Employee

Motivation
Merit pay
Merit pay is a potentially good technique for jobs in
which productivity is difficult to measure.

Group Incentive Plans

Gainsharing ties groupwide financial incentives to
improvements (gains) in organizational performance.
Profit Sharing
As its name implies, profit-sharing programs provide
employees with a percentage of profits above a certain
amount.
Gainsharing
The idea behind group-based, or organization-based,
incentive plans is to get employees to participate in
the success or failure of the organization.
Stock Options
With stock options, employees are given the
opportunity to purchase stock in the future, typically at
the market price on the day the options were granted.
Usually stock options vest over a certain period of time
and must be exercised within a maximum time frame.
Expectancy Theory
An influential theory of worker motivation that integrates many of
the factors discussed previously in this chapter is expectancy theory.

3 Components:
Expectancy (E): The perceived relationship between the
amount of effort an employee puts in and the resulting
outcome.
Instrumentality (I): The extent to which the outcome of a
worker’s performance, if noticed, results in a particular
consequence.
Valence (V): The extent to which an employee values a
particular consequence.
Reward Versus Punishment
Rather than rewarding desired behaviors, we can change employee
performance by punishing undesired behaviors. That is, instead of
rewarding employees who do not miss work, we punish those who
do.
Are Rewards and Resources Given Equitably?
Another factor related to motivation and job satisfaction
is the extent to which employees perceive that they are
being treated fairly. The first theory on this topic was
equity theory.
Equity theory is based on the premise that our levels of motivation and job
satisfaction are related to how fairly we believe we are treated in
comparison with others.

Three components are involved in this perception of fairness:

Inputs are those personal elements that we put into our jobs. The
obvious elements are time, effort, education, and experience.
Outputs are those elements that we receive from our jobs. A list of
obvious outputs includes pay, benefits, challenge, and responsibility.
According to the theory, employees subconsciously list all their
outputs and inputs and then compute an input/output ratio by
dividing output value by input value.
Are Other Employees Motivated?
If an organization’s older employees work hard and talk
positively about their jobs and their employer, new
employees will model this behavior and be both productive
and satisfied.

The reverse is also true: If veteran employees work slowly

and complain about their jobs, so too will new employees.
Integration of Motivation Theories
Some people, such as those with high self-esteem, are generally
more motivated than others.

From the discrepancy and needs theories, we will be

motivated in our jobs if the job itself and the organization
meet our expectations and values and satisfy our needs.

From goal-setting theory, we find that employees who

have, understand, and agree to goals will be more
motivated than those without goals or with unclear goals.
Integration of Motivation Theories
From expectancy theory and goal-setting theory, we know
that the goals must be challenging but reasonable.

From operant learning and expectancy theories, it is clear

that extrinsically motivated people will be more motivated
if the behavior results in a reward.

From these same two theories plus discrepancy theory, the

needs theory, and the Premack Principle, we know that the
rewards must
Integration of Motivation Theories
From these same two theories plus the discrepancy theory,
the needs theory, and the Premack Principle, we know that
the rewards must have value to the employee to be
motivating.

From equity theory, we know that rewards that are valued

will be motivated only if they are given in an equitable
way.
Integration of Motivation Theories
Social influence theory tells us that if other employees are
motivated, there is an increased probability that we will
model their behavior and be motivated.