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Part 3


Announcements Lincoln Case

Plan for today  Understanding theories of motivation   Problems with incentive plans How to design incentive plans considering the problems .

intrinsic .Problems with incentive plans  Extrinsic vs.

Extinsic  Extrinsic Motivation: The desire to act based on factors external to the individual .

Derived from interests. .Intrinsic Motivation  Intrinsic Motivation: The desire to take action based on factors within the individual.

Video .

Vietnam .Watch you are rewarding  WW2 vs.

Reward: Staying alive WW1 9 .

10 .

so how do we make an incentive system that works . but we live in the real world.Designing incentive systems at work Pt1 Intrinsic motivation sounds nice.

Job Characteristics Theory      Autonomy Task identity Variety Task significance Feedback .

Quick word on Maslow .

employees will work harder Most lower-level needs society has already satisfied Individuals who desire higher order needs will be most likely to obtain them when they work effectively on meaningful jobs that provide feedback on the adequacy of their personal work activities.Five propositions for JCT      To the extent that individuals believe they obtain an outcome they value by engaging in some particular behavior. . Outcomes are valued to the extent that they fulfill the physiological and psychological needs of the individual To the extent that the situation at work can be arranged to fulfill those needs . the likelihood that they will engage in the behavior increases.

but we live in the real world.Designing incentive systems at work Pt2 Intrinsic motivation sounds nice. so how do we make an incentive system that works .

commitment. self-efficacy Goal Selection Performance Contingent rewards Consequences Satisfaction . feedback.Goal Setting Theory Ability.

Goal acceptance: the extent to which a person adopts a goal as his or her own.Factors affecting Goal Setting    Goal difficulty: the level of difficulty to achieve the goal. Goal specificity: the goal should be relatively clear and precise in its target. .

Individual factors    Goal Commitment: the extent to which a person is interested to reach the goal. Attainability: individuals must believe they can attain a defined goal.especially important when dealing with difficult or complex goals. Self-efficacy: the higher someone’s self-efficacy regarding a certain task. the more likely they will set higher goals. . and the more persistence they will show.

This is where technology can help.  .The importance of feedback  Feedback: Goal-setting may have little effect if individuals cannot check where the state of their performance is in relation to their goal.

.Limitations    Goal alignment Not a one-size-fits-all Gets complicated with goals that require interdependence.