1. Lesson 8: Motivation - From Concepts to Applications
Chapter 8: Motivations: From Concepts to Applications

2. Learning Objectives
After studying this chapter, you should be able to:
Describe the job characteristics model and the way it motivates by changing the work environment.
Compare the main ways jobs can be redesigned.
Explain how specific alternative work arrangements can motivate employees.
Describe how employee involvement measures can motivate employees.
Demonstrate how the different types of variable-pay programs can increase employee motivation.
Show how flexible benefits turn benefits into motivators.
Identify the motivational benefits of intrinsic rewards.
We begin this chapter with the learning objectives:
Describe the job characteristics model and the way it motivates by changing the work environment.
Compare the main ways jobs can be redesigned.
Explain how specific alternative work arrangements can motivate employees.
Describe how employee involvement measures can motivate employees.
Demonstrate how the different types of variable-pay programs can increase employee motivation.
Show how flexible benefits turn benefits into motivators.
Identify the motivational benefits of intrinsic rewards.

3. LO 1
Describe the Job Characteristics Model and the Way It Motivates by Changing the Work Environment
The Job Characteristics Model (JCM) proposes that any job may be described by five core job dimensions:
Skill variety is the degree to which the job requires a variety of different activities, so the worker can use a number of different skills and talent.
Task identity is he degree to which the job requires completion of a whole and identifiable piece of work.
Task significance is the degree to which the job has a substantial impact on the lives or work of other people.
Autonomy is the degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and determining the procedures to be used in carrying it out.
Feedback is the degree to which carrying out the work activities required by the job results in the individual obtaining direct and clear information about the effectiveness of his or her performance.
The first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work the incumbent will view as important, valuable, and worthwhile. From a motivational standpoint, the JCM proposes that individuals obtain internal rewards when they learn (knowledge of results) that they personally (experienced responsibility) have performed well on a task they care about (experienced meaningfulness). Individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and respond to them more positively—than are their counterparts with low growth need.

4. LO 1
Describe the Job Characteristics Model and the Way It Motivates by Changing the Work Environment
The core dimensions of the job characteristics model (JCM) can be combined into a single predictive index called the motivating potential score (MPS).
Evidence supports the JCM concept that the presence of a set of job characteristics does generate higher and more satisfying job performance.
A few studies have tested the JCM in different cultures, but the results aren’t very consistent.
The core dimensions of the JCM can be combined into a single predictive index called the motivating potential score (MPS). To be high on motivating potential, jobs must be high on at least one of the three factors that lead to experienced meaningfulness, and high on both autonomy and feedback. If jobs score high on motivating potential, the model predicts that motivation, performance, and satisfaction will improve and absence and turnover will be reduced.
Much evidence supports the JCM concept that the presence of a set of job characteristics—variety, identity, significance, autonomy, and feedback—does generate higher and more satisfying job performance. But apparently we can better calculate motivating potential by simply adding the characteristics rather than using the formula.
A few studies have tested the job characteristics model in different cultures, but the results aren’t very consistent. One study suggested that when employees are “other oriented” (i.e., concerned with the welfare of others at work), the relationship between intrinsic job characteristics and job satisfaction was weaker. The fact that the job characteristics model is relatively individualistic (i.e., considering the relationship between the employee and his or her work) suggests job enrichment strategies may not have the same effects in collectivistic cultures as in individualistic cultures (such as the United States). Another study suggested the degree to which jobs had intrinsic job characteristics predicted job satisfaction and job involvement equally well for American, Japanese, and Hungarian employees.

5. Compare the Main Ways Jobs Can Be Redesigned
LO 2
Repetitive jobs provide little variety, autonomy, or motivation.
Job Rotation
Referred to as cross-training.
Periodic shifting from one task to another.
Strengths: reduces boredom, increases motivation, and helps employees better understand their work contributions.
Weaknesses: creates disruptions, requires extra time for supervisors addressing questions and training time, and reduced efficiencies.
People generally seek out jobs that are challenging and stimulating, but repetitive jobs provide little variety, autonomy, or motivation. One way to make repetitive jobs more interesting is job rotation, which is also known as cross-training. It involves periodic shifting of an employee from one task to another. When activity is no longer challenging, the employee is shifted to a different task.
Strengths of job rotation are that it reduces boredom, increases motivation, and helps employees better understand their work contributions. Indirect benefits include employees with wider ranges of skills that give management more flexibility in scheduling, adapting to changes, and filling vacancies. Some weaknesses of job rotation include disruptions, a need for extra time for supervisors addressing questions and training time, and reduced efficiencies.

6. Compare the Main Ways Jobs Can Be Redesigned
LO 2
Compare the Main Ways Jobs Can Be Redesigned
Exhibit 8–2 shows guidelines for job enrichment. Job enrichment expands jobs by increasing the degree to which the worker controls the planning, execution, and evaluation of the work.
The first guideline is combining tasks that puts fractionalized tasks back together to form a new and larger module of work. Second is forming natural work units that make an employee’s tasks create an identifiable and meaningful whole. Third, establishing client relationships increases the direct relationships between workers and their clients. (Clients can be internal as well as outside the organization.) Fourth, expanding jobs vertically gives employees responsibilities and control formerly reserved for management. Finally, opening feedback channels lets employees know how well they are doing and whether their performance is improving, deteriorating, or remaining constant.

7. Compare the Main Ways Jobs Can Be Redesigned
LO 2
Compare the Main Ways Jobs Can Be Redesigned
Relational Job Design
To make jobs more prosocially motivating:
Connect employees with the beneficiaries of their work.
Relate stories from customers who have found the company’s products or services to be helpful.
Meet beneficiaries firsthand.
Employees see that their actions affect a real person, and that their jobs have tangible consequences.
Connections make customers or clients more accessible in memory and more emotionally vivid.
Leads employees to consider the effects of their actions more.
Fosters higher levels of commitment.
While redesigning jobs on the basis of job characteristics theory is likely to make work more intrinsically motivating to people, more contemporary research is focusing on how to make jobs more prosocially motivating to people. One way to make jobs more prosocially motivating is to better connect employees with the beneficiaries of their work, for example, by relating stories from customers who have found the company’s products or services to be helpful. Beneficiaries of organizations might include customers, clients, patients, and users of products or services. Meeting beneficiaries firsthand allows employees to see that their actions affect a real, live person, and that their jobs have tangible consequences. In addition, connections with beneficiaries make customers or clients more accessible in memory and more emotionally vivid, which leads employees to consider the effects of their actions more. Finally, connections allow employees to easily take the perspective of beneficiaries, which fosters higher levels of commitment.

8. Explain How Specific Alternative Work Arrangements Can Motivate Employees
Alternative work arrangements are also used to boost motivation. They include flextime, defined as flexible work hours like those shown in Exhibit 8-3. This allows employees some discretion over when they arrive at and leave work. Benefits include reduced absenteeism, increased productivity, reduced overtime expense, reduced hostility toward management, and increased autonomy and responsibility for employees. A major drawback is that it’s not applicable to all jobs or all workers.

9. LO 3
Explain How Specific Alternative Work Arrangements Can Motivate Employees
Job Sharing
Two or more people split a 40-hour-a-week job.
Declining in use.
Can be difficult to find compatible pairs of employees who can successfully coordinate the intricacies of one job.
Increases flexibility and can increase motivation and satisfaction when a 40-hour-a-week job is just not practical.
Job sharing allows two or more individuals to split a traditional 40-hour-a-week job. Only 12 percent of larger organizations now offer job sharing, a decline from 18 percent in Reasons it is not more widely adopted are likely the difficulty of finding compatible partners to share a job and the historically negative perceptions of individuals not completely committed to their job and employer. The major drawback is finding compatible pairs of employees who can successfully coordinate the intricacies of one job.
However, job sharing allows an organization to draw on the talents of more than one individual in a given job. From the employee’s perspective, job sharing increases flexibility and can increase motivation and satisfaction when a 40-hour-a-week job is just not practical.

10. LO 3
Explain How Specific Alternative Work Arrangements Can Motivate Employees
Telecommuting
Employees who do their work at home at least two days a week on a computer that is linked to their office.
Virtual office
Well-known organizations actively encourage telecommuting
Telecommuting refers to employees who do their work at home at least two days a week on a computer that is linked to their office.
The U.S. Department of the Census estimated there had been a 25% increase in self-employed, home-based workers from 1999 to 2005, and a 20% increase in employed workers who work exclusively from home. One recent survey of nearly 500 organizations found that 57% of organizations offered telecommuting, with 36% allowing employees to telecommute at least part of the time and 20% allowing employees to telecommute full time – those percentages have remained relatively stable since 2008.
Well-known organizations that actively encourage telecommuting include AT&T, IBM, American Express, Sun Microsystems, and a number of U.S. government agencies.

11. LO 3
Explain How Specific Alternative Work Arrangements Can Motivate Employees
Telecommuting Advantages
Larger labor pool
Higher productivity
Less turnover
Improved morale
Reduced office-space costs
There are reasons for and against telecommuting. The advantages include a larger labor pool of workers, higher productivity, less turnover, improved morale, and reduced office-space costs.

12. LO 3
Explain How Specific Alternative Work Arrangements Can Motivate Employees
Telecommuting Disadvantages
Employer
Less direct supervision of employees.
Difficult to coordinate teamwork.
Difficult to evaluate non-quantitative performance.
Employee
May not be noticed for his or her efforts.
Disadvantages of telecommuting for the employer include less direct supervision of employees, difficulty coordinating teamwork, and difficulty evaluating non-quantitative performance. Disadvantages for the employee include that he or she may not be as noticed for his or her efforts.

13. LO 3
Explain How Specific Alternative Work Arrangements Can Motivate Employees
The Social and Physical Context Of Work
The job characteristics model shows most employees are more motivated and satisfied when their intrinsic work tasks are engaging.
Research demonstrates that social aspects and work context are as important as other job design features.
The job characteristics model shows most employees are more motivated and satisfied when their intrinsic work tasks are engaging.
Having the most interesting workplace characteristics in the world may not always lead to satisfaction if you feel isolated from your co-workers, and having good social relationships can make even the most boring and onerous tasks more fulfilling. Research demonstrates that social aspects and work context are as important as other job design features.
Some social characteristics that improve job performance include interdependence, social support, and interactions with other people outside work.
The work context is also likely to affect employee satisfaction.
To assess why an employee is not performing to her best level, look at the work environment to see whether it’s supportive.

14. Describe How Employee Involvement Measures Can Motivate Employees
Employee Involvement: a participative process that uses employees’ input to increase their commitment to the organization’s success.
Examples of Employee Involvement Programs
Participative management
Representative participation
Employee involvement refers to a participative process that uses employees’ input to increase their commitment to the organization’s success. Two examples of such programs are participative management and representative participation.

15. Describe How Employee Involvement Measures Can Motivate Employees
Participative management
Joint decision making.
Acts as a panacea for poor morale and low productivity.
Trust and confidence in leaders is essential.
Studies of the participation-performance have yielded mixed results.
Participative management is the first of the options for employee involvement programs. Common to all participative management programs is joint decision making, wherein subordinates share a significant degree of decision making power with their immediate superiors. Participative management has, at times, been promoted as a panacea for poor morale and low productivity. But for it to work, employees must be engaged in issues relevant to their interests so they’ll be motivated, they must have the competence and knowledge to make a useful contribution, and trust and confidence must exist among all parties.
Studies of the participation–performance relationship have yielded mixed findings. Organizations that institute participative management do have higher stock returns, lower turnover rates, and higher estimated labor productivity, although these effects are typically not large. A careful review of research at the individual level shows participation typically has only a modest influence on employee productivity, motivation, and job satisfaction. Of course, this doesn’t mean participative management can’t be beneficial under the right conditions. But it is not a sure means for improving performance.

16. Describe How Employee Involvement Measures Can Motivate Employees
Representative participation
Workers are represented by a small group of employees who actually participate in decision making.
Almost every country in Western Europe requires representative participation.
The two most common forms:
Works councils
Board representatives
Representative participation is spreading. Almost every country in Western Europe has some type of legislation requiring it. It is the most widely legislated form of employee involvement around the world. The goal is to redistribute power within an organization, putting labor on a more equal footing with the interests of management and stockholders.
The two most common forms include works councils that link employees with management. They are groups of nominated or elected employees who must be consulted when management makes decisions involving personnel. Second is board representatives, who are employees who sit on a company’s board of directors and represent the interests of the firm’s employees. The overall influence of representative participation seems to be minimal. The evidence suggests that works councils are dominated by management and have little impact on employees or the organization. If one were interested in changing employee attitudes or in improving organizational performance, representative participation would be a poor choice.

17. Describe How Employee Involvement Measures Can Motivate Employees
Linking Employee Involvement Programs and Motivation Theories
Theory Y is consistent with participative management.
Theory X aligns with autocratic style.
Two-factor theory aligns with employee involvement programs in providing intrinsic motivation.
Extensive employee involvement programs clearly have the potential to increase employee intrinsic motivation in work tasks.
Employee involvement draws on several of the theories on motivation that we discussed in Chapter 7. Theory Y is consistent with participative management.
Theory X aligns with autocratic style. The two-factor theory aligns with employee involvement programs in providing intrinsic motivation. And extensive employee involvement programs clearly have the potential to increase employee intrinsic motivation in work tasks.

18. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
What to Pay: Establishing a Pay Structure
Complex process that entails balancing internal equity and external equity.
Some organizations prefer to pay leaders by paying above market.
Paying more may net better-qualified and more highly motivated employees who may stay with the firm longer.
Now, let’s talk about using rewards to motivate people, and specifically, what to pay employees. As we saw in Chapter 3, pay is not a primary factor driving job satisfaction. However, it does motivate people, and companies often underestimate its importance in keeping top talent. A 2006 study found that while 45% of employers thought pay was a key factor in losing top talent, 71% of top performers called it a top reason.
So, what should an organization do? How should the pay structure be established? The answer is not easy – it’s a complex process that entails balancing internal equity and external equity. Some organizations prefer to pay leaders by paying above market. Keep in mind that paying more may net better-qualified and more highly motivated employees who may stay with the firm longer.

19. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
How to Pay: Rewarding Individual Employees Through Variable-Pay Programs
Many organizations are moving away from paying solely on credentials or length of service.
Piece-rate plans
Merit-based pay
Bonuses
Profit sharing
Gain sharing
Employee stock ownership plans
Earnings therefore fluctuate up and down.
Rewarding individual employees through variable-pay programs is becoming more common in the workplace. A number of organizations are moving away from paying solely on credentials or length of service. Piece-rate plans, merit-based pay, bonuses, profit sharing, gain sharing, and employee stock ownership plans are all forms of a variable-pay program, which base a portion of an employee’s pay on some individual and/or organizational measure of performance. Individual earnings therefore fluctuate up and down.

20. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Piece-Rate Pay
Workers are paid a fixed sum for each unit of production completed.
A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces.
Limitation: not a feasible approach for many jobs.
Although incentives are motivating and relevant for some jobs, it is unrealistic to think they can constitute the only piece of employees’ pay.
The first of the variable pay programs is piece-rate pay plans. Here, workers are paid a fixed sum for each unit of production completed. A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces. The main limitation of the piece rate plan is that it doesn’t work for all types of jobs. Although incentives are motivating and relevant for some jobs, it is unrealistic to think they can constitute the only piece of some employees’ pay.

21. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Merit-Based Pay
Based on performance appraisal ratings.
Allows employers to differentiate pay based on performance.
Creates perceptions of relationships between performance and rewards.
Limitations:
Based on annual performance appraisal; merit pool fluctuations based on economic conditions; unions typically resist merit-based pay plans.
The second variable pay method is the merit-based pay plan. These plans are based on performance appraisal ratings. Their main advantage is that they allow employers to differentiate pay based on performance, and so create perceptions of relationships between performance and rewards. Most large organizations have merit pay plans, particularly for salaried employees. Limitations to merit-based plans include that they are based on annual performance appraisal, that the merit pool fluctuates based on economic conditions, and that unions typically resist merit-based pay plans.

22. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Bonuses
An annual bonus is a significant component of total compensation for many jobs.
Increasingly include lower-ranking employees.
Many companies now routinely reward production employees with bonuses when profits improve.
Downside: employees’ pay is more vulnerable to cuts.
The use of bonuses is becoming more common in many organizations. An annual bonus is a significant component of total compensation for many jobs. Among Fortune 100 CEOs, the bonus (mean of $1.01 million) generally exceeds the base salary (mean of $863,000). Bonus plans increasingly include lower-ranking employees; many companies now routinely reward production employees with bonuses in the thousands of dollars when profits improve. The incentive effects of performance bonuses should be higher than those of merit pay because rather than paying for performance years ago, which was rolled into base pay, bonuses reward recent performance. When times are bad, firms can cut bonuses to reduce compensation costs. The downside of bonuses is that employees’ pay is more vulnerable to cuts.

23. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Skill-Based Pay
Bases pay levels on how many skills employees have or how many jobs they can do.
Increases the flexibility of the workforce.
Facilitates communication across the organization because people gain a better understanding of each other’s jobs.
Limitations:
People can “top-out” and learn all the skills.
Don’t address performance.
Skill-based pay is also called competency-based or knowledge-based pay and is an alternative to job-based pay that bases pay levels on how many skills employees have or how many jobs they can do. For employers, the lure of skill-based pay plans is that they increase the flexibility of the workforce, because filling staffing needs is easier when employee skills are interchangeable. Skill-based pay also facilitates communication across the organization because people gain a better understanding of each other’s jobs. The disadvantages to skill-based pay are few. However, people can “top out”—that is, they can learn all the skills the program calls for them to learn. Finally, skill-based plans don’t address level of performance—they deal only with whether someone can perform the skill.

24. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Profit-Sharing Plans
Organization-wide programs that distribute compensation based on some established formula centered around a company’s profitability.
Appear to have positive effects on employee attitudes at the organizational level.
Employees have a feeling of psychological ownership.
Profit-sharing plans are organization-wide programs that distribute compensation based on some established formula centered around a company’s profitability. Compensation can be direct cash outlays or, particularly for top managers, allocations of stock options. Profit-sharing plans at the organizational level appear to have positive impacts on employee attitudes; employees report a greater feeling of psychological ownership.

25. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Gainsharing
Uses improvements in group productivity from one period to the next to determine the total amount of money allocated.
Common among large manufacturing companies and in some healthcare organizations.
Ties rewards to productivity gains rather than profits.
Employees can receive incentive awards even when the organization isn’t profitable.
Because the benefits accrue to groups of workers, high performers pressure weaker ones to work harder, improving performance for the group as a whole.
Gainsharing is a formula-based group incentive plan. Its popularity seems narrowly focused among large manufacturing companies, although some healthcare organizations have experimented with it as a cost-saving mechanism. Gainsharing differs from profit sharing in tying rewards to productivity gains rather than profits, so employees can receive incentive awards even when the organization isn’t profitable. Because the benefits accrue to groups of workers, high performers pressure weaker ones to work harder, improving performance for the group as a whole.

26. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Employee Stock Ownership Plan (ESOP)
A company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits.
Increases employee satisfaction and innovation.
Employees need to psychologically experience ownership.
Can reduce unethical behavior.
Another variable-pay option is the employee stock ownership plan, or ESOP. An ESOP is a company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits. Most of the 10,000 or so ESOPs in the United States are in small, privately held companies. Research on ESOPs indicates that they increase employee satisfaction and innovation. ESOPs have the potential to increase employee job satisfaction and work motivation, but employees need to psychologically experience ownership.
ESOP plans for top management can reduce unethical behavior. CEOs are more likely to manipulate firm earnings reports to make themselves look good in the short run when they don’t have an ownership share, even though this manipulation will eventually lead to lower stock prices. However, when CEOs own a large amount of stock, they report earnings accurately because they don’t want the negative consequences of declining stock prices.

27. LO 5
Demonstrate How the Different Types of Variable-Pay Programs Can Increase Employee Motivation
Evaluation of Variable Pay
Do variable-pay programs increase motivation and productivity? The answer is a qualified yes.
Studies generally support the idea that organizations with profit-sharing plans have higher levels of profitability than those without them.
Are there cultural differences?
Maybe, but more research is needed.
Do variable-pay programs increase motivation and productivity? The answer is a qualified yes. Studies generally support the idea that organizations with profit-sharing plans have higher levels of profitability than those without them. One study found that whereas piece-rate pay-for performance plans stimulated higher levels of productivity, this positive affect was not observed for risk-averse employees.
You’d probably think individual pay systems such as merit pay or pay-for-performance work better in individualistic cultures such as the United States or that group-based rewards such as gain sharing or profit sharing work better in collectivistic cultures. Unfortunately, there isn’t much research on the issue. One recent study did suggest that employee beliefs about the fairness of a group incentive plan were more predictive of pay satisfaction in the United States than in Hong Kong. One interpretation is that U.S. employees are more critical in appraising a group pay plan, and therefore it’s more critical that the plan be communicated clearly and administered fairly.

28. Show How Flexible Benefits Turn Benefits Into Motivators
LO 6
Flexible Benefits: Developing a Benefits Package
Flexible benefits individualize rewards.
Allow each employee to choose the compensation package that best satisfies his or her current needs and situation.
Replaces the “one-benefit-plan-fits-all” programs designed for a male with a wife and two children at home that dominated organizations for more than 50 years.
Flexible benefits individualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation. These plans replace the “one-benefit-plan-fits-all” programs designed for a male with a wife and two children at home that dominated organizations for more than 50 years. Fewer than 10% of employees now fit that image. About 25% are single, and one-third are part of two-income families with no children.
Flexible benefits can accommodate differences in employee needs based on age, marital status, spouses’ benefit status, and number and age of dependents.

29. Show How Flexible Benefits Turn Benefits Into Motivators
LO 6
Show How Flexible Benefits Turn Benefits Into Motivators
There are three basic types of programs:
Modular plans: pre-designed with each module put together to meet the needs of a specific group of employees.
Core-plus plans: a core of essential benefits and a menu-like selection of other benefit options.
Flexible spending plans: employees set aside pretax dollars up to the amount offered in the plan to pay for particular benefits, such as healthcare and dental premiums.
There are three basic types of programs:
Modular plans: pre-designed with each module put together to meet the needs of a specific group of employees.
Core-plus plans: a core of essential benefits and a menu-like selection of other benefit options.
Flexible spending plans: employees set aside pretax dollars up to the amount offered in the plan to pay for particular benefits, such as healthcare and dental premiums.
Today, almost all major corporations in the United States offer flexible benefits. They’re becoming the norm in other countries too. A recent survey of 211 Canadian organizations found that 60% offer flexible benefits, up from 41% in A similar survey of firms in the United Kingdom found that nearly all major organizations were offering flexible benefits programs, with options ranging from private supplemental medical insurance to holiday trading, discounted bus travel, and childcare vouchers.

30. Identify the Motivational Benefits of Intrinsic Rewards
LO 7
Identify the Motivational Benefits of Intrinsic Rewards
Intrinsic Rewards: Employee Recognition Programs
Organizations are increasingly recognizing that important work rewards can be both intrinsic and extrinsic.
Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensation systems.
Financial incentives might be more motivating in the short-term, but nonfinancial rewards are more important in the long-term.
Organizations are increasingly recognizing that important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensation systems.
Employee recognition programs range from a spontaneous and private thank-you to widely publicized formal programs in which specific types of behavior are encouraged and the procedures for attaining recognition are clearly identified. Some research suggests financial incentives may be more motivating in the short term, but in the long run, it’s nonfinancial incentives. A few years ago, research found that recognition, recognition, and more recognition was key to employee motivation.

31. Implications for Managers
Recognize individual differences.
Spend the time necessary to understand what’s important to each employee.
Design jobs to align with individual needs and maximize their motivation potential.
Use goals and feedback.
You should give employees firm, specific goals, and they should get feedback on how well they are faring in pursuit of those goals.
The study of what motivates individuals is ultimately key to organizational performance. Employees whose differences are recognized, who feel valued, and who have the opportunity to work in jobs that are tailored to their strengths and interests will be motivated to perform at the highest levels. Employee participation also can increase employee productivity, commitment to work goals, motivation, and job satisfaction.
Managers should:
Recognize individual differences. Spend the time necessary to understand what’s important to each employee. Design jobs to align with individual needs and maximize their motivation potential.
Use goals and feedback. You should give employees firm, specific goals, and they should get feedback on how well they are faring in pursuit of those goals.

32. Implications for Managers
Link rewards to performance.
Rewards should be contingent on performance, and employees must perceive the link between the two.
Check the system for equity.
Employees should perceive that experience, skills, abilities, effort, and other obvious inputs explain differences in performance and hence in pay, job assignments, and other obvious rewards.
In addition, managers should:
Allow employees to participate in decisions that affect them. Employees can contribute to setting work goals, choosing their own benefits packages, and solving productivity and quality problems.
Link rewards to performance. Rewards should be contingent on performance, and employees must perceive the link between the two.
Check the system for equity. Employees should perceive that experience, skills, abilities, effort, and other obvious inputs explain differences in performance and hence in pay, job assignments, and other obvious rewards.