CHAPTER 10 Motivating and Leading Employees Business Sixth

2 Learning Objectives Describe the nature and importance of psychological contracts in the workplace Discuss the importance of job satisfaction and employee morale and summarize their roles in human relations in the workplace Identify and summarize the most important theories of employee motivation Describe some of the strategies used by organizations to improve job satisfaction and employee motivation Discuss different managerial styles of leadership and their impact on human relations in the workplace Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

3 Psychological Contract expectations held by employees concerning their contribution to an organization and what the organization will provide in return If either party perceives an inequity in the contract, that party may seek a change t Employees may seek increased pay, or reduce their efforts t Employers may offer more training, fire, or transfer staff Contracts created, maintained and managed effectively = satisfied & motivated workers Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

4 Job Satisfaction and Morale Job satisfaction <the sense of pleasure and accomplishment employees feel from performing their jobs well <when job satisfaction is high, so is employee morale Employee morale <the mental attitude that employees have towards their workplace Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

5 Benefits of Satisfied Employees Increased commitment to their work and the firm Work harder to contribute to the organization Have fewer grievances Have lower absenteeism Lower turnover (% of workforce that leaves) Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

6 Motivation in the Workplace Motivation <the set of forces that cause people to behave in certain ways Motivational Theories <Classical theory and Scientific Management <Behaviour theory <Contemporary theories Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

7 Classical Theory & Scientific Management Classical Theory Workers are motivated primarily by money If money motivates, then paying employees more would result in higher levels of production Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Scientific management Analyzes jobs and finds more efficient ways to perform them < Time-and-motion studies Copyright © 2008 Pearson Education Canada

8 Hawthorne Studies Researchers attempted to measure the impact of lighting on productivity < Productivity increased whether or not the lighting was high or low < Something, other than money and lighting, was impacting on performance < Key factor: Attention Hawthorne Effect < The tendency of workers to increase productivity when they receive special attention from management Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

9 Contemporary Motivation Theories Based on the importance of good human relations in motivating employees <Theory X and Theory Y <Hierarchy of Needs Model <Two-Factor Theory <Expectancy Theory <Equity Theory <Goal-Setting Theory Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

10 The Human Resources Model: Theories X and Y Managers’ may act under two different sets of beliefs Theory X Theory Y <employees are basically lazy and irresponsible < employees are naturally energetic and responsible < must be forced to work productively <want to be productive Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

11 Theory X Employees Theory X managers believe employees t are Lazy t Lack ambition t Dislike responsibility t are Self-centred t Resist change t are Gullible and unintelligent Must be punished or rewarded to stimulate motivation Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

12 Theory Y Employees Theory Y managers believe employees are t. Energetic t. Ambitious t. Responsible t. Selfless t. Intelligent t. Willing to contribute to business success More likely to have satisfied, motivated employees Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

13 Maslow’s Hierarchy of Needs are hierarchical < lower level needs must be met first < research finds hierarchy varies widely Different people = different needs = different motivators Needs levels t Self-actualization t Esteem t Social t Security t Physiological Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

14 Physiological Needs Basic survival requirements <food <shelter <water <sleep t. Comfortable environment and money for food & shelter Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

15 Security Need for stability and protection tpension plans tjob security tpersonal safety Business,

16 Social Need for friendship and companionship Need to belong to a group Need to “fit in” and be accepted Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

17 Esteem Need for recognition and status Need to “stand out” from the group tjob title tlarge office Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

18 Self-Actualization Need for self-fulfillment Need for personal growth and development Need to contribute to society and achieve meaningful goals Need to be true to yourself and satisfy yourself t. Challenging work Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

19 Two-Factor Theory (Hertzberg) Two different factors affect job satisfaction and dissatisfaction Hygiene factors <cause job dissatisfaction if they are missing or inadequate Satisfaction Motivation factors < cause job satisfaction if they are present and satisfactory Dissatisfaction No satisfaction Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke No dissatisfaction Copyright © 2008 Pearson Education Canada

20 Motivation and Hygiene Factors Motivation Hygiene <achievement < working conditions <recognition <the work itself < interpersonal relations <responsibility < pay and security <advancement and growth < company policies and administration Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

21 Expectancy Theory Motivation is based on the belief that <performance is linked to the reward <one can perform at a level to achieve the required results <the reward is valuable Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

22 Expectancy Theory Model Individual Effort Individual Performance Effort. Performance issue Organizational Rewards Performance. Reward issue Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Personal Goals Rewards. Personal Goals issue Copyright © 2008 Pearson Education Canada

23 Equity Theory Employees use social comparisons to evaluate their treatment relative to others Individuals compare their perception of what they contribute (inputs) what they receive (outputs) < = > others’ inputs others’ outputs The result is a feeling of equity or inequity < the ratios must be fair, not the same, to perceive equity Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

24 Dealing with Inequity Employees will attempt to restore equity in an inequitable situation tseeking raises treducing work effort treducing work week tcomplaining to their superiors tseeking different employees for comparison tquitting the job Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

25 Goal-Setting Theory Employees perform better when they set specific, quantified, time-framed goals <Moderately challenging <Specific tfocuses energy and attention <Participatory tincreases commitment and motivation Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

26 Strategies for Enhancing Job Satisfaction Reinforcement & punishment Management by objectives Participative management Team management Job enrichment Job redesign Modified work schedules Workshare programs Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

27 Reinforcement Positive behaviour is reinforced through rewards t cash bonuses for performance Negative behaviour is punished t less pay, fewer hours, suspension, dismissal This management approach is most effective when employees are trying to master new skills or behaviours Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

28 Management by Objectives System of collaborative goal setting that extends from the top to the bottom of the firm When employees participate in goal setting they < learn more about company objectives < feel they are an important part of a team < see how they can improve company performance < accept and are committed to their goals Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

29 Management by Objectives Establish organizational goals & plans Meeting Communicating organizational goals & plans Counselling Collaborative setting of personal goals & plans Identifying resources Periodic review Evaluation and reward Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

30 Participative Management Employees will be more satisfied on the job if they have a say in how they do their jobs and how the company is managed temployees feel more committed to goals tnot desired by all employees Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

31 Team Management Note for everyone Less effective in traditional bureaucracies In small, flexible organizations teams: thelp make decisions more quickly and effectively tenhance communication thelp members feel a part of the organization Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

32 Job Enrichment Changing < the nature of the job, < the way various jobs work together, < how employees rotate through jobs Increases job satisfaction by changing the job < increased responsibility or growth < employees acquire new skills and feel valued Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

33 Job Redesign Increases job satisfaction by improving the employee-job fit <combining tasks <creating natural work groups <establishing client relationships Useful for individuals with strong needs for growth or achievement Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

34 Redesign Methods Combining tasks < enlarges the job and increases variety < work seems more meaningful Natural work groups < creates teams among individuals who work on projects < reveals place & importance of jobs in overall structure Establish client relationships < allows employees to interact with customers < more variety, feedback and more control over jobs Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

35 Modified Work Schedules Allows individuals to fulfill work commitments more effectively around personal or community obligations <Helps increase job satisfaction Flextime Compressed workweek Telecommuting Workshare programs Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

36 Flextime Adjusts the standard daily work schedule to fit employees’ needs < all must be available during the core time < start and end times can vary < some offices will also allow flexible hours between 11: 00 a. m. and 1: 00 p. m. for lunch am 6 7 Flex time 8 9 pm 10 11 12 1 Core time Flex time 2 Core time Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke 3 4 5 6 7 6 Flex time Copyright © 2008 Pearson Education Canada

37 The Compressed Workweek work regular weekly hours in less than five days work longer hours on the work days Potential scheduling options < 40 hours = 5 days x 8 hours < 40 hours = 4 days x 10 hours < 36 hours = 3 days x 12 hours (nurses) Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

38 Telecommuting Employees do all or some work away from the office Home-based office technology is used <computers, voicemail, e-mail, fax modems, cell phones, overnight delivery services Barriers <Feelings of isolation <Must be self-motivated <Suspicious managers Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

39 Worksharing Two people share a single, full-time position < also referred to as job sharing Useful for those who wish to stay in the workforce part-time < parents of young children < co-op programs < individuals easing into retirement < 8% of part-time Canadian workers are worksharing Most workshare employees are universityeducated women in professional occupations Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

40 Managerial Styles and Leadership < the process of motivating others to meet goals Managerial style < patterns of behaviour that a manager exhibits when dealing with subordinates t. Autocratic style t. Democratic style t. Free-rein style Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

41 Autocratic Style Managers issue orders and expect them to be obeyed without question or discussion Rapid decisions due to lack of consultation Useful where quick decision making and conformity is required < military applications This style suits employees who do not want to make decisions Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

42 Democratic Style Managers ask for input from subordinates but retain final decision-making power Benefits those who wish to have input Can lead to frustration if the manager’s decisions are not consistent with the input Annoys those who do not wish to have input Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

43 Free-Rein Style Managers simply advise subordinates <Employees have the authority to make the final decisions themselves May be useful in circumstances where a loose structure exists <A volunteer organization Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

44 Canadians Vs. Americans Canadian managers tend to be <more subtle and subdued <more committed to their organizations <more independent thinkers <more culturally tolerant Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

45 Contingency Approach to Leadership The most effective management style depends on the situation being managed <cultural differences <some workers dislike participative style Managers are more effective when they adapt their style to the situation Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada

46 Motivation & Leadership in the 21 st Century Changing patterns of motivation <Rewards desired by today’s employees are different from those of yesterday’s t. Money may not be the prime motivator t. Individual goals vary more than ever before Changing patterns of leadership <Less of an emphasis on autocratic styles as employees become more empowered Business, Sixth Canadian Edition, by Griffin, Ebert, and Starke Copyright © 2008 Pearson Education Canada