize an employee's contribution. Asia: Singling out an individual can be embarrassing as they prefer team recognition. In Asia, a demotion could motivate an employee to perform better. In the U.S., this could cause the employee to look for another job!