Motivation 1 Intrinsic vs Extrinsic Motivation l Intrinsic

Motivation 1

Intrinsic vs. Extrinsic Motivation l Intrinsic Motivation is seen in behavior that is performed for its own sake or from the sense of accomplishment and achievement derived from doing the work itself (e. g. , playing music) l Extrinsic Motivation comes from consequences of behavior - material/social rewards or avoiding punishment - and not from the behavior itself (e. g. , trash collection) Fundamental distinction. Which one do we want in organizations? 2

Maslow’s Hierarchy Of Needs Self. Actualization Esteem Social Safety Physiological 3 Research does not support Maslow's model as such, but it highlights that there are different needs that people try to satisfy.

Maslow’s Hierarchy of Needs l Physiological needs: – l Safety needs: – l internal esteem factors such as self-respect and achievement as well as external esteem factors such as status and recognition. Self-actualization needs: – 4 affection, belongingness, acceptance, and friendship. Esteem needs: – l security and protection from physical and emotional harm. Social needs: – l food, drink, shelter. growth, achieving one’s potential; the drive to become what one is capable of becoming.

Mc. Clelland’s Needs Theory l Need for achievement (n. Ach) – – l Need for affiliation (n. Aff): – l drive to excel, to achieve in relation to a set of standards, and to strive to succeed Desire for friendly and close interpersonal relationships Need for power (n. Pow): – Need to make others behave in a way that they would not have behaved otherwise - Personalized power – power in pursuit of own goals + Socialized power – power channeled towards constructive improvement of organizations and societies l 5 Best managers tend to be high in the need for power and low in the need for affiliation – Need for achievement may help, or may not

Herzberg’s Motivator-Hygiene Theory l Two continua: – Satisfiers (motivators) l – Dissatisfiers (hygiene factors) l 6 Items found in descriptions of positive events Items found in descriptions of negative events

Model of Motivation l Social inputs: – l Personal inputs: – l Money, being recognized, being promoted Outcome experiences: – 7 Experiencing something new, being creative, helping others Social feedback: – l Being challenged, being trusted, knowing what was expected Winning, pride, self-esteem, learning from failure, seeing progress

Reinforcement Theory: Link actions and rewards to motivate l Basis: Motivation is driven by external consequences, especially when consequences tightly linked to actions l Four types of reinforcers (consequences): – – 8 Positive reinforcement – Rewarding behavior with something pleasant Negative reinforcement – Rewarding behavior with the elimination of something unpleasant Punishment – Penalize undesirable behavior Extinction – Eliminating any reinforcement for undesirable behavior. What reinforcers are most effective? What provides positive reinforcement, other than money?

Reinforcers in depth l Positive reinforcement – l Punishment – – – l Can cause resentment, loss of self-respect, desire to retaliate Focus on behavior, not the person Do it immediately, and privately Negative reinforcement – – – 9 Powerful. Use whenever possible. Similar risks to punishment Negative reinforcement = remove something unpleasant in return for functional behavior Punishment = administer something unpleasant in response to dysfunctional behavior

Expectancy Theory l Motivation derives from an “Expectancy Chain” -linkages between effort, performance, and rewards: – – – l l 10 Expectancy (effort-performance linkage) Instrumentality (performance-reward linkage) Valence (reward-goal linkage) attractiveness / importance of the potential organizational outcome/reward Increase motivation by strengthening linkages Most comprehensive, widely accepted motivational theory Why do I say “Expectancy Chain? ”

Expectancy Theory Model: the “Expectancy Chain” Individual Effort Individual Performance Organizational Rewards Expectancy: Effort-performance linkage Instrumentality: Performance-reward linkage 11 Individual Goals Valence: Attractiveness

Goal-Setting Theory: building commitment to organizational goals l Three basic steps – – – l Set Goals that are motivating Gain acceptance and commitment to goals Feedback on progress maintains motivation Increases: – – Effort and persistence Alignment with organizational goals Most important, valid, and useful single approach to motivating performance 12

Eg Goal-Setting Theory Guidelines for Job Redesign

Equity Theory or “Mommy, Johnny’s piece of candy is bigger than mine” l Equity Theory: Motivation is influenced by social comparison & perceptions of fairness: – – – Overpayment inequity = your ratio is worse (higher) Underpayment inequity = your ratio is better (lower) – Inequity motivates most people to restore equity – 14 You compare your situation to a referent (similar) individual Equity = your “outcome to input ratio” matches the referent’s.

Different ways to bring Outcomes (O) into balance with Inputs (I)* Decrease inputs Modify comparison Increase outcomes O O --- = --I I Leave the situation * For underpayment inequity 15 Distort reality

Behavior Modification l Differs from expectancy and equity theory – – l Assumptions – – 16 Does not use cognitive processes Uses observable behavior People go toward positive outcomes People avoid negative outcomes

Approaches to Affecting Behavior l Positive Reinforcement – l Punishment (side effects are also important) – l Withdraw positive consequence to decrease the frequency of an undesirable behavior Negative Reinforcement – 17 Use a negative event to decrease the frequency of an undesirable behavior Extinction – l Use a positive event to increase the frequency of desirable behavior Withdraw negative event to increase the frequency of desirable behavior

Performance Management Performance appraisal: the specific and formal evaluation of an employee in order to determine the degree to which the employee is performing his or her job effectively Performance management: the continuous set of activities carried out by the organization to identify, measure, and develop the performance of individuals and teams and align performance with the strategic goals of the organization

Purposes of Performance Appraisal l Administrative purpose – – l Developmental purpose – – l Rate past performance Justify allocation of rewards Predict future performance Alter future performance Strategic purpose – Evaluation of performance is a form of reward or punishment and thus may affect current behavior 19

Given the multiple and conflicting purposes: – Performance appraisals should consist of a series of ongoing interactions – Interactions with different purposes should be clearly separated in time. l In particular, interactions with an administrative purpose should be separated from interactions with a developmental purpose. You cannot be a judge and a helper at the same time. 20

Common Rater Errors l Leniency Error: consistently rates employees at high end of the scale l Severity Error: consistently rates employees at low end of the scale l Central Tendency Error: consistently rates employees at scale midpoint l Halo Error: evaluation of employee performance on one dimension creates overall Pos/Neg impression that drives ratings on other dimensions l Recency Error: rating is heavily influenced by most recent performance l Contrast Error: current employee rating is boosted after rating a poor employee or lowered after rating an excellent employee l Similar-to-me Error: rating is 21 inflated because of a personal connection

Validity of Appraisal Job Performance Measure Contaminated Validity 22 Actual Job Performance Deficient

Graphic Rating Scale 23 Evaluates poorly by the subjective evaluation criteria

Behaviorally Anchored Rating Scale 24

Sample Appraisal- Management by Objectives Objective Reduce time to fill open positions Method of Measurement Average time to fill open positions 2009 Goal 2009 Result 14 days 21 days Increase use of web Percentage of new -based recruiting hires that make initial contact via internet 50% 60% Make training new hires more cost effective $10, 000 $9, 500 Training costs per new hire

Comparative Approach to Appraisal n Simple Ranking n Forced Distribution n Paired Comparison

Performance Management and Motivation How can performance management systems influence motivation…. . Justice: • Procedural • Distributive 27

Compensation l the set of rewards that organizations provide to individuals in return for their willingness to perform various tasks within the organization. l Two categories: – Pay (wages or salary) – Benefits

The Purposes of Compensation Retention Attraction Compensation Performance

Effects of Compensation Components 30 Attract Motivate Retain Salary / Wages High Low High Short Term Incentives High Medium Long Term Incentives Medium High Benefits High Low High

Critical Questions About Compensation l What should our market pay position be? l What should individual pay be based on? – Vary pay according to seniority or individual human capital l – – (e. g. , skills, experience) Vary pay according to jobs Vary pay according to performance l (Individual, Team, Organizational)

Sample Pay Structure by Job Maximum Salary (in dollars) Maximum Midpoint Minimum Midpoint Minimum Grade (class): Containing jobs: | | | 1 2 3 4 5 GHI JKLM NOP ABC DEF 32

Pay to Performance: Reinforcement Behavior is controlled by its consequences. Thus, individuals will: – – Repeat behavior that is rewarded Discontinue behavior that is punished or not rewarded

Pay to Performance: Reinforcement Rewards that increase frequency of behavior: l Positive reinforcement: behavior is followed by a positive event l Negative reinforcement: behavior is followed by removal of a negative event Rewards that decrease frequency of behavior: l Punishment: behavior is followed by a negative event l Extinction: behavior is followed by no consequences

Perceived Fairness of Rewards Individuals make fairness judgments about reward systems through a process of social comparison l l They compare their rewards to the rewards of others They compare the ratio of outcomes/inputs. Individuals expect equity not equality They make comparisons to a specific referent (a person or expectations). Although similarity is an important basis of referent choice, other factors also determine the relevance of referents.

Pay Dispersion/Compression l In most cases, measurement of performance and assignment of pay is insufficiently precise to create perceptions of equity l Dispersed pay systems are associated with: – – Increased conflict Decreased cooperation Decreased team performance Increased turnover