Business Management - Chap 16 PDF

PAR T 5 CH 16 Individual Needs and Motivation Intrinsic and Extrinsic Rewards Content Perspectives on Motivation The Hierarchy of Needs ERG Theory A Two-Factor Approach to Motivation Acquired Needs Process Perspectives on Motivation Goal Setting Equity Theory Expectancy Theory Reinforcement Per...

PAR T 5 CH 16 Individual Needs and Motivation Intrinsic and Extrinsic Rewards Content Perspectives on Motivation The Hierarchy of Needs ERG Theory A Two-Factor Approach to Motivation Acquired Needs Process Perspectives on Motivation Goal Setting Equity Theory Expectancy Theory Reinforcement Perspective on Motivation LEARNING OBJECTIVES CHAPTER OUTLINE Motivating Employees After studying this chapter, you should be able to: 1. Describe how motivation is related to individual needs. 2. Explain the difference between intrinsic and extrinsic rewards. 3. Describe content theories of motivation. 4. Describe process theories of motivation. 5. Explain how the reinforcement perspective can be used to motivate employees. 6. Discuss how job design influences motivation. 7. Explain how empowerment and engagement approaches can be used to heighten employee motivation. Direct Reinforcement Social Learning Theory Job Design for Motivation Job Enrichment Job Characteristics Model Leading-Edge Ideas for Motivating Empowering People to Meet Higher Needs Giving Meaning to Work Through Engagement Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. What Motivates You? INSTRUCTIONS: Think of a specific, recent work or study task on which you worked alone. How important was each of the following as a reason for doing that activity? INTRODUCTION 1 __________ 2. I was supposed to do the activity. __________ __________ 3. It was something I felt that I had to do. __________ __________ 4. I avoided the negative consequences that would happen if I didn’t do it. __________ __________ 5. I thought the task was interesting. __________ __________ 6. I enjoyed doing the task. __________ __________ 7. I acquired new knowledge or skill. __________ __________ 8. I became fully immersed in the task. __________ __________ SCORING AND INTERPRETATION: Give yourself 1 point for each “Mostly True” response for items 1–4 and write your score here: E 5 __________. Then give yourself 1 point for each “Mostly True” response for items 5–8 and write your score here: I 5 __________. Your “E” score represents your extrinsic motivation for that task, and your “I” score indicates your intrinsic motivation for that task. Each type of motivation is described in the next few pages of this chapter. Managers and organizations often use extrinsic motivation techniques, but intrinsic motivation is more satisfying for most people. Which score was higher for you? Do you think you would prefer intrinsic or extrinsic rewards in your career? S PSH NA OT R ich Sheridan recently advised a group of automotive industry executives on how to solve one of their biggest problems—employee unhappiness. His advice   didn’t have anything to do with vehicle specifications or manufacturing efficiency. Sheridan, the co-founder, CEO, and “chief storyteller” of Ann Arbor, Michigan, software design and development company Menlo Innovations, says joyful workplaces are the path to productive businesses. He and two colleagues founded Menlo Innovations with the goal of creating an organization “with joyful people achieving joyful outcomes.” At Menlo, there are no “bosses” and people have a great deal of autonomy in how they do their work. Software programmers work in pairs, sharing a single computer and passing the keyboard and mouse back and forth. People are encouraged to experiment continually, and mistakes are accepted as a way to learn. The company has anthropologists on staff to help ensure it achieves its mission to “end human suffering in the world as it relates to technology.” Thousands of businesspeople tour Menlo each year to learn what makes the company’s “joyful” work environment so effective.1 Sheridan points out that being joyful is not just about having fun. Unhappy, disengaged workers affect the bottom line. Managers in other companies are discovering that creating an environment where people feel valued, feel that their work is meaningful, have good relationships with their colleagues and managers, and feel that they have opportunities Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 3 PLANNING __________ 4 ORGANIZING Organizing 1. I received a reward for doing it. 5 LEADING Mostly False 6 CONTROLLING Mostly True ENVIRONMENT 2 572 PART 5 LEADING for growth and development can be a key to high employee motivation. Recent research found that 79 percent of people who quit their jobs cited a lack of appreciation as a major reason for leaving.2 A motivated workforce is an essential ingredient for organizational success. Most people begin a new job with energy and enthusiasm, but employees can lose their drive if managers fail in their role as motivators. Yet motivation is a challenge for many managers, because motivation arises from within employees and may differ for each ­person. Some people are motivated primarily by money, others are motivated to perform well because managers make them feel appreciated for doing a good job, and still others find their p­ rimary motivation in the challenge of solving complex problems or making a contribution to society. With such diverse motivations among individuals, how do managers find the right way to motivate people toward common organizational goals? This chapter reviews several approaches to employee motivation. First, we define motivation and identify the types of rewards that managers use. Then, we examine several models that describe the employee needs and processes associated with motivation. We also look at the use of reinforcement for motivation, explain social learning theory, and examine how job design—changing the structure of the work itself—can affect employee satisfaction and productivity. 16-1 Individual Needs and Motivation Most of us get up in the morning, go to school or work, and behave in ways that are predictably our own. All these behaviors are motivated by something, but most of us don’t think of why we do the things we do. Motivation refers to the forces either within or external to a person that arouse enthusiasm and persistence to pursue a certain course of action. Employee motivation affects productivity, and part of a manager’s job is to channel motivation toward the accomplishment of organizational goals.3 Studies have found that high employee motivation goes hand in hand with high organizational performance and profits.4 It is the responsibility of managers to find the right combination of motivational techniques and rewards to satisfy employees’ needs and simultaneously encourage great work performance. When people come to work, they bring a set of needs with them, and those needs influence their behavior in significant ways.5 Various lists of great companies to work for, such as those from Fortune, use employee surveys to rank companies, and the top-ranking companies typically both exhibit positive corporate cultures and offer a range of benefits that meet varied employee needs, such as inspiring missions, higher than standard wages, free health care coverage, flexible work arrangements, and work–life balance initiatives. The interest in these lists reflects that being a good place to work is important to people because their individual needs are being met. Exhibit 16.1 presents a simple model of how motivation is related to human needs. Needs—such as for recognition, achievement, or monetary gain—translate into an internal EXHIBIT 16.1 A Simple Model of Motivation NEED Creates desire to fulfill needs (money, friendship, recognition, achievement) BEHAVIOR Results in actions to fulfill needs REWARDS Satisfy needs; intrinsic or extrinsic rewards FEEDBACK Reward informs person whether behavior was appropriate and should be used again Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 16 Motivating Employees 573 tension that motivates specific behaviors with which to fulfill those needs. To the extent that the behavior is successful, the person is rewarded because the need is satisfied. The reward also informs the person that the behavior was appropriate and can be used again in the future. Intrinsic and Extrinsic Rewards Intrinsic Four Categories of Motives Managers Can Use 1. Negative Approach 3. Positive Approach Threats and punishments Rewards such as pay raises, bonuses, praise 2. Negative Approach 4. Positive Approach Tap into self-doubts Help people enjoy their work, get a sense of accomplishment Pain/Fear Pleasure/Growth SOURCE: Based on Bruce H. Jackson, “Influence Behavior; Become a Master Motivator,” Leadership Excellence (April 2010): 14. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING 16.2 Extrinsic EXHIBIT PSH NA OT Managers who understand the motives that compel people to initiate, alter, or continue a desired behavior are more successful as motivators. Exhibit 16.2 illustrates four categories of motives based on two criteria. The vertical dimension contrasts intrinsic versus extrinsic rewards. The horizontal dimension contrasts behaviors that are driven by fear or pain versus those driven by growth or pleasure. Intrinsic rewards are the internal satisfactions and positive feelings that a person receives in the process of performing a particular action. The completion of a complex task may bestow a pleasant feeling of accomplishment, for instance, or solving a problem that benefits others may fulfill a personal mission. An example of intrinsic rewards comes from cloud-based software company Salesforce, where employees say they are motivated by the positive feelings of working on the “cutting edge” of reinventing how companies handle ordinary but critical tasks like sales, customer relations, and internal communications.6 By contrast, extrinsic rewards originate externally. Extrinsic rewards are received from outside the individual, are often given by another person, such as a manager, and include things such as pay raises, promotions, awards, and praise. At the Alta Gracia factory in the Dominican Republic, owned by Knights Apparel, employees are motivated by the extrinsic reward of high pay because they need money to support their families and can’t make nearly as much anywhere else.7 Effective managers want people to receive both extrinsic and intrinsic rewards to meet their needs. Researchers at the London School of Economics analyzed more than 50 studies to examine what gets people motivated at work. They concluded that people give their best effort when the work itself interests and excites them, when they feel that S 16-2 574 PART 5 LEADING their work provides meaning and purpose, and when they feel appreciated for their work and contributions.8 Why does Wegmans Food Markets regularly show up on Fortune magazine’s list of “Best Places to Work”? One reason is that Wegmans provides extrinsic rewards such as health insurance even for part-­ timers, subsidized gym memberships, and c­ ollege tuition reimbursement. But the real key to motivation may be the intrinsic rewards that people get from working there. Produce workers, for example, have the chance to be farm-to-table ambassadors on the organic farms supplying their stores, and 98 percent of Wegmans employees surveyed say they believe customers appreciate the quality service they provide. S OT PSH NA S OT PSH NA Richard Levine/Alamy Stock Photo Concept Connection The four quadrants in Exhibit 16.2 represent four differing approaches to motivating people.9 Quadrants 1 and 2 are both negative approaches to motivating. Quadrant 1 uses negative, extrinsic methods, such as threats or punishments, to get people to perform as desired. For example, some companies have found that penalizing employees for smoking or being overweight by charging extra for health insurance is an effective way to change behaviors and lower company health care costs. The use of such practices is growing, with leaders citing behavioral science research showing that people typically respond more strongly to a potential loss (such as a financial penalty for not losing weight), a response referred to as loss aversion, than to an expected gain (such as a financial reward for losing weight). Participation in the health-risk assessment program at Mohawk Industries increased 97 percent after managers began penalizing employees $100 if they didn’t participate. Previously, the company offered rewards for participation, but enrollment rates remained low, which sparked the shift to penalties.10 Quadrant 2 methods attempt to motivate people by tapping into their self-doubts or anxieties. For example, a manager might motivate people to work hard by emphasizing the weak economy and high unemployment rate. Quadrants 1 and 2 methods can indeed be effective, as fear is a powerful motivator.11 However, using fear to motivate people in organizations almost always has negative consequences for employee development and long-term performance. Quadrants 3 and 4 are positive motivational approaches. Quadrant 3 methods attempt to influence behavior by using extrinsic rewards that create pleasure. Something as simple as giving employees free food and beverages and giving people time to socialize makes them happier and more motivated. Meadow Office Interiors, with headquarters in New York City, used to have wine gatherings on Wednesdays and pizza on Fridays but had to find a new approach for people working at home because of the shutdown during the ­COVID-19 pandemic. Managers turned to SnackMagic, a new brand from Kitchen Stadium, Inc., and allowed remote workers to choose $45 worth of personalized snacks that were sent to their homes. Marissa Allen, chief operating officer and co-owner, said providing snacks helps maintain a sense of community, adding, “We need to try and focus on that even when we’re not in the office.”12 Many managers have also learned that praise and expressions of appreciation are powerful extrinsic motivators. Lee Cockerell, retired executive vice president of operations Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. S Shoptalk Tribune Content Agency LLC/Alamy Stock Photo Motivating in a Bossless Environment 5 A s companies flatten their hierarchies and eliminate managers, motivated employees become especially important. In a truly bossless organization, no one is taking attendance or monitoring work. People and teams act on their own. An organization that wants to go bossless should consider the following motivational methods: LEADING MANAGER’S PSH NA OT for the Walt Disney World Resort, says high motivation and top performance come from “recognition, encouragement, and appreciation.” Disney has been holding “Employee Appreciation Day” for cast members (Disney’s term for employees) on the first Friday of each March for more than 25 years, but Cockrell says it is also important to make sure every person feels appreciated on a regular basis: “Perhaps you can send [people] on the front line a note telling them how thankful you are for their contributions. . . . Or maybe verbalize to [someone] how much of a positive impact they truly make.”13 The positive motivational approach of Quadrant 3 is useful but limited. External rewards are important, but they can lose their power as motivational tools over time. The most effective managers also emphasize Quadrant 4 techniques that tap into employees’ deep-seated energy and commitment by helping people get intrinsic rewards from their work. For example, at Morrison Management Specialists, which provides food, nutrition, and dining services to the health care and senior living industries, managers provide training sessions under the title of “Our Great Partnership” and strive to help people see how their jobs make a difference in the lives of elderly or ill people. A “People First” recognition program gives employees a chance to recognize one another for exceptional service.14 In organizations that have shifted to a bossless workplace, where no one is telling people what to do and keeping tabs on whether they do it, managers need people who can act based on their own motivation. The “Manager’s Shoptalk” describes motivation techniques managers can use in a bossless environment. 575 Melvyn Longhurst/The Image Bank Unreleased/Getty Images CHAPTER 16 Motivating Employees •• Don’t hide information. At Menlo Innovations, information concerning motivational factors is so open that a new employee is likely to feel exposed. A chart displays the names, titles, and pay grades of all employees. In response to a question about what it felt like to have his CONTINUED Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 576 PART 5 LEADING salary visible to colleagues, an employee responded, “It’s liberating.” •• Rely on intrinsic rewards. People at the Web design and hosting firm DreamHost understand that the way employees are motivated is changing. “Twenty years ago, it was about higher pay. Now it’s more about finding your work meaningful and interesting,” said former CEO Simon Anderson. •• Let people own the goal. At tomato-processor Morning Star, goals—not supervisors—are used for motivation. A tomato sorter pledges to sort a predetermined amount of tomatoes a day, for example. A person responsible for helping evaporate the water out of tomato pulp signs an agreement to evaporate a specific number of gallons of water every week. With a clear goal, people are left alone to do their work. •• Reward the team. In a bossless environment, achievement is usually tied to the team, so individual rewards are replaced by shared achievement. Friendliness and helpfulness matter more than personal ladder-climbing and reward-seeking. At Menlo Innovations and other bossless companies, peer teams make hiring decisions as well as deciding promotions, layoffs, and firings. •• Hire attitude over aptitude. Hiring workers who are selfstarters and team players can be vital to making a bossfree system work. Technical wizards who are jerks will poison the culture. Cissy Pau, principal consultant at Clear HR Consulting, says employees “need to know what to do, how to do it, when to do it.” •• Reinvent management. Thomas Davenport, co-author of Manager Redefined, says managers must learn to motivate in a different way. “Nobody comes to work in the 21st century world and says, ‘Please manage me.’ They say, ­‘Create an environment where I can be successful.’ ” ­Managers must learn to see themselves as working among equals, rather than being above others. Their new job is to support the people around them, remove obstacles, and encourage better work, which is similar to the “servant leadership” described in Chapter 15. Sources: Matthew Shaer, “The Boss Stops Here,” New York Magazine (June 24–July 1, 2013): 25–34; Knowledge@Wharton, “Going BossFree: Utopia or ‘Lord of the Flies’?” (August 1, 2012), http://knowledge. wharton.upenn.edu/article/going-boss-free-utopia-or-lord-of-theflies/; Shelley White, “The Bossless Office: Motivational Experience or Invitation to Anarchy?” (October 11, 2012), www.theglobeandmail.com/ report-on-business/small-business/sb-managing/human-resources/ the-bossless-office-motivational-experience-or-invitation-to-anarchy/ article4601671/; and Ilya Pozin, “Want Happier Employees? Get Rid of the Bosses,” Inc. (June 18, 2012), www.inc.com/ilya-pozin/want-happieremployees-get-rid-of-the-bosses.html. Re m e m b e r T h i s •• Motivation is the arousal of enthusiasm and persistence to pursue a certain course of action. •• All behaviors are motivated by something, such as the desire to fulfill needs for money, recognition, friendship, or a sense of accomplishment. •• Intrinsic rewards are the internal satisfactions and positive feelings that a person receives in the process of performing a particular action. •• Extrinsic rewards are given by another person, such as a manager, and include pay increases, promotions, and praise. •• Meadow Office Interiors has wine gatherings on community among employees; with people working at home during the COVID-19 pandemic, managers gave them a chance to choose $45 worth of snacks that were sent to their homes. •• People can be driven to act by fear, but good managers avoid the use of fear tactics to motivate people because this approach damages employee commitment and performance in the long run. •• In addition to providing appropriate extrinsic rewards, effective managers try to help people achieve intrinsic rewards from their work. Wednesdays and pizza on Fridays to promote a sense of Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 16 Motivating Employees 577 Content Perspectives on Motivation 16-3 Content theories emphasize the needs that motivate people. At any point in time, people have a variety of needs. These needs translate into an internal drive that motivates specific behaviors in an attempt to fulfill the needs. In other words, our needs are like a hidden catalog of the things that we want and will work to get. To the extent that managers understand employees’ needs, they can design reward systems to meet them and direct employees’ energies and priorities toward attaining organizational goals. 16-3A THE HIERARCHY OF NEEDS Probably the most famous content theory was developed by Abraham Maslow.15 Maslow’s hierarchy of needs theory proposes that people are motivated by multiple needs, and that these needs exist in a hierarchical order, as illustrated in Exhibit 16.3. Maslow identified five general types of motivating needs, listed here in order of ascendance: EXHIBIT 16.3 S PSH NA OT 1. Physiological needs. These most basic human physical needs include food, water, and oxygen. In the organizational setting, they are reflected in the needs for adequate heat, air, and base salary to ensure survival. 2. Safety needs. These needs include a safe and secure physical and emotional environment and freedom from threats—that is, for freedom from violence and for an orderly society. In the workplace, safety needs reflect the needs for safe jobs, fringe benefits, and job security. Safety needs assumed priority for many people during the ­COVID-19 pandemic. For example, after the Orange County, California, board of education voted in July 2020 to return students to school without face masks or social distancing, teacher Denise Bradford said, “How horrible is it that one of the Maslow’s Hierarchy of Needs Needs Hierarchy Fulfillment on the Job Self-Actualization Needs Opportunities for advancement, autonomy, growth, creativity Esteem Needs Recognition, approval, high status, increased responsibilities Belongingness Needs Work groups, clients, coworkers, supervisors Safety Needs Safe work, fringe benefits, job security Physiological Needs Heat, air, base salary Higher Needs Lower Needs Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. LEADING 5 578 PART 5 LEADING S OT PSH NA S OT PSH NA S OT PSH NA things on the list to do is to have a plan for students and teachers dying?” In hardhit Arizona, with administrators in limbo about how to keep teachers and students safe from COVID-19, art teacher Marcy Warner made the tough decision to retire, saying, “I love those kids and where I taught and what I did, but I’m not quite willing to die for them.”16 Job security was also a growing concern during the pandemic. One job satisfaction survey has indicated that job security is the most important element of job satisfaction, with good benefits being second most important.17 3. Belongingness needs. These needs reflect the desire to be accepted by one’s peers, have friendships, be part of a group, and be loved. In the organization, these needs influence the desire for good relationships with coworkers, participation in a work group, and a positive relationship with supervisors. To help meet belongingness needs at Sadler’s Wells Theatre in London, artistic director and CEO Alistair Spalding implemented an “associate artists” program, giving regularly performing artists free office space and access to rehearsal studios and the cafeteria. The increased interaction and mingling between artists and theater staff led to significant positive changes. Staff members, who previously had a somewhat antagonistic attitude toward the artists, became more motivated and engaged when they saw how important their contributions were to the nightly dance performances. Thanks to the higher level of belongingness, Sadler’s Wells became a dynamic community in which everyone focused on achieving the goal of becoming a center of innovation in dance.18 4. Esteem needs. These needs relate to the desire for a positive self-image and the desire to receive attention, recognition, and appreciation from others. Within organizations, esteem needs reflect a motivation for recognition, an increase in responsibility, high status, and credit for contributions to the organization. One example comes from Intuit, where Jennifer Lepird spent weeks working long, grueling hours on a big acquisition deal. After the deal closed, Lepird was delighted to get a thank-you note from her manager, along with a small gift certificate, because it met her need to feel appreciated. “The fact that somebody took the time to recognize the effort made the long hours just melt away,” she says.19 5. Self-actualization needs. These needs include the need for self-fulfillment, which is the highest need category. They concern developing one’s full potential, increasing one’s competence, and becoming a better person. Self-actualization needs can be met in the organization by providing people with opportunities to grow, be creative, and acquire training for challenging assignments and advancement. According to Maslow’s theory, lower-order needs take priority—they must be satisfied before higher-order needs are activated. The needs are satisfied in sequence: Physiological needs come before safety needs, safety needs before belongingness needs, and so on. A person desiring physical safety will devote his or her efforts to securing a safer environment and will not be concerned with esteem needs or self-actualization needs. Once a need is satisfied, it declines in importance, and the next-higher need is activated. A study of employees in the manufacturing department of a major health care company in the United Kingdom provides some support for Maslow’s theory. Most line workers said that they worked at the company primarily because of the good pay, benefits, and job security. Thus, employees’ lower-level physiological and safety needs were being met. When questioned about their motivation, employees indicated the importance of positive social relationships with both peers and supervisors (belongingness needs) and a desire for greater respect and recognition from management (esteem needs).20 16-3B ERG THEORY Clayton Alderfer proposed a modification of Maslow’s theory in an effort to simplify it and respond to criticisms of its lack of empirical verification.21 His ERG theory identified three categories of needs: 1. Existence needs. Needs for physical well-being Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 16 Motivating Employees 579 2. Relatedness needs. Needs for satisfactory relationships with others 3. Growth needs. Needs focusing on the development of human potential and the desire for personal growth and increased competence Concept Connection Managers are finding that existence needs for Generation Z employees reflect •• Employee ownership. Publix is the world’s largest employee-owned company. After a year on the job, people are awarded stock valued at an average of 10 percent of their compensation and get annual allotments after that. •• Regular feedback and frequent pay raises. New employees have 30-day, 60-day, and 90-day check-in meetings with their managers and are eligible for pay raises every six months. •• A promote-from-within culture. Publix works with even part-time employees to pursue a lifelong career track. Nearly 100 percent of its retail management team started as entry-level sales associates. Some companies have also found that job flexibility is a great high-level motivator. Some evidence indicates that people who have greater control over their work schedules are significantly less likely to suffer job burnout and are more highly committed to their employers.23 Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING S PSH NA OT The ERG model and Maslow’s hierarchy of needs are similar in that both take a hierarchical form, with individuals presumed to move up the hierarchy one step at a time. However, Alderfer reduced the number of need categories to three and proposed that movement up the hierarchy is more complex, reflecting a frustration-regression principle—namely, that failure to meet a high-order need may trigger a regression to an already fulfilled lowerorder need. Thus, a worker who cannot fulfill a need for personal growth may revert to a lower-order need and redirect his or her efforts toward making a lot of money. The ERG model therefore is less rigid than Maslow’s needs hierarchy, suggesting that individuals may move down as well as up the hierarchy, depending on their ability to satisfy their needs. Needs hierarchy theories explain why organizations find ways to recognize employees, encourage their participation in decision making, and give them opportunities to make significant contributions to the organization and society. Consider how Publix, which Fortune writer Christopher Tkaczyk says “may have the happiest, most motivated workforce in America,” works to meet both higher- and lower-level needs. Tkaczyk identified three specific components of Publix’s successful motivation strategy:22 Fredrick Kippe/Alamy Stock Photo a concern for personal safety and security because of experiences with online bullying. Relatedness needs are especially strong among these younger workers who crave acceptance by their peer group, and Gen Z employees express growth needs with their desire for individual achievement through their own hard work. 580 PART 5 LEADING A TWO-FACTOR APPROACH TO MOTIVATION 16-3C S OT PSH NA Frederick Herzberg developed another popular theory of motivation called the two-factor theory.24 Herzberg interviewed hundreds of workers about times when they were highly motivated to work and other times when they were dissatisfied and unmotivated. His findings suggested that the work characteristics associated with dissatisfaction were quite different from those pertaining to satisfaction, which prompted the notion that two factors influence work motivation. The two-factor theory is illustrated in Exhibit 16.4. The center of the scale is neutral, meaning that workers are neither satisfied nor dissatisfied. Herzberg believed that two entirely separate dimensions contribute to an employee’s behavior at work. The first, called hygiene factors, involves the presence or absence of job dissatisfiers, such as working conditions, pay, company policies, and interpersonal relationships. When hygiene factors are poor, work is dissatisfying. However, good hygiene factors simply remove the dissatisfaction; they do not in themselves cause people to become highly satisfied and motivated in their work. Pulitzer Prize–winning journalist Charles Duhigg wrote an article about attending a business school reunion that illustrates this point. Duhigg was surprised to find former classmates who were making more than $1 million per year but said they hated going to the office. One said, “My work feels totally meaningless. If you spend 12 hours a day doing work you hate, at some point it doesn’t matter what your paycheck says.”25 Herzberg’s second set of factors does influence job satisfaction. Motivators focus on high-level needs and include achievement, recognition, responsibility, and opportunity for EXHIBIT Highly Satisfied 16.4 Herzberg’s Two-Factor Theory Area of Satisfaction Motivators Achievement Recognition Responsibility Work itself Personal growth Neither Satisfied nor Dissatisfied Area of Dissatisfaction Hygiene Factors Motivators influence level of satisfaction. Hygiene factors influence level of dissatisfaction. Working conditions Pay and security Company policies Supervisors Interpersonal relationships Highly Dissatisfied Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 16 Motivating Employees S S PSH NA OT ACQUIRED NEEDS The acquired needs theory, developed by David McClelland, proposes that certain types of needs are acquired during the individual’s lifetime. In other words, people are not born with these needs, but rather learn them through their life experiences.28 The three needs most frequently studied are these: •• Need for achievement. The desire to accomplish something difficult, attain a high stan- dard of success, master complex tasks, and surpass others •• Need for affiliation. The desire to form close personal relationships, avoid conflict, and establish warm friendships •• Need for power. The desire to influence or control others, be responsible for others, and have authority over others Early life experiences typically determine whether people acquire these needs. If children are encouraged to do things for themselves and receive reinforcement, they will acquire a need to achieve. If they are reinforced for forming warm human relationships, they will develop a need for affiliation. If they get satisfaction from controlling others, they will acquire a need for power. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING 16-3D PSH NA OT growth. Herzberg believed that when motivators are absent, workers are neutral toward work, but when motivators are present, workers are highly motivated and satisfied. Thus, hygiene factors and motivators represent two distinct factors that influence motivation. Hygiene factors work only in the area of dissatisfaction. Unsafe working conditions, low pay, or a noisy work environment will cause people to be dissatisfied, but correction of these conditions will not lead to a high level of motivation and satisfaction. Motivators such as challenge, responsibility, and recognition must be in place before employees will be highly motivated to excel at their work. In one survey, 60 percent of people said they were more motivated by recognition than by money. At the same time, 82 percent reported feeling that their supervisor didn’t recognize them for what they did.26 The implications of the two-factor theory for managers are clear. On the one hand, providing hygiene factors will eliminate employee dissatisfaction, but will not motivate workers to high achievement levels. On the other hand, recognition, challenge, and opportunities for personal growth are powerful motivators and will promote high satisfaction and performance. The manager’s role is to remove dissatisfiers—that is, to provide hygiene factors sufficient to meet basic needs—and then to use motivators to meet higher-level needs and propel employees toward greater achievement and satisfaction. Consider how managers at Mars Incorporated, the maker of candies such as M&Ms and pet foods such as the Pedigree line, provide both hygiene factors and motivators. Compensation at Mars is very good compared to similar companies, and many employees get bonuses ranging from 10 percent to 100 percent of their salaries if their team performs well. Vending machines dispense free candy all day long, and employees in the pet foods division can bring their dogs to work. These elements provide positive hygiene factors, but Mars also provides motivators. Employees are often paired with a mentor to learn new skills. Younger employees may serve as mentors for high-level executives, helping them develop social media skills. People can take paid time off to volunteer for community activities such as cleaning parks, planting gardens, or assisting at medical clinics. A highly competitive program selects 80 or so people each year to spend up to six weeks working with Mars-related partners (such as growers of cocoa beans) in remote areas of other countries.27 581 582 PART 5 LEADING Do You Have a Need for Achievement, Affiliation, or Power?29 INSTRUCTIONS: This questionnaire asks you to describe situations that you like. For each item below, give the n ­ umber “3” to the phrase that best describes you, “2” to the item that is next best, and “1” for the item that is least like you. 1. __________ a. I like to do my best in whatever I undertake. __________ b. I like to form new friendships. __________ c. I like to tell other people how to do their jobs. 2. __________ a. I like to be able to say that I have done a difficult job well. __________ b. I like to have strong attachments with my friends. __________ c. I like to take on responsibilities and obligations. 3. __________ a. I like to accomplish tasks that require skill and effort. __________ b. I like to share things with my friends. __________ c. I like to be called upon to settle arguments and disputes between others. 4. __________ a. I like to be successful in things I undertake. __________ b. I like to do things for my friends. __________ c. I like to be able to persuade others to do what I want to do. 5. __________ a. I like to seek satisfaction from accomplishing a difficult task. __________ b. I like to meet new people. __________ c. I like to be regarded by others as a leader. 6. __________ a. I would like to be a recognized authority in my career field. __________ b. I like to participate in groups in which the members have warm and friendly feelings toward one another. __________ c. When in a group, I like to make the decisions about what we are going to do. 7. __________ a. I like to confront the difficult challenges of the job. __________ b. I like to make as many friends as I can. __________ c. I would like to be a powerful executive or politician. SCORING AND INTERPRETATION: Compute your scores as follows: Need for achievement 5 1a 1 2a 1 3a 1 4a 1 5a 1 6a 1 7a 5 __________ Need for affiliation 5 1b 1 2b 1 3b 1 4b 1 5b 1 6b 1 7b 5 __________ Need for power 5 1c 1 2c 1 3c 1 4c 1 5c 1 6c 1 7c 5 __________ David McClelland’s research found that some human needs are learned during early life experiences, and the three that he studied are personal need for achievement, affiliation, and power. Achievement means the need to excel. Affiliation means the need for harmonious relationships. Power means the need to direct and influence others. One of the three needs is typically stronger than the others in most people. The higher your score on a need, the stronger it is and the more it will guide your behavior. What do the relative strengths of the three needs mean to you? If you can align your career to use and satisfy your stronger needs, you are more likely to be successful. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 16 Motivating Employees 583 For more than 20 years, McClelland studied human needs and their implications for management. People with a high need for achievement are frequently entrepreneurs. People who have a high need for affiliation are successful integrators, whose job is to coordinate the work of several departments in an organization. Integrators include brand managers and project managers, who must have excellent people skills. A high need for power often is associated with successful attainment of top levels in the organizational hierarchy.30 For example, McClelland studied managers at AT&T for 16 years and found that those with a high need for power were more likely to follow a path of continued promotion over time. More than half of the employees at the top levels had a high need for power. In contrast, managers with a high need for achievement but a low need for power tended to peak earlier in their careers and at a lower level. The reason is that achievement needs can be met through the task itself, but power needs can be met only by ascending to a level at which a person has power over others. In summary, content theories focus on people’s underlying needs and label those particular needs that motivate behavior. The hierarchy of needs theory, the ERG theory, the twofactor theory, and the acquired needs theory all help managers understand what motivates people. In this way, managers can design work to meet needs and hence elicit appropriate and successful work behaviors. Re m e m b e r T h i s people. • • The most well-known content theory is Maslow’s hierarchy of needs theory, which proposes that people are motivated by five categories of needs— physiological, safety, belongingness, esteem, and self-actualization—that exist in a hierarchical order. •• ERG theory is a modification of the needs hierarchy and proposes three categories of needs: existence, relatedness, and growth. •• The frustration-regression principle is the idea that failure to meet a higher-order need may cause a regression to an already satisfied lower-order need; thus, people may move down as well as up the needs hierarchy. •• One element of Herzberg’s two-factor theory, hygiene factors, focuses on lower-level needs and involves the presence or absence of job dissatisfiers, including working conditions, pay, and company policies. •• Herzberg’s second factor, motivators, influences job satisfaction based on fulfilling higher-level needs such as achievement, recognition, responsibility, and opportunities for personal growth. •• Sixty percent of people surveyed said they were more motivated by recognition than by money, and 82 percent of those surveyed reported feeling that their supervisor didn’t recognize them for what they did. •• The acquired needs theory proposes that certain types of needs, including the need for achievement, need for affiliation, and need for power, are acquired during an individual’s lifetime of experiences. Process Perspectives on Motivation 16-4 Process theories explain how people select behavioral actions to meet their needs and determine whether their choices were successful. Important perspectives in this area include goal setting, equity theory, and expectancy theory. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING •• Content theories emphasize the needs that motivate 584 PART 5 LEADING 16-4A GOAL SETTING Recall from Chapter 7 our discussion of the importance and purposes of goals. Numerous studies have shown that specific, challenging targets significantly enhance people’s motivation and performance levels.31 You have probably noticed in your own life that you are more motivated when you have a specific goal, such as making an A on a final exam, losing 10 pounds before spring break, or earning enough money during the summer to buy a used car. Goal-setting theory, described by Edwin Locke and Gary Latham, proposes that managers can increase motivation and enhance performance by setting specific, challenging goals, and then helping people track their progress toward goal achievement by providing timely feedback. Exhibit 16.5 illustrates key components of goal-setting theory.32 •• Goal specificity refers to the degree to which goals are concrete and unambiguous. Spe- cific goals, such as “Visit one new customer each day” or “Sell $1,000 worth of merchandise a week,” are more motivating than vague goals, such as “Keep in touch with new customers” or “Increase merchandise sales.” Vague goals can be frustrating for employees. •• In terms of goal difficulty, hard goals are more motivating than easy ones. Easy goals provide little challenge for employees and don’t require them to increase their output. Highly ambitious but achievable goals ask people to stretch their abilities and provide a basis for greater feelings of accomplishment and personal effectiveness. A study in Germany found that, over a three-year period, only employees who perceived their goals as difficult reported increases in positive emotions and feelings of job satisfaction and success.33 •• Goal acceptance means that employees have to “buy into” the goals and be committed to them. Having people participate in setting goals is a good way to increase acceptance and commitment. •• The component of feedback means that people get information about how well they are doing in progressing toward goal achievement. It is important for managers to provide performance feedback on a regular, ongoing basis. However, self-feedback, where people EXHIBIT 16.5 Criteria for Motivational Goals Provide feedback Challenging Specific Accepted Higher Motivation Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 16 Motivating Employees are able to monitor their own progress toward a goal, has been found to be an even stronger motivator than external feedback.34 585 “If you look at the modern workplace, I would say it’s one of the most feedback-deprived places in American civilization.” S EQUITY THEORY Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING PSH NA OT Equity theory focuses on individuals’ perceptions of how fairly they are treated compared with others. Developed by J. Stacy Adams, equity theory proposes that people are motivated to seek social equity in the rewards they receive for performance.37 According to equity theory, if people perceive their compensation as being equal to what others receive for similar contributions, they will believe that their treatment is fair and equitable. People evaluate equity by determining the ratio of inputs to outcomes. Inputs to a job include education, experience, effort, and ability. Outcomes from a job include pay, recognition, benefits, and promotions. The inputs-to-outcomes ratio may be compared to that of another person in the work group or to a perceived group average. A state of equity exists whenever the ratio of one person’s inputs to outcomes equals the ratio of another’s inputs to outcomes. Inequity occurs when the inputs-to-outcomes ratios are out of balance, such as when a new, inexperienced employee receives the same salary as a person with a high level of education or experience. Consider what happened when Dan Price, the co-founder and CEO of Gravity Payments, announced that every employee at the company, even the newly hired clerk or the lowest-paid assistant, would earn at least $70,000 per year. He thought people would be happier and more motivated, and at first, that seemed to be the case. Then, the problems started. The toughest challenge for Price was that he started losing some of his best people. A Web developer quit, even though he had gotten a $9,000 raise. Why? He felt as if he put 110 percent into his job and didn’t like the fact that “people who were just clocking in and out were making the same as me.” The financial manager also resigned, believing that the biggest raises were going to “the people with the least skills,” rather than rewarding those who were making the greatest contributions. Even a few newly hired employees were unhappy, even though they were making a lot of money for an entry-level job. “Am I doing my job well enough to deserve this?” one asked. “I didn’t earn it.”38 The difficulties Dan Price experienced at Gravity Payments show that motivation can falter if people feel that they aren’t being treated fairly. Some long-term experienced employees lost their motivation when they saw that newly hired people were earning the same S 16-4B OT Why does goal setting increase motivation? For one thing, it enables people to focus their energies in the right direction. People know what to work toward, so they can direct their efforts toward the most important activities to accomplish the goals. Goals also energize behavior because people feel compelled to develop plans and strategies that keep them focused on achieving the targets. Specific, difficult goals provide a challenge and encourage people to put forth high levels of effort. In addition, when goals are achieved, pride and satisfaction increase, contributing to higher motivation and morale.35 The motivational power of goal setting is illustrated by something that occurred when Advanced Circuits was having trouble with frequent stops and restarts on its production line, which was costing the company —Daniel Pink , about $50,000 per month. Former Advanced Circuits CEO Ron Huston came up JOURNALIST AND AUTHOR OF DRIVE: THE SURPRISING TRUTH ABOUT WHAT MOTIVATES US with a plan: He bought a junk car, placed it in the parking lot, and told employees they could take a sledgehammer to the car every day the production line did not have a restart. Employees set a goal of flattening the car in 90 days. Everybody had fun, and they met the 90-day goal by solving production-line problems, which was PSH NA the whole point of the exercise for Huston. Huston realized how motivating it could be for people to have a clear, specific goal, especially if achieving it was fun. He began setting goals for other aspects of the business and rewarding people when the goals were met.36 586 PART 5 LEADING salaries as they were. Others believed they put in more effort and should be rewarded for it, rather than earning the same amount as people they believed weren’t making similar contributions. The example also supports the idea that perceived inequity can occur in the other direction, when people feel they are making too much money. Scientific studies indicate that the human brain seems programmed to dislike inequity, even when we benefit from it. Moreover, people get less satisfaction from money they receive without having to earn it than they do from money they work hard to receive.39 Perceived inequity creates tensions within individuals that motivate them to bring equity into balance.40 The following methods are most commonly used to reduce perceived inequity: •• Change work effort. A person may choose to increase or decrease his or her inputs to the organization. Individuals who believe that they are underpaid may reduce their level of effort or increase their absenteeism. Overpaid people may increase their effort on the job. •• Change outcomes. A person may change his or her outcomes. An underpaid person may request a salary increase or a bigger office. A union may try to improve wages and working conditions to be consistent with a comparable union whose members make more money. •• Change perceptions. Research suggests that people may change perceptions of equity if they are unable to change inputs or outcomes. They may increase the status attached to their jobs artificially or distort others’ perceived rewards to bring equity into balance. •• Leave the job. People who feel inequitably treated may decide to leave their jobs rather than suffer the inequity of being underpaid or overpaid. In their new jobs, they expect to find a more favorable balance of rewards. S OT PSH NA The implication of equity theory for managers is that employees do, indeed, evaluate the perceived equity of their rewards compared to the rewards of others. Many big law firms are reducing the compensation of 10 to 30 percent of their partners each year so as to free up money to hire and reward “star performers,” rejecting the traditional practice of paying partners relatively similar amounts. Such a change fits with the strategy of rewarding people who generate more business, but it is having a damaging effect on the morale and motivation of other partners, who perceive the new compensation scheme as inequitable.41 Inequitable pay puts pressure on employees that is sometimes almost too great to bear. To remedy this situation, they may attempt to change their work habits, try to change the system, or leave the job.42 Concept Connection Managers are dealing with issues related to efits consultants say that pay and promotions are no longer secretive topics. In one survey, nearly half of Millennial employees said they talk about their compensation with colleagues. To avoid ­ erceived inequity, managers must spend p more time designing their compensation practices, ensuring that pay decisions are fair, and explaining why some people are paid more than others. fizkes/Shutterstock.com equity theory more frequently today. Ben- Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 16 Motivating Employees EXPECTANCY THEORY PSH NA OT Expectancy theory suggests that motivation depends on individuals’ expectations about their ability to perform tasks and receive