McShane/ Von Glinow 2/e. Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

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1 6 C H A P T E R Applied Motivation Practices

2 Rewarding Employees at IKEA IKEA held a special bonus in which the Scandinavian home furnishings company pledged an entire day s sales revenue to employees. The day doubled previous sales records and awarded each employee $1,800. Courtesy of IKEA

3 The Meaning of Money Corel Corp. Money and employee needs affects several needs, not just existence needs Money and attitudes Money ethic -- not evil, represents success, should be budgeted carefully Money and self-identity Influences our self-perceptions Evidence that men more than women identify with money

4 Types of Rewards in the Workplace Membership and seniority Job status Competencies Performance Corel Corp.

5 Membership/Seniority Based Rewards Fixed wages, seniority increases Advantages guaranteed wages may attract job applicants seniority-based rewards reduce turnover Disadvantages doesn t motivate job performance discourages poor performers from leaving may act as golden handcuffs

6 Job Status-Based Rewards Includes job evaluation and status perks Advantages: job evaluation tries to maintain pay equity motivates competition for promotions Disadvantages: employees exaggerate duties, hoard resources creates psychological distance across hierarchy Inconsistent with flatter organizations

7 Competency-Based Rewards Pay increases with competencies acquired or demonstrated Skill-based pay Pay increases with skill modules learned Advantages More flexible work force, better quality, consistent with employability Disadvantages Potentially subjective, higher training costs

8 Performance-Based Rewards Organizational rewards Stock ownership Stock options Profit sharing Team rewards Gainsharing Bonuses Individual rewards Piece rate Commissions Royalties Merit pay

9 Rewards at Steel Dynamics Steel Dynamics remains competitive by applying team and organizational rewards. Along with handing out profit sharing bonuses, the company rewards production staff for achieving production targets and reducing input costs (gainsharing). Courtesy of Steel Dynamics Inc.

10 Team and Organizational Rewards Gainsharing plans based on cost reductions and increased labor efficiency ESOPs employees own company stock Stock options right to purchase company shares at a future date at a predetermined price Profit sharing employees receive share of profits Courtesy of Steel Dynamics Inc.

11 Problems with Performance Rewards Shift attention away from motivation job itself to extrinsic rewards Create a psychological distance with reward giver Discourage risk taking Used as quick fixes

12 Improving Reward Effectiveness Corel Corp. Link rewards to performance Ensure rewards are relevant Team rewards for interdependent jobs Ensure rewards are valued Beware of unintended consequences

13 Job Design Assigning tasks to a job, including the interdependency of those tasks with other jobs Technology influences, but does not determine, job design Employability affects job design Photodisc. With permission.

14 Evaluating Job Specialization Advantages Less time changing tasks Lower training costs Job mastered quickly Better person-job matching Disadvantages Job boredom Discontentment pay Lower quality Lower motivation

15 Job Characteristics Model Core Job Characteristics Critical Psychological States Outcomes Skill variety Task identity Task significance Autonomy Feedback from job Meaningfulness Responsibility Knowledge of results Individual differences Work motivation Growth satisfaction General satisfaction Work effectiveness

16 Job Rotation vs. Job Enlargement Job Rotation Job 1 Operate Camera Job 2 Operate Sound Job 3 Report Story Job Enlargement Job 1 Operate Camera Operate Sound Report Story Job 2 Operate Camera Operate Sound Report Story Job 3 Operate Camera Operate Sound Report Story

17 Job Enrichment Strategies Empowering employees giving employees more autonomy feeling of control and self-efficacy Forming natural work units completing an entire task assigning employees to specific clients Establishing client relationships employees put in direct contact with clients Photodisc. With permission.

18 Obstacles to Job Design Difficult to accurately measure job characteristics Resistance to change skilled workers labor union leaders supervisors Problem finding optimal level of enrichment and specialization

19 Self-Leadership The process of influencing oneself to establish the self-direction and self-motivation needed to performance task Includes concepts/practices from: Goal setting Social learning theory Sports psychology

20 Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Personal goal setting Employees set their own goals Apply effective goal setting practices

21 Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Positive self-talk Talking to ourselves about thoughts/actions Potentially increases self-efficacy Mental imagery Mentally practicing a task Visualizing successful task completion

22 Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Finding ways to make the job itself more motivating eg. altering the way the task is accomplished

23 Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Reinforce- ment Self- Monitoring Keeping track of your progress toward the self-set goal Looking for naturally-occurring feedback Designing artificial feedback

24 Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Reinforce- ment Self- Monitoring Taking a reinforcer only after completing a self-set goal eg. Watching a movie after writing two more sections of a report eg. Starting a fun task after completing a task that you don t like

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