Management Theories: Nucor Case Study

• Management theory covers motivation
• Edmond Grady is the author

Nucor Case Study

• Nucor Corporation in Charlotte, North Carolina is covered in this case study.
• Nucor's incentives directly connect to production, ensuring no employee layoffs.
• Decreasing steel demand and increased competition may lead to lower production and wages.
• Management must decide how to distribute reduced work and maintain motivation beyond wages.

Basics of Motivation

• Motivation includes effort and performance.
• Satisfying needs is fundamental to motivation.
• Rewards can be extrinsic or intrinsic.
• Motivation can be achieved by using the basic principles.

Effort and Performance

• Performance combines initiation, direction, and sustained persistence.

• Job performance equals motivation multiplied by ability and situational constraints

• Technology can tempt people to appear busy when they are not.

• It is important to work hard for the company, customers and themselves.

Need Satisfaction

• The requirements, whether physical or psychological, are essential for survival and well-being.

• Unmet needs drive motivation.

• Needs are organized using the Maslow's Hierarchy, Alderfer's ERG, and McClelland's Learned Needs.

• Unsatisfied needs cause tension, leading to action and performance to achieve satisfaction

Maslow's Hierarchy of Needs

• There are five levels of needs within Maslow's Hierarchy of Needs
• The five levels are Physiological, Safety, Belongingness, Esteem and Self-Actualization

Alderfer's ERG Theory

• Alderfer's ERG Theory contains three aspects: Existence, Relatedness, and Growth.

McClelland's Learned Needs Theory

• McClelland's Learned Needs Theory argues that the important facets are Power, achievement and Affiliation

Extrinsic and Intrinsic Rewards

• Extrinsic rewards are tangible and visible to others with performance-based contingencies.

• Intrinsic rewards are natural and tied to the task's inherent enjoyment.

• Extrinsic rewards motivate people to join organizations, attend work and perform at their job

• Intrinsic rewards include a sense of accomplishment, responsibility, personal growth and enjoyment

• Performing jobs effectively is rewarded by intrinsic feelings and extrinsic benefits

Motivating with the Basics

• Ask people what they need
• Fulfill lower-order needs initially.
• Anticipate changing needs
• Promote chances for employees to get intrinsic rewards.

Equity Theory

• Equity theory explains that fairness affects motivation.

Expectancy Theory

• Expectancy theory describes that worker expectations about rewards, efforts, and the link between rewards and performance impacts motivation.

Components of Equity Theory

• Inputs are employee contributions to the organization

• Outcomes are rewards that employees receive from the organization

• Referents act as comparison benchmarks

• Ratio = Outcome/Input

• Inequity occurs when an individual's outcome/input ratio is different from their referent.

• Underreward occurs when a referent's O/I ratio is higher, leading to anger

• Overreward ensues when a referent's O/I ratio is lower, causing guilt.

• Reactions to Indequity can include reducing inputs, asking for more outcomes and/or changing their perspectives

Motivating with Equity Theory

• Motivating with equity includes;
• Looking for major ineqities
• Minimising employee inputs
• Ensuring that the decision making process is fair through, distributive and procedural justice

Components of Expectancy Theory

• Valence: The attractiveness of a reward or outcome.

• Expectancy: Belief that effort will lead to good performance

• Instrumentality: Belief that good performance will lead to valued rewards.

• To increase expectancy, training for employees is an effective option

Motivating with Expectancy Theory

• It is important to systematically find out what employees need/want from their jobs
• Then links rewards to individual performance
• Also empowers employees to make their own decisions
• When all this occurs expectancy perception is enhanced

Reinforcement Theory

• Reinforcement theory dictates behaviours are determined by consequences of either positives or negative results

• Positive reinforcement uses rewards to increase desirable behavior

• Negative reinforcement removes negative consequences to strengthen positive behavior

• Punishment uses consequences to weaken behaviours

• Extinction is not enforcing a consequence to change a response

Delivering Reinforcements

• Reinforcements are most effective for motivation either continuously or intermittently

• Continuous reinforcement schedules administer consequences after every instance of a specific behavior.

• Intermittent reinforcement features Fixed and Variable schedules of interval and ratios

• An effective strategy is to:

• Identify, measure, analyse and evaluate

• Don't reinforce the wrong behaviour

• Accurately measure punishment at a good time

• Simplest and suitable schedule is preferred

• Financial, nonfinancial and social rewards should provide incentives

• The highest probability of success comes with a combination

Components of Goal-Setting Theory

• Goal Specificity- requires clear, defined goals

• Goal Difficulty- is the measure of how challenging goals are

• There must be goal acceptance and an understanding of goals.

• There needs to be constant performance feedback for an increase in success

• Setting goals can be aggressive such as JetBlue has what is perhaps the industry's most aggressive baggage handling goal meaning plane's hold to baggage claim in 20 minutes.

• Goals creates tension- and thus need to be satisfied only

Motivating With Goal-Setting Theory

• Managers should enforce goals with
  • Specifity to challenges
  • Should be for all workers to ensure they accept the company goals
  • Provide continuous feedback

Integrated Model

• Motivitating with the basics, Expectancy Theory, reinforement theory, Equity and goal setting theory influence eachother to achieve ideal output