Fourth Edition
PART 3 . . . . . . . . . . . . . . . . . . . . . . . .
Understanding People in Organizations
Copyright ©2003 Prentice Hall, Inc.
Chapter 8
Motivating, Satisfying,
and Leading Employees
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“A leader is best when people barely know
he exists, when his work is done… they will
say: We did it ourselves.”
~ Lao-Tzu, c. 600 B.C.
“Leadership is the art of getting someone
else to do something you want done
because he wants to do it.”
~ Dwight D. Eisenhower, 1890 - 1969
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Key Topics
Psychological contracts in the workplace
Job satisfaction and employee morale
Theories of employee motivation
Job satisfaction and employee motivation
Managerial styles of leadership
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Psychological Contract
A Set of Employment Expectations
Contributions:
What does each employee expect to contribute to
the organization?
Inducements:
What will the organization provide to each
employee in return?
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Satisfied Employees Are More
Productive and More Committed
Low Turnover:
A low percentage of employees
leave each year
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MORALE
An overall positive employee
attitude toward the workplace
TURNOVER
High Morale:
MORALE
Degree of enjoyment employees
derive from doing their jobs
TURNOVER
Job Satisfaction:
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Raising Morale Is a High Priority When
Unemployment Is Low
0% 10% 20% 30% 40% 50% 60%
Alternative Work Arrangements
Long-term Care Insurance
Group Financial Planning
Group Auto Insurance
Group Home Owners Insurance
NA
1994
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1997
2000
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Fortune Magazine’s
100 Best Companies to Work For
“It's not easy being good these days
at least if you're an employer.”
Edward Jones
Cisco Systems
Microsoft
Patagonia
Starbucks
Wal-Mart
#1
#15
#28
#41
#58
#94
Source: Fortune Magazine, February 4th, 2002
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8-8
Highly Motivated Employees Are
Critical to Business Success
Motivation:
The set of forces that cause people to behave in
certain ways
 Classical
 Behavior: The Hawthorne Studies
 Contemporary
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The Human Resources Model
Theory X and Theory Y
Theory X
Theory Y
 People are lazy.
 People are energetic.
 People lack ambition and
dislike responsibility.
 People are ambitious and
seek responsibility.
 People are self-centered.
 People resist change.
 People are gullible and
not very bright.
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 People can be selfless.
 People want to contribute
to business growth and
change.
 People are intelligent.
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Maslow’s Hierarchy of Needs
General
Examples
Status
SelfSelfActualization
Actualization
Needs
Needs
Esteem Needs
Esteem
Needs
Friendship
Social Needs
Social
Needs
Self-Fulfillment
Stability
Security Needs
Security
Needs
Shelter
Physiological Needs
Physiological
Needs
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Organizational
Examples
Challenging Job
Job Title
Friends at Work
Pension Plan
Salary
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Two Factor Theory
Hygiene Factors
Motivation Factors
• Supervisors
• Achievement
• Working Conditions
• Recognition
• Interpersonal Relations
• The Work Itself
• Pay & Security
• Responsibility
• Company Policies &
Administration
• Advancement & Growth
Dissatisfaction
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Satisfaction
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Expectancy Theory
Individual
Effort
Individual
Performance
EffortPerformance
Issue
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Organizational
Rewards
PerformanceReward
Issue
Personal
Goals
RewardsPersonal
Goals Issue
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Equity Theory
Employees evaluate their treatment relative to
the treatment of others
Inputs: Employee contributions to their jobs
Outputs: What employees receive in return
The perceived ratio of contribution to return
determines perceived equity
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Strategies for Enhancing Job
Satisfaction and Morale
 Reinforcement/behavior
modification
 Management by objectives
 Participative management
and empowerment
 Job enrichment and job
redesign
 Modified work schedules
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Reinforcement /
Behavior Modification Theory
Punishment
When negative consequences are attached
directly to undesirable behavior
Positive Reinforcement
When rewards are tied directly to
performance
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8 - 16
Management by Objectives
Collaborative Goal-setting
Collaborative
Goal Setting &
Planning
Communicating
Organizational
Goals & Plans
Periodic
Review
Evaluation
Meeting
Setting
Verifiable Goals
& Clear Plans
Counseling
Identifying
Resources
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Participative Management
and Empowerment
Increasing job satisfaction by
encouraging participation
Team management represents
a growing trend
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Job Enrichment and Job Redesign
Job Enrichment: Adding one or more motivating
factors to job activities
Job Redesign: Designing a better fit between
workers and their jobs
Combining tasks
Forming natural work groups
Establishing client relationships
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Modified Work Schedules
Work share programs
Flextime programs and
alternative workplace
strategies
Telecommuting and
virtual offices
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Sample Flextime Scheduling
6:00 7:00 8:00
A.M.
A.M.
A.M.
Flexible
Time
9:00 10:00 11:00 12:00 1:00
A.M.
A.M.
Core
Time
A.M.
NOON
Flexible
Time
P.M.
2:00 3:00
P.M.
Core
Time
P.M.
4:00
5:00
6:00
P.M.
P.M.
P.M.
Flexible
Time
Joe
Sue
Pat
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Evaluating Modified Schedules and
Alternative Workplaces
Advantages
Disadvantages
More satisfied,
committed
employees
Challenging to
coordinate and
manage
Less congestion
Poor fit for some
workers
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Managerial Leadership
The process of
motivating others
to work to meet
specific objectives
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Five Fundamental Leadership Practices
 Challenge the process
 Inspire a shared vision
 Enable others to act
 Model the way
 Encourage the heart
Source: www.theleadershipchallenge.com
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Leadership at General Electric
“Four E’s of GE Leadership”
A high energy level
The ability to energize others around common
goals
The edge to make tough decisions
The ability to consistently execute and deliver
on promises
Source: Jack Welch Tells It Straight from the Gut, Anderson Assets, Winter 2002
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Managerial Styles
Autocratic Style
Democratic Style
Free-rein Style
Contingency Approach
The appropriate style in any situation is contingent
on the unique elements of that situation
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Motivation and Leadership in the
Twenty-first Century
Motivation
Security and pay are no
longer enough
Leadership
 “Coach” mentality
 Diversity
 Flexibility
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Chapter Review
Describe psychological contracts
Discuss the importance of job satisfaction
and employee morale
Summarize the most important theories of
employee motivation
Describe strategies to improve job
satisfaction and employee motivation
Discuss different managerial styles
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