10 Chapter Motivating Employees 10 Mc GrawHillIrwin Understanding

10 Chapter Motivating Employees 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

MOTIVATION and Intrinsic vs. Extrinsic Rewards 10 -2 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Extrinsic Rewards • Extrinsic Rewards -- Something given as a recognition of good work. • Kinds of Extrinsic Rewards: - Pay Raises - Promotions - Awards 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Intrinsic Rewards • Intrinsic Rewards -- Personal satisfaction felt for a job well done. • Kinds of Intrinsic Rewards: - Pride in your performance - Sense of achievement 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Evolution of Human Relations Concepts Scientific Management ü Frederick Taylor ü Henry L. Gantt ü Gilbreths Behavioral Management üHawthorne (Mayo) üMaslow üHerzberg üMc. Gregor üOuchi üVroom 10 -5 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Scientific Management ü Frederick Taylor ü Time-Motion ü Henry L. Gantt ü Gantt Charts ü Gilbreths ü Principle of Motion Economy ü therblig 10 -6 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Taylor’s Scientific Management • Scientific Management -- Studying workers to determine the most efficient ways of doing things and then teaching those techniques. • Three Key Elements to Increase Productivity 1. Time 2. Methods of Work 3. Rules of Work Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Taylor’s Four Key Principles 1. Study how a job is performed. • Gather time & motion information. • Check different methods. 2. Codify the best method into rules. 3. Choose workers whose skill matches the rules. 4. Establish a fair level of performance and pay. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

TAYLOR and UPS • UPS drivers work under strict rules and work requirements, e. g. , • How to get out of their trucks: - Right foot first • How fast to walk: - 3 ft per second • How to hold their keys: - Teeth up, third finger 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Time-Motion Studies • Time-Motion Studies -- Studies of which tasks must be performed to complete a job and the time needed to do each task. Henry L. Gantt • Led to the development of the Principle of Motion Economy -- Every job can be broken down into a series of elementary motions; developed by Frank and Lillian Gilbreth. • therblig 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Behavioral Management üMayo (Hawthorne) üMaslow üHerzberg üMc. Gregor üOuchi ü Vroom 10 -11 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

ELTON MAYO HAWTHORNE STUDIES 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Hawthorne Studies: Purpose • Conducted by Elton Mayo (1927 -1933) • First Experiment: Determine if lighting was a factor in productivity. • Researchers studied worker efficiency under different levels of light. • Productivity increased regardless of light condition. • Next Experiments: Determine if other factors affected productivity. 10 -13 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Hawthorne Studies: Results • Researchers decided it was a human or psychological factor at play. • Hawthorne Effect -- People act differently when they know they are being studied. • These studies encouraged the study of Human Motivation. 10 -14 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

ABRAHAM MASLOW HEIRARCHY OF HUMAN NEEDS 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Maslow’s Hierarchy of Needs • Hierarchy of Needs -- Theory of motivation based on unmet human needs from basic physiological needs to safety, social and esteem needs to self-actualization needs. 10 -16 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Self-Actualization Needs Esteem Needs Social Needs Safety Needs Physiological Needs • • • • • • Reaching Your Potential Independence Creativity Self-Expression Responsibility Self-Respect Recognition Sense of Accomplishment Companionship Acceptance Love and Affection Group Membership Security for Self an Possessions Avoidance of Risks Avoidance of Harm Avoidance of Pain Food Clothing Shelter Comfort Self-Preservation Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -17

Maslow’s Theory of Motivation 1. Needs that have already been met do not motivate. 2. If a need is filled, another higher-level need emerges. 3. If a need becomes unsatisfied, a person will retreat to satisfy that need. 10 -18 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

FREDERICK HERZBERG MOTIVATING FACTORS 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Herzberg’s Motivating Factors 1. Motivators 2. Hygiene Factors 10 -21 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Herzberg’s Motivating Factors • Herzberg’s research centered on two questions: 1. What factors controlled by managers are most effective in increasing worker motivation? 2. How do workers rank job -related factors in order of importance related to motivation? 10 -22 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Job Content • Herzberg found job content factors were most important to workers – workers like to feel they contribute to the company. • Motivators -- Job factors that cause employees to be productive and that give them satisfaction. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Job Environment • Job environment factors maintained satisfaction but did not motivate employees. • Hygiene Factors – Job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased. 10 -24 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Herzberg’s Theory Figure 10. 5 Comparison of Maslow and Herzberg 10 -25 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Herzberg’s Theory Motivators vs. Hygiene (Maintenance) Factors • Motivators: Job Content • Hygiene Factors: Job Environment 10 -26 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

DOUGLAS Mc. GREGOR THEORY X THEORY Y 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Theory X and Theory Y • Douglas Mc. Gregor proposed that managers had two different sets of assumptions concerning workers. • Their attitudes about motivating workers was tied to these assumptions. • Mc. Gregor called them Theory X and Theory Y. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

ASSUMPTIONS of THEORY X MANAGERS • Workers dislike work and seek to avoid it. • Workers must be forced or threatened with punishment to get them to perform. • Workers prefer to be directed and avoid responsibility. • Primary motivators are fear and money. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

ASSUMPTIONS of THEORY Y MANAGERS • People like work, it’s a part of life. • Workers seek goals to which they are committed. • Commitment to goals depends on perceived rewards. • People can use creativity to solve problems. • Intellectual capacity is only partially realized. • People are motivated by a variety of rewards. 10 - Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

WILLIAM OUCHI THEORY Z 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

THEORY Z • William Ouchi researched cultural differences between the U. S. (Type A) and Japan (Type J). • Type J committed to the organization and group. • Type A focused on the individual. • Theory Z is the hybrid approach of Types A and J. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Ouchi’s Theory Z Type J Type A Japanese Management Approach American Management Approach • Lifetime employment • Short-term employment • Consensual decision making • Individual decision making • Collective responsibility for the outcomes of decisions • Individual responsibility for the outcomes of decisions • Slow evaluations & promotions • Rapid evaluation & promotion • Nonspecialized career paths • Holistic concern for employees ©Mc. Graw-Hill/Irwin 2002 by The Mc. Graw. Hill Companies, Business, Inc. All 7/e Understanding 10 -34 © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -34

Ouchi’s Theory Z • Long-Term Employment • Collective Decision-making • Individual Responsibility • Slow Evaluation/ Promotion • Specialized Career Path • Holistic Concern for Employees 10 -35 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

PETER DRUCKER MANAGEMENT BY OBJECTIVES 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Management By Objectives (MBO) • Peter Drucker – Goal-Setting Theory – Employees Motivate Themselves 10 -37 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

GOAL-SETTING THEORY • Goal-Setting Theory -Setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Applying Goal-Setting Theory • Management by Objectives (MBO) -Involves a cycle of discussion, review and evaluation of objectives among top and middle-level managers, supervisors and employees. • Managers formulate goals in cooperation with everyone. • Need to monitor results and reward achievement. 10 -39 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

VICTOR VROOM EXPECTANCY THEORY 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Employee-Oriented Motivational Techniques • Expectancy Theory – expectations of the outcome 10 -41 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Nadler & Lawler’s Modification Researchers Nadler and Lawler modified expectancy theory and suggested five steps for managers: 1. Determine what rewards employees value. 2. Determine worker’s performance standard. 3. Make sure performance standards are attainable. 4. Tie rewards to performance. 5. Be sure employees feel rewards are adequate. 10 -42 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Expectancy Theory in Motivation • Expectancy Theory -- The amount of effort employees exert on a specific task depends on their expectations of the outcome. • Employees ask: • Can I accomplish the task? • What’s my reward? • Is the reward worth the effort? Expectations can vary from person to person. 10 -43 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Expectancy Theory 10 -44 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Reinforcement Theory • Reinforcement Theory -- Positive and negative reinforcers motivate a person to behave in certain ways. • Positive reinforcement includes praise, pay increases and recognition. • Negative reinforcement includes reprimands, reduced pay, and layoff or firing. 10 -45 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Equity Theory • Equity Theory -- Employees try to maintain equity between inputs and outputs compared to others in similar positions. • Workers often base perception of their outcomes to a specific person or group. • Perceived inequities can lead to reduced quality and productivity, absenteeism even resignation. 10 -46 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Job-Oriented Motivational Techniques 10 -47 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Job-Oriented Motivational Techniques • Job Enrichment/Redesign • Job Simplification 10 -48 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

ENRICHING JOBS • Job Enrichment -- A motivational strategy that emphasizes motivating the worker through the job itself. • Based on Herzberg’s motivators, such as responsibility, achievement and recognition. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Types of Job Enrichment • Job Enlargement -- A job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment. 1. Skill Variety 2. Task Identity 3. Task Significance 10 -50 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Types of Job Enrichment • Job Rotation -- A job enrichment strategy that involves moving employees from one job to another. 10 -51 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Job-Oriented Motivational Techniques Job Simplification 10 -53 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Recognizing a Job Well Done 10 -55 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

RECOGNIZING GOOD WORK • Raises are not the only ways to recognize an employee’s performance. Recognition can also include: - Paid time off - Flexible scheduling - Work from home opportunities - Paid child or elder care - Stock options or profit sharing - Company awards - Company events or teams 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Motivating Employees Across the Globe • Cultural differences make worker motivation a challenging task for global managers. • High-Context cultures require relationships and group trust before performance. • Low-Context cultures believe relationship building distracts from tasks. 10 -57 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

IMPORTANCE of CULTURAL COMPENTENCY • A better understanding of cultures helps managers increase customer satisfaction and loyalty. • It’s not just knowing other languages, it’s knowing what’s proper. • UPS operates in over 200 countries successfully by emphasizing diversity. 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

TAYLOR and UPS • UPS drivers work under strict rules and work requirements, e. g. , • How to get out of their trucks: - Right foot first • How fast to walk: - 3 ft per second • How to hold their keys: - Teeth up, third finger 10 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved. 10 -

Motivating Across the Generations • Baby Boomers (1946 – 1964) - Experienced great economic prosperity, job security, optimism about their future. 10 -60 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Motivating Across the Generations • Generation X (1965 – 1980) - Raised in dual-career families, attended day care, feeling of insecurity about jobs 10 -61 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Generation X in the Workplace • Desire economic security but focus more on career security more than job security. • Good motivators as managers due to emphasis on results rather than work hours. • Tend to be flexible and good at collaboration and consensus building. • Very effective at giving employee feedback and praise. 10 -62 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Motivating Across the Generations • Generation Y or Millennials (1980 – 2000) - Raised by indulgent parents, used to many comforts like computers and cell phones 10 -63 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Millennials in the Workplace • Tend to be impatient, skeptical, blunt and expressive. • Are tech-savvy and able to grasp new concepts. • Able to multi-task and are efficient. • Highlight a strong sense of commitment. • Place a high value on work-life balance. • Fun and stimulation are key job requirements. 10 -64 Mc. Graw-Hill/Irwin Understanding Business, 7/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

Tips for Motivating Employees 1. Thank employees for good job 2. Listen to employees 3. Give feedback 4. Give rewards 5. Keep them informed 6. Allow for input 7. Training opportunities 8. Remember important dates 9. Have and abide by policies 10. Celebrate goal accomplishment 10 -65 Mc. Graw-Hill/Irwin Understanding Business, 7/e Source: Allfoodbusiness. com © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.