McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter 1010 Motivating Employees 10-1

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Evolution of Human Relations Concepts Scientific Management Frederick Taylor Henry L. Gantt Gilbreths Behavioral Management Hawthorne (Mayo) Maslow Herzberg McGregor Ouchi Vroom

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Scientific Management Frederick Taylor Time-Motion Henry L. Gantt Gantt Charts Gilbreths Principle of Motion Economy therblig Scientific Management

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Taylor’s Scientific Management Scientific Management -- Studying workers to determine the most efficient ways of doing things and then teaching those techniques. Three Key Elements to Increase Productivity 1. Time 2. Methods of Work 3. Rules of Work

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Taylor’s Four Key Principles 1. Study how a job is performed. Gather time & motion information. Check different methods. 2. Codify the best method into rules. 3. Choose workers whose skill matches the rules. 4. Establish a fair level of performance and pay.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved TAYLOR and UPS UPS drivers work under strict rules and work requirements, e.g.,UPS How to get out of their trucks:  Right foot first How fast to walk:  3 ft per second How to hold their keys:  Teeth up, third finger 10-6

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Time-Motion Studies Time-Motion Studies -- Studies of which tasks must be performed to complete a job and the time needed to do each task. Henry L. Gantt Led to the development of the Principle of Motion Economy -- Every job can be broken down into a series of elementary motions; developed by Frank and Lillian Gilbreth. therblig

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Behavioral Management Mayo (Hawthorne) Maslow Herzberg McGregor Ouch i Vroom

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved ELTON MAYO HAWTHORNE STUDIES

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Hawthorne Studies: Purpose Conducted by Elton Mayo ( ) First Experiment: Determine if lighting was a factor in productivity. Researchers studied worker efficiency under different levels of light. Productivity increased regardless of light condition. Next Experiments: Determine if other factors affected productivity.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Hawthorne Studies: Results Researchers decided it was a human or psychological factor at play. Hawthorne Effect -- People act differently when they know they are being studied. These studies encouraged the study of Human Motivation.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved ABRAHAM MASLOW HEIRARCHY OF HUMAN NEEDS

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Maslow’s Hierarchy of Needs Hierarchy of Needs -- Theory of motivation based on unmet human needs from basic physiological needs to safety, social and esteem needs to self-actualization needs.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Reaching Your Potential Independence Creativity Self-Expression Responsibility Self-Respect Recognition Sense of Accomplishment Companionship Acceptance Love and Affection Group Membership Security for Self an Possessions Avoidance of Risks Avoidance of Harm Avoidance of Pain Food Clothing Shelter Comfort Self-Preservation Self-Actualization Needs Esteem Needs Social Needs Safety Needs Physiological Needs

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Maslow’s Theory of Motivation (Rules) 1.Needs that have already been met do not motivate. 2.If a need is filled, another higher-level need emerges. 3.If a need becomes unsatisfied, a person will retreat to satisfy that need.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved FREDERICK HERZBERG MOTIVATING FACTORS

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Herzberg’s Motivating Factors 1.Motivators 2.Hygiene Factors

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Herzberg’s Motivating Factors Herzberg’s research centered on two questions: 1.What factors controlled by managers are most effective in increasing worker motivation? 2.How do workers rank job-related factors in order of importance related to motivation?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Job Content Herzberg found job content factors were most important to workers – workers like to feel they contribute to the company. Motivators -- Job factors that cause employees to be productive and that give them satisfaction

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Job Environment Job environment factors maintained satisfaction but did not motivate employees. Hygiene Factors – Job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Figure 10.5 Comparison of Maslow and Herzberg Herzberg’s Theory

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Herzberg’s Theory Motivators vs. Hygiene (Maintenance) Factors Motivators: Job Content Hygiene Factors: Job Environment

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved DOUGLAS McGREGOR THEORY X THEORY Y

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Theory X and Theory Y Douglas McGregor proposed that managers had two different sets of assumptions concerning workers. Their attitudes about motivating workers was tied to these assumptions. McGregor called them Theory X and Theory Y.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved ASSUMPTIONS of THEORY X MANAGERS Workers dislike work and seek to avoid it. Workers must be forced or threatened with punishment to get them to perform. Workers prefer to be directed and avoid responsibility. Primary motivators are fear and money

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved ASSUMPTIONS of THEORY Y MANAGERS People like work, it’s a part of life. Workers seek goals to which they are committed. Commitment to goals depends on perceived rewards. People can use creativity to solve problems. Intellectual capacity is only partially realized. People are motivated by a variety of rewards

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved WILLIAM OUCHI THEORY Z

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved THEORY Z William Ouchi researched cultural differences between the U.S. (Type A) and Japan (Type J). Type J committed to the organization and group. Type A focused on the individual. Theory Z is the hybrid approach of Types A and J

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved © 2002 by The McGraw- Hill Companies, Inc. All Rights Reserved Type J Japanese Management Approach Lifetime employment Consensual decision making Collective responsibility for the outcomes of decisions Slow evaluations & promotions Nonspecialized career paths Holistic concern for employees Type A American Management Approach Short-term employment Individual decision making Individual responsibility for the outcomes of decisions Rapid evaluation & promotion Ouchi’s Theory Z

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Ouchi’s Theory Z Long-Term EmploymentLong-Term Employment Collective Decision-makingCollective Decision-making Individual ResponsibilityIndividual Responsibility Slow Evaluation/ PromotionSlow Evaluation/ Promotion Specialized Career PathSpecialized Career Path Holistic Concern for EmployeesHolistic Concern for Employees

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved PETER DRUCKER MANAGEMENT BY OBJECTIVES

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Management By Objectives (MBO) Peter Drucker – –Goal-Setting Theory – –Employees Motivate Themselves

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved GOAL-SETTING THEORY Goal-Setting Theory -- Setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Applying Goal-Setting Theory Management by Objectives (MBO) -- Involves a cycle of discussion, review and evaluation of objectives among top and middle-level managers, supervisors and employees. Managers formulate goals in cooperation with everyone. Need to monitor results and reward achievement.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved What is MBO? Set organizational objectives Link objectives to employee’s goals Monitor Reward performance Evaluate performance Source: Bloomberg Business Week, accessed November 2014.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved ORGANIZATIONS USING MBO Toyota Motor Company Emerson Electric Company U.S. Department of Defense

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved VICTOR VROOM EXPECTANCY THEORY

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Employee-Oriented Motivational Techniques Expectancy Theory The amount of effort employees exert on a specific task depends on their expectations of the outcome.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Nadler & Lawler’s Modification Researchers Nadler and Lawler modified expectancy theory and suggested five steps for managers: 1. Determine what rewards employees value. 2. Determine worker’s performance standard. 3. Make sure performance standards are attainable. 4. Tie rewards to performance. 5. Be sure employees feel rewards are adequate.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Expectancy Theory in Motivation Employees ask: Can I accomplish the task? What’s my reward? Is the reward worth the effort? Expectations can vary from person to person.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Expectancy Theory

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Using Reinforcement Theory Reinforcement Theory -- Positive and negative reinforcers motivate a person to behave in certain ways. Positive reinforcement includes praise, pay increases and recognition. Negative reinforcement occurs when people work to escape punishment (reprimands, reduced pay, and layoff or firing).

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Equity Theory Equity Theory -- Employees try to maintain equity between inputs and outputs compared to others in similar positions. Workers often base perception of their outcomes to a specific person or group. Perceived inequities can lead to reduced quality and productivity, absenteeism even resignation.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Job-Oriented Motivational Techniques

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Job-Oriented Motivational Techniques Job Enrichment/Redesign Job Simplification

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Job Enrichment Job Enrichment -- A motivational strategy that emphasizes motivating the worker through the job itself. Based on Herzberg’s motivators, such as responsibility, achievement and recognition

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Types of Job Enrichment Job Enlargement -- A job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment. 1. Skill Variety 2. Task Identity 3. Task Significance

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Types of Job Enrichment Job Rotation -- A job enrichment strategy that involves moving employees from one job to another.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved WHEN TOO MUCH is TOO MUCH 24/7 Access Isn’t Always a Good Thing Schedule correspondence:   Don’t check whenever it arrives, schedule times to check. Pick one task:   Having too much open at once takes attention away from singular tasks. Don’t answer the phone:   Don’t be afraid of voic . Maintain human contact:   Don’t look at your computer or phone while someone is at your desk. Keep attention (and respect!) on them. Source: Entrepreneur, accessed November

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved RECOGNIZING GOOD WORK LO 10-7 Raises are not the only ways to recognize an employee’s performance. Recognition can also include:   Paid time off   Flexible scheduling   Work from home opportunities   Paid child or elder care   Stock options or profit sharing   Company awards

WHAT’S GOOD for YOU Most Positive Remedies for Employee Morale 10-51

WHAT’S BAD for YOU Most Negative Actions for Employee Morale 10-52

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Motivating Employees Across the Globe Cultural differences make worker motivation a challenging task for global managers. High-Context cultures require relationships and group trust before performance. Low-Context cultures believe relationship building distracts from tasks.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved IMPORTANCE of CULTURAL COMPENTENCY A better understanding of cultures helps managers increase customer satisfaction and loyalty. It’s not just knowing other languages, it’s knowing what’s proper. UPS operates in over 200 countries successfully by emphasizing diversity

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved MOTIVATING ACROSS the GENERATIONS Baby Boomers (1946 – 1964)   Experienced great economic prosperity, job security, optimism about their future Generation X (1965 – 1980)   Raised in dual-career families, attended day care, feeling of insecurity about jobs Generation Y or Millennials (1980 – 1995)   Raised by indulgent parents, used to many comforts like computers and cell phones

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved UPCOMING GENERATIONS in the WORKPLACE Generation Z (1996 – 2009)   Grew up post 9/11, in the wake of the Great Recession and amid many reports of school violence Generation Alpha (after 2010)

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved GENERATION X in the WORKPLACE Desire economic security but focus more on career security than job security. Good motivators as managers due to emphasis on results rather than work hours. Tend to be flexible and good at collaboration and consensus building. Very effective at giving employee feedback and praise.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved MILLENNIALS and the WORKPLACE Tend to be impatient, skeptical, blunt and expressive. Are tech-savvy and able to grasp new concepts. Able to multi-task and are efficient. Highlight a strong sense of commitment. Place a high value on work-life balance. Fun and stimulation are key job requirements.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved COMMUNICATION ACROSS the GENERATIONS Baby Boomers (1946 – 1964)   Prefer meetings and conference calls. Generation X (1965 – 1980)   Prefer and will choose meetings only if there are no other options. Generation Y or Millennials (1980 – 1995)   Prefer to use technology to communicate, particularly through social media.