Chapter 16
Motivation
What Would You Do?
Motivation at Medtronic



Medtronic has increased sales of medical
equipment (defibrillators) by 19 percent per
year
Industry is becoming very competitive
How can Medtronic continue to motivate
employees following its long-term success?
2
Learning Objectives
What Is Motivation?
After discussing this section,
you should be able to:
1.
explain the basics of motivation.
3
Components of Motivation
Direction
Initiation
Persistence
4
Basics of Motivation
Need
Satisfaction
Effort
and
Performance
Extrinsic
and
Intrinsic
Rewards
Motivating With the Basics
5
A Basic Model of Work Motivation
and Performance
Effort
• Initiation
• Direction
• Persistence
Adapted From Exhibit 16.2
Performance
6
Effort and Performance
Job Performance = Motivation X Ability X Situational Constraints

Job performance


Motivation


effort put forth on the job
Ability


how well someone performs the job
capability to do the job
Situational Constraints

external factors affecting performance
7
Need Satisfaction

Needs:




physical or psychological requirements
must be met to ensure survival and well being
Unmet needs motivate people
Three approaches



Maslow
Alderfer
McClelland
8
Adding Need Satisfaction to the Model
Unsatisfied
need
Tension
Energized to
take action
Effort
• Initiation
• Direction
• Persistence
Satisfaction
Adapted from Exhibit 16.3
Performance
9
Needs Classification of Different
Theories
Maslow’s
Hierarchy
Alderfer’s
ERG
HigherOrder
Needs
Self-Actualization Growth
Relatedness
Esteem
Belongingness
LowerOrder
Needs
Safety
Physiological
Adapted From Exhibit 16.4
McClelland’s
Learned Needs
Power
Achievement
Affiliation
Existence
10
Extrinsic and Intrinsic Rewards

Extrinsic Rewards



tangible and visible to others
given contingent on performance
Intrinsic Rewards


natural rewards
associated with the task for its own sake
11
Adding Rewards to the Model
Unsatisfied
need
Tension
Energized to
take action
Effort
• Initiation
• Direction
• Persistence
Extrinsic
Rewards
Satisfaction
Performance
Intrinsic
Rewards
Adapted from Exhibit 16.5
12
Motivating with the Basics




Ask people what their needs are
Satisfy lower order needs first
Expect people’s needs to change
Satisfy higher order needs by looking for
ways to allow employees to experience
intrinsic rewards
Adapted from Exhibit 16.6
13
Learning Objectives
How Perceptions and
Expectations Affect
Motivation
After discussing this section,
you should be able to:
2.
3.
use equity theory to explain how employees’
perceptions of fairness affect motivation.
use expectancy theory to describe how workers’
expectations about rewards, effort, and the link
between rewards and performance influence
motivation.
14
Been There, Done That
Executive Motivation and Compensation at
Oglebay Norton

Current CEO compensation
entirely in the form of stock options



is
current stock price has fallen below strike price
CEO believes his compensation should be
based on the “difference” he makes
Is performance-based executive pay a
good motivator?
15
Equity Theory
How People
React to
Perceived
Inequity
Components
of
Equity
Theory
Motivating
with
Equity
Theory
16
Components of Equity Theory

Inputs


Outcomes


rewards employees receive from the organization
Referents


employee contributions to the organization
comparison others
Outcome/input (O/I) ratio
Outcomesself
Inputsself
= Outcomesother
Inputsother
17
Inequity


When a person’s O/I ratio differs from their
referent’s O/I ratio
Underreward



referent’s O/I ratio is greater than yours
experience anger or frustration
Overreward


referent’s O/I ratio is less than yours
experience guilt
18
How People React to Perceived
Inequity (Underreward)





Reduce inputs
Increase outcomes
Rationalize inputs or outcomes
Change the referent
Leave
19
Adding Equity to the Model
Unsatisfied
need
Tension
Perceived
Equity/Inequity
Extrinsic
Rewards
Satisfaction
Perceived
Equity/Inequity
Adapted from Exhibit 16.8
Energized to
take action
•
•
Restoring Equity•
Effort
Initiation
Direction
Persistence
• Decrease inputs
• Increase outcomes
• Rationalize inputs or
outcomes
• Change the referent
• Leave
Performance
Intrinsic
Rewards
20
Motivating with Equity Theory



Look for and correct major inequities
Reduce employees’ inputs
Make sure decision-making processes are
fair


distributive justice
procedural justice
21
Expectancy Theory
Components of Expectancy Theory
Motivating with Expectancy Theory
22
Components of Expectancy Theory

Valence


Expectancy


attractiveness or desirability of reward or outcome
perceived relationship between effort and
performance
Instrumentality

perceived relationship between performance and
rewards
Motivation = Valence X Instrumentality X Expectancy
23
Adding Expectancy Theory to the
Model
Effort
Energized to
Unsatisfied
• Initiation
take action
• Direction
Restoring Equity
• Persistence
• Decrease inputs
Instrumentality
• Increase outcomes
• Rationalize inputs or
Valence
outcomes
• Change the referent
Perceived
Extrinsic
• Leave
Equity/Inequity
Rewards
Tension
need
Satisfaction
Performance
Expectancy
Perceived
Equity/Inequity
Adapted from Exhibit 16.10
Intrinsic
Rewards
24
Motivating with Expectancy Theory



Systematically gather information to find out
what employees want from their jobs
Clearly link rewards to individual performance
Empower employees to make decisions
which enhances
expectancy
perceptions
25
Learning Objectives
How Rewards and Goals
Affect Motivation
After discussing this section,
you should be able to:
4.
5.
6.
explain how reinforcement theory works and how it
can be used to motivate
describe the components of goal-setting theory and
how managers can use them to motivate workers
discuss how the entire motivation model can be
used to motivate workers
26
Reinforcement Theory
Components of Reinforcement Theory
Motivating with Reinforcement Theory
27
Components of Reinforcement
Theory
 Positive reinforcement


Negative reinforcement


withholding unpleasant consequence
strengthens behavior
Punishment


desirable consequence strengthens behavior
unpleasant consequence weakens behavior
Extinction

no consequence weakens behavior
28
Adding Reinforcement Theory to the Model
Unsatisfied
need
Energized to
take action
Tension
Instrumentality
Schedules of
Reinforcement
Perceived
Equity/Inequity
Restoring Equity
• Decrease inputs
Valence
• Increase outcomes
Reinforcement
• Rationalize inputs
Contingencies
or outcomes
• Change the referent
• Leave
Extrinsic
Rewards
Satisfaction
Perceived
Equity/Inequity
Adapted from Exhibit 16.12
Effort
• Initiation
• Direction
• Persistence
Performance
Expectancy
Intrinsic
Rewards
29
Blast From The Past
Send in the Reinforcements!

1972, Michigan Bell


1971, Emery Air Freight


standards and timely feedback
baselines and goals
1911, Frederick W. Taylor

work redesign and incentives
30
Schedules for Delivering
Reinforcement
Continuous
Intermittent
31
Intermittent Reinforcement Schedules

Interval Schedules


consequence delivered after time passes
two types



fixed
variable
Ratio Schedules


consequence delivered after behavior occurs
two types


fixed
variable
32
Motivating with Reinforcement
Theory




Identify, measure, analyze, intervene, and
evaluate
Don’t reinforce the wrong behavior
Correctly administer punishment at the
appropriate time
Choose the simplest and most effective
schedule of reinforcement
33
What Really Works?
Financial, Nonfinancial, and Social Rewards
Overall Performance and Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
63%
34
What Really Works? (cont’d)
Performance in Manufacturing Organizations
Financial Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
84%
Nonfinancial Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
87%
Financial, Nonfinancial, and Social Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
96%
35
What Really Works? (cont’d)
Performance in Service Organizations
Financial Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
61%
Nonfinancial Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success 54%
Social Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
61%
36
What Really Works? (cont’d)
Performance in Service Organizations
Financial and Nonfinancial Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
72%
Nonfinancial and Social Rewards
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
73%
37
Goal-Setting Theory
Components of Goal-Setting
Motivating with Goal-Setting
38
Components of Goal-Setting Theory

Goal Specificity


Goal Difficulty


how challenging goals are
Goal Acceptance


the clarity of goals
how well goals are agreed to or understood
Performance Feedback

information on goal progress
39
Adding Goal-Setting Theory to the
Model
Unsatisfied
need
Energized to
take action
Tension
Instrumentality
Schedules of
Reinforcement
Perceived
Equity/Inequity
Valence
Reinforcement
Contingencies
Extrinsic
Rewards
Satisfaction
Perceived
Equity/Inequity
Adapted from Exhibit 16.15
Effort
• Initiation
• Direction
• Persistence
Restoring Equity
• Decrease inputs
• Increase outcomes
• Rationalize inputs
or outcomes
• Change the referent
• Leave
Goals
Performance
Expectancy
Intrinsic
Rewards
40
Motivating with Goal-Setting Theory



Assign specific, challenging goals
Make sure workers truly accept
organizational goals
Provide frequent, specific performancerelated feedback
41
Motivating with the Integrated Model
Motivating with
the Basics
Motivating with
Expectancy Theory
Motivating with
Goal-Setting Theory
Motivating with
Equity Theory
Motivating with
Reinforcement
Theory
42
What Really Happened?
Motivation at Medtronic

Meet employee’s lower-order needs


Offer competitive set of extrinsic rewards


insurance needs, family issues, fitness, etc.
matching 401k plan, retirement plan, Employee
Stock Ownership Plan, Employee Stock Purchase
Plan, cash performance awards
Importance of medical products leads to
intrinsic rewards
43