Motivating By Job Design (PDF)

TOPIC 5: MOTIVATION: FROM CONCEPT TO APPLICATION Motivating by Job Design: The Job Characteristics Model (JCM) The way work is structured has a bigger impact on an individual’s motivation than might first appear. Job design suggests that the way elements in a job are organized can influence employee...

TOPIC 5: MOTIVATION: FROM CONCEPT TO APPLICATION Motivating by Job Design: The Job Characteristics Model (JCM) The way work is structured has a bigger impact on an individual’s motivation than might first appear. Job design suggests that the way elements in a job are organized can influence employee effort. Job characteristics model, discussed next, can serve as a framework to identify opportunities for changes to those elements. The Job Characteristics Model The job characteristics model (JCM) describes jobs in terms of five core job dimensions: - 1. Skill variety is the degree to which a job requires different activities using specialized skills and talents. The work of a garage owner-operator who does electrical repairs, rebuilds engines, does bodywork, and interacts with customers scores high on skill variety. The job of a body shop worker who sprays paint 8 hours a day scores low on this dimension. - 2. Task identity is the degree to which a job requires completion of a whole and identifiable piece of work. A cabinetmaker who designs furniture, selects the wood, builds the furniture, and finishes the pieces has a job that scores high on task identity. A job scoring low on this dimension is operating a lathe solely to make table legs. - 3. Task significance is the degree to which a job affects the lives or work of other people. The job of a nurse helping patients in a hospital intensive care unit score high on task significance Sweeping floors in a hospital score low.  - 4. Autonomy is the degree to which a job provides the worker freedom, independence, and discretion in scheduling work and determining the procedures for carrying it out. A sales manager who schedules his own work and tailors his sales approach for each customer without supervision has a highly autonomous job. An account representative who is required to follow a standardized sales script with potential customers has a job low on autonomy. - 5. Feedback is the degree to which carrying out work activities generates direct and clear information about your own performance. A job with high feedback is testing and inspecting iPads. Installing components of iPads as they move down an assembly line provides low feedback. Exhibit 8-1 (page 288) presents the JCM. Note how the first three dimensions—skill variety, task identity, and task significance combine to create meaningful work the employee will view as: - Important - Valuable - Worthwhile. Jobs with high autonomy give employees: - A feeling of personal responsibility for results Feedback- shows them how effectively they are performing. The JCM proposes that individuals obtain internal rewards when they learn (knowledge of results in the model) that they personally have performed well (experienced responsibility) on a task they care about (experienced meaningfulness). The more these three psychological states are present the greater will be employees’: - Motivation - Performance - Satisfaction - Lower their absenteeism and likelihood of leaving. As Exhibit 8-1 indicates, individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and are more likely to respond to them more positively. Much evidence supports the relationship between the presence of these job characteristics and higher job satisfaction and organizational commitment through increased motivation. JOB REDESIGN “Every day was the same thing,” Frank said. “Stand on that assembly line. Wait for an instrument panel to be moved into place. Unlock the mechanism and drop the panel into the Jeep... as it moved by on the line. Then I plugged in the harnessing wires. I repeated that for eight hours a day. I do not care that they were paying me 24 dollars an hour. I was going crazy. Finally, I just said this is not going to be the way I am going to spend the rest of my life. My brain was turning to JELL-O. So, I quit. Now I work in a print shop and I make less than 15 dollars an hour. But let me tell you, the work I do is interesting. The job changes all the time, I am continually learning new things, and the work really challenges me! I look forward every morning to going to work again.” The repetitive tasks in Frank’s job at the Jeep plant provided little variety, autonomy, or motivation. In contrast, his job in the print shop is challenging and stimulating. From an organizational perspective, the failure of Frank’s first employer to redesign his job into a more satisfying one led to increased turnover. Redesigning jobs therefore has important practical implications—reduced turnover and increased job satisfaction among them. Let us look at some ways to put the JCM into practice to make jobs more motivating. Job Rotation and Job Enrichment Job Rotation Periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level (also called cross- training). Manufacturers also use job rotation as needed to respond more flexibly to the volume of incoming orders. New managers are sometimes rotated through jobs, too, to help them get a picture of a whole organization. At Singapore Airlines, for instance, a ticket agent may temporarily take on the duties of a baggage handler, both to be cross-trained and to get exposure to different aspects of the organization. Extensive job rotation is among the reasons that Singapore Airlines is rated one of the best airlines in the world. The use of job rotation has been shown to increase: - Job satisfaction - Organizational commitment - Organizational performance  - Reduces boredom - Increases motivation - Helps employees understand how their work contributes to the organization. - Increase safety - Reduce repetitive-based work injuries Job rotation does have drawbacks: - Training costs increase when each rotation necessitates a round of training. - Moving a worker into a new position reduces overall productivity for that role. - Job rotation creates disruptions when members of the work group must adjust to new employees. - Supervisors may have to spend more time answering questions and monitoring the work of recently rotated employees. Job Enrichment In job enrichment- high-level responsibilities are added to the job to: - Increase a sense of purpose - Direction - Meaning - Intrinsic motivation. - Job satisfaction - Reducing turnover Relational Job Design While redesigning jobs based on job characteristics theory is likely to make work more intrinsically motivating, research is focusing on how to make jobs more pro socially motivating to people. In other words, how can managers design work so employees are motivated to promote the well-being of the organization’s beneficiaries (customers, clients, patients, and employees)? Shifts the spotlight from the employee to those whose lives are affected by the job that employee performs (Pro-socially) by: - Connect employees more closely with the beneficiaries of their work by relating stories from customers who have found the company’s products or services to be helpful. Example: The medical device manufacturer Medtronic invites people to describe how its products have improved, or even saved their lives and shares these stories with employees during annual meetings, which provides the employees a powerful reminder of the impact of their work. Example: Once a child’s chemotherapy comes to an end at one of the many cancer canters across the United States and he or she has successfully defeated cancer, it has become tradition for the child to ring a bell, the sound of which is often broadcast throughout many areas of the hospital. The mere act of hearing this bell is inspiring to the staff. It motivates individuals toward increased: - Job performance - Job satisfaction - Especially when coupled with autonomy. - Higher level of commitment **Employee be able to relate positive consequences (their actions affect others) of their job to their customers (lifesaving /helping others) ALTERNATIVE WORK ARRANGEMENT Flextime Susan is the classic “morning person.” Every day she rises at 5:00 a.m. sharp, full of energy. However, as she puts it, “I’m usually ready for bed right after the 7:00 p.m. news.” Susan’s work schedule as a claim’s processor at The Hartford Financial Services Group is flexible. Her office opens at 6:00 a.m. and closes at 7:00 p.m., and she schedules her 8-hour day within this 13-hour period. Because she is a morning person whose 7-year-old son gets out of school at 3:00 p.m. every day, Susan opts to work from 6:00 a.m. to 3:00 p.m. “My work hours are perfect. I am at the job when I am mentally most alert, and I can be home to take care of my son after he gets out of school.” Susan’s schedule is an example of flextime, short for flexible work time or flexible work arrangements. Flextime employees must work a specific number of hours per week but may vary their hours of work, within limits. As Exhibit 8-2 shows, each day consists of a common core, usually 6 hours, with a flexibility band surrounding it. The core may be 9:00 a.m. to 3:00 p.m., and the office opens at 6:00 a.m. and closes at 6:00 p.m. Employees must be at their jobs during the common core period, but they may accumulate their other 2 hours around that. Flextime is related to positive work outcomes: - Reductions in absenteeism - Improvements in productivity - Satisfaction. Flextime tends to reduce absenteeism because employees can schedule their work hours to align with personal demands, reducing tardiness and absences, and they can work when they are most productive. Flextime can also help employees balance work and family lives; it is a popular criterion for judging how family friendly a workplace is. flextime is weakly effective at reducing the extent to which work interferes with family, it does not affect situations in which family interferes with work. However, flextime’s effects on work-life balance are more nuanced than they might appear. A British survey showed that men use flexitime to increase flexibility and control over work while maintaining earning capacity. However, the practical limitations of using flexitime may create difficulties for women due to the constraints of their greater household contribution. **Flextime is not suitable for all jobs (is depend on the jobs) Job Sharing Two or more individuals to split a traditional full-time job. For example: Top Ford engineers Julie Levine and Julie Rocco engaged in a job- sharing program that allowed both to spend time with their families while redesigning the Explorer crossover. Typically, one of them would work late afternoons and evenings while the other worked mornings. They both agreed that the program worked well, although making it feasible required a great deal of time and preparation. Not popular: - Not more widely adopted - Difficulty of finding compatible partners to job-share - Historically negative perceptions of individuals not completely committed to their jobs and employers. Job sharing allows: - An organization to draw on the talents of more than one individual for a given job. - It opens the opportunity to acquire skilled workers - For instance: Retirees and parents with young children—who might not be available on a full-time basis. From employees’ perspectives, job sharing can increase motivation and satisfaction if they can work when they would not normally be able to do so. An employer’s decision to use job sharing is often based on policy and financial reasons. Two part-time employees sharing a job can be less expensive in terms of salary and benefits than one full-timer. Pitfalls: - Training, coordination, and administrative costs can be high. - Seeking to match the skills, personality, and needs of the employee with the tasks required for the job is hard. Telecommuting Telecommuting refers to working at home—or anywhere else the employee chooses that is outside the workplace. Despite the benefits of telecommuting, large organizations such as Yahoo! and Best Buy have eliminated it. Yahoo! CEO Marissa Mayer discussed how telecommuting may undermine corporate culture, noting, “People are more productive when they’re alone, but they’re more collaborative and innovative when they’re together.” **Telecommuting is more productive when work alone but less collaborative and innovative) What kinds of jobs lend themselves to telecommuting? (Suitable jobs for telecommuting?) Writers, attorneys, analysts, and employees who spend most their time on computers or the telephone—including telemarketers, customer service representatives, reservation agents, and product support specialists—are candidates. As telecommuters, they can access information on their computers at home as easily as in the company’s office. **Not all type of jobs suitable for telecommuting Telecommuting has several benefits: - It reduces role stress and turnover intentions. - Reductions in work-family conflict more intensely than those who are in the office most of their workweek. - Beyond the benefits to organizations and their employees, telecommuting has potential benefits to society. (Environment saving-energy saving/emit greenhouse gases/reduce traffic jam/cost saving to repair the road) Telecommuting has several downsides: - Lead to social loafing (a person exerting less effort to achieve a goal when they work in group than when working alone) (i.e., employees shirking responsibility in a team setting), especially when the employees have many family responsibilities but their teammates do not.  - Your manager working remotely can affect your performance negatively. - Managers are also challenged to handle the demotivation of office workers who feel they are unfairly denied the freedom of telecommuters. From the employee’s standpoint: - Increase feelings of isolation - Reduce job satisfaction - Reduce coworker relationship quality. - Family conflict in general, you might still experience What can employees and employers do to ensure the arrangements are effective? - Self-leadership (including proactive, goal-setting, and personal performance management are related to success in telework) - Using smart collaboration tools - Communicating frequently - Having clear and transparent policies - Building trust among virtual team members EMPLOYEE INVOLVEMENT Employee involvement and participation (EIP)- is a process that uses employees’ input to increase their commitment to organizational success. (give autonomy and control) will be increase: - Motivation - Commitment - Productive  - Satisfaction with their jobs (and less likely to leave their jobs). - Morale - Performance **EIP programs should be tailored to local and national norms/culture. (US/India/China) Examples of Employee Involvement Programs Let us look at two major forms of employee involvement— participative management and representative participation—in more detail. Participative Management Is joint decision making, in which subordinates share a significant degree of decision-making power with their immediate superiors. Participative management reduces: - The negative effects of job insecurity on satisfaction and turnover intentions. Participative management have a moderate effect on job performance. For participative management to be effective when followers: - Trust - Confidence in their leaders - Prepared for the change in management style Leaders should avoid: - Coercive techniques Focus on: - Organizational consequences of decision making to their followers - Review progress periodically. Participative management may realize: - Higher stock returns - Lower turnover rates - Higher labor productivity Representative Participation Representative participation redistributes power within an organization, putting labor’s interests on a more equal footing with the interests of management and stockholders by including a small group of employees (Can be from union/non-union) as participants in decision making. The two most common forms of representation are: - Works councils (Groups of nominated or elected employees who must be consulted when management makes decisions about employees) - Board representatives (Employees who sit on a company’s board of directors and represent employees’ interests) **Representative participation uses as a tool to increase motivation level. REWARDS AND BENEFITS Using Rewards to Motivate Employees Given that pay is so important, will the organization lead, match, or lag the market in pay? How will individual contributions be recognized? In this section, we consider what to pay employees (decided by establishing a pay structure), and (2) how to pay individual employees (decided through variable-pay plans). What to Pay: Establishing a Pay Structure Establish a pay structure to balance: - Internal equity—the worth of the job to the organization (usually established through a technical process called job evaluation) - External equity—the competitiveness of an organization’s pays relative to pay in its industry (usually established through pay surveys). Obviously, the best pay system reflects what the job is worth and stays competitive relative to the labor market. Some organizations prefer to pay above the market: - Get better-qualified - More highly motivated employees - Stay with the organization longer. - Higher morale - More productive - Customers were more satisfied But pay is often the highest single operating cost for an organization, which means paying too much can make the organization’s products or services too expensive. It is a strategic decision an organization must make, with clear trade-offs. Example: Walmart versus Costco In the case of Walmart, it appears that its strategic decision on pay did not work. While annual growth in U.S. stores slowed to around 1 percent in 2011, one of Walmart’s larger competitors, Costco, grew around 8 percent. The average worker at Costco made approximately $45,000 compared to approximately $17,500 for the average worker at Walmart-owned Sam’s Club. Costco’s strategy was that it will get more if it pays more—and higher wages resulted in increased employee productivity and reduced turnover. Given the recent Walmart decision to increase worker wages throughout the organization, perhaps its executives agree. While some may lag the market because they cannot afford to pay market rates or they are willing to bear the costs of paying below market (namely, higher turnover because people are lured to better- paying jobs). How to Pay: Rewarding Individual Employees through Variable-Pay Programs “Why should I put any extra effort into this job?” asked Anne, a fourth- grade elementary schoolteacher in Denver, Colorado. “I can excel or I can do the bare minimum. It makes no difference. I get paid the same. Why do anything above the minimum to get by?” Comments like Anne’s have been voiced by schoolteachers for decades because pay increases were tied to seniority. Recently, however, many states have altered their compensation systems to motivate teachers by linking pay to results in the classroom, and other states are considering such programs. Many organizations, public and private, are moving away from pay based on seniority or credentials. A variable-pay program: (pay for performance) - Piece-rate - Merit-based - Bonus - Profit-sharing - Employee stock ownership plans Some studies: - Employee creativity and intrinsic motivation was bolstered by pay-for-performance plans, but only when employees trusted management - When guanxi (specific, personal connections between subordinates, supervisors, and coworkers) played less of a role in human resources (HR) practices. - Leadership (see Chapter 12) also plays a role, with pay-for- performance plans leading to performance more clearly when contingent reward leadership and other positive leadership behaviors are used. - Extraverted and emotionally stable individuals tend to be more receptive to and perform better under pay for performance- - Whereas conscientious employees were not as receptive. Secrecy plays a role in the motivational success of variable-pay plans. In some government and nonprofit agencies, pay amounts are either specifically or generally made public, but most U.S. organizations encourage or require pay secrecy. Is this good or bad? Unfortunately, it is bad: Pay secrecy has a detrimental effect on job performance. Even worse, it adversely affects high performers more than other employees. It very likely increases employees’ perception that pay is subjective, which can be demotivating. Individual pay amounts may not need to be broadcast to restore the balance, but if general pay categories are made public and employees feel variable pay is linked objectively to their performance, the motivational effects of variable pay can be retained. The fluctuation in variable pay is what makes these programs attractive to management. It turns part of an organization’s fixed labor costs into a variable cost, thus reducing expenses when performance declines. For example, When the U.S. economy encountered a recession in 2001 and again in 2008, companies with variable pay could reduce their labor costs much faster than others could. Over time, low performers’ pay stagnates, while high performers enjoy pay increases commensurate with their contributions. Piece-Rate Pay The piece-rate pay plan has long been popular as a means of compensating production workers with a fixed sum for each unit of production completed, but it can be used in any organizational setting where the outputs are similar enough to be evaluated by quantity. A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces. Example: Ballpark workers selling peanuts and soda are frequently paid piece- rate. If they sell 40 bags of peanuts at $1 each for their earnings, their take is $40. The more peanuts they sell, the more they earn. Alternatively, piece-rate plans are sometimes distributed to sales teams, so a ballpark worker makes money on a portion of the total number of bags of peanuts sold by the group during a game. ***Piece-rate plans are known to produce higher productivity and wages, so they can be attractive to organizations and motivating for workers. Others - Low-performing workers are generally not interested in piece- rate pay, for obvious reasons—they will not get paid much! (prefer in group/team pay rate) - The chief concern of both individual and team piece-rate workers is financial risk. A recent experiment in Germany found that 68 percent of risk-averse individuals prefer an individual piece-rate system (they can control their own work) because they are concerned others will slack off in a team setting. - European research has suggested that when the pace of work is determined by uncontrollable outside factors such as customer requests rather than internal factors such as coworkers, targets, and machines, a piece rate plan is not motivating. - Either way, managers must be mindful of the motivation for workers to decrease quality and thus increase their speed of output. **Piece-rate plans is not suitable for all jobs, it depends on the nature of the jobs itself, e.g., Doctor) Merit-Based Pay A merit-based pay plan- Pays for individual performance based on performance appraisal ratings. A main advantage is that high performers can get bigger raises. If designed correctly, merit-based plans let individuals perceive a strong relationship between their performance and their rewards. Most large organizations have merit pay plans, especially for salaried employees. Merit pay is slowly taking hold in the public sector. For example, Most U.S. government employees are unionized, and the unions that represent them have usually demanded that pay raises be based solely on seniority. Claiming a new era of accountability, however, New Jersey governor Chris Christie implemented merit pay for teachers. The Newark teacher’s union approved the plan, which included funding from Facebook CEO Mark Zuckerberg. In another unusual move, New York City’s public hospital system pays doctors based on how well they reduce costs, increase patient satisfaction, and improve the quality of care. A move away from merit pay, on the other hand, is coming from some organizations that don’t feel it separates high and low performers enough. “There’s a very strong belief and there’s evidence and academic research that shows that variable pay does create focus among employees,” said Ken Abosch, a compensation manager at human resources consulting firm Aon Hewitt. But when the annual review and raise are months away, the motivation of this reward for high performers diminishes. Even companies that have retained merit pay are rethinking the allocation. Although you might think a person’s average level of performance is the key factor in merit pay decisions, the projected level of future performance also plays a role. One study found that National Basketball Association (NBA) players whose performance was on an upward trend were paid more than their average performance would have predicted. Managers of all organizations may unknowingly be basing merit pay decisions on how they think employees will perform, which may result in overly optimistic (or pessimistic) pay decisions. Despite their intuitive appeal, merit pay plans have several limitations: - One is that they are typically based on an annual performance appraisal and thus are only as valid as the performance ratings, which are often subjective. - This brings up issues of discrimination, as we discussed in Chapter 2. Research indicates that black employees receive lower performance ratings than white employees, women’s ratings are higher than men’s, and there are demographic  differences in the distribution of salary increases, even with all other factors equal. - The pay-raise pool of available funds fluctuates on economic or other conditions that have little to do with individual performance. For instance, a colleague at a top university who performed very well in teaching and research was given a pay raise of $300. Why? Because the pay-raise pool was very small. Yet that amount is more of a cost-of-living increase than a pay-for-performance one. Unions typically resist merit pay plans. Relatively few teachers are covered by merit pay for this reason. Instead, seniority-based pay, which gives all employees the same raises, predominates. merit-based pay plan A pay plan based on performance appraisal ratings. The concept and intention of merit pay—that employees are paid for performance—is sound. For employee motivation purposes, however, merit pay should be only one part of a performance recognition program. Bonus An annual bonus is a significant component of total compensation for many jobs. Bonuses reward recent performance. When times are bad, firms can cut bonuses to reduce compensation costs. The problem is when employees depend on bonuses or take them for granted. “People have begun to live as if bonuses were not bonuses at all but part of their expected annual income,” said Jay Lorsch, a Harvard Business School professor. The way bonuses and rewards are categorized also affects peoples’ motivation. Splitting rewards and bonuses into categories—even if the categories are meaningless—may increase motivation. Why? Because people are more likely to feel they missed out on a reward if they don’t receive one from each category, and then work harder to earn rewards from more categories. Short-term bonuses can also have an effect: In a high-tech manufacturing factory, cash, family meal vouchers, and employee recognition (see later in this chapter) all increased performance by 5 percent Nonmoney based bonuses were actually more effective at improving performance. Profit-Sharing Plan A profit-sharing plan- Distributes compensation based on some established formula designed around a company’s profitability. Compensation can be direct cash outlays or, particularly for top managers, allocations of stock options. For example, Jacob Luke started his own lawn-mowing business at age 13. He employed his brother Isaiah and friend Marcel and paid them each 25 percent of the profits he made on each yard. Studies generally support the idea that organizations with profit- sharing plans have higher levels of profitability than those without them. These plans have also been linked to: - Higher levels of employee commitment - Have positive impacts on employee attitudes - Employees report a greater feeling of psychological ownership - Motivate individuals to higher job performance  Employee Stock Ownership Plan An employee stock ownership plan (ESOP) is a company-established benefit plan in which employees acquire stock, often at below- market prices, as part of their benefits. Research on ESOPs indicates: - Increase firm performance - Increase employee innovation - Organizational identification - Potential to increase job satisfaction only when employees psychologically experience ownership. - ESOPs for top management can reduce unethical behavior. For instance, CEOs are less likely to manipulate firm earnings reports to make themselves look good in the short run when they have an ownership share. - ESOPs are also tools that can be used for community wealth building, such as the Cleveland model of networked worker cooperatives in Ohio. Evaluation of Variable Pay Do variable-pay programs increase motivation and productivity? Generally, yes, but that doesn’t mean everyone is equally motivated by them. Many organizations have more than one variable-pay element in operation, such as an ESOP and bonuses, so managers should evaluate the effectiveness of the plan in terms of the employee motivation gained from each element separately and from all elements together. Managers should monitor their employees’ performance-reward expectancy because a combination of elements that makes employees feel that their greater performance will yield them greater rewards will be the most motivating. **Organization should evaluate which of variable pay program is the most motivated factors to organizational performance. ***USING BENEFITS TO MOTIVATE EMPLOYEE (SELF DIRECTED LEARNING)