CHAPTER
6-1
6
Motivation: From
Concepts to
Applications
Set me anything to
do as a task, and it is
inconceivable the
desire I have to do
something else.
-- G.B. Shaw
© 1998 by Prentice Hall
CHAPTER
6-2
6
Chapter Outline
Management By Objectives
Employee Recognition
Programs
Employee Involvement
Programs
Variable Pay Programs
Skill-Based Pay Plans
Flexible Benefits
Special Issues in Motivation
© 1998 by Prentice Hall
CHAPTER
6-3
6
Motivation:
From Concepts to
Applications
Learning Objectives
 Identify the four ingredients common to MBO
programs
 Explain why managers might want to use
employee involvement programs
 Contrast participative management with
employee involvement
 Define quality circles
 Explain how ESOPs can increase employee
motivation
 Contrast gainsharing and profit sharing
 Describe the link between skill-based pay plays
and motivation theories
 Explain how flexible benefits turn benefits into
motivators
 Contrast the challenges of motivating
professional employees versus low-skilled
employees
 Contrast the challenges in motivating
professional employees with temporary workers
© 1998 by Prentice Hall
CHAPTER
6-4
6
Management by
Objectives
 A program that encompasses
–
–
–
–
specific goals
participatively set
for an explicit time period
with feedback on goal progress
 MBO operationalizes the concept of
objectives by devising a process by
which objectives cascade down
through the organization.
 The result is a hierarchy of objectives
that links objectives at one level to
those at the next level.
 For the individual employee, MBO
provides specific personal
performance objectives.
© 1998 by Prentice Hall
CHAPTER
6-5
6
Exhibit 6-1
Cascading of Objectives
XYZ Company
Overall
Organizational
Objectives
Divisional
Objectives
Consumer Products
Division
Departmental
Objectives
Industrial Products
Division
Sales
Production
Customer
Service
Marketing
Develop
Research
Individual
Objectives
© 1998 by Prentice Hall
CHAPTER
6-6
6
Linking MBO and
Goal-Setting
Theory
 Goal Setting Theory Demonstrates
that:
– hard goals result in a higher level of
individual performance,
– specific hard goals result in higher levels of
performance than do no goals or
generalized goals, and
– feedback on one’s performance leads to
higher performance
 MBO directly advocates specific goals
and feedback.
© 1998 by Prentice Hall
CHAPTER
6-7
6
Employee
Recognition Programs
 What Are Employee Recognition
Programs
– Programs that use multiple sources and
recognizes both individual and group
accomplishments.
 Linking Programs and Reinforcement
Theory
– Consistent with the reinforcement theory,
rewarding a behavior with recognition
immediately following that behavior is likely
to encourage its repetition.
 Employee Recognition Programs in
Practice
– In contrast to most other motivators,
recognizing an employee’s superior
performance often costs little or no money,
making them highly attractive to industry.
© 1998 by Prentice Hall
CHAPTER
6-8
6
Employee
Involvement Programs
 A participative process that uses the
entire capacity of employees and is
designed to encourage increased
commitment to the organization’s
success.
 Examples of Employee Involvement
–
–
–
–
–
–
Participative Management
Representative Participation
Work Councils
Board Representatives
Quality Circles
Employee Stock Ownership Plans
© 1998 by Prentice Hall
CHAPTER
6-9
6
Exhibit 6-2
How a Typical Quality
Circle Operates
Problem
Identification
Decision
Problem
Selection
Solutions
Reviewed
Problem
Review
Solutions
Recommended
© 1998 by Prentice Hall
CHAPTER
6-10
6
Variable-Pay
Programs
 A portion of an employee’s pay is
based on some individual and/or
organizational measure of
performance.
– piece-rate pay plans
– profit-sharing plans
– gainsharing plans
 Linking Variable-Pay Plans and
Expectancy Theory
– evidence supports the importance of this
linkage, especially for operative employees
working under piece-rate systems.
– group and organization wide incentives
reinforce and encourage employees to
sublimate personal goals for the best
interests of their department or
organization.
© 1998 by Prentice Hall
CHAPTER
6-11
6
Skill-Based Pay
Plans
 Pay levels based on how many skills
employees have or how many jobs
they can do.
 What’s the appeal of skill-based pay?
– Management’s perspective
• flexibility
• facilitates communication
• lessens “protective territory” behavior
 Is there a Downside?
–
–
–
–
People can “top out”
Employee frustration can increase
Skills become obsolete
Paying people for acquired skills not used
© 1998 by Prentice Hall
CHAPTER
6-12
6
Flexible Benefits
Allowing employees to tailor
their benefit program to meet
their personal needs by
picking and choosing from a
menu of benefit options.
© 1998 by Prentice Hall
CHAPTER
6-13
6
Motivating
Professionals
 How are “Professionals” different?
– Receive a great deal of “intrinsic”
satisfaction from their work.
– Strong and long-term commitment to their
field of expertise
– Well paid/ Chief reward is work itself.
– Value support
– More focused on work as central life
interest.
 How do we motivate professionals?
– Provide challenging projects
– Give them autonomy in follow interests and
structure work.
– Reward with educational opportunities.
– Recognize their contributions.
© 1998 by Prentice Hall
CHAPTER
6-14
6
Motivating
Contingent Workers
 No simple solutions to motivating
contingent workers.
– Contingent or temporary workers have little
or no job security/stability, therefore they
don’t identify with the organization or
display the commitment of permanent
employees.
– Contingent or temporary workers are
typically provided with little or no health
care, pensions, or similar benefits.
 Greatest motivating factor is the
opportunity to gain permanent
employment.
 Motivation is also increased if the
employee sees that the job he or she
is doing for the firm can develop
salable skills.
© 1998 by Prentice Hall
CHAPTER
6-15
6
Motivating the
Diversified Work Force
 Not all employees are motivated by
money.
– flexibility is the key to maximizing your
employees’ motivation by understanding
and responding to the diversity of needs.
•
•
•
•
•
•
•
•
•
•
specially designed work schedules
flexible compensation plans
flexible benefits plans
physical work settings
child care
elderly care
flexible work hours
job sharing
flexible leave
work teams
© 1998 by Prentice Hall
CHAPTER
6-16
6
Motivating the LowSkilled Service Worker
 One of the most challenging problems
in industry today.
– Many “plans” have been tried, almost all
unsuccessfully
• flexible work schedules
• broader responsibility for inventory,
scheduling, and hiring
• creation of a “family” atmosphere among
employees
 Unless pay and benefits rise
significantly, continued high turnover
can be expected.
© 1998 by Prentice Hall
CHAPTER
6-17
6
Motivating People
Doing Highly Repetitive Tasks
 Motivating individuals in these jobs can
be made through careful selection:
– People vary in their tolerance for ambiguity.
– Many individuals prefer jobs that have a
minimal amount of discretion and variety.
 High pay and careful selection can
reduce:
– recruitment problems and high turnover,
however, this
– doesn’t necessarily lead to highly motivated
workers.
 Creative personnel programs have
exhibited some success by providing:
– clean and attractive work surroundings,
ample work breaks and opportunity to
socialize during breaks, and empathetic
supervisors.
© 1998 by Prentice Hall
CHAPTER
6-18
6
Summary and
Implications for
Managers
 Recognize Individual Differences
– Employees have different needs.
– Don’t treat them all alike.
– Spend the time necessary to understand
what’s important to each employee.
 Use Goals and Feedback
 Allow Employees to Participate in
Decisions That Affect Them
 Link Rewards to Performance
– Employees must perceive a clear linkage.
 Check the System for Equity
© 1998 by Prentice Hall