Chapter 10
- Focus on why people choose certain behaviors to
MOTIVATION .mp4 - Google Drive
Managing Employee Motivation and
Performance
The Nature of Motivation
Motivation
- The set of forces that cause people to behave in
certain ways
- The desire to do the job
- Is the process by which a person’s efforts are
energized, directed, and sustained towards attaining
a goal
- The act of inspiring others to move toward goal-
directed action
Individual behavior is a complex phenomenon…
- People choose to work hard
- People choose to do just enough
- People choose to do nothing
Determinants of Individual Performance
 Motivation (the desire to do the job),
 Ability (the capability to do the job),
 The work environment (the resources needed
to do the job). If an employee lacks ability, the
manager can provide training or replace the
worker.
Perspectives of Motivation
Content Perspectives on Motivation
- Focus on needs and deficiencies of individuals
- Try to answer the question, “What factors in the
workplace motivate people?”
- Hierarchy of Needs Theory (Abraham Maslow)
- Two-Factor Theory (Frederick Herzberg)
- Achievement, Power, and Affiliation Needs
(David McClelland)
Process Perspectives
satisfy needs and how they evaluate satisfaction
after they have attained goals.
- Expectancy Theory
- Porter-Lawler Extension of Expectancy Theory
- Equity Theory
- Goal-Setting Theory
Early Theories of Motivation
Maslow’s Hierarchy of Needs Theory
- Suggests that people must satisfy five groups of
needs in order— physiological, security,
belongingness, esteem, and self-actualization
- Low-order (external): physiological, safety
- High-order (internal): social, esteem, self-
actualization
Needs were categorized as five levels of lower to
higher order needs
- Individual must satisfy lower-order needs
before they can satisfy higher-order needs.
- Satisfied needs will no longer motivate.
- Motivating a person depends on knowing at
what level that person is on the hierarchy.
Physical
- Attending to basic survival and biological functions
Security
- Seeking a safe physical and emotional
environment
Belongingness
- experiencing love and affection
Esteem
- Having a positive self-imagine/self-respect and
recognition and respect from others
Self-actualization
- Realizing one’s potential for personal growth and
development
Herzberg’s Motivation-Hygiene Theory (Two-Factor
Theory
- Job satisfaction and job dissatisfaction are created
by different factors.
 Hygiene factors: extrinsic (environmental)
 Motivators: intrinsic (psychological)

- This concludes that managers must ensure that
hygiene factor are not deficient
- Pay and security must be appropriate
- Working conditions must be safe
- Technical supervision must be acceptable
- Employee whole managers attempt to “satisfy”
through hygiene factors is no enough
Motivation becomes a two-stage process:
- Ensuring that deficient hygiene factors are not
blocking motivation
- Using job enrichment and redesign of jobs to
increase motivational factors for employees
such as achievement and recognition
Individual Human Needs (David C. McClelland)
Need for Achievement
- The desire to accomplish a goal or task more
effectively than in the past
Need for Affiliation
- The desire for human companionship and
acceptance
Need for Power
- The desire to be influential in a group and to
control one’s environment
Process Perspectives
- Approaches to motivation that focus on why
people choose certain behavioral options to
satisfy their needs and how they evaluate their
satisfaction after they have attained those goals
Expectancy Theory (Victor Vroom)
- States that an individual tends to act in a certain
way based on the expectation that the act will
be followed by a given outcome and on the
attractiveness of that outcome to the individual
- Motivation depends on
- how much we want something
- how likely we think we are to get it
Theory assumes that:
- Behavior is determined by personal and
environmental forces
- People make decisions about their own
behavior
- Different people have different types of needs,
desires, and goals
- People choose among alternatives of behaviors
in selecting one that leads to a desired outcome
The Expectancy Model of Motivation
- Suggests that motivation leads to effort, when
combined with ability and environmental factors,
that results in performance which, in turn, leads to
various outcomes that have value (valence) to
employees.
Elements of Expectancy Model of Motivation
Effort-to-Performance Expectancy
- The individual’s perception of the probability that
effort will lead to high performance
- E> ^P – strong expectancy
- E, P are unrelated – weak expectancy
- E somewhat related to P—moderate
Performance-to-Outcome Expectance
- The individual’s perception that performance will
lead to a specific outcome or reward in an
organizational setting
- High P> Pay raise – high expectancy
- High P may raise Pay – moderate
- High P not related to Pay – low expectancy
Valence
- An index of how much an individual values a
particular outcome; the attractiveness of the
outcome to the individual
Outcomes (Consequences)
- Attractive outcomes have positive valences and
unattractive outcomes have negative valances
- Outcomes to which an individual is indifferent have
zero valences
The Porter–Lawler Extension of Expectancy Theory
- Suggests that if performance results in
equitable rewards, people will be more
satisfied. Thus, performance can lead to
satisfaction. Managers must therefore be sure
that any system of motivation includes rewards
that are fair, or equitable, for all.
Assumptions:
 - If performance results in equitable and fair
rewards, people will be more satisfied.
- High performance can lead to rewards and high
satisfaction.
Types of Rewards:
- Extrinsic rewards are outcomes set and
awarded by external parties
- Intrinsic rewards are outcomes that are internal
to the individual
Equity Theory
Contends that people are motivated to seek social
equity in the rewards they receive for performance
- Proposes that employees perceive what they get
from a job situation (outcomes) in relation to what
they put in (inputs) and then compare their inputs-
outcomes ratio with the inputs-outcomes ratios of
relevant others.
- If the ratios are perceived as equal, then a state of
equity (fairness) exists.
- If the ratios are perceived that as unequal, inequity
exists, and the person feels under- or over-
rewarded.
- When inequities occur, employees will attempt to do
something to rebalance the ratios (seek justice).
Equity Comparisons and Behavior
Feeling equitably rewarded:
- Maintain performance and accept comparison
as fair estimate.
- Employee responses to perceived inequalities:
* Distort own or others’ ratios
* Induce others to change their inputs or
outcomes
* Change own inputs (increase or decrease
efforts) or outcomes (seek greater rewards)
* Choose a different comparison (referent)
other (person, systems, or self)
* Quit their job
Goal-Setting Theory
- Assumes that behavior is a result of conscious
goals and intentions
- Proposes that setting gals that are accepted,
specific, and challenging yet achievable will
result in higher performance than having no or
easy goals
Behavior is a result of conscious goals and intentions.
Setting goals influences behavior in organizations.
Characteristics of Goals (Expanded G-S Theory)
 Goal difficulty is the extent to which a goal is
challenging and requires effort. – to achieve
difficult goals means to work harder
 Goal specificity is the clarity and precision of
the goal.
 Goal acceptance is the extent to which a person
accepts a goal as his or her own.
 Goal commitment is the extent to which he or
she is personally interested in reaching the goal.
Benefits of Participation in Goal-Setting
- Increases the acceptance of goals
- Fosters commitment to difficult, public goals
- Provides for self-feedback ((internal locus of
control) that guides behavior and motivates
performance (self-efficacy)
The Reinforcement Perspectives on Motivation
Reinforcement Theory
- Approach to motivation that argues that behavior that
results in rewarding consequences is likely to be
repeated, whereas behavior that results in punishing
consequences is less likely to be repeated
- Focuses on the role of rewards as they cause behavior
to change or remain the same over the time
Assumes that:
 Behavior that is rewarded is likely to be
repeated.
 Behavior that is punished is less likely to be
repeated
Kinds of Reinforcement in Organization
Positive Reinforcement
- A method of strengthening behavior with
rewards or positive outcomes after a desired
behavior is performed
Avoidance
- Used to strengthen behavior by avoiding
unpleasant consequences that would result if the
behavior were not performed
Punishment
- Used to weaken undesired behaviors by using
negative outcomes or unpleasant consequences
when the behavior is performed
Extinction
- Used to weaken undesired behaviors by simply
ignoring or not reinforcing them

Time
Fixed-Interval Schedule
- Provides reinforcement at fixed intervals of
time, such as regular weekly pay-checks
Variable-Interval Schedule
- Provides reinforcement at varying intervals of
time, such as occasional visits by the supervisor
Frequency
Fixed-Ratio Schedule
- Provides reinforcement after a fixed number of
behaviors regardless of the time interval involved,
such as a bonus for every fifth sale
Variable-Ratio Schedule
- Provides reinforcement after varying numbers of
behaviors are performed, such as the use of
compliments by a supervisor on an irregular basis
Using Reinforcement in Organizations
Organizational Behavior Modification (OB Mod)
- Method for applying the basic elements of
reinforcement theory in an organizational setting
- Specific behaviors are tied to specific forms of
reinforcement
Popular Motivational Strategies
Empowerment
- The process of enabling workers to set their own
work goals, make decisions, and solve problems
within their sphere of influence or responsibility and
authority
Participation
- The process of giving employees a voice in making
decisions about their own work
Areas of Participation for Employees
 Making decisions about their jobs.
 Making decisions about administrative matters.
 Participating in decision making about broader
issues of product quality.
Alternative Forms of Work Arrangement
Compressed Work Schedule
- Working a full forty-hour week in fewer than the
traditional five days
Flexible-Work Schedules
- Work schedules that allow employees to select,
within broad parameters, the hours they work
Job Sharing
- When two part-time employees share one full-time
job
Telecommuting
- Allowing employees to spend part of their time
working offsite, usually at home
Using Reward Systems To Motivate Performance
Reward system
- The formal and informal mechanisms by which
employee performance is defined, evaluated, and
rewarded
Effects of Organizational Rewards
 Higher-level performance-based rewards
motivate employees to work harder.
 Rewards help align employee self-interest with
organizational goals.
 Rewards foster increased retention and
citizenship.
Merit Reward Systems
Merit Pay
- Pay awarded to employees on the basis of the
relative value of their contributions to the
organization
Merit Pay Plan
- Compensation plan that formally bases at least
some meaningful portion of compensation on
merit
Incentive Reward System
 Monetary Incentives From Theory to Practice: Guidelines for Motivating
- Incentive plan Employees
- Employee is paid a certain amount of money for
- Use goals
every unit the employee produces.
- Ensure that goals are perceived as attainable
- Sales commissions plan
- Individualize rewards
- Employee is paid a percentage of the
- Link rewards to performance
employee’s sales to customers for selling the
- Check system for equity
firm’s products or services.
- Use recognition
Nonmonetary Incentives - Show care and concern for employees
- Immediate, and one-time rewards - Don’t ignore money
- Days off, additional paid vacation time, and
special perks

Common Team and Group Reward Systems

Gainsharing Programs
- Designed to share the cost savings from
productivity improvements with employees

Scanlon Plan
- Similar to gainsharing, but the distribution of
gains is tilted much more heavily toward
employees

Profit Sharing Plans

- Provide an annual bonus to all employees based
on corporate profits.

Employee Stock Ownership Plans (ESOP)

Executive Compensation

Standard Forms of Executive Compensation

 Base salary

 Incentive pay (bonuses)

Special Forms of Executive Compensation

 Stock option plans

 Executive perks

Criticism of Executive Compensation

 Excessively large compensation amounts

 Compensation not tied to overall and long-term

performance of the organization

 Earnings gap between executive pay and typical

employee pay

Employee Participation

 Allowing employee participation in the deciding

the distribution of rewards.

Innovation in Incentive Programs

 Offering stock options to all employees.

 Individualizing reward systems such that

different employees can be offered different
incentives

More Effective Communication

 Sharing information about how awards are

earned and distributed