MIDTERM | ORGBEV | A-123 | A.

Y 2022 - 2023

Managing Employee Motivation

NATURE OF MOTIVATION

MOTIVATION
- The set of forces that causes 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
• Leader
• Manager
- There is driving force or energy that will direct an individual to
exert effort and achieve goals

DETERMINANTS OF INDIVIDUAL PERFORMANCE

- Motivation
- Ability
- Work environment

INDIVIDUAL BEHAVIOR IS A COMPLEX PHENOMENON

- People choose to work hard
- People choose to do just enough
- People choose to do nothing
- It is the goal of the manager to maximize the first behavior
• To work hard
• To avoid subordinates form doing nothing

THE MOTIVATION FRAMEWORK

1
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
PERSPECTIVES OF MOTIVATION

CONTENT PERSPECTIVES ON MOTIVATION

‣ First part of motivation
‣ 2 parts
- Pay or working hours/conditions
- Autonomy and responsibility
‣ Focus on need and deficiencies of individuals
‣ Try to answer the question,
- “What factors in the workplace motivate people?”
‣ Focuses on:
- What are the factors

PROCESS PERSPECTIVES
‣ Focus on why people choose certain behaviors to satisfy need and how
they evaluate satisfaction after they have attained goals.
‣ Focuses on:
- How and the reason why

CONTENT PERSPECTIVE THEORIES

‣ Abraham Mallow’s Hierarchy of Needs Theory
‣ Frederick Herzberg’s Two-Factor Theory
‣ David McClelland’s Achievement, Power, and Affiliation Needs

PROCESS PERSPECTIVE THEORIES

‣ Expectancy Theory
‣ Porter-Lawler Extension of Expectancy Theory
‣ Equity Theory
‣ Goal-Setting Theory

CONTENT PERSPECTIVE THEORIES

MASLOW’S HIERARCHY OF NEEDS THEORY

‣ Hierarchy of needs
- Lower-order (external):
• Physiological
• Safety

2
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
- Higher-order (internal)
• Social
• Esteem
• Self-actualization
‣ Needs were categorized as five levels of lower to higher order needs
- Individuals 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

WEAKNESS OF ABRAHAM MASLOW’S THEORY OF NEEDS

‣ All levels of needs are not always present
‣ Ordering of needs will not always be the same depending on the person

3
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
‣ Give more importance of other needs
‣ Cultural Differences
- Can change priority and the order of satisfying these needs

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

‣ People can be satisfied and dissatisfied at the same time

‣ Pay may not motivate performance
‣ Pay may symbolizes a person’s worth or value in an organization

THE TWO-FACTOR THEORY

‣ 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

4
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
‣ Employee whom managers attempt to “satisfy” through hygiene factors
is not 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 motivation
factor for employees such as achievement and recognition
- CRITICISM
• There are different satisfaction and dissatisfaction factors
• Individuals may be satisfied with one factor different from
others
• Cannot identify what would satisfy or dissatisfy and individual

INDIVIDUAL HUMAN NEEDS (DAVID C. MCCLELLAND)

‣ Has needs similar to Abraham Maslow’s Hierarchy of Needs

SHIFTING PERSPECTIVES: FROM CONTENT TO PROCESS

‣ Process perspective focuses on why people choose certain behaviors to
satisfy certain needs and how they evaluate satisfaction after
attaining goal

5
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023

PROCESS PERSPECTIVE THEORIES

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
• You will exert effort if you think you are likely to get it
‣ Theory assumes that:
- Behavior is determined by personal environment factors
- People make decision 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 environment factors, that results in performance which, in turn,
leads to various outcomes that have value (valence) to employees

ELEMENTS OF EXPECTANCY THEORY

6
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023

‣ Effort-to-performance Expectancy
- The perceived probability than an individual’s effort will result
in a certain level of performance
• Effort > ^ Performance
- Strong expectancy
• E, P are unrelated
- Weak expectancy
• E Somewhat related to P
- Moderate

‣ Performance-to-outcome Expectancy
- The individual’s perception of the probability that performance
will lead to a specific outcome, or consequence or reward in an
organizational setting
- Effort will affect performance, performance will affect outcome
• High performance > Pay raise
- High expectancy
• High Performance may raise pay
- Moderate expectancy
• High performance not related to pay
- Low expectancy

‣ Valences
- An index of how much an individual values a particular outcome
- The attractiveness of the outcome to the individual
- Positive valence motivates employee to exert effort

‣ Outcomes (Consequences)
- Attractive outcomes have positive valences and unattractive
outcomes have negative valences
- Outcomes to which an individual is indifferent have zero valences

EXPECTANCY THEORY EXTENSION: THE PORTER-LAWYER

‣ Assumptions
- If performance results in equable 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
- If rewards are evaluated to be fairly given, the individual is
satisfied

7
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023

EQUITY THEORY
‣ 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 ratio of
relevant others
‣ People are motivated to seek social equity in the rewards they
receive by comparing with their colleagues on the outcomes received
- If ratio is perceived as equal then a state of equity / fairness
exists
- If the ratio are perceived 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 inequities
• Distort own or other’s ratios
• Induce others to change their own inputs or outcomes
• Change own inputs or outcomes
- Increase or decrease efforts
- Seek greater rewards
• Choose different comparison
- Compare to another
- Referent
- Person
- Systems
- Self
• Quit their job

GOAL SETTING THEORY

‣ Assumes that behavior is a result of conscious goals and intentions
‣ Proposes that setting goals that are accepted, specific, and
challenging yet achievable will result in higher performance than
having no or easy goals
‣ Characteristics of goals
- Goal Difficulty
• Extent to which goal is challenging and requires effort
• To achieve difficult goals means to work harder

8
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
- Goal specificity
• Clarity and precision of the goal
• Employees must be given clear expectations
- Goal acceptance
• Accepting goals as his
- Goal commitment
• Extent to 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)

REINFORCEMENT PERSPECTIVES ON MOTIVATION

‣ Reinforcement Theory
- Focuses on the role of rewards as they cause behavior to change or
remain the same over time
- Assumes that a desired behavior is externally caused, and if
reinforced/rewarded is likely to be repeated
- Behavior that is punished is less likely to be repeated

PROVIDING REINFORCEMENT IN ORGANIZATION

9
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
‣ Positive reinforcement
- one method of strengthening behavior, is a reward or a positive
outcome after a desired behavior is performed.
- Praises, pay raises, promotions, and awards
‣ Avoidance
- Behavior of an employee to avoid unpleasant consequences for his
behavior
- Does not want to be marked late, be punctual
‣ Punishment
- Weaken undesired behaviors
- Use of negative outcomes or unpleasant consequences when behavior
is performed
- Reduce possibility of misbehavior
- Reprimand, disciplinary actions, fines
- Negative effect:
• Cause of feeling of resentment
• Hostility
• Advised to avoid this form of reinforcement
‣ Extinction
- Ignoring behavior or not reinforcing behavior so individual will
know that you do not welcome such behavior
- Employees ignored by boss when he showed up late for meeting
- Ignore remarks that are unwelcome

APPLYING REINFORCEMENT THEORY

‣ Fixed interval
- Receive same monthly salary regardless of behavior
‣ Variable interval
- Applied at variable times
- Random visit of supervisor for performance appraisal
‣ Fixed ratio

10
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
- Reinforcement applied after fixed number of behaviors regardless of
time
• Example meeting quota and receiving rewards
‣ Variable ratio
- Is the reinforcement applied after varying numbers of behavior
regardless of time
- Cannot be constantly monitored but happen randomly based on
behavior
- Complimented today but not acknowledged the following days

USING REINFORCEMENTS IN ORGANIZATIONS

‣ Organizational Behavior Modification (OB Mod)
- Technique managers use for reinforcement to motivate employees
- A 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 and Participation
- Empowerment
• Enabling workers to set own work goals, make decisions, and solve
problems within their sphere of influence
- Participation
• Giving employees a voice in making decisions about work
• When employees are given the chance to participate in decisions
making, they are able to see the positive effects of their
contribution
- Makes them more committed which will enhance their self esteem
- 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

11
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023

ALTERNATIVE FORMS OF WORKING ARRANGEMENT

‣ Relevant during COVID-19 pandemic

‣ Compressed work schedule
- Working a full forty- hour week in fewer than the traditional five
days
‣ Flexible work schedules (flextime)
- Work schedules that allow employees to select, within broad
parameters, the hours they work
- BPO have different shifts
‣ Job sharing
- When two part-time employees share one full-time job
‣ Telecommuting
- Work from home
- allowing employees to spend part of their time working offsite,
usually at home.
- By using various forms of digital communication, many employees can
maintain close contact with their organization and still get just
as much—or even more—work done at home as if they were in their
office.

12
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023

REWARD SYSTEM AND PERFORMANCE

‣ The formal and informal mechanisms by which employee performance is

defined, evaluated, and rewarded
‣ When you have higher level performance, rewards motivate employees to
work hard.
- self-interests coincide with the organization’s interests
- Employee retention and citizenship

MERIT REWARD SYSTEM

‣ Merit pay
- Pay awarded to employees on the basis of the relative value of
their contributions to the organization
- Performance appraisal
‣ Merit pay plan
- Compensation plan that formally bases at least some meaningful
portion of compensation on merit

INCENTIVE REWARD SYSTEMS

‣ Monetary incentives
- Piece-rate incentive plan
• Employee is paid a certain amount of money for every unit the
employee produces
- Individual incentive plan
• Individual performance at the time when high performance occurs
- Sales commissions plan

13
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023
• Employee is paid a percentage of the employee’s sales to
customers for selling the firm’s products or services
‣ Non monetary incentives
- Immediate and on-time rewards
• Days off
• Additional paid vacation time
• Special perks

COMMON TEAM AND GROUP REWARD SYSTEMS

‣ Gainsharing
- Sharing cost saving that result from productivity improvements

‣ Scanlon Plan
- Distribution of gains is tilted towards the employees and is spread
across the organization

‣ 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

14
MIDTERM | ORGBEV | A-123 | A.Y 2022 - 2023

NEW APPROACHES TO PERFORMANCE-BASED REWARDS

‣ Employee Participation
- Allowing employee participation in the decision of distributing of
rewards

‣ Innovation in incentives 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
- Top management should be transparent on how incentives and salaries
are given

FROM THEORY TO PRACTICE: GUIDELINES FOR MOTIVATION

EMPLOYEES
‣ Use goals
‣ Ensure that goals are perceived as attainable
‣ Individualizing rewards
‣ Link rewards to performance
‣ Check the system for equity
‣ Use recognition
‣ Show care and concern for employees
‣ Don’t ignore money

15