Chapter 5, 6, 7
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
What does employee want!
 Work
 Whenever you want
 Wherever you like
 Follow your favorite band around!
 Watch movies on a workday!
 Go home at times when there are less traffic
Is this a way to run business?
Adeyl Khan, Faculty, BBA, NSU
3
A real-life example
 Set own schedule
 No meetings (Subject to PE)
 Result
 Voluntary turnover decreased
 Productivity Increase
33% AT&T Managers
W/O dedicated workplace
40% IBM Employee
W/O a formal office
SUN employees
work anywhere
Adeyl Khan, Faculty, BBA, NSU
4
Job Characteristics Model
 Identifies five job characteristics and their
relationship to personal and work outcomes.
Skill variety
Task
identity
Autonomy
Adeyl Khan, Faculty, BBA, NSU
Task
significance
Feedback
Motivating by Job Design
Skill Variety
 The degree to which a job requires a variety of
different activities (how may different skills are used
in a given day, week, month?).
 High variety
 The owner-operator of a garage who does electrical
repair, rebuilds engines, does body work, and
interacts with customers
 Low variety
 A body-shop worker who sprays paint eight hours a
day
Adeyl Khan, Faculty, BBA, NSU
Task Identity
 The degree to which the job requires completion of
a whole and identifiable piece of work (from
beginning to end).
High
• A cabinetmaker who
designs a piece of
furniture, selects the
wood, builds the object,
and finishes it to
perfection
Adeyl Khan, Faculty, BBA, NSU
Low
• A worker in a furniture
factory who operates a
lathe to make table legs
Task Significance
 The degree to which the job has a substantial
impact on the lives or work of other people
High
Low
• Nursing the sick
in a hospital
intensive care unit
• Sweeping hospital
floors
Adeyl Khan, Faculty, BBA, NSU
Autonomy
 The degree to which the job provides substantial
freedom and discretion to the individual in
scheduling the work and in determining the
procedures to be used in carrying it out.
High
Low
• A telephone installer who
schedules his or her own
work for the day, and
decides on the best
techniques for a
particular installation
• A telephone operator who
must handle calls as they
come according to a
routine, highly specified
procedure
Adeyl Khan, Faculty, BBA, NSU
Feedback
 The degree to which carrying out the work activities
required by a job results in the individual obtaining
direct and clear information about the effectiveness
of his or her performance.
High
• An electronics factory
worker who assembles a
radio and then tests it to
determine if it operates
properly
Adeyl Khan, Faculty, BBA, NSU
Low
• An electronics factory
worker who assembles a
radio and then routes it
to a quality control
inspector who tests and
adjusts it
Job Characteristics Model
 Jobs with skill variety, task identity,
task significance, autonomy, and
for which feedback of results is
given, directly affect three
psychological states of
employees:



Meaningfulness of work
Personal feelings of responsibility
for results
Knowledge of results
Controls
…
Motivation,
Performance
Job Satisfaction
Absence
Turnover
Adeyl Khan, Faculty, BBA, NSU
The Job Characteristics Model
Source: J.R. Hackman and G.R. Oldham, Work Design (excerpted from pp. 78–80). © 1980 by
Addison-Wesley Publishing Co., Inc. Reprinted by permission of Addison-Wesley Longman, Inc.
Adeyl Khan, Faculty, BBA, NSU
Moderating Variable
Job dimensions operate through the
psychological states in influencing
personal and work outcome
variables rather than influencing
them directly.
Moderating variables
Adeyl Khan, Faculty, BBA, NSU
>> Individuals growth needs
>> Desire of self esteem, self actualization
13
Adeyl Khan, Faculty, BBA, NSU
14
MPS Index
 The five core job characteristics can be combined to
form a motivating potential score (MPS) for a job,
which can be used as an index of how likely a job is
to affect an employee's attitudes and behaviors
 MPS= (Sv + Ti + Ts)/3 x Autonomy x Feedback
Adeyl Khan, Faculty, BBA, NSU
15
Improving Jobs to reflect
Corporate Goal
Motivation,
Performance
Absence
Adeyl Khan, Faculty, BBA, NSU
Job
Satisfaction
Turnover
16
Job (Re)design and scheduling
 Job Rotation/cross training
 The periodic shifting of a worker
from one task to another
(challenging task).
 Skills, knowledge, scheduling,
training cost, productivity,
disruptions
 Job Enlargement (horizontal
expansion)
 Change job
 Housekeeping employees
Adeyl Khan, Faculty, BBA, NSU
Brain turning pudding!
Job (Re)design and scheduling
 Job Enrichment
 The vertical expansion of jobs
 Increases Planning, execution, and evaluation
Freedom/Independence +
Responsibility + Feedback
= Performance
Satisfaction
Adeyl Khan, Faculty, BBA, NSU
Absenteeism
Turn-over
Guidelines for Enriching a Job
Bank OneTraining, Productivity, Satisfaction, Bottom Line
Adeyl Khan, Faculty, BBA, NSU
Redesign
jobs
Involving in
Decision
Making
Motivating
Work
Environment
Alternative Work Arrangements
Flextime
Job Sharing
Telecommuting
Adeyl Khan, Faculty, BBA, NSU
Flextime Schedule
 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.
Choton is a morning person
Adeyl Khan, Faculty, BBA, NSU
Job Sharing
 The practice of having two or more people split a 40-
hour-a-week job.
 Issues



Finding the right partner
Promotion
Bonuses
 Advantages



More Heads!
Skilled labor (Moms)
Humanitarian
Adeyl Khan, Faculty, BBA, NSU
22
Telecommuting
Advantages
•
•
•
•
•
•
Larger labor pool
Higher productivity
Less turnover
Improved morale
Reduced office-space costs
Traffic, dress, interruptions ….
Disadvantages (Employer)
• Less direct supervision of employees
• Difficult to coordinate teamwork
• Difficult to evaluate non-quantitative performance
Adeyl Khan, Faculty, BBA, NSU
Telecommuting
 Employees do their work at home on a
computer that is linked to their office.
 Categories of telecommuting jobs:
 Routine information handling tasks
 Mobile activities
 Professional and other knowledge-
related tasks
Adeyl Khan, Faculty, BBA, NSU
Performance = f(A x M x O)
Rohini Vs. Anwar
Gifted Vs. Hardworking
Work Environment Vs. Capability
Adeyl Khan, Faculty, BBA, NSU
Employee Involvement
 A participative process that uses the input of
employees and is intended to increase
employee commitment to the organization’s
success.
 Participative Management
Vs. Job Design
Adeyl Khan, Faculty, BBA, NSU
E.I. Programs
Participative
Management
• A process in which
subordinates share
a significant
amount of
decision making
power with
immediate
superior.
• Relevant Issues,
trust/confidence
• Competence,
knowledge
Adeyl Khan, Faculty, BBA, NSU
Representative
Participation
• Workers
participate in
organizational
decision making
through a small
group of
representative
employees.
• Management,
Stockholders …
• Motivation:
Individual Vs.
Group
Quality Circle
• A work group of
employees who
meet regularly to
discuss their quality
problems,
investigate causes,
recommend
solutions, and take
corrective actions.
• 8-10 people
• Employee
satisfaction ?
• Productivity ?
EI Programs and Motivation Theories
Theory Y
(Believing
employees want
to be involved)
Physiological
Safety
Adeyl Khan, Faculty, BBA, NSU
Employee
Involvement
Programs
Two-Factor
Theory
(Intrinsic
Motivation)
Hierarchy of
needs (Employee
(Employee
Needs)
Needs)
Social
ERG
Esteem
Selfactualization
Rewarding Employees
Four Aspects
 What to Pay
 How to Pay
 What Benefits to Offer
 How to Recognize Employees
Xers 1985+
Nexters 2000+
Adeyl Khan, Faculty, BBA, NSU
What to Pay
 Internal equity
 Worth of job to organization
 External equity
 Worth in the industry (Competitiveness)
 Do a job survey
 Pay leaders above the market rate
 Fortune 500 CEOs
Rewarding employees
Adeyl Khan, Faculty, BBA, NSU
30
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
Elementary school-teacher
Seniority Vs. Performance
Rewarding employees
Adeyl Khan, Faculty, BBA, NSU
Variable Pay Programs …
 Piece-rate Pay Plans (Output)
 Workers are paid a fixed sum for each unit
of production completed.

Example: Sweater Industry- No base rate!
 How to pay a cricket team
 Merit based pay (Performance)
 Based on Performance Appraisals rating




Pay α Performance
Pay increase based on PA, Ambiguity
Economic condition (Pay raise pool) !
Unions resist
Adeyl Khan, Faculty, BBA, NSU
Bonuses
 Rewards employees on recent performance
compared to historical performance
 Fortune 100 CEOs, Bonus Mean of $1 Mil
 Bonuses Vs. Small Merit pay increase
 Combinations!
Rewarding employees
Adeyl Khan, Faculty, BBA, NSU
Skill-Based Pay Plans
 Pay levels are based on how many skills employees
have or how many jobs they can do.
 Benefits of Skill-based Pay Plans:
 Provides staffing flexibility.
 Facilitates communication across the organization.
 Lessens “protection of territory” behaviors.
 Meets the needs of employees for advancement
(without promotion).
 Leads to performance improvements.
Adeyl Khan, Faculty, BBA, NSU
Skill-Based Pay Plans (cont’d)
 Drawbacks
 Lack of additional learning opportunities that will
increase employee pay.
 Continuing to pay employees for skills that have
become obsolete.
 Paying for skills which are of no immediate use to the
organization.
 Paying for a skill, not for the level of employee
performance for the particular skill.
Adeyl Khan, Faculty, BBA, NSU
Linking Skill-based Plans and Motivation
Theories
Equity
Reinforcement
Theory
Skill Based Pay
Plans
Hierarchy
of
ERG Theory
needs
(Self
(Growth)
Actualization)
Adeyl Khan, Faculty, BBA, NSU
Theory
(Comparison)
McClelland’s
Need for
Achievement
Physiological
Achievement
Safety
Affiliation
Social
Esteem
Selfactualization
Hierarchy of
needs (Self
Power
Actualization)
McClelland’s
Need for
Achievement
Adeyl Khan, Faculty, BBA, NSU
37
Variable Pay Programs (cont’d)
 Profit-Sharing Plans
 Organization wide programs that distribute
compensation based on some established formula
designed around a company’s profitability.
 Gain Sharing (Productivity Gain Vs. Profit)
 An incentive plan in which improvements in group
productivity determine the total amount of money
that is allocated.
 Employee Stock Ownership Plan (ESOPs)
 Below market rate- increase employee satisfaction
 Job satisfaction and work motivation depends on
“Psychologically experience ownership”
Adeyl Khan, Faculty, BBA, NSU
Flexible Benefits
 Employees tailor their benefit program to meet
their personal need by picking and choosing from a
menu of benefit options.
 Core-Plus Plans: a core of essential benefits and a
menu-like selection of other benefit options.
 Modular Plans: predesigned benefits packages for
specific groups of employees.
 Flexible Spending Plans: allow employees to use
their tax-free benefit dollars to purchase benefits
and pay service premiums.
Adeyl Khan, Faculty, BBA, NSU
Linking reward to
individuals goals
 Change in demographic
Expectancy Theory
Adeyl Khan, Faculty, BBA, NSU
 At Super Club, a large
warehouse store, the
employees strive to obtain
the "Employee of the
Month" award with the
benefits of having their
picture featured on the wall
of fame in the staff lounge.
…
Adeyl Khan, Faculty, BBA, NSU
41
Employee Recognition Programs
 Intrinsic rewards: stimulate intrinsic motivation
 Personal attention given to employee
 Approval & appreciation for a job
well done
 Growing in popularity and usage
 Benefits of programs
 Fulfill employees’ desire for
recognition
 Inexpensive to implement
 Encourages repetition of desired behaviors
 Drawbacks of programs
 Susceptible to manipulation by management
Adeyl Khan, Faculty, BBA, NSU
Long Term
Motivation
Gift certificates & cash reward
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
Implications for Managers
 In Order to Motivate Employees
 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.
Adeyl Khan, Faculty, BBA, NSU