Organizational behavior

Exam 2 notes

Chapter 5:

Perception and Individual Decision Making

• Perception is a process by which individuals organize and interpret their sensory
impressions to give meaning to their environment.
• It is important to the study of OB because people’s behaviors are based on their
perception of what reality is, not on reality itself.

Exhibit 5-1 Factors That Influence Perception

• Attribution theory suggests that when we observe an individual’s behavior, we attempt

to determine whether it was internally or externally caused.
 • Determination depends on three factors:
– Distinctiveness
– Consensus
– Consistency

Explain Attribution Theory

• Clarification of the differences between internal and external causation
– Internally caused – those that are believed to be under the personal control of
the individual.
– Externally caused – resulting from outside causes.

Attribution Theory

• Fundamental attribution error

– We have a tendency to underestimate the influence of external factors and
overestimate the influence of internal or personal factors.
• Self-serving bias
– Individuals attribute their own successes to internal factors.

• Common Shortcuts in Judging Others

– Selective perception
• Any characteristic that makes a person, object, or event stand out will
increase the probability that it will be perceived.
• Since we can’t observe everything going on around us, we engage in
selective perception.
• Halo effect
– The halo effect occurs when we draw a general impression based on a single
characteristic.
• Contrast effects
– We do not evaluate a person in isolation.
– Our reaction to one person is influenced by other persons we have recently
encountered.
• Stereotyping
– Judging someone based on one’s perception of the group to which that person
belongs.
• We have to monitor ourselves to make sure we’re not unfairly applying a
stereotype in our evaluations and decisions.
• Applications of Shortcuts in Organizations
– Employment Interview
• Evidence indicates that interviewers make perceptual judgments that are
often inaccurate.
• Interviewers generally draw early impressions that become very
quickly entrenched.
• Studies indicate that most interviewers’ decisions change very
little after the first four or five minutes of the interview.
• Performance Expectations
– Evidence demonstrates that people will attempt to validate their perceptions of
reality, even when those perceptions are faulty.
• Self-fulfilling prophecy, or the Pygmalion effect, characterizes the fact
that people’s expectations determine their behavior.
• Expectations become reality.
• Performance Evaluation
– An employee’s performance appraisal is very much dependent upon the
perceptual process.
• Many jobs are evaluated in subjective terms.
• Subjective measures are problematic because of selective perception,
contrast effects, halo effects, and so on.
• Implications for Managers
– Behavior follows perception, so to influence behavior at work, assess how
people perceive their work. Often behaviors we find puzzling can be explained by
understanding the initiating perceptions.
– Make better decisions by recognizing perceptual biases and decision-making
errors we tend to commit. Learning about these problems doesn’t always
prevent us from making mistakes, but it does help.
– Combine rational analysis with intuition. These are not conflicting approaches to
decision making. By using both, you can improve your decision making
effectiveness.
 – Try to enhance your creativity. Actively look for novel solutions to problems,
attempt to see problems in new ways, use analogies, and hire creative talent. Try
to remove work and organizational barriers that might impede your creativity.

Chapter 7:
Motivation Concepts

• Motivation is the processes that account for an individual’s intensity, direction, and
persistence of effort toward attaining a goal.
• The level of motivation varies both between individuals and within individuals at
different times.

• The three key elements of motivation are:

• Intensity: concerned with how hard a person tries.
• Direction: the orientation that benefits the organization.
• Persistence: a measure of how long a person can maintain his/her effort.

Maslow’s Hierarchy of Needs

Compare the Early Theories of Motivation

• Maslow’s need theory has received wide recognition, particularly among practicing
managers.
– It is intuitively logical and easy to understand and some research has validated it.
– However, most research does not, and it hasn’t been frequently researched
since the 1960s.
 • Comparison of Satisfiers and Dissatisfiers

Contrasting View of Satisfaction and Dissatisfaction

• Criticisms of Herzberg’s theory:

– Limited because it relies on self-reports.
– Reliability of methodology is questioned.
– No overall measure of satisfaction was utilized.

• McClelland’s Theory of Needs

– The theory focuses on three needs:
• Need for achievement (nAch): drive to excel, to achieve in relation to a
set of standards, to strive to succeed.
• Need for power (nPow): need to make others behave in a way that they
would not have behaved otherwise.
 • Need for affiliation (nAfl): desire for friendly and close interpersonal
relationships.
• McClelland’s theory has had the best support.
– It has less practical effect than the others.
– Because McClelland argued that the three needs are subconscious—we may
rank high on them but not know it—measuring them is not easy.
– It is more common to find situations in which managers aware of these
motivational drivers label employees based on observations made over time.
• Self-Determination Theory
– People prefer to feel they have control over their actions.
• Focus on the beneficial effects of intrinsic motivation and harmful effects
of extrinsic motivation.
• Cognitive evaluation theory - When people are paid for work, it feels less
like something they want to do and more like something they have to do.
– Proposes that in addition to being driven by a need for autonomy, people seek
ways to achieve competence and positive connections to others.
• What does all of this mean?
– For individuals:
• Choose your job for reasons other than extrinsic rewards.
– For organizations:
• Provide intrinsic as well as extrinsic incentives.
• Goal-Setting Theory
– Goals tell an employee what needs to be done and how much effort is needed.
• Evidence suggests:
– Specific goals increase performance.
– Difficult goals, when accepted, result in higher performance than do easy goals.
– Feedback leads to higher performance than does non-feedback.

Self-Efficacy, Reinforcement, and Expectancy Theory

• Self-efficacy theory is an individual’s belief that he or she is capable of performing a
task.
• Also known as social cognitive theory and social learning theory.
• Reinforcement theory: behavior is a function of its consequences.
– Reinforcement conditions behavior.
– Behavior is environmentally caused.
• Goal setting is a cognitive approach: an individual’s purposes direct his or her action.
• Operant conditioning theory: people learn to behave to get something they want or to
avoid something they don’t want.
– B.F. Skinner’s behaviorism.
• Social-learning theory: we can learn through both observation and direct experience.
• Expectancy theory: a tendency to act in a certain way depends on an expectation that
the act will be followed by a given outcome and on the attractiveness of that outcome
to the individual.
 • Three relationships:
– Effort-performance relationship
– Performance-reward relationship
– Rewards-personal goals relationship
• Expectancy Theory

• Expectancy theory helps explain why a lot of workers aren’t motivated and do only the
minimum.
• Three questions employees need to answer in the affirmative if their motivation is to be
maximized:
– If I give maximum effort, will it be recognized in my performance appraisal?
– If I get a good performance appraisal, will it lead to organizational rewards?
– If I’m rewarded, are the rewards attractive to me?

Forms of Organizational Justice Equity Theory

Equity Theory
Ratio Comparisons* Perception

O O Inequity due to being under rewarded

<
I A IB

O O Equity
=
I A IB

O O Inequity due to being overrewarded

>
I A IB

O O
Where represents the employee and represents relevant others
IA IB

Model of Organizational Justice

 • Justice Outcomes
– All the types of justice discussed have been linked to higher levels of task
performance and citizenship.

Implications of Job Engagement for Management

• Job engagement: the investment of an employee’s physical, cognitive, and emotional
energies into job performance.
– Gallup organization: more engaged employees in successful organizations than in
average organizations.
– Academic studies: job engagement is positively associated with performance and
citizenship behaviors.
• What makes people more engaged in their job?
– The degree to which an employee believes it is meaningful to engage in work.
– A match between the individual’s values and the organization’s.
– Leadership behaviors that inspire workers to a greater sense of mission.

Implications for Managers

• Make sure extrinsic rewards for employees are not viewed as coercive, but instead
provide information about competence and relatedness.
• Either set or inspire your employees to set specific, difficult goals and provide quality,
developmental feedback on their progress toward those goals.
• Try to align or tie in employee goals to the goals of your organization.
 • Model the types of behaviors you would like to see performed by your employees.
• Expectancy theory offers a powerful explanation of performance variables such as
employee productivity, absenteeism, and turnover.
• When making decisions regarding resources in your organization, make sure to consider
how the resources are being distributed (and who’s impacted), the fairness of the
decision, along with whether your actions demonstrate that you respect those involved.

Chapter 8:
Motivation: From Concepts to Applications

• Repetitive jobs provide little variety, autonomy, or motivation.

• Job Rotation
– Referred to as cross-training.
– Periodic shifting from one task to another.
– Strengths: reduces boredom, increases motivation, and helps employees better
understand their work contributions.
– Weaknesses: creates disruptions, requires extra time for supervisors addressing
questions and training time, and reduced efficiencies.
• Job Enrichment
– Increasing a job’s high-level responsibilities to increase intrinsic motivation.
• Involves adding another layer of responsibility and meaning.
• Can be effective at reducing turnover.
• Relational Job Design
– To make jobs more prosocially motivating:
• Connect employees with the beneficiaries of their work.
• Meet beneficiaries firsthand.
• How Specific Alternative Work Arrangements Motivate Employees
Possible Flextime Staff Schedules
Blank Schedule 1
Percent Time: 100% = 40 hours per week
Core Hours: 9:00 A.M.–5:00 P.M., Monday through Friday
(1 hour lunch)
Work Start Time: Between 8:00 A.M. and 9:00 A.M.
Work End Time: Between 5:00 P.M. and 6:00 P.M.
Blank Schedule 2
Percent Time: 100% = 40 hours per week

Work Hours: 8:00 A.M.–6:30 P.M., Monday through Thursday

(1/2 hour lunch)
Friday off
 Work Start Time: 8:00 A.M.
Work End Time: 6:30 P.M.

Schedule 3
Percent Time: 90% = 36 hours per week
Work Hours: 8:30 A.M.–5:00 P.M., Monday through Thursday
(1/2 hour lunch)
8:00 A.M.–Noon Friday (no lunch)
Work Start Time: 8:30 A.M. (Monday–Thursday); 8:00 A.M. (Friday)
Work End Time: 5:00 P.M. (Monday–Thursday); Noon (Friday)
Blank Schedule 4
Percent Time: 80% = 32 hours per week
Work Hours: 8:00 A.M.–6:00 P.M., Monday through Wednesday
(1/2 hour lunch)
8:00 A.M.–11:30 A.M. Thursday (no lunch)
Friday off
Work Start Time: Between 8:00 A.M. and 9:00 A.M.
Work End Time: Between 5:00 P.M. and 6:00 P.M.

• Job Sharing
– Two or more people split a 40-hour-a-week job.
 Declining in use.
 Can be difficult to find compatible pairs of employees who can
successfully coordinate the intricacies of one job.
 Increases flexibility and can increase motivation and satisfaction when a
40-hour-a-week job is just not practical.
• Telecommuting
– Employees who do their work at home at least two days a week through virtual
devices linked to the employer’s office.
 Some well-known organizations actively discourage telecommuting, but
for most organizations it remains popular.

• Telecommuting Advantages
– Positively related to objective performance and job satisfaction.
– Reduced work-family conflict.
– Reduced carbon emissions.
• Telecommuting Disadvantages
 – Employer
 Social loafing.
 Difficult to coordinate teamwork.
 Difficult to evaluate non-quantitative performance.
– Employee
 Increased feelings of isolation and reduced coworker relationship quality.
 May not be noticed for his or her efforts.

Who Works from Home

Employee Involvement and Employee Motivation

• Employee Involvement: a participative process that uses employees’ input to increase
their commitment to the organization’s success.
• Examples of Employee Involvement Programs
– Participative management
– Representative participation
• Participative management
– Joint decision making.
– Acts as a panacea for poor morale and low productivity.
– Trust and confidence in leaders is essential.
– Studies of the participation-performance have yielded mixed results.
• Representative participation
– Workers are represented by a small group of employees who actually participate
in decision making.
– Almost every country in Western Europe requires representative participation.
– The two most common forms:
• Works councils
• Board representatives
 Variable-Pay Programs and Employee Motivation
• What to Pay:
– Complex process that entails balancing internal equity and external equity.
– Some organizations prefer to pay leaders by paying above market.
– Paying more may net better-qualified and more highly motivated employees
who may stay with the firm longer.
• How to Pay:
– Variable pay programs:
• Piece-rate plans
• Merit-based pay
• Bonuses
• Profit sharing
• Employee stock ownership plans
– Earnings therefore fluctuate up and down.
• Piece-Rate Pay
– A pure piece-rate plan provides no base salary and pays the employee only for
what he or she produces.
– Limitation: not a feasible approach for many jobs.
– The main concern for both individual and team piece-rate workers is financial
risk.
• Merit-Based Pay
– Allows employers to differentiate pay based on performance.
– Creates perceptions of relationships between performance and rewards.
– Limitations:
• Based on annual performance appraisals.
• Merit pool fluctuates.
• Union resistance.
• Bonuses
– An annual bonus is a significant component of total compensation for many jobs.
– Increasingly include lower-ranking employees.
• Many companies now routinely reward production employees with
bonuses when profits improve.
– Downside: employees’ pay is more vulnerable to cuts.

• Profit-Sharing Plans
– Organization-wide programs that distribute compensation based on some
established formula centered around a company’s profitability.
– Appear to have positive effects on employee attitudes at the organizational level.
• Employees have a feeling of psychological ownership.
 • Employee Stock Ownership Plan (ESOP)
– A company-established benefit plan in which employees acquire stock, often at
below-market prices, as part of their benefits.
– Increases employee satisfaction and innovation.
 Employees need to psychologically experience ownership.
– Can reduce unethical behavior.
– Can be used for community wealth building.

• Evaluation of Variable Pay

– Do variable-pay programs increase motivation and productivity?
• Generally, yes, but that doesn’t mean everyone is equally
motivated by them.

• Developing a Benefits Package

– Flexible benefits individualize rewards.
 Allow each employee to choose the compensation package that best
satisfies his or her current needs and situation.
• Today, almost all major corporations in the United States offer
flexible benefits.
• However, it may be surprising that their usage is not yet global.
• Employee Recognition Programs
– Organizations are increasingly recognizing that important work rewards can be
both intrinsic and extrinsic.
– Rewards are intrinsic in the form of employee recognition programs and
extrinsic in the form of compensation systems.

Implications for Managers

• Recognize individual differences.
– Spend the time necessary to understand what’s important to each employee.
– Design jobs to align with individual needs and maximize their motivation
potential.
• Use goals and feedback.
– You should give employees firm, specific goals, and they should get feedback on
how well they are faring in pursuit of those goals.

• Allow employees to participate in decisions that affect them.

– Employees can contribute to setting work goals, choosing their own benefits
packages, and solving productivity and quality problems.
• Link rewards to performance.
– Rewards should be contingent on performance, and employees must perceive
the link between the two.
• Check the system for equity.
– Employees should perceive that individual effort and outcomes explain
differences in pay and other rewards.