MOTIVATION Concepts and Rewards MOTIVATION DEFINED Willingness to

MOTIVATION Concepts and Rewards

MOTIVATION DEFINED ä Willingness to exert high levels of effort to reach organizational goals.

BASIC ASSUMPTIONS ä Everyone is motivated ä Key? ä Two types of motivation ä Intrinsic ä Extrinsic

TYPES OF MOTIVATION ä Extrinsic Motivation: ä "What gets rewarded gets done" ä Based on extrinsic/tangible rewards ä Intrinsic Motivation: ä "What is rewarding gets done" ä Based on intrinsic/intangible rewards

Motivation Theories ä Need (Maslow & ERG) ä Equity ä Reinforcement ä Expectancy Theory ä Goal-Setting Theory

Needs (stage of development) ä Maslow l l l ä Self actualization Self esteem Social (love) Safety Physiological Alderfer (ERG) l l l Growth Relatedness Existence

NEED THEORIES OF MOTIVATION What are the implications of need-based theories for managers?

TODAY’S TOPIC ä Motivation

EQUITY THEORY ä ä People compare their outcome/input ratio to that of others Conclusions ä ä Ratios are equal (equity exists) Ratios are unequal (inequity exists)

RESPONSES TO EQUITY/INEQUITY ä Equity: Maintenance ä Inequity: ä Change Inputs ä Change Outcomes ä Quit

Forms of Justice

REINFORCEMENT THEORY ä ä ä Behavior is a function of consequences Behavior that is rewarded persists To increase behavior ä ä Positive reinforcement negative reinforcement

REINFORCEMENT THEORY ä To reduce behavior ä ä Extinction Punishment Immediacy is crucial Implications?

REWARDING B ä WE HOPE FOR: ä ä Long-term growth Setting challenging goals Total Quality Candor ä BUT WE REWARD: ä ä Teamwork ä ä

EXPECTANCY THEORY People are motivated to do that which they believe is possible and valuable ä Expectancy: Belief that you can perform ä Instrumentality: Belief that performance will lead to an outcome ä Valence: Value of the outcome

EXPECTANCY THEORY ä According to expectancy theory, what must managers do to motivate their employees? ä ä ä

GOAL SETTING THEORY ä People naturally set goals ä Benefits of Goals: ä Increase effort ä Direct effort ä Increase persistence ä Most effective goals are:

Making MBO Work: SMARTER Goals ä ä S M Improve conflict management process vs. Ø 80% reduction in grievances filed by second quarter Ø ä ä ä A R T E R

Motivation Theories ä Need (Maslow & ERG) ä Equity ä Reinforcement ä Expectancy Theory ä Goal-Setting Theory

Effective Rewards & Incentive Systems: ä ä ä

NORDSTROMS ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä ä 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 ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä What do you see as its strengths?

NORDSTROMS ä “This is Your Business. Treat it Like Your Own Business. ” F Highest sales productivity F Earnings > $80, 000 F Compound growth in sales, earnings, stores sq. ft. F Highly, educated workforce

NORDSTROMS ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä What do you see as its strengths? ä Any potential concerns?

NORDSTROMS ä “This is Your Business. Treat it Like Your Own Business. ” F Highest sales productivity F Earnings > $80, 000 F Compound growth in sales, earnings, stores sq. ft. F Highly, educated workforce ä “It’s fear that Provides Great Customer Service” F Local 1001 publicity campaign F Union complaint with Washington Dept. L & I F NLRB charges F $15 million reserve against earnings F shareholder class action suit F employee class action suit F Wall Street Journal story F 60 Minutes TV story

NORDSTROMS ä Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By management?

NORDSTROMS

NORDSTROMS ä Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive system in place at Nordstroms. ä ä 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?