INDIVIDUAL DIFFERENCES
PERSONALITY
 Unique
set of traits and characteristics that
are relatively stable over time and
determine a person’s preferences and
behavior.
 Does personality matter?
 Implication?
Adjust styles/practices to the personality
 Consider personality when assigning jobs/teams

 Which
dimensions of personality?
SELF-ESTEEM (SELF CONCEPT)
 How
we perceive ourselves in terms of our
abilities, competencies, and effectiveness

Global, role-specific, job-based, organization-based
High self esteem is related to higher performance,
commitment, loyalty, and longevity.
 What can managers do to foster high self esteem?

LOCUS OF CONTROL

The extent to which people believe their
actions determine what happens to them in life.
 Internal
 External

Why is locus of control important?
 Performance?
 Incentive
Systems?
JUNGS TYPOLOGY
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16 personality types based on 4 sets of preferences
Extraversion vs. Introversion
Sensation vs. Intuition (N)—Perception
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Thinking vs. Feeling—Judgment
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How a person becomes aware of ideas, facts
Sensation: practical, orderly, precise, unambiguous
Intuition: future oriented, dislike precision--jump to conclusions,
inspiration
Making judgments about perceptions
Thinking: Analytic and logical, impersonal; principles over people
Feeling: Subjective on the basis of values;
Perception vs. Judgment
SELF-PERCEPTION
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Group member 2 and group member 3 attempt to identify
group member #1’s type
Group member #1 then reports their results to the group.
Also indicate if you have you taken the assessment before
and if so, whether the results were the same.
Group member #1: Do you agree with the results? Why or
why not?
Group members #2 and 3: Do you agree with #1’s results?
As a group:
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Were there any differences between #1’s self perceptions and the
way 2 and 3 perceive #1?
What do the results suggest #1’s strengths and weaknesses are?
Repeat the process for Group members #2 and #3
IMPLICATIONS FOR THE GROUP
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Based on these results, what are some potential
strengths and weaknesses of the group?
Where might there be potential areas of synergy?
Where might there be potential areas for conflict?
THE “BIG FIVE”:
Conscientiousness
 The
degree to which a person is dependable,
organized, thorough, perseverant, honest
 Most consistent personality predictor of
performance
 Also predicts lack of problem behavior
THE “BIG FIVE”:
Emotional Stability
 The
degree to which a person is NOT
anxious, depressed, moody, emotionally
unstable, temperamental.
 May predict job performance in what type
of jobs?
THE “BIG FIVE”:
Emotional Stability
 The
degree to which a person is NOT
anxious, depressed, moody, emotionally
unstable, temperamental.
 May predict job performance in what type
of jobs?
 High
stress (e.g., customer relations)
THE “BIG FIVE”: Agreeableness
 The
extent to which a person is polite, good
natured, flexible, cooperative, trusting.
 May predict job performance in jobs…
THE “BIG FIVE”: Agreeableness
 The
extent to which a person is polite, good
natured, flexible, cooperative, trusting.
 May predict job performance in jobs…

Teamwork; customer relations
THE “BIG FIVE”: Extraversion
 The
degree to which a person is sociable,
talkative, assertive, active, ambitious.
 May predict job performance in what type
of jobs?
THE “BIG FIVE”: Extraversion
 The
degree to which a person is sociable,
talkative, assertive, active, ambitious.
 May predict job performance in what type
of jobs?
 Extensive
interaction (management, sales)
MOTIVATION
MOTIVATION DEFINED

Willingness to exert high levels of effort to
reach organizational goals.
Good to Great (by Jim Collins)
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“Motivating people is the greatest waste of
time managers engage in. If you have the
right people on the bus, you don’t need to
worry about them being motivated.”
BASIC ASSUMPTIONS
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Everyone is motivated
 Key?
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Two types of motivation
 Intrinsic
 Extrinsic
TYPES OF MOTIVATION
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Extrinsic Motivation:
 "What
gets rewarded gets done"
 Based on extrinsic/tangible rewards an/or
punishment
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Intrinsic Motivation:
 "What
is rewarding gets done"
 Based on intrinsic/intangible rewards
HERZBERG
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Movement vs. Motivation
KITA
What’s wrong with KITA? With movement?
Motivation Theories
Need (Maslow & ERG)
 Equity
 Reinforcement
 Expectancy Theory
 Goal-Setting Theory
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Needs (stage of development)
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Maslow
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Self actualization
Self esteem
Social (love)
Safety
Physiological
Alderfer (ERG)
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Growth
Relatedness
Existence
NEED THEORIES OF MOTIVATION
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What are the implications of need-based
theories for managers?
NEED THEORIES OF MOTIVATION
What are the implications of need-based
theories for managers?
 Identify employee needs
 First satisfy lower level needs
 Then focus on higher level
 Individualized HR practices
TODAY’S TOPIC
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Motivation
EQUITY THEORY
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People compare their
outcome/input ratio to
that of others
Conclusions
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Ratios are equal
(equity exists)
Ratios are unequal
(inequity exists)
RESPONSES TO EQUITY/INEQUITY
Equity: Maintenance
 Inequity:
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 Change
Inputs
 Change Outcomes
 Quit
REINFORCEMENT THEORY
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Behavior is a function
of consequences
Behavior that is
rewarded persists
To increase behavior
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Positive reinforcement
negative reinforcement
REINFORCEMENT THEORY
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To reduce behavior
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Extinction
Punishment
Immediacy is crucial
Implications?
EXPECTANCY THEORY
People are motivated to do that which they
believe is possible and valuable
 Expectancy: Belief that you can perform
 Instrumentality: Belief that performance
will lead to an outcome
 Valence: Value of the outcome
EXPECTANCY THEORY

According to expectancy theory, what must
managers do to motivate their employees?
 Clarify
expectations
 Utilize realistic standards
 Link valued rewards to performance
 Individualize rewards
GOAL SETTING THEORY
People naturally set goals
 Benefits of Goals:

 Increase
effort
 Direct effort
 Increase persistence

Most effective goals are:
Goal setting (MBO) works...
 specific
(time, targets, measurements)
 difficult (“stretch targets”) but...
 attainable (expectancy theory)
 participative (must accept goal)
 prioritize, and then:
 provide feedback
 create explicit, valent rewards
Motivation Theories
Need (Maslow & ERG)
 Equity
 Reinforcement
 Expectancy Theory
 Goal-Setting Theory
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Effective Incentives:
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Clearly linked to key desired behaviors
 (Reinforcement,
Expectancy)
 Those that fulfill strategic objectives
 Avoid rewarding undesirable behaviors
REWARDING B
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WE HOPE FOR:
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BUT WE REWARD:
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Long-term growth
Setting challenging goals
Total Quality
Candor
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Teamwork
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Quarterly earnings
Making the numbers
Shipping on time
Reporting good news;
agreeing with the boss
Individual effort
Effective Rewards:
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Clearly linked to specific key desired behaviors
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Clearly defined targets and expectations
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Goal Setting
Fair/equitable (Be consistent)
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Goal setting, Expectancy
Measurable
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(Reinforcement, Expectancy)
Those that fulfill strategic objectives
(Equity Theory)
Reward proportional to behavior

Equity theory
Effective Rewards:
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Reward ASAP after behavior
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Challenging yet realistic (under employees’ control)
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Reinforcement Theory
Goal Setting, Expectancy
Intrinsic Motivation
Valued Rewards
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Expectancy
Individualized (Need Theories; Individual differences)
NORDSTROMS
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Using theories of motivation & related keys to
effective incentive systems, evaluate the Incentive
system in place at Nordstroms.
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What do you see as its strengths?
Any concerns/questions regarding the system?
Are Nordstrom employees pressured
inappropriately by the sales-per-hour system? By
management?
What (if any) changes would you recommend?
NORDSTROMS

Using theories of motivation & related keys
to effective incentive systems, evaluate the
Incentive system in place at Nordstroms.
 What
do you see as its strengths?
NORDSTROMS
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“This is Your Business. Treat
it Like Your Own Business.”
 Highest sales productivity
 Earnings > $80,000
 Compound growth in sales,
earnings, stores sq. ft.
 Highly, educated workforce
NORDSTROMS

Using theories of motivation & related keys
to effective incentive systems, evaluate the
Incentive system in place at Nordstroms.
 What
do you see as its strengths?
 Any potential concerns?
NORDSTROMS

“This is Your Business. Treat
it Like Your Own Business.”
 Highest sales productivity
 Earnings > $80,000
 Compound growth in sales,
earnings, stores sq. ft.
 Highly, educated workforce

“It’s fear that Provides
Great Customer Service”
 Local 1001 publicity
campaign
 Union complaint with
Washington Dept. L & I
 NLRB charges
 $15 million reserve against
earnings
 shareholder class action suit
 employee class action suit
 Wall Street Journal story
 60 Minutes TV story
NORDSTROMS
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Are Nordstrom employees pressured
inappropriately by the sales-per-hour
system? By management?
NORDSTROMS
ACTIVITY
Drive to another store to pick
up merchandise for a customer
Home delivery
Obtain merchandise from
another department for a
customer
Thank you notes
Merchandise stocking
Store displays
Sales meetings
Inventory count
Record keeping
SELL
NONSELL
NORDSTROMS

Using theories of motivation & related keys to
effective incentive systems, evaluate the Incentive
system in place at Nordstroms.
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What do you see as its strengths?
Any concerns/questions regarding the system?
Are Nordstrom employees pressured
inappropriately by the sales-per-hour system? By
management?
What (if any) changes would you recommend?
CONCLUSIONS
Effective incentive systems can be powerful
motivators & focus attention on critical behaviors.
However, performance pressures can cause
participants to engage in undesirable behaviors.
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maximize the statistic in counter-productive ways
willful distortion
Strong internal controls must be present to prevent
manipulation.
Systems must clearly communicate that explicit
pressure and gaming behavior is unacceptable and
subject to detection and punishment.