1. o r g a n i z a t i o n a l b e h a v i o r e l e v e n t h e d i t i o n

2. ORGANIZATIONAL BEHAVIOR S T E P H E N P. R O B B I N S E L E V E N T H E D I T I O N W W W. P R E N H A L L. C O M / R O B B I N S © 2005 Prentice Hall Inc. All rights reserved. PowerPoint Presentation by Charlie Cook Chapter 7 Motivation: From Concept to Applications

3. © 2005 Prentice Hall Inc. All rights reserved.7–2 After studying this chapter, you should be able to: 1.Identify the four ingredients common to MBO programs. 2.Explain why managers might want to use employee involvement programs. 3.Contrast participative management with employee involvement. 4.Explain how ESOPs can increase employee motivation. 5.Describe how a job can be enriched. L E A R N I N G O B J E C T I V E S

4. © 2005 Prentice Hall Inc. All rights reserved.7–3 After studying this chapter, you should be able to: 6.Compare the benefits and drawbacks to telecommuting from the employee’s point of view. 7.Contrast gainsharing and profit sharing. 8.Describe the link between skill-based pay plans and motivation theories. 9.Explain how flexible benefits turn benefits into motivators. L E A R N I N G O B J E C T I V E S (cont’d)

5. © 2005 Prentice Hall Inc. All rights reserved.7–4 Emphasizes converting overall organizational objectives into specific objectives for individual units and members that are tangible, verifiable, and measurable Management by Objectives (MBO)

6. © 2005 Prentice Hall Inc. All rights reserved.7–5 Overall organizational objectives Overall organizational objectives Divisional objectives Divisional objectives Departmental objectives Departmental objectives Individual objectives Individual objectives Cascading of Objectives

7. © 2005 Prentice Hall Inc. All rights reserved.7–6 Management by Objectives Four ingredients common to MBO programs: 1. Goal specificity 2. Participative decision making 3. Explicit time period 4. Performance feedback

8. © 2005 Prentice Hall Inc. All rights reserved.7–7 Management by Objectives (MBO)  Organizational objectives translated to specific objectives for each level (division, department, individual)  Lower-level managers participate in setting their own goals  Results in hierarchy of objectives that links one level to the next  If all individuals achieve goals, organizational objectives will be attained

9. © 2005 Prentice Hall Inc. All rights reserved.7–8 What is MBO? Key Elements 1.Goal specificity 2.Participative decision making 3.An explicit time period 4.Performance feedback Key Elements 1.Goal specificity 2.Participative decision making 3.An explicit time period 4.Performance feedback Management by Objectives (MBO) A program that encompasses specific goals, participatively set, for an explicit time period, with feedback on goal progress.

10. © 2005 Prentice Hall Inc. All rights reserved.7–9 Cascading of Objectives E X H I B I T 7–1

11. © 2005 Prentice Hall Inc. All rights reserved.7–10 Linking MBO and Goal-Setting Theory MBO Goal-Setting Theory Goal SpecificityYesYes Goal DifficultyYesYes FeedbackYesYes ParticipationYesNo (qualified)

12. © 2005 Prentice Hall Inc. All rights reserved.7–11 Why MBO’s Fail  Unrealistic expectations about MBO results  Lack of commitment by top management  Failure to allocate reward properly  Cultural incompatibilities

13. © 2005 Prentice Hall Inc. All rights reserved.7–12 The application of reinforcement theory to individuals in the work setting using a problem-solving model, feedback, and positive reinforcements Behavior Modification (OB Mod)

14. © 2005 Prentice Hall Inc. All rights reserved.7–13 1 Identify performance- related behavioral events 1 Identify performance- related behavioral events 2 Measure: Baseline the frequency of response 2 Measure: Baseline the frequency of response 3 Identify existing behavioral contingencies through functional analysis 3 Identify existing behavioral contingencies through functional analysis 4a Develop intervention strategy 4a Develop intervention strategy 4b Apply appropriate strategy 4b Apply appropriate strategy 4c Measure: Chart the frequency of response after intervention 4c Measure: Chart the frequency of response after intervention Steps in OB Mod 4d Maintain desirable behavior 4d Maintain desirable behavior 5 Evaluate for performance improvement 5 Evaluate for performance improvement Yes No Adapted by permission of the publisher from Personnel, July-August © 1974. Fred Luthans, American Management Association, New York. All rights reserved. Problem solved?

15. © 2005 Prentice Hall Inc. All rights reserved.7–14 Using multiple sources to reward behavior and recognize publicly both individual and group accomplishments Employee Recognition Programs

16. © 2005 Prentice Hall Inc. All rights reserved.7–15 Employee Recognition Programs repetition  Rewarding behavior with recognition immediately leads to its repetition publicly communicate  To maximize motivation potential, publicly communicate who and why is being recognized costs little  Recognizing employee’s superior performance often costs little  Suggestion systems  Suggestion systems are widely used recognition devices

17. © 2005 Prentice Hall Inc. All rights reserved.7–16 Employee Recognition Programs  Types of programs –Personal attention –Expressing interest –Approval –Appreciation for a job well done  Benefits of programs –Fulfill employees’ desire for recognition. –Encourages repetition of desired behaviors. –Enhance group/team cohesiveness and motivation. –Encourages employee suggestions for improving processes and cutting costs.

18. © 2005 Prentice Hall Inc. All rights reserved.7–17 E X H I B I T 7–2 From the Wall Street Journal, October 21, 1997. Reprinted by permission of Cartoon Features Syndicate.

19. © 2005 Prentice Hall Inc. All rights reserved.7–18 A participative process that uses the entire capacity of employees related to decisions that affect them is designed to encourage increased commitment to the organization's success Employee Involvement

20. © 2005 Prentice Hall Inc. All rights reserved.7–19 What is Employee Involvement? Employee Involvement Program A participative process that uses the entire capacity of employees and is designed to encourage increased commitment to the organization’s success.

21. © 2005 Prentice Hall Inc. All rights reserved.7–20 Employee Involvement decisions  Involve workers in decisions that will affect them autonomy  Increase their autonomy and control over their work lives techniques  Include techniques with a common core –Employee participation –Participative management –Workplace democracy –Empowerment –Employee ownership

22. © 2005 Prentice Hall Inc. All rights reserved.7–21 E X H I B I T 7–3 Source: Courtesy of Phoenix Inn Suites.

23. © 2005 Prentice Hall Inc. All rights reserved.7–22 Examples of Employee Involvement Programs Participative Management A process in which subordinates share a significant degree of decision-making power with their immediate superiors.

24. © 2005 Prentice Hall Inc. All rights reserved.7–23 Examples of Employee Involvement Programs (cont’d) Representative Participation Workers participate in organizational decision making through a small group of representative employees. Works Councils Groups of nominated or elected employees who must be consulted when management makes decisions involving personnel. Board Representative A form of representative participation; employees sit on a company’s board of directors and represent the interests of the firm’s employees.

25. © 2005 Prentice Hall Inc. All rights reserved.7–24 Examples of Employee Involvement Programs (cont’d) Quality Circle A work group of employees who meet regularly to discuss their quality problems, investigate causes, recommend solutions, and take corrective actions.

26. © 2005 Prentice Hall Inc. All rights reserved.7–25 Examples of Employee Involvement Programs (cont’d) Employee Stock Ownership Plans (ESOPs) Company-established benefit plans in which employees acquire stock as part of their benefits.

27. © 2005 Prentice Hall Inc. All rights reserved.7–26 Linking EI Programs and Motivation Theories Employee Involvement Programs Theory Y Participative Management Two-Factor Theory Intrinsic Motivation ERG Theory Employee Needs

28. © 2005 Prentice Hall Inc. All rights reserved.7–27 Job Design and Scheduling Job Rotation The periodic shifting of a worker from one task to another. Job Enlargement The horizontal expansion of jobs. Job Enrichment The vertical expansion of jobs.

29. © 2005 Prentice Hall Inc. All rights reserved.7–28 Guidelines for Enriching a Job E X H I B I T 7–4 Source: J.R. Hackman and J.L. Suttle, eds., Improving Life at Work (Glenview, IL: Scott Foresman, 1977), p. 138.

30. © 2005 Prentice Hall Inc. All rights reserved.7–29 Work Schedule Options Flextime Employees work during a common core time period each day but have discretion in forming their total workday from a flexible set of hours outside the core. Job Sharing The practice of having two or more people split a 40-hour-a-week job.

31. © 2005 Prentice Hall Inc. All rights reserved.7–30 Example of a Flextime Schedule E X H I B I T 7–5

32. © 2005 Prentice Hall Inc. All rights reserved.7–31 Work Schedule Options Categories of telecommuting jobs: Routine information handling tasks Mobile activities Professional and other knowledge-related tasks Categories of telecommuting jobs: Routine information handling tasks Mobile activities Professional and other knowledge-related tasks Telecommuting Employees do their work at home on a computer that is linked to their office.

33. © 2005 Prentice Hall Inc. All rights reserved.7–32 Telecommuting  Advantages –Larger labor pool –Higher productivity –Less turnover –Improved morale –Reduced office-space costs  Disadvantages (Employer) –Less direct supervision of employees –Difficult to coordinate teamwork –Difficult to evaluate non-quantitative performance

34. © 2005 Prentice Hall Inc. All rights reserved.7–33 Forms of compensation where a portion of an employee’s pay is based on the measure of performance either of the individual, the organization, or both Variable-Pay Programs

35. © 2005 Prentice Hall Inc. All rights reserved.7–34 Variable-Pay Programs Four widely used variable-pay programs –Piece-rate wages –Piece-rate wages - fixed sum for each unit completed –Bonuses –Bonuses - a percent of annual pay based on company earnings –Profit sharing –Profit sharing - based on a formula designed around company’s profitability –Gainsharing –Gainsharing - formula-based group incentive plan for improvements in productivity

36. © 2005 Prentice Hall Inc. All rights reserved.7–35 Variable Pay Programs A portion of an employee’s pay is based on some individual and/or organization measure of performance. Piece rate pay plans Profit sharing plans Gain sharing plans

37. © 2005 Prentice Hall Inc. All rights reserved.7–36 Variable Pay Programs (cont’d) Profit-Sharing Plans Organizationwide programs that distribute compensation based on some established formula designed around a company’s profitability. Gain Sharing An incentive plan in which improvements in group productivity determine the total amount of money that is allocated. Piece-rate Pay Plans Workers are paid a fixed sum for each unit of production completed.

38. © 2005 Prentice Hall Inc. All rights reserved.7–37 Pay levels based on how many skills employees have or how many jobs they can do Skill-Based Pay (Competency-Based Pay)

39. © 2005 Prentice Hall Inc. All rights reserved.7–38 Skill-Based Pay Advantages:  Attractive due to flexibility for management  Encourages employees to acquire a range of skills  Facilitates communication and understanding of others’ jobs  Meets needs of ambitious employees without a promotion in job titleDisadvantages:  Topping out - learning all the skills  Skills might become obsolete  Do not address level of performance

40. © 2005 Prentice Hall Inc. All rights reserved.7–39 Skill-Based Pay Plans Benefits of Skill-based Pay Plans: 1.Provides staffing flexibility. 2.Facilitates communication across the organization. 3.Lessens “protection of territory” behaviors. 4.Meets the needs of employees for advancement (without promotion). 5.Leads to performance improvements. Benefits of Skill-based Pay Plans: 1.Provides staffing flexibility. 2.Facilitates communication across the organization. 3.Lessens “protection of territory” behaviors. 4.Meets the needs of employees for advancement (without promotion). 5.Leads to performance improvements. Pay levels are based on how many skills employees have or how many jobs they can do.

41. © 2005 Prentice Hall Inc. All rights reserved.7–40 Skill-Based Pay Plans (cont’d) Drawbacks of Skill-based Pay Plans: 1.Lack of additional learning opportunities that will increase employee pay. 2.Continuing to pay employees for skills that have become obsolete. 3.Paying for skills which are of no immediate use to the organization. 4.Paying for a skill, not for the level of employee performance for the particular skill. Drawbacks of Skill-based Pay Plans: 1.Lack of additional learning opportunities that will increase employee pay. 2.Continuing to pay employees for skills that have become obsolete. 3.Paying for skills which are of no immediate use to the organization. 4.Paying for a skill, not for the level of employee performance for the particular skill.

42. © 2005 Prentice Hall Inc. All rights reserved.7–41 Flexible Benefits Flexible Spending Plans: allow employees to use their tax-free benefit dollars purchase benefits and pay service premiums. Modular Plans: predesigned benefits packages for specific groups of employees. Core-Plus Plans: a core of essential benefits and a menu-like selection of other benefit options. Employees tailor their benefit program to meet their personal need by picking and choosing from a menu of benefit options.

43. © 2005 Prentice Hall Inc. All rights reserved.7–42 Implications for Managers  Motivating Employees in Organizations –Recognize individual differences. –Use goals and feedback. –Allow employees to participate in decisions that affect them. –Link rewards to performance. –Check the system for equity.

44. © 2005 Prentice Hall Inc. All rights reserved.7–43 Implications for Managers are groundedbasic motivation theories  Programs designed to increase employee motivation, productivity, and satisfaction are grounded on basic motivation theories not applicable  Six motivation programs described are not applicable to every organization or every manager’s needs designing internal systems  Understanding will help with designing internal systems to increase employee productivity and satisfaction