2. Motivating and Rewarding Employee Performance13
Chapter
Motivating and Rewarding Employee Performance
McGraw-Hill/Irwin
Principles of Management
© The McGraw-Hill Companies, Inc., All Rights Reserved.

3. Learning Objectives Diagram and summarize the MARS model.
Describe four-drive theory and explain how these drives influence motivation and behavior.
Describe the characteristics of effective goal setting and feedback.
Diagram the expectancy theory model and discuss its practical implications for motivating employees.
Discuss the advantages and disadvantages of the four reward objectives.
Discuss ways to measure employee performance more accurately.
Summarize the equity theory model, including how people try to reduce feelings of inequity.
Diagram the job characteristics model of job design.
Define empowerment and identify strategies to support empowerment.

4. Employee Engagement Employees emotional and rational motivation
Their perceived ability to perform the job
Their clear understanding of the organization’s vision
Their belief that they have been given the resources to get the job done
It encompasses the four main factors that contribute to employee performance
See Learning Objective 1: Diagram and summarize the MARS model.
See text page: 316

5. Motivation: True or False?
I can motivate people
Fear is a damn good motivator
I know what motivates me, so I know what motivates my employees
Increased job satisfaction means increased job performance
See Learning Objective 1: Diagram and summarize the MARS model.
Motivation Myths
This slide presents some common myths of motivation.
Ask the students – True or False on each:
People have to motivate themselves.
Fear is a good motivator in a very short term but long term, it doesn’t work.
Different things motivate different people.
Research shows that increased job satisfaction doesn’t necessarily increase performance.
Source: Managementhelp.org
Source: Managementhelp.org

6. MARS Model Situational factors Ability Motivation (effort)
*Direction *Intensity *Persistence
Employee behavior and results
See Learning Objective 1: Diagram and summarize the MARS model.
See text page: 317
Role Perceptions

7. Ability & Role Perceptions
Ability – consists of both the natural aptitudes and learned capabilities required to successfully complete a task
Important factor of employee development
Role perceptions – they understand the specifics, importance, and preferred behaviors of the tasks. Ways to improve is through job description and ongoing coaching
See Learning Objective 1: Diagram and summarize the MARS model.
See text page: 317

8. Managing Employee Motivation
1. Drives and needs
Motivation (effort)
*Direction *Intensity *Persistence
Employee behavior and results
3. Extrinsic and intrinsic rewards
See Learning Objective 1: Diagram and summarize the MARS model.
See text page: 319
2. Goals, expectations, and feedback

9. Maslow’s Needs Hierarchy
Challenging tasks, freedom to try new ideas
Job status, recognition, mastering the job
Human interaction, being accepted as a team member
Job security, employee benefits, safe workplace
Work hours, nourishments, air quality, temperature
See Learning Objective 1: Diagram and summarize the MARS model.
See text page: 320

10. Called in Sick?
See Learning Objective 1: Diagram and summarize the MARS model.
Called in Sick?
This slide presents the top three reasons why workers took a sick day when not sick.
About 49% say they called in sick because they just needed a break. 22% indicated an illness in the family, and 9% said they needed to run errands.
Ask the students – have they used similar excuse in a job or attending a class? Why?
What other reasons may compel individuals to call in sick? (Possibility of loosing the sick days if not taken, looking for another job, etc.)
What can managers do to create an atmosphere of trust and loyalty among workers?
Source: USA Today Snapshots
Source: USA Today Snapshots

11. Question
Money is a powerful motivator. If an organization wants to be motivate employees, all its managers need to do is give them more money. Do you agree? Explain.
See Learning Objective 1: Diagram and summarize the MARS model.
Question
Students should be able to argue against this point with many examples. In a recent survey of teens, it was found that 78 percent indicated that personal fulfillment was more important to them than money. Ask the students, where do they stand? What do they want?

12. Management Implications of Maslow’s Theory
Employees have different needs at different times
Employees have several interdependent needs, not just one dominant need
At some point, most employees want to achieve their full potential (self-actualization)
Employee needs are influenced by values and norms
See Learning Objective 1: Diagram and summarize the MARS model.
See text page: 321

13. Learned Needs Theory Need for Achievement (nAch)
Need for Affiliation (nAff)
See Learning Objective 1: Diagram and summarize the MARS model.
See text page: 322
Need for Power (nPow)

14. Four-Drive Theory Motivation
Drive to acquire
Social norms
Past experience
Personal values
Drive to bond
Mental skill set resolves competing drive demands
Goal-directing choice and effort
Drive to learn
See Learning Objective 2: Describe four-drive theory and explain how these drives influence motivation and behavior.
See text page: 324
Drive to defend

15. Goal Setting
The process of motivating employees and clarifying their role perceptions by establishing performance objectives
A goal is a desirable future state that an organization or person attempts to realize
Goal setting improves role perceptions and consequently clarifies the direction of employee effort
See Learning Objective 3: Describe the characteristics of effective goal setting and feedback.
See text page: 325

16. Question Precise and measurable Equitable Expectancy-oriented Timely
Raj, a new manager at Telcom International, in his first meeting at the company told his employees that the sales goals were significantly enhanced for this year and he expects all of his employees to buckle down and work hard to meet the goals. Raj’s instructions violates which of the aspects of effective goal-setting?
Precise and measurable
Equitable
Expectancy-oriented
Timely
See Learning Objective 3: Describe the characteristics of effective goal setting and feedback.
See text page:
Answer: A

17. Expectancy Theory of Motivation
Outcome valence (the outcome’s positive or negative value to the employee)
E-to-P expectancy (probability that effort will result in a specific level of performance)
P-to-O expectancy (probability that performance will result in specific outcomes)
Outcome 1 + or -
See Learning Objective 4: Diagram the expectancy theory model and discuss its practical implications for motivating employees.
See text page: 327
Effort
Outcome 1 + or -
Performance
Outcome 1 + or -

18. Rewards
Extrinsic Rewards – anything received from another person that the recipient values and is contingent on his or her behavior or results
Paychecks, performance bonuses, praise, and other forms of recognition
Intrinsic Rewards – a positive emotional experience resulting directly and naturally from the individual’s behavior or results
Learning a new task, feeling of accomplishment, etc.
See Learning Objective 5: Discuss the advantages and disadvantages of the four reward objectives.
See text page: 329

19. Motivation Through Extrinsic Rewards
Membership & seniority-based rewards
Nonfinancial rewards
Job status-based rewards
Improving performance appraisals
Competency-based rewards
Rewards employees equitably
Performance-based rewards
See Learning Objective 5: Discuss the advantages and disadvantages of the four reward objectives.
See text pages:

20. How to Accurately Evaluate Employee Performance?
Use more objective measures of performance
Use anchored performance appraisal instruments
Use multiple sources of performance information
Use performance appraisal training
See Learning Objective 6: Discuss ways to measure employee performance more accurately.
See text pages:

21. Best Practices at Nucor
Pay for performance – On average two-thirds of a Nucor steelworker’s pay is based on a production bonus
Listen to the frontline – According to the Execs, almost all of the best ideas come from the factory floor
Push-down authority – minimizing layers of management
Protect your culture –compatibility of culture with its egalitarian philosophy and team spirit is a big focus of its acquisition research
See Learning Objective 6: Discuss ways to measure employee performance more accurately.
Best Practices at Nucor
This slide presents some of the best practices at Nucor that has help the company forge a highly profitable partnership with employees.
With pay for performance and added profit-sharing layer, average employee received $91,293 in 2005.
With best ideas coming from workers, and pushing down authority and responsibilities, jobs are more enriched and worker motivation enhanced.
Ask the students – would you like to work for a company like Nucor? Why or why not?
Source: Business Week, May 1, 2006
Source: Business Week, May 1, 2006

22. Correcting Inequity Feelings
Change Inputs
Change Outcomes
Change Perceptions
Leave the Situation
See Learning Objective 7: Summarize the equity theory model, including how people try to reduce feelings of inequity.
See text pages:

23. Job Characteristics Model
Core job characteristics
Critical psychological states
Outcomes
Skill variety Task identity Task significance
Work motivation
Growth satisfaction
General Satisfaction
Work effectiveness
Meaningfulness
Autonomy
Responsibility
See Learning Objective 8: Diagram the job characteristics model of job design.
See text page: 336
Feedback from job
Knowledge of results
Individual differences *Knowledge and skill *Context satisfaction *Growth need strength

24. Core Job Characteristics
Skill variety – the use of different skills and talents to complete a variety of work activities
Task identity – the degree to which a job requires completion of a whole or identifiable piece of work
Task significance – the degree to which the job affects the organization and society
Autonomy – provide freedom, independence, and discretion in scheduling work and procedures
Job feedback – the degree to which employees can tell how well they are doing
See Learning Objective 8: Diagram the job characteristics model of job design.
See text pages:

25. Job enrichment
A job design practice in which employees are given more responsibility for scheduling, coordinating, and planning their own work
Combine highly interdependent tasks into one job
Establishing client relationships
Give employees more autonomy over their work
See Learning Objective 9: Define empowerment and identify strategies to support empowerment.
See text page: 337

26. Loyal vs. Trapped?
See Learning Objective 9: Define empowerment and identify strategies to support empowerment.
Loyal or Trapped?
This slide presents the results of a workplace loyalty study.
Only about 30% were classified as truly loyal, i.e., who would go an extra mile to satisfy the customers and are highly motivated. About 34% were classified as high risk (neither committed to work nor planning to stay with the company) and another 31% were classified as “trapped” (neither committed to work nor the employer but without prospect for another job).
What can managers do to create an atmosphere of trust and loyalty among workers? (Some of the things managers can do to breed loyalty and commitment are: Care and concern for employees, fairness of pay and evaluation, developmental opportunities, recognition of work, and work-life balance. Also refer to the slide on inspiring employees.)
Source: CIO, October 1, 2003
Source: CIO, October 1, 2003

27. Empowerment A psychological concept represented by four dimensions:
Self-determination – they have freedom, interdependence, and discretion over their work activities
Meaning – they care about their work and believe that what they do is important
Competence – their ability to perform the work well and have a capability to grow with new challenges
Impact – Active participants in the organization; that is, their decisions and actions influence the company’s success
See Learning Objective 9: Define empowerment and identify strategies to support empowerment.
See text page: 338

28. Inspiring Employees Don’t ask for worker input – use it.
Tell your people you care about them.
Show employees what they are learning
Support people when they make a mistake.
Set clear goals and celebrate accomplishments.
See Learning Objective 9: Define empowerment and identify strategies to support empowerment.
Inspiring Employees
Money isn’t the only way to recognize and reward employees. This slide presents various alternatives.
Ask the students – do they agree with these suggestions? Why or why not?
What other items could help make the jobs more meaningful? (For example: sharing priorities and focusing on career development of employees.)
Source: Business Week, May 1, 2006
Source: Business Week, May 1, 2006