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Fourth Edition

PART 3 . . . . . . . . . . . . . . . . . . . . . . . .

Understanding People in Organizations

Copyright 2003 Prentice Hall, Inc.

Chapter 8

Motivating, Satisfying, and Leading Employees

Copyright 2003 Prentice Hall, Inc.


A leader is best when people barely know he exists, when his work is done they will say: We did it ourselves.
~ Lao-Tzu, c. 600 B.C.

Leadership is the art of getting someone else to do something you want done because he wants to do it.
~ Dwight D. Eisenhower, 1890 - 1969
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Key Topics
Psychological contracts in the workplace Job satisfaction and employee morale Theories of employee motivation Job satisfaction and employee motivation Managerial styles of leadership

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Psychological Contract
A Set of Employment Expectations Contributions:
What does each employee expect to contribute to the organization?

What will the organization provide to each employee in return?

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Satisfied Employees Are More Productive and More Committed

Job Satisfaction:

Degree of enjoyment employees derive from doing their jobs

High Morale:
An overall positive employee attitude toward the workplace

Low Turnover:
A low percentage of employees leave each year
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Raising Morale Is a High Priority When Unemployment Is Low

0% 10% 20% 30% 40% 50% 60%

Alternative Work Arrangements Long-term Care Insurance Group Financial Planning Group Auto Insurance Group Home Owners Insurance

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Fortune Magazines
100 Best Companies to Work For
It's not easy being good these days at least if you're an employer. Edward Jones Cisco Systems Microsoft Patagonia Starbucks Wal-Mart
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#1 #15 #28 #41 #58 #94


Source: Fortune Magazine, February 4th, 2002

Highly Motivated Employees Are Critical to Business Success Motivation:

The set of forces that cause people to behave in certain ways

 Classical  Behavior: The Hawthorne Studies  Contemporary

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The Human Resources Model

Theory X and Theory Y
Theory X
 People are lazy.  People lack ambition and dislike responsibility.  People are self-centered.  People resist change.  People are gullible and not very bright.
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Theory Y
 People are energetic.  People are ambitious and seek responsibility.  People can be selfless.  People want to contribute to business growth and change.  People are intelligent.
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Maslows Hierarchy of Needs

General Examples
Self-Fulfillment Status Friendship Stability Shelter
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SelfSelfSelfActualization Actualization Needs Needs Esteem Needs Esteem Needs

Social Needs Social Needs Security Needs Security Needs Physiological Needs PhysiologicalNeeds

Organizational Examples
Challenging Job Job Title Friends at Work Pension Plan Salary
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Two Factor Theory

Hygiene Factors
Supervisors Working Conditions Interpersonal Relations Pay & Security Company Policies & Administration

Motivation Factors
Achievement Recognition The Work Itself Responsibility Advancement & Growth



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Expectancy Theory

Individual Effort

Individual Performance

Organizational Rewards

Personal Goals RewardsPersonal Goals Issue

EffortPerformance Issue

PerformanceReward Issue

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Equity Theory

Employees evaluate their treatment relative to the treatment of others

Inputs: Employee contributions to their jobs Outputs: What employees receive in return

The perceived ratio of contribution to return determines perceived equity

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Strategies for Enhancing Job Satisfaction and Morale

Reinforcement/behavior modification Management by objectives Participative management and empowerment Job enrichment and job redesign Modified work schedules
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Reinforcement / Behavior Modification Theory

When negative consequences are attached directly to undesirable behavior

Positive Reinforcement
When rewards are tied directly to performance
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Management by Objectives
Collaborative Goal-setting

Collaborative Goal Setting & Planning

Communicating Organizational Goals & Plans

Meeting Setting Verifiable Goals & Clear Plans Counseling Identifying Resources

Periodic Review


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Participative Management and Empowerment

Increasing job satisfaction by encouraging participation Team management represents a growing trend

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Job Enrichment and Job Redesign

Job Enrichment: Adding one or more motivating factors to job activities Job Redesign: Designing a better fit between workers and their jobs Combining tasks Forming natural work groups Establishing client relationships
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Modified Work Schedules

Work share programs Flextime programs and alternative workplace strategies Telecommuting and virtual offices
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Sample Flextime Scheduling

6:00 7:00 8:00
A.M. A.M. A.M.

9:00 10:00 11:00 12:00 1:00

A.M. A.M. A.M. NOON P.M.

2:00 3:00
P.M. P.M.




Flexible Time Joe

Core Time

Flexible Time

Core Time

Flexible Time


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Evaluating Modified Schedules and Alternative Workplaces

More satisfied, committed employees Less congestion

Challenging to coordinate and manage Poor fit for some workers

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Managerial Leadership

The process of motivating others to work to meet specific objectives

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Five Fundamental Leadership Practices

Challenge the process Inspire a shared vision Enable others to act Model the way Encourage the heart
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Leadership at General Electric

Four Es of GE Leadership
A high energy level The ability to energize others around common goals The edge to make tough decisions The ability to consistently execute and deliver on promises
Source: Jack Welch Tells It Straight from the Gut, Anderson Assets, Winter 2002 Gut,
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Managerial Styles

Autocratic Style Democratic Style FreeFree-rein Style Contingency Approach

The appropriate style in any situation is contingent on the unique elements of that situation
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Motivation and Leadership in the Twenty-first Century

Security and pay are no longer enough

Coach mentality Diversity Flexibility
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Chapter Review
Describe psychological contracts Discuss the importance of job satisfaction and employee morale Summarize the most important theories of employee motivation Describe strategies to improve job satisfaction and employee motivation Discuss different managerial styles
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