Motivation: From principle to applications

CHAPTER OVERVIEW

We have presented lots of motivation theories and applications in this and the prior chapter. While it is usually dangerous to synthesize a large number of sophisticated ideas into a few simple suggestions, the following suggestions summarize the essence of what we know about motivating employees in organizations.

Recognize individual differences. Employees have different needs. Do not treat all of them alike. Moreover, spend enough time necessary to understand what is important to each worker. This will allow you to individualize goals, degree of engagement, and rewards to align with individual needs.

Use goals and feedback. Employees must have hard, specific goals, as well as reviews how well they are simply faring in search of those goals.

Allow employees to participate in decisions that affect them. Employees can contribute to a number of decisions that affect them: setting up work goals, choosing their own benefits packages, solving efficiency and quality problems, and the like. This may increase employee productivity, commitment to work goals, motivation, and job satisfaction.

Link rewards to performance. Rewards should be contingent on performance. Notably, employees must perceive a definite linkage. Regardless of how closely rewards are in reality correlated to performance requirements, if individuals perceive this romance to be low, the results will be low performance, a decrease in job satisfaction, and a rise in turnover and absenteeism reports.

Check the system for equity. Rewards also needs to be perceived by employees as equating with the inputs they bring to the job. At a simplistic level, this should imply that experience, skills, ability, effort, and other clear inputs should make clear distinctions in performance and, hence, pay, job assignments, and other obvious rewards.

WEB EXERCISES

At the finish of each chapter of the instructor's manual you will find suggested exercise and ideas for exploring the WWW on OB issues. The exercises "Exploring OB Matters on the net" are setup to be able to simply photocopy the webpages, distribute these to your class, and make projects accordingly. You may want to assign the exercises as an out-of-class activity or as laboratory activities with your category. Within the lecture notes the visual will remember that there is a WWW activity to aid this materials.

The chapter opens with the new compensation system integrated by the accounting organization of J. H. Cohn. Usually, accounting businesses have based reimbursement in large part on seniority. Cohn, however, has improved its reimbursement program to reveal purchase performance. Cohn's CEO, Tom Marino, sees performance centered pay as helping motivate younger partners to build the business enterprise. It provides incentive and rewards performance.

BRIEF CHAPTER OUTLINE

Management by Objectives

  1. What Is MBO?
  1. Management by goals emphasizes participatively establish goals that are tangible, verifiable, and measurable.
  2. MBO operationalizes objectives by devising an activity by which objectives cascade down through the organization. (Display 7-1).
  3. MBO Elements
  • Goal specificity
  • Participative decision making
  • Explicit time period
  • Performance feedback
  1. Linking MBO and Goal-Setting Theory
  1. Goal-setting theory demonstrates that:
  • Hard goals cause a higher degree of performance
  • Specific hard goals result in higher degrees of performance
  • Feedback on one's performance causes higher performance.
  1. MBO immediately advocates specific goals and feedback.
  • Goals must be regarded as feasible
  • Most effective when goals require stretching
  1. The only area of possible disagreement with goal setting techniques theory is involvement in the environment of goals.
  1. MBO in Practice
  1. MBO is a popular technique

Instructor Note: At this point in the lecture you might create the TEAM EXERCISE - Goal Setting Task within the written text and at the end of these section notes. The goal of the exercise is to learn how to write tangible, verifiable, measurable, and relevant goals as might progress from an MBO program.

Employee Identification Programs

  1. What Are Employee Identification Programs?
  1. Employee popularity programs contain personal attention, expressing interest, acceptance, and understanding for a job done well.
  1. Linking Reputation Programs and Reinforcement Theory
  1. Research indicates that the most powerful workplace motivator is acknowledgement.
  1. Employee Popularity Programs in Practice
  1. The highly competitive global economy has put most organizations under severe cost stresses, which is why identification programs are especially attractive. Spotting an employee's superior performance often costs little or no money.

Employee Involvement Programs

  1. What Is Worker Involvement?
  1. A catchall term covering a number of techniques--participation or participative management, workplace democracy, empowerment, and worker ownership.
  1. Examples of Employee Involvement Programs
  1. Four varieties of employee participation:
  • Participative management
  • Representative participation
  • Quality circles
  • Employee stock ownership plans (ESOP's)
  1. The evidence regularly indicates that it requires possession and a participative style of management to accomplish significant improvements in an organization's performance.

Instructor Note: At this point in the lecture you may want to create the POINT-COUNTER POINT - The Power of Stock Options AS BEING A Motivator within the written text and by the end of these section notes. A suggestion for a class exercise practices the intro of the material.

  1. Linking Employee Participation Programs and Motivation Theories
  1. Employee involvement pulls on many of the motivation
  • Theory Y is constant with participative management. Theory X aligns with the more traditional autocratic style of management.
  • Two-factor theory-employee participation programs could provide intrinsic desire.
  • Employee involvement works with with ERG theory and initiatives to activate the accomplishment need.
  1. Employee Involvement Programs in Practice
  1. In Europe, the basic principle of professional democracy is fairly well established. Other countries, including Japan and Israel, involve some form of representative contribution.
  2. Employee involvement programs that stress contribution have become typical in North America.
  3. Employee involvement procedures change between countries. Practices need to be modified to reveal national culture.

Job Redesign and Arranging Programs

  1. What is job redesign and scheduling
  1. Ways to reshape jobs in order that they are more difficult, stimulating, and motivating.
  2. Three Job redesign options-job rotation, job enhancement, and job enrichment
  • Job rotation
  • Job enlargement
  • Job enrichment (Exhibit 7-4)
  1. How does indeed management enrich an employee's job?
  • Combining tasks
  • Forming natural work units
  • Establishing client relationships
  • Expanding careers vertically
  • Opening responses channels
  1. Overall evidence signifies that job enrichment reduces absenteeism and turnover costs and increases satisfaction.
  2. Flextime. (flexible work time). Allows employees some discretion over when they reach and leave work. (Display 7-5).
  3. Job showing. Allows two or more individuals to split a traditional 40-hour weekly job.
  4. Telecommuting. Employees who do their work at home at least two times a week on the computer that is associated with their office.

Variable Pay Programs

  1. What Are Variable-Pay Programs?
  1. Variable Pay Programs may take the form of piece-rate wages, bonuses, profit writing and gainsharing.
  2. A part of an employee's pay is dependant on some individual and/or organizational way of measuring performance.
  3. Variable-pay programs are usually successful in increasing motivation and production. Studies generally support that organizations with profit-sharing programs have higher degrees of success than those without.

Instructor Note: At this time in the lecture you may want to introduce the truth INCIDENT - Once the Perks Fade within the text and at the end of these chapter notes. A suggestion for a class exercise comes after the advantages of the material.

  1. Linking Variable-Pay Programs and Expectancy Theory
  1. Variable pay is probably most compatible with expectancy theory predictions. Individuals should understand a strong romance between their performance and the rewards they obtain if motivation is usually to be maximized.
  2. The evidence supports the importance of the linkage:
  1. Variable-Pay Programs in Practice
  1. Variable pay is rapidly replacing the total annual cost-of-living raise.
  2. The new craze has been broadening this practice to non-managerial employees.
  3. Seventy-eight percent of U. S. companies involve some form of variable pay plan with ranking and file workers.
  4. Gain sharing's popularity appears to be narrowly targeted among large, unionized developing companies.

Instructor Note: At this time in the lecture you might create the ETHICAL Problem EXERCISE - Are American CEO's Paid Too Much? box found in the text and by the end of these section notes. A suggestion for a class exercise employs the release of the material.

Instructor Note: At this time in the lecture you may want to create the OB IN THE NEWS - Purchase Performance at Siebel Systems container found in the written text and below. A suggestion for a category exercise employs the benefits of the materials below.

Skilled-Based Pay Plans

  1. What Are Skill-Based Pay Plans?
  1. Skill-based pay is an option to job-based pay. It really is sometimes called competency-based pay or knowledge-based pay.
  2. The charm, from management's point of view is versatility:
  1. Linking Skill-Based Pay Plans to Motivation Theories
  1. Skill-based pay strategies are constant with several inspiration theories.
  • ERG theory - because they encourage employees to learn, broaden their skills, and grow
  • Achievement need - paying visitors to expand their skill levels, high achievers will see their jobs more challenging
  • Reinforcement theory - by pushing employees to develop their flexibility, to continue to learn, to cross-train, to be generalists alternatively than specialists, and work cooperatively with others in the organization.
  1. Skill-based pay may additionally have collateral implications. When employees make their input-outcome comparisons, skills may provide a fairer suggestions criterion for identifying pay than factors such as seniority or education.
  1. Skill-Based Pay in Practice
  1. A volume of studies conclude that skill-based pay is widening which it generally causes higher staff performance and satisfaction.

Flexible Benefits

  1. What Are Flexible Benefits?
  1. The idea is to allow each staff to choose a benefit package that is singularly personalized to his/her own needs and situation.
  2. An organization creates a versatile spending account for every single employee, usually based on some ratio of his / her salary, and then a price is placed on each benefit. You can find three basic types of programs:
  • Modular Plans:
  • Core-plus Programs:
  • Flexible Spending Programs:
  1. Linking Flexible Benefits and Expectancy Theory
  1. Consistent with expectancy theory's thesis that organizational rewards should be linked to every individual employee's goals, versatile benefits individualize rewards by allowing each staff to find the compensation package deal that best satisfies his/her current needs.
  1. Flexible Benefits in Practice
  1. From the organization's standpoint, it often produces savings. Once set up, costly increases often have to be significantly utilized by the employee.

EXPANDED CHAPTER OUTLINE

Management by Objectives

  1. What Is MBO?
  1. Management by goals emphasizes participatively established goals that are tangible, verifiable, and measurable. It isn't a fresh idea. It originated more than 50 years back.
  2. MBO's appeal lies in its emphasis on changing overall organizational aims into specific objectives for organizational items and individual associates. MBO operationalizes aims by devising an activity by which targets cascade down through the business. (Exhibit 7-1).
  3. Common elements in MBO programs:
  4. Goal specificity:

The aims in MBO should be concise assertions of expected achievements. Example - To minimize departmental costs by seven percent, to boost service by ensuring that all telephone requests are processed within 24 hours of receipt, or even to increase quality by keeping comes back to significantly less than one percent of sales.

  1. Participative decision making:
  • The goals in MBO aren't unilaterally arranged by the boss and then designated to employees.
  • The administrator and worker jointly choose the goals and acknowledge on how they'll be measured.
  1. An explicit time period:
  • Each goal has a specific time period in which it is to be completed.
  • Typically three months, six months, or a year
  1. Performance feedback

MBO seeks to provide continuous feedback on improvement toward goals so that personnel can screen and appropriate their own activities.

  1. Linking MBO and Goal-Setting Theory
  1. Goal-setting theory demonstrates that:
  1. Hard goals cause a higher level of individual performance than do easy goals.
  2. Specific hard goals result in higher degrees of performance than no goals whatsoever or generalized goals.
  3. Feedback on one's performance brings about higher performance.
  1. MBO immediately advocates specific goals and reviews.
  1. Implies that goals must be perceived as feasible
  2. Is most effective when the goals are difficult enough to require stretching

The only part of possible disagreement with goal setting theory is participation-MBO firmly advocates it. Goal-setting theory-assigning goals to subordinates-frequently works equally well participation.

  1. MBO in Practice
  1. Reviews of studies claim that MBO is a popular approach - it is employed in business, health care, educational, government, and nonprofit organizations.
  2. MBO's popularity shouldn't be construed to imply that it always works.
  • Where it has failed, the problems rarely rest with MBO's basic components.
  • Rather, factors such as unrealistic goals regarding results, insufficient top-management dedication, and an inability or unwillingness by management to allocate rewards predicated on goal accomplishment are the cause.

Instructor Take note of: At this point in the lecture you may want to create the TEAM EXERCISE - GOAL SETTING TECHNIQUES Task found in the written text and at the end of these section notes. The goal of the exercise is to learn how to create tangible, verifiable, measurable, and relevant goals as might develop from an MBO program.

Employee Recognition Programs

  1. What Are Staff Acknowledgement Programs?
  1. Employee identification programs consist of personal attention, expressing interest, agreement, and appreciation for a job well done. They are able to take numerous forms.
  2. The best ones use multiple resources and realize both specific and group achievements.
  1. Linking Acceptance Programs and Support Theory
  1. Fifteen-hundred employees were surveyed in a number of work settings in what they regarded as the most powerful place of work motivator. Their response was "recognition!"
  2. Consistent with support theory, satisfying a patterns with recognition rigtht after that behavior will probably encourage its repetition.
  3. Recognition can take many forms:
  • Personally congratulate a worker.
  • Send a handwritten take note of or an e-mail meaning.
  • "Bragging Planks, " etc.
  1. Employee Identification Programs in Practice
  1. The highly competitive global current economic climate has put most organizations under severe cost pressures, which explains why reputation programs are especially attractive. Spotting an employee's superior performance often costs little if any money.
  2. Employee recognition programs have experienced significant progress in attractiveness.
  3. Critics argue that these programs are vunerable to political manipulation by management. If abused, the worthiness of acknowledgement programs is undermined, leading to demoralized employees.

Employee Involvement Programs

  1. What Is Employee Involvement?
  1. Employee involvement has become a catchall term to hide a variety of techniques. It encompasses employee involvement or participative management, workplace democracy, empowerment, and staff ownership.
  2. Employee participation is a participative process that uses the whole capacity of employees and was created to encourage increased commitment to the organization's success.
  3. The main logic is that by involving workers in those decisions that affect them and by increasing their autonomy and control over their work lives, employees will become more determined, more committed to the organization, more productive, and much more content with their careers.
  1. Examples of Staff Involvement Programs
  1. Four forms of employee involvement are participative management, representative involvement, quality circles, and worker stock ownership plans.
  2. Participative management:
  • The distinct characteristic common to all participative management programs is that subordinates actually reveal a significant immediate amount of decision-making power with the superiors.
  • It has been advertised as a panacea for poor morale and low production. However, it isn't appropriate for each and every organization. For it to work, there has to be adequate period to participate, the problems where employees get involved must be relevant to their passions, employees will need to have the power (intelligence, specialized knowledge, communication skills) to participate, and the organization's culture must support employee involvement.
  • Why would management want to talk about its decision-making electric power with subordinates?
  1. Managers often have no idea everything their employees do.
  2. Better decisions
  3. Increased determination to decisions
  4. Intrinsically satisfying employees makes their careers more interesting and meaningful

Dozens of studies have been conducted but the findings are combined. It appears that involvement typically has only a humble influence on output, determination, and job satisfaction.

  1. Representative participation: Nearly every country in Western Europe has some type of legislation necessitating it. It is the most broadly legislated form of employee involvement round the world.
  • The goal is to redistribute ability within an corporation, adding labor on a more equal footing with the hobbies of management and stockholders.
  • The two most typical forms:
  1. Works councils web page link employees with management. These are sets of nominated or elected employees who must be consulted when management makes decisions including personnel.
  2. Board associates are employees who take a seat on a company's plank of directors and represent the hobbies of the firm's employees.
  3. In some countries, large companies may be legally required to be sure that employee staff have the same range of board seats as stockholder staff.
  4. The overall influence seems to be minimal. The evidence suggests that works councils are dominated by management and have little impact on employees or the business.

If one were considering changing employee attitudes or in increasing organizational performance, representative participation will be a poor choice.

  1. Quality circles:
  1. Quality circles became popular in North America and Europe during the 1980s.
  2. A quality circle contains a work band of eight to ten employees and supervisors who've a shared portion of responsibility. Key components are:
  1. They meet regularly on company time to discuss their quality problems, investigate factors behind the problems, recommend alternatives, and take corrective activities.
  2. They take over the responsibility for resolving quality problems plus they generate and evaluate their own feedback.
  3. Management typically retains control over the ultimate execution decision.
  1. A review of the evidence indicates they are likely to positively affect production, however, they have a tendency to show little if any effect on staff satisfaction.
  2. QC's seem to be always a gimmick that has come and ended up.
  1. First is the little bit of time (usually just an hour per week) that actually deals with employee involvement.
  2. Second, the ease of putting into action quality circles often performed against them. The lack of planning and top-management dedication often contributed to quality group failures.
  3. Employee stock possession plans:
  1. Employee ownership can mean a variety of things. Most frequent is ESOPs which are company-established benefit plans where employees acquire stock within their benefits.
  2. In the normal ESOP, an employee stock ownership trust is established. Companies contribute either stock or cash to buy stock for the trust and allocate the stock to employees.
  3. Employees usually cannot take physical ownership of their stocks or sell them as long as they remain employed at the business.
  4. The research suggests that they increase employee satisfaction, but their effect on performance is less clear.
  1. The evidence constantly indicates that it requires ownership and a participative style of management to attain significant improvements within an organization's performance.

Instructor Note: At this time in the lecture you may want to expose the POINT-COUNTER POINT - The Power of Stock Options AS THE Motivator found in the written text and by the end of these chapter notes. A suggestion for a category exercise comes after the benefits of the materials.

  1. Linking Employee Engagement Programs and Drive Theories
Employee involvement pulls on many of the motivation theories previously discussed
  • Theory Y is consistent with participative management. Theory X aligns with a lot more traditional autocratic style of management.
  • Two-factor theory-employee engagement programs could provide intrinsic drive.
  • Employee involvement is compatible with ERG theory and work to stimulate the achievement need.
  1. Employee Involvement Programs in Practice
  1. Germany, France, Holland, and the Scandinavian countries have tightly established the principle of professional democracy in European countries. Other countries, including Japan and Israel, have usually practiced some type of representative contribution.
  2. Participative management and representative contribution were much slower to get ground in North American organizations. Employee involvement programs that stress contribution have become the norm.
  3. Employee involvement practices fluctuate between countries. Methods have to be modified to indicate national culture.
  4. The titles of companies which may have used quality circles read like a Who's Who of Corporate America. However the success of quality circles has been far from overwhelming. In recent years, many organizations have used more complete team-based constructions.

Job Redesign and Scheduling Programs

  1. What is job redesign and scheduling
  1. Ways to reshape careers so that they are more difficult, rousing, and motivating.
  2. Three Job redesign options-job rotation, job enhancement, and job enrichment
  • Job rotation - (sometimes known as cross-training). The practice of regular shifting of an employee from one process to some other.
    1. Reduces boredom and increases motivation
    2. Training costs are increased, productivity is reduced
  • Job enlargement - Expanding jobs horizontally.
    1. Efforts have achieved with significantly less than enthusiastic results
    2. Some successful applications.
  • Job enrichment - refers to the vertical development of jobs. Increases the degree to which staff member control buttons planning, execution, and analysis of their work. (Show 7-4).
    1. How will management enrich an employee's job?
    • Combining tasks
    • Forming natural work units
    • Establishing consumer relationships
    • Expanding careers vertically
    • Opening opinions channels
    1. Overall evidence signifies that job enrichment reduces absenteeism and turnover costs and increases satisfaction. Information is inconclusive on the problem of output.
    2. Flextime. (adaptable work time). Allows employees some discretion over when they reach and leave work. (Show 7-5).
    • Benefits include reduced absenteeism, increased productivity, reduced overtime charge, and reduced hostility toward management, and increased autonomy and responsibility for employees.
    • Major downside is that it's not applicable to all jobs.
    1. Job posting. Allows two or more individuals to divided a traditional 40-hour weekly job.
    2. Telecommuting. Employees who do their work at home at least two days and nights a week on a computer that is linked to their office.

    Self-Assessment Exercise

    Job Enrichment

    Instructor Note: Students should complete the Self-Assessment Exercise from SAL #19 "Do I'D LIKE an Enriched Job?" The results from this exercise directly relate with the chapter material.

    Students should consider the following once they have completed the exercises
    • What performed you learn about yourself in doing this exercise?
    • How can you use this information in assisting you in the workplace?
    • Do you think these details will help you as a director? How?

    Instructor Note: At this time in the lecture you might introduce the MYTH OR Research? "Everyone Needs a Challenging Job"" found in the text and at the end of these section notes. The talk of the material provides students the possibility to discuss how managers should determine whether individuals desire more difficult jobs.

    MYTH OR SCIENCE? - Everyone Would like a Challenging Job

    This assertion is false. In spite of all the attention concentrated by the media, academicians, and communal scientists on real human probable and the needs of individuals, there is no evidence to aid that the vast majority of employees want challenging jobs. Some individuals favor highly complex and challenging jobs; others prosper in simple, routinized work.

    The individual-difference adjustable that seems to gain the best support for explaining who prefers a challenging job and who doesn't is the effectiveness of a person's higher-order needs. Individuals with high growth needs tend to be responsive feet challenging work. But what percentage of rank-and-file personnel actually desire higher-order need satisfactions and can respond positively to challenging jobs? No current data are available, but a report from the 1970's projected the shape at about 15 percent. Even after adjusting for changing work attitudes and the expansion in white-collar jobs, it seems improbable that the number today surpasses 40 percent.

    The strongest speech advocating challenging careers is not workers-it's been professors, social-science research workers, and journalists. Professors, research workers, and journalists certainly made their profession choices, to some extent, because they wished jobs that gave them autonomy, id, and problem. That, of course, is their choice. But for them to task their needs onto the workforce in general is presumptuous.

    Not every staff is searching for a challenging job. Many workers meet their higher-order needs off the work. You can find 168 hours atlanta divorce attorneys individual's week. Work almost never uses more than thirty percent of this time. That leaves appreciable opportunity, even for individuals with strong growth needs, to find higher-order need satisfaction beyond your workplace.

    Class Exercise:

    1. Have students work in teams of 3-5 associates.
    2. Each team should make a short presentation based on this feature.
    3. The display should concentrate on the role of managers in determining whether individuals welcome and/or "need" more difficult work.

    Linking Job Redesign and Arranging to Inspiration Theories

    1. Exhibit 7-4. Recommendations for enriching careers straight related to the work characteristics model.
    2. Enrichment linked to Hertzberg's two-factor theory.
    3. Flexibility styles in job scheduling is resolved in expectancy theory with the value located on linking rewards to personal goals.

    Variable Pay Programs

    1. What Are Variable-Pay Programs?
    1. Variable Pay Programs may take the form of piece-rate pay, bonuses, profit sharing and gainsharing.
    2. A part of an employee's pay is based on some specific and/or organizational way of measuring performance. Unlike more traditional base-pay programs, adjustable pay is not an annuity-there is no guarantee.
    3. The fluctuation in varying pay programs makes them attractive to management. The organization's fixed labor costs turn into a variable cost lowering expenditures when performance declines. Also, tying pay to performance recognizes contribution alternatively than being truly a form of entitlement.
    4. Four trusted programs are piece-rate salary, bonuses, profit writing, and gain posting:
    • Piece-rate wages
    1. Around for almost a century
    2. Popular as a way for compensating production workers
    3. Workers are paid a set sum for each and every unit of development completed.
    4. A genuine piece-rate plan-the staff gets no bottom salary which is paid limited to production. For instance: Advertising peanuts in ballparks works this way.
    5. Modified piece-rate plan-employees earn a base hourly wage plus a piece-rate differential.
    • Bonuses
    1. These can be paid exclusively to executives or even to all employees.
    2. Increasingly, bonus plans are dealing with a larger net within organizations to include lower-ranking employees to prize creation and increased revenue.
    • Profit-sharing plans
    1. Organization wide programs that disperse compensation based on some established formulation designed around a company's profitability
    2. Direct cash outlays or, particularly in the case of top professionals, allocated as stock options
    • Gainsharing
    1. This is a formula-based group motivation plan.
    2. Improvements in group productivity-from one period to another-determine the amount of money allocated.
    3. Gainsharing and revenue writing are similar but not the same thing. It focuses on productivity gains alternatively than gains.
    4. Gainsharing rewards specific actions that are less influenced by external factors. Employees in a gainsharing plan can receive incentive awards even when the organization is n0t profitable.
    1. Variable-pay programs are usually successful in increasing determination and productivity. Studies generally support that organizations with profit-sharing programs have higher degrees of success than those without.

    Instructor Note: At this time in the lecture you may want to introduce the truth INCIDENT - Once the Perks Fade found in the written text and by the end of these chapter notes. A suggestion for a class exercise comes after the introduction of the material.

    1. Gain writing has been found to boost productivity in a majority of cases and frequently has a confident impact on employee attitudes. For example:
    1. An American Management Association analysis of 83 companies.
    2. On average, grievances slipped 83 percent, absences fell 84 percent, and lost-time incidents reduced by 69 percent.
    1. The disadvantage of changing pay is its unpredictability.
    1. Depending how your varying pay is determined, company downturns can lower income.
    1. Moreover, people get started to take repeated twelve-monthly performance bonus deals for awarded.
    1. Linking Variable-Pay Programs and Expectancy Theory
    1. Variable pay is most likely most compatible with expectancy theory predictions. Individuals should perceive a strong marriage between their performance and the rewards they receive if motivation is usually to be maximized.
    2. The evidence supports the importance of this linkage:
    • Group and organization-wide incentives strengthen and encourage employees to sublimate personal goals to discover the best interests of the department or the business.
    • Group-based performance incentives are also an all natural extension for creating a strong team ethic.
    1. Variable-Pay Programs in Practice
    1. Variable pay is speedily replacing the gross annual cost-of-living raise. This is because of its motivational electric power and cost implications, preventing the fixed expense of permanent salary raises.
    2. This pay strategy has been utilized in managerial levels going back 10 roughly years. The new tendency has been widening this practice to non-managerial employees.
    3. Variable-pay plans are becoming ever more popular: Seventy-eight percent of U. S. companies have some form of varying pay plan with get ranking and file personnel. Even Japan has created these programs-a recent study discovered that 21. 8 percent of Japanese companies now use such pay systems.
    4. Gain sharing's level of popularity appears to be narrowly targeted among large, unionized production companies.
    5. Common concerns among businesses that contain not released performance-based settlement programs are:
    • What should constitute performance, and how it should be measured?
    • Overcoming the historical attachment to cost-of-living changes and the fact that they may have an responsibility to keep all employees' pay in step with inflation.
    • Salary scales keyed to what your competition is paying, etc.
    • From the employees' standpoint, the major matter is a potential drop in revenue.

    Instructor Note: At this time in the lecture you may want to create the ETHICAL Problem EXERCISE - Are American CEO's Paid AN EXCESSIVE AMOUNT OF? box found in the text and at the end of these chapter notes. An indicator for a class exercise follows the launch of the materials.

    Instructor Note: At this time in the lecture you might bring in the OB IN THE NEWS HEADLINES - Purchase Performance at Siebel Systems container found in the text and below. A suggestion for a school exercise employs the launch of the material below.

    OB IN THE NEWS HEADLINES - Purchase Performance at Siebel Systems

    Executives at Siebel Systems, the sales automation software company headquartering in San Mateo, California, understand how rewards shape action. They may have scrapped their traditional system of fulfilling their sales people solely based on how well they achieve their sales focuses on. They have substituted it with a new motivation system that broadens this is of sales performance to include building long-term client satisfaction.

    Siebel considers building long-term customer connections to be its priority. Says the business's vice chief executive of complex services, Steve Mankoff: "[If reps] close a deal with a person, continue to follow up your customer, and make sure that customer is prosperous, its likely that that customer should come back for further. In any given 1 / 4, 45 to 60 percent of our own business is from do it again customers. "

    So now practically 40 percent of every salesperson's incentive reimbursement is dependant on their customer's reported satisfaction with service and implementation of the merchandise they have got purchased. To determine how well its salespeople are doing, Siebel regularly studies customers on the responsiveness of its sales company, the sales consultant's ability to combine a customer's requirements with Siebel's software solutions, the rep's understanding of the products and of the customer's project, and ease of purchasing and contracting.

    By broadening purchase performance from just generating sales to also including client satisfaction, Siebel gets its sales team to concentrate on the needs of its customers. "It works, " says Mankoff. "Our loyalty rate among customers is in the 96 to 99 percent range. "

    Class Exercise:

    1. Ask students to break right into small groupings. Their assignment is to develop customer retention/commitment approaches for a landscape design and installation business. (These strategies can be a variety of things such as: getting in touch with a customer after an outdoor patio installation, calling to offer additional products and services, keeping free gardening seminars, using a booth at the twelve-monthly home sales, and providing a free monthly newsletter by email to customers. )
    2. Once they are suffering from their strategy, keep these things determine which of the strategies pertains to the sales staff for the company. Then keep these things develop requirements for satisfying salespeople for engaging in these conducts. Or, they may choose to encourage the salesperson in another way after repeat business occurs such as providing an extra fee bonus when a preexisting customer reorders.
    3. Discuss the strategies they developed as a class. Was this a fairly easy or difficult task? Why does they make the options they made. Ask if indeed they would be happy to be assessed on those criteria and how a lot of their pay should be at the mercy of those alternative standards.

    Skilled-Based Pay Plans

    1. What Are Skill-Based Pay Ideas?
    1. Skill-based pay is an alternative to job-based pay. It is sometimes called competency-based pay or knowledge-based pay.
    2. Competency-based pay sets pay levels on the basis of how many skills employees have or just how many careers they can.
    3. The appeal, from management's perspective is overall flexibility:
    • Filling staffing needs is simpler when worker skills are interchangeable.
    • Organizations today require more generalists and less specialists.
    • It facilitates communication across the business because people gain a better knowledge of others' jobs.
    • It lessens dysfunctional "protection of territory" patterns.
    • Additionally, it can help meet up with the needs of ambitious employees who confront nominal advancement opportunities.
    • It appears to lead to performance advancements.
    1. Downside of skill-based pay:
    • People can "top out, " learning all the abilities the program demands them to learn.
    • Skills can become obsolete. Organizations spending money on skills they no longer need.
    • Skill-based programs do not treat level of performance.
    1. Linking Skill-Based Pay Plans to Inspiration Theories
    1. Skill-based pay strategies are constant with several desire theories.
    • ERG theory-because they encourage employees to learn, broaden their skills, and grow
    • Achievement need-paying visitors to expand their skill levels, high achievers will find their careers more challenging
    • Reinforcement theory-by encouraging employees to develop their flexibility, to keep to learn, to cross-train, to be generalists alternatively than specialists, and also to work cooperatively with others in the organization.
    1. Skill-based pay may additionally have collateral implications. When employees make their input-outcome comparisons, skills might provide a fairer input criterion for identifying pay than factors such as seniority or education.
    1. Skill-Based Pay in Practice
    1. A number of studies conclude that skill-based pay is extending and this it generally contributes to higher employee performance and satisfaction.
    2. The increased use of skills as a basis for pay is best among organizations facing extreme foreign competition and those with brief product life cycles.
    3. Skilled-based pay is apparently a concept whose time has come. Your market value is currently predicated on what you expertise is.

    Flexible Benefits

    1. What Are Flexible Benefits?
    1. The idea is to permit each employee to choose an advantage package that is independently designed to his/her own needs and situation.
    2. Average fringe benefits identical roughly 40% of salary. Traditional advantage programs were designed for a male with a wife and two children at home.
    3. Less than 10 % of employees now fit this stereotype. Traditional programs do not have a tendency to meet their needs: Some facts:
    • Twenty-five percent of today's employees are single.
    • A third are part of two-income people without any children.
    1. An organization sets up a adaptable spending account for every employee, usually based on some percentage of his or her salary, and a price is placed on each benefit. A couple of three basic types of programs:
    • Modular Plans: pre-designed with each module come up with to meet the needs of a specific group of employees.
    • Core-plus Plans: a core of essential benefits and a menu like collection of other gain options.
    • Flexible Spending Plans: employees reserve a specific dollar amount for benefits tax-free and pull against the account for medical and oral services as needed.
    1. Linking Flexible Benefits and Expectancy Theory
    1. Flexible benefits transform the benefits' costs into a motivator. About 13 percent of large and mid-sized U. S. companies have versatile benefits ideas.
    2. Consistent with expectancy theory's thesis that organizational rewards should be linked to every individual employee's goals, versatile benefits individualize rewards by allowing each staff to find the compensation package deal that best satisfies his/her current needs.
    1. Flexible Benefits in Practice
    1. Benefit for employees is the flexibleness. It is attractive because they can tailor their benefits and degrees of coverage with their own needs.
    2. From the organization's standpoint, it often produces savings. Once in place, costly increases often have to be considerably utilized by the employee.
    3. Drawbacks from the employee's standpoint is the fact that the costs of individual benefits often go up, so fewer total benefits can be purchased.

    Drawbacks for the organization are that these plans are definitely more cumbersome for management to oversee, and administering the programs is often expensive.

    Self-Assessment Exercise

    Motivation

    Instructor Note: Students should complete the Self-Assessment Exercise from SAL #18 "What's My Job Motivating Probable?" You can use student results to discuss applications of the many motivation ideas.

    Students should think about the following once they have completed the exercises
    • What did you learn about yourself in doing this exercise?
    • How can you use this information in helping you at work?
    • Do you think this information can help you as a director? How?

    POINT-COUNTERPOINT - THE ENERGY Of COMMODITY As A Motivator

    POINT

    Professional employees are different than your average staff. And they're more difficult to encourage. Why? Because experts don't react to the same stimuli that nonprofessionals do.

    Professionals like technical engineers, accountants, law firms, nurses, and software designers are different from nonprofessionals. They have a solid and long-term determination with their field of competence. Their devotion is more regularly to their occupation than with their workplace. And typical rewards, like money and promotions, are seldom effective in encouraging specialists to exert high levels of effort.

    Pros see their allegiance with their profession, not to the business that employs them. A nurse, for case, may work for Mercy Hospital but she reads nursing journals, belongs to nursing associations, attends nursing conferences, and hangs around with other nurses during her breaks at the job. When asked what she will for a full time income, she's more apt to answer, "I'm a registered nurse" than "I work at Mercy Medical center. "

    Money and offers are typically low on the professional's top priority list. Why? Because they tend to be well paid already plus they enjoy what they do. For example, professionals aren't typically anxious to stop their work to defend myself against managerial tasks. They've invested significant amounts of commitment in growing their professional skills. They've typically attended professional schools for several years and undergone professional training to make their proficiencies. They also invest regularly-in conditions of reading, taking classes, attending meetings, and the like-to keep their skills current. Getting into management often means cutting off their ties to their profession, losing touch with the latest advancements in their field, and having to let the skills that they've spent years developing become obsolete.

    This commitment to the job and less affinity for typical organizational rewards makes motivating professionals more challenging and complex. They don't really respond to traditional rewards. And because they have a tendency to give their major allegiance with their profession alternatively than their workplace, they're much more likely to quit if they're dissatisfied. As an employer, you might be justified in deciding not to exert the effort to develop and keep professionals because they're improbable to reciprocate loyalty initiatives you make.

    COUNTERPOINT

    Let's first address the question of whether professionals with advanced certifications are actually that not the same as nonprofessionals. Among the differences often cited regarding pros is their allegiance with their profession. But this isn't unique to the so-called "degreed specialists. " For example, plumbers, electricians, and similar trades people aren't considered experts however they typically see themselves as affiliated with their trade or union alternatively than their workplace. Similarly, many car personnel at Ford and GM give their main allegiance to the United Auto Individuals union.

    Even though you accept that pros will vary than nonprofessionals, these differences could make it easier to motivate professionals alternatively than harder. For a big proportion of specialists, their work is their life. They rarely specify their workweek in conditions of 8 to 5 and five times a week. Working 60 hours a week or even more is often common. They love what they do and often prefer to be working rather than doing anything else. So as long as they enjoy their work, they're likely to be self-motivated.

    What factors are likely to determine if indeed they enjoy their work? Job task tends to be rated high. They like to tackle problems and discover solutions. They like jobs that score high on the job characteristics model; that is, they want jobs offering variety, identity, relevance, autonomy, and feedback. Experts also value support, acknowledgement, and opportunities to improve and grow their specialists' competence.

    Just how do you motivate professionals? Supply them with ongoing challenging tasks. Give them autonomy to follow their interests and invite those to structure their work with techniques that they find fruitful. Provide them with lateral steps that allow them to broaden their experience. Praise them with educational opportunities-training, workshops, participating conferences-that permit them to keep current in their field. Additionally, praise them with identification. And consider creating substitute career paths that allow them to earn more money and position, without assuming managerial tasks. At Merck, IBM, and AT&T, for example, the best experts, engineers, and experts gain titles such as fellow and older scientist. They hold pay and prestige much like those of managers but without the corresponding expert or responsibility.

    QUESTIONS FOR REVIEW

    1. Relate goal-setting theory to the MBO process. How are they similar? Different?

    Answer - Management by goals emphasizes participatively established goals that are tangible, verifiable, and measurable. It isn't a new idea. Linking MBO and goal-setting theory
    Goal-setting theory demonstrates that
    • Hard goals cause a higher level of specific performance than do easy goals.
    • Specific hard goals cause higher degrees of performance than no goals in any way or generalized goals.
    • Feedback on one's performance causes higher performance.

    MBO

    • Directly advocates specific goals and opinions.
    • Implies that goals must be regarded as feasible.
    • Is most reliable when the goals are difficult enough to require stretching out.

    The only region of possible disagreement is involvement.

    • MBO firmly advocates it.
    • Goal-setting theory-assigning goals to subordinates frequently works just as well as participation.

    2. What is an ESOP? How might it positively influence employee inspiration?

    Answer - ESOPs are company-established gain plans where employees acquire stock as part of their benefits. In the normal ESOP, an employee stock possession trust is established. Companies add either stock or cash to buy stock for the trust and allocate the stock to employees. Employees usually cannot take physical possession of their stocks or sell them so long as they remain employed at the company. The research reveals that ESOPs increase employee satisfaction, but their effect on performance is less clear. One review likened 45 ESOPs against regular companies. The ESOPs outperformed the traditional firms both in conditions of occupation and sales progress, but other studies show disappointing results. The evidence consistently implies that it requires ownership and a participative style of management to achieve significant improvements in an organization's performance.

    3. Explain the assignments of employees and management in quality circles.

    Answer - Essentially the most widely reviewed and carried out formal style of employee participation is management in quality circles. It really is a work band of eight to ten employees and supervisors who have a shared part of responsibility. They meet regularly on company time to go over their quality problems, investigate causes of the problems, recommend solutions, and take corrective activities. They take over the duty for dealing with quality problems, plus they generate and assess their own reviews. Management typically keeps control over the ultimate implementation decision. Exhibit 7-3 describes a typical quality circle process.

    4. What exactly are the pluses of variable-pay programs from an employee's viewpoint? From management's viewpoint?

    Answer - Varying pay offers bigger rewards and ties rewards to work. For management, it reduces cost because pay is linked with efficiency and eliminates or reduces long lasting boosts in labor costs.

    5. Compare job-based and skill-based pay.

    Answer - Instead of job title determining one's pay (just as job-based pay), one's competency (or the number and level of skills you have) can determine pay levels.

    6. What's gain showing? What talks about its recent recognition?

    Answer - That is a formula-based group incentive plan. Advancements in group productivity-from one period to another-determine the money allocated. Gain posting and profit posting are similar however, not the same thing. Gainsharing rewards specific habits that are less affected by external factors. Employees in a gainsharing plan can obtain incentive awards even when the business is not profitable.

    Studies generally support that organizations with profit-sharing strategies have higher levels of success than those without. Gain showing has been found to boost productivity in most cases and often has an optimistic impact on employee attitudes.

    7. What exactly are the features of flextime from an employee's point of view? From management's point of view?

    Answer - Worker perspective-can plan work hours to align with personal needs; Management's perspective-reduces absenteeism and sometimes improves worker output; lessens hostility toward management and could increase staff job satisfaction.

    8. What exactly are the features of job posting from an employee's point of view? From management's perspective?

    Answer - Employee perspective-increases flexibility especially in which a 40 hour weekly job isn't sensible. Management perspective-allows the business to sketch on the skills greater than one person in confirmed job. Opens up the possibility to acquire skilled employees who is probably not available on a full-time basis.

    9. What role, if any, does money play in MBO, employee reputation, job redesign, and skill-base pay?

    Answer - Money is remuneration and could be placed on a purchase performance basis in any of the programs right here. It is not often necessary for staff acceptance. However, where careers are redesigned and include more responsibilities, money would be appropriate.

    10. What is it possible to do, as a administrator, to increase the possibility that your employees will exert a high level of work?

    Answer - Check the machine for equity. Rewards should also be perceived by employees as equating with the inputs they bring to the work. At a simplistic level, this should imply that experience, skills, expertise, effort, and other evident inputs should describe distinctions in performance and, hence, pay, job assignments, and other clear rewards.

    QUESTIONS FOR CRITICAL THINKING

    1. Identify five different conditions where organizations can compensate employees. Based on your knowledge and experience, do you consider performance is the criterion most found in practice? Discuss.

    Answer - Seniority, position, merit, skill, and output/performance. Students' reactions will vary; generally, there's a great deal of debate of performance pay in the literature and among professionals. The key concern is whether employees perceive the compensation-performance linkage, regardless of what management implements.

    2. "Recognition may be motivational for the moment but it generally does not have any staying power. It is a clear reinforcer. Why? Since when you go the grocery store, they don't take acknowledgement as a kind of payment!" Can you acknowledge or disagree? Discuss.

    Answer - Students' answers may vary more because of the personalities than facts. Some people never forget being known once, others look for continual identification. Keys to keep in mind in the conversation are the following: The very best identification programs use multiple sources and discover both specific and group achievements. Employees consider identification to be the most powerful workplace motivator. In keeping with reinforcement theory, fulfilling a action with recognition immediately following that behavior will probably encourage its repetition.

    3. "Performance cannot be assessed, so any work to web page link pay with performance is a dream. Variations in performance tend to be caused by the system, which means the business ends up worthwhile the circumstances. It's the same thing as rewarding the weather forecaster for a nice day. " Do you really concur or disagree with this declaration? Support your position.

    Answer - Performance dimension can be difficult with regards to the type of job being evaluated. The key is to try to control for those factors that employees cannot control, strategy, and reward the ones that employees can control. Also, building in bottom part income in an incentive system helps clean the dips which come credited to factors beyond worker control.

    4. It is an indisputable proven fact that there has been an explosive increase in the difference between your average U. S. worker's income and the ones of senior executives. In 1980, the common CEO made 42 times the average blue-collar worker's pay. In 1990, it was 85 times. In 2000, it got risen to 531 times. What are the implications of this trend for inspiration in organizations?

    Answer - Students will have varying opinions on this. Given recent corporate and business scandals concerning CEO's who got millions at the expense of employees' retirement life accounts they should take into account such factors as trust, worker retention, output, efficiency, etc.

    5. This publication argues for recognizing individual differences. It also suggests watching members of diversity teams. Is this contradictory? Discuss.

    Answer - There is absolutely no inherent contradiction because both approaches seek to take care of people as individuals. Sensitivity to diversity is not sensitivity to a group, but to the individual within the group.

    TEAM EXERCISE - Goal-Setting Task

    Purpose: This exercise can help you learn how to create tangible, verifiable, measurable, and relevant goals as might evolve from an MBO program.

    Time: Around 20 to 30 minutes

    Instructions:

    1. Break into groups of 3 to 5.
    2. Spend a few momemts discussing your school instructor's job. Exactly what does she or he do? What defines good performance? What behaviors will lead to good performance?
    3. Each group is to develop a list of five goals that, however is not proven participatively with your instructor, you think might be developed in an MBO program at the college. Make an effort to choose goals that seem most significant to the effective performance of your instructor's job.
    4. Each group will select a leader who will share his / her group's goals with the entire class. For each group's goals, class discussion should concentrate on their: (a) specificity, (b) simple dimension, (c) importance, and (d) motivational properties.

    Teaching notes:

    1. The exercise is self-explanatory.
    2. Focus on the criteria in #4 first. Then right any misperceptions students have of your job.
    3. Use the discourse of any misperceptions to exemplify the issue of setting goals.

    ETHICAL Issue EXERCISE - Are American CEOs Paid AN EXCESSIVE AMOUNT OF?

    Critics have identified the astronomical pay plans given to North american CEO's as "rampant greed. " They note, for case, that through the 1990s, corporate gains increased 108 percent. During this same period, staff' pay rose only 28 percent. Yet CEO pay increased 481 percent! In the year 2000, the average CEO of a major American corporation made 531 times approximately the average manufacturing plant worker. If the average production staff' pay had increased at the same rate as CEO pay during this time period, staff member pay would be $110, 399 today somewhat than $29, 267.

    High degrees of executive compensation appear to be generally spread in the United States. In 2000, for example, John Chambers of Cisco Systems got home $157. 3 million; Basic Electric's Jack Welch was paid $122. 6 million; and Coca-Cola's Douglas Daft attained $91. 7 million. These statistics were for pay and exercised commodity only. They do not include potentially vast sums more from treasured value of unexercised commodity. Twenty-five years back,

    Also We Can Offer!

    Other services that we offer

    If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

    How to ...

    We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)