Chapter
12
Motivation
PowerPoint Presentation by Charlie Cook
© Copyright The McGraw-Hill Companies, Inc., 2003. All rights reserved.
Learning Objectives
• After studying the chapter, you should be able to:
Explain what motivation is and why managers need
to be concerned about it.
Describe from the perspectives of expectancy
theory and equity theory what managers should do
to have a highly motivated workforce.
Explain how goals and needs motivate people and
what kinds of goals are especially likely to result in
high performance.
Identify the motivation lessons that managers can
learn from operant conditioning theory and social
learning theory.
© Copyright McGraw-Hill. All rights reserved.
12–2
Learning Objectives (cont’d)
Explain why and how managers can use pay as a
major motivation tool.
© Copyright McGraw-Hill. All rights reserved.
12–3
Chapter Outline
• The Nature of Motivation
• Expectancy Theory
Expectancy
Instrumentality
Valence
Bringing It All Together
• Need Theories
Maslow’s Hierarchy of Needs
Alderfer’s ERG Theory
Herzberg’s Motivator-Hygiene Theory
© Copyright McGraw-Hill. All rights reserved.
12–4
Chapter Outline (cont’d)
• Need Theories (cont’d)
McClelland’s Needs for Achievement, Affiliation, and
Power
Other Needs
• Equity Theory
Equity
Inequity
Ways to Restore Equity
• Goal-Setting Theory
© Copyright McGraw-Hill. All rights reserved.
12–5
Chapter Outline (cont’d)
• Learning Theory
Operant Conditioning Theory
• Social Learning Theory
• Pay and Motivation
Basing Merit Pay on Individual, Group, or
Organizational Performance
Salary Increase or Bonus?
Examples of Merit Pay Plans
© Copyright McGraw-Hill. All rights reserved.
12–6
The Nature of Motivation
• Motivation
The psychological forces acting on an individual
that determine:
• Direction—possible behaviors the individual could
engage in
• Effort—how hard the individual will work
• Persistence—whether the individual will keep trying
or give up
Explains why people behave the way they do in
organizations
© Copyright McGraw-Hill. All rights reserved.
12–7
The Nature of Motivation (cont’d)
• Intrinsic Motivation
Behavior that is performed for its own sake.
• The source of the motivation that comes from actually
engaging in the behavior.
• The sense of accomplishment and achievement
derived from doing the work itself
• Extrinsic Motivation
Behavior that is performed to acquire material or
social rewards or to avoid punishment.
• The source of the motivation is the consequences of
the behavior and not the behavior itself.
© Copyright McGraw-Hill. All rights reserved.
12–8
Sources of Motivation
Personal
Characteristics
Nature of the
Job
Individual
Motivation
Nature of the
Organization
© Copyright McGraw-Hill. All rights reserved.
12–9
Outcomes and Inputs
• Outcome
Anything a person gets from a job or an
organization
• Pay, job security, autonomy, accomplishment
• Input
Anything a person contributes to his or her job or
organization
• Time, effort, skills, knowledge, work behaviors
© Copyright McGraw-Hill. All rights reserved.
12–10
The Motivation Equation
Figure 12.1
© Copyright McGraw-Hill. All rights reserved.
12–11
Expectancy Theory
• Motivation will be high when workers believe:
High levels of effort will lead to high performance.
High performance will lead to the attainment of
desired outcomes.
• Major Factors of Motivation
Expectancy—the belief that effort (input) will result
in a certain level of performance
Instrumentality—the belief that performance results
in the attainment of outcomes
Valence—how desirable each of the available
outcomes from the job is to a person
© Copyright McGraw-Hill. All rights reserved.
12–12
Expectancy, Instrumentality, and Valence
Source:
© Copyright McGraw-Hill. All rights reserved.
Figure 12.2
12–13
Expectancy Theory in Practice
Expectancy: Effort will result in a level of
performance.
• Employees will work work hard if they believe they
can attain high performance—organizations must
provide the resources that support performance.
Instrumentality: Performance leads to outcomes.
• Workers are only motivated if they think performance
leads to an outcome—managers must link
performance to outcomes.
Valence: How desirable an outcome is to a person.
• Workers have preferences for outcomes—managers
must determine which outcomes are valued.
© Copyright McGraw-Hill. All rights reserved.
12–14
Expectancy and Motivation
• Motivation is highest when expectancy,
instrumentality, and valence levels are high.
If one of the values is low, motivation will be low.
• Workers do not believe they can perform well.
• Workers do not believe that performance and rewards
are closely linked.
• Workers do not value the rewards offered for
performance.
© Copyright McGraw-Hill. All rights reserved.
12–15
Expectancy Theory
Source:
© Copyright McGraw-Hill. All rights reserved.
Figure 12.3
12–16
Need Theories
• Need
A requirement for survival and well-being.
• Need Theories
Theories of motivation that focus on what needs
people are trying to satisfy at work and what
outcomes will satisfy those needs.
Basis premise is that people are motivated to obtain
outcomes at work to satisfy their needs.
• Managers must determine what needs a worker
wants satisfied and ensure that a person receives the
outcomes when performing well.
© Copyright McGraw-Hill. All rights reserved.
12–17
Maslow’s Hierarchy of Needs
Needs
Highest-level
needs
Lowest-level
needs
Description
Examples
Selfactualization
Realize one’s
full potential
Use abilities
to the fullest
Esteem
Feel good
about oneself
Promotions
and recognition
Belongingness
Social
interaction, love
Interpersonal
relations, parties
Safety
Security, stability
Job security,
health insurance
Physiological
Food, water,
shelter
Basic pay level
to buy items
Lower-level needs must be satisfied
before higher-level needs are addressed.
Table 12.1
© Copyright McGraw-Hill. All rights reserved.
12–18
Alderfer’s ERG Theory
Needs
Highest-level
needs
Lowest-level
needs
Description
Examples
Growth
Self-development,
creative work
Continually
improve skills
Relatedness
Interpersonal
relations, feelings
Good relations,
accurate feedback
Existence
Food, water,
clothing, and shelter
Adequate pay
for necessities
After lower level needs satisfied, person seeks higher needs. When
unable to satisfy higher needs, lower needs motivation is raised.
Source:
© Copyright McGraw-Hill. All rights reserved.
Table 12.2
12–19
Herzberg’s Motivation-Hygiene Theory
• Focuses on outcomes that lead to higher
motivation and job satisfaction, and those
outcomes that can prevent dissatisfaction.
Motivator needs relate to the nature of the work
itself—autonomy, responsibility, interesting work.
Hygiene needs are related to the physical and
psychological context of the work—comfortable
work environment, pay, job security.
• Unsatisfied hygiene needs create dissatisfaction;
satisfaction of hygiene needs does not lead to
motivation or job satisfaction.
© Copyright McGraw-Hill. All rights reserved.
12–20
McClelland’s Needs for Achievement,
Affiliation, and Power
• Need for Achievement
A strong need to perform challenging tasks well
and meet personal standards for excellence
• Need for Affiliation
A concern for good interpersonal relations, being
liked, and getting along
• Need for Power
A desire to control or influence others
© Copyright McGraw-Hill. All rights reserved.
12–21
Adam’s Equity Theory
• Focuses on people’s perceptions of the
fairness (or lack of fairness) of their work
outcomes in proportion to their work inputs.
A relative outcome to input ratio comparison to
oneself or to another person (referent) perceived as
similar to oneself.
Equity exists when a person perceives that their
outcome/input ratio to be equal to the referent’s
ratio.
• If the referent receives more outcomes, they should
also give more inputs to achieve equity.
© Copyright McGraw-Hill. All rights reserved.
12–22
Equity Theory
Condition
Equity
Underpayment
Equity
Overpayment
Equity
Person
Outcomes
Inputs
Outcomes
Inputs
Outcomes
Inputs
Referent
Example
= Outcomes
Inputs
Worker contributes
more inputs but also
gets more outputs
than referent
< Outcomes
Inputs
Worker contributes
more inputs but also
gets the same outputs
as referent
> Outcomes
Inputs
Worker contributes
same inputs but also
gets more outputs
than referent
Table 12.3
© Copyright McGraw-Hill. All rights reserved.
12–23
Equity Theory (cont’d)
• Inequity exists when worker’s outcome/input
ratio is not equal to referent.
Underpayment inequity: ratio is less than the
referent.
• Workers feel they are not getting the outcomes they
should for their inputs.
Overpayment inequity: ratio is higher than the
referent.
• Workers feel they are getting more outcomes than
they should for their inputs.
© Copyright McGraw-Hill. All rights reserved.
12–24
Equity Theory (cont’d)
• Restoring Equity: Inequity creates tension in
workers causing them to attempt to restore
equity.
In underpayment, workers may reduce input levels
to correct (rebalance) the ratio or seek a raise.
In overpayment, workers may change the referent
person and readjust their ratio perception.
If inequity persists, workers will often choose leave
the organization.
© Copyright McGraw-Hill. All rights reserved.
12–25
Goal Setting Theory
• Focuses on identifying the types of goals that
are effective in producing high levels of
motivation and explaining why goals have
these effects.
• Considers how managers can ensure that
workers focus their inputs in the direction of
high performance and the achievement of
organizational goals.
© Copyright McGraw-Hill. All rights reserved.
12–26
Goal Setting Theory (cont’d)
• Goal
What a person is trying to accomplish.
• Characteristics of Motivating Goals
Specific and not vague in providing direction
Difficult but not impossible to attain
Accepted and committed to by workers
Feedback on goal attainment is important.
• Goals point out what is important to the firm.
Workers should be encouraged to develop action
plans to attain goals.
© Copyright McGraw-Hill. All rights reserved.
12–27
Learning Theories
• Theories that focus on increasing motivation
and performance by linking outcomes to
performance and the attainment of goals.
• Learning
A relatively permanent change in person’s
knowledge or behavior that results from practice or
experience.
© Copyright McGraw-Hill. All rights reserved.
12–28
Operant Conditioning Theory
• Operant Conditioning
People learn to perform behaviors that lead to
desired consequences and learn not to perform
behaviors that lead to undesired consequences.
Linking specific behaviors to the attainment of
specific outcomes can motivate high performance
and prevent behaviors that detract from
organizational effectiveness.
© Copyright McGraw-Hill. All rights reserved.
12–29
Operant Conditioning Tools
• Positive Reinforcement
Getting desired outcomes for performing needed
work behaviors
• Positive reinforcers: Pay, praises, or promotions
• Negative Reinforcement
Eliminating undesired outcomes once the desired
behavior occurs
• Negative reinforcers: criticisms, pay cuts, suspension
© Copyright McGraw-Hill. All rights reserved.
12–30
Operant Conditioning Tools (cont’d)
• Extinction
Curtailing the performance of a dysfunctional
behavior by eliminating whatever is reinforcing it.
• Behavior is not rewarded and over time, the worker
stops performing it.
• Punishment
Administering an undesired/negative consequence
to immediately stop a dysfunctional behavior.
• Manager administers an undesired consequence to
worker (verbal reprimand, demotion, pay cut).
© Copyright McGraw-Hill. All rights reserved.
12–31
Organizational Behavior Modification
• Organizational Behavior Modification (OB MOD)
The systematic application of operant conditioning
techniques to organizationally functional behaviors
and discourage dysfunctional behaviors.
Improves productivity, attendance, punctuality and
other behaviors that are specific, objective and
countable.
Has Criticized for ethicality of application and effects
on workers.
Appears to be effective in promoting organizational
efficiency.
© Copyright McGraw-Hill. All rights reserved.
12–32
Steps in
Organizational
Behavior
Modification
Figure 12.4
Source: Adapted from
Organizational Behavior
Modification and Beyond by
F. Luthans and R. Kreitner
(Scott, Foresman, 1985). With
permission of the authors.
© Copyright McGraw-Hill. All rights reserved.
12–33
Social Learning Theory
• A theory that takes into account how learning
and motivation are influenced by people’s
thoughts and beliefs and their observations of
other people’s behavior.
• Vicarious Learning (Observational Learning)
Learning that occurs when a learner is motivated to
perform a behavior by watching another person
perform and be rewarded.
• People are motivated to imitate models who are
highly competent, expert, receive attractive
reinforcers, and are friendly or approachable.
© Copyright McGraw-Hill. All rights reserved.
12–34
Social Learning Theory (cont’d)
• Conditions for Social Learning
The learner observes the model performing the
behavior.
The learner accurately perceives the model’s
behavior.
The learner remembers the behavior.
The learner has the skills and abilities needed to
perform the behavior.
The learner sees or knows that the model is
positively reinforced for the behavior.
© Copyright McGraw-Hill. All rights reserved.
12–35
Social Learning Theory (cont’d)
• Self-Reinforcement
Any desired or attractive outcome or award that a
person can give himself or herself for good
performance.
• “The self-management of behavior”
• Self-efficacy
A person’s belief about his or her ability to perform
a behavior successfully.
• Influences motivation both when managers provide
reinforcement and when workers themselves provide
it.
© Copyright McGraw-Hill. All rights reserved.
12–36
Pay and Motivation
• Pay as a Motivator
Expectancy: pay is an instrumentality (and
outcome), must be high for motivation to be high.
Need Theory: pay is used to satisfy many needs.
Equity Theory: pay is given in relation to inputs.
Goal Setting Theory: pay is linked to attainment of
goals.
Learning Theory: outcomes (pay), is distributed
upon performance of functional behaviors.
© Copyright McGraw-Hill. All rights reserved.
12–37
Merit Pay and Performance
• Merit Pay Plan
A compensation plan that bases pay on based on
individual, group and/or organization performance.
Individual plan: when individual performance
(sales) can accurately measured.
Group plan: when group that works closely
together is measured and rewarded as a group.
Organization plan: when group or individual
outcomes not easily measured.
© Copyright McGraw-Hill. All rights reserved.
12–38
Salary Increase or Bonus?
• Motivational Value of a Bonus Is Higher When:
Salary levels are unrelated to current performance.
Changes in other compensation items (cost of
living, seniority) are not having a large effect in
increasing compensation.
Salaries rarely change and performance does.
• Benefits of Using Bonuses
Do not become permanent part of compensation
Are more directly tied to current performance
Provide more flexibility in distributing rewards
© Copyright McGraw-Hill. All rights reserved.
12–39
Salary Increase or Bonus? (cont’d)
• Employee Stock Option
A financial instrument that entitles the bearer to
buy shares of an organization’s stock at a certain
price during a certain period of time or under
certain conditions.
Uses
• To attract high-level managers
• To motivate employee performance through
ownership in the firm
© Copyright McGraw-Hill. All rights reserved.
12–40
Examples of Merit Pay Plans
• Piece-rate Pay
Employee’s pay is based on the number of units
that the employee produces.
• Commission Pay
Employee’s pay is based on a percentage of sales
that the employee makes.
• Organization-based Merit Plans
Scanlon plan—focuses on reduced expenses or
cutting costs
Profit sharing—employees receive a share of an
organization’s profits
© Copyright McGraw-Hill. All rights reserved.
12–41