8/19/2011. Motivating Employees. SERGEY BRIN & LARRY PAGE Google INTRINSIC REWARDS

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1 Chapter Ten Employees McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. SERGEY BRIN & LARRY PAGE Google Founded Google in 1998 in a friend s garage. Their success is a result of constant innovation and motivating employees to pursue their own interests. Walls are painted in bright colors, offices are open and the Googleplex provides food and recreation activities for all employees. Profile 10-2 INTRINSIC REWARDS Intrinsic Rewards -- Personal satisfaction felt for a job well done. Kinds of Intrinsic Rewards: - Pride in your performance - Sense of achievement The Value of Motivation

2 EXTRINSIC REWARDS Extrinsic Rewards -- Something given as a recognition of good work. The Value of Motivation Kinds of Extrinsic Rewards: - Pay Raises - Promotions - Awards 10-4 FRINGE BENEFITS Perks Offered to Employees at Top 50 Employers The Value of Motivation LG1 Source: Bloomberg BusinessWeek, accessed September TAYLOR S SCIENTIFIC MANAGEMENT Scientific Management -- Studying workers to determine the most efficient ways of doing things and then teaching those techniques. Three Key Elements to Increase Productivity 1. Time 2. Methods of Work 3. Rules of Work Frederick Taylor: The Father of Scientific Management LG

3 TAYLOR S FOUR KEY PRINCIPLES 1. Study how a job is performed. Gather time & motion information. Check different methods. 2. Codify the best method into rules. Frederick Taylor: The Father of Scientific Management LG1 3. Choose workers whose skill matches the rules. 4. Establish a fair level of performance and pay TIME-MOTION STUDIES Frederick Taylor: The Father of Scientific Management LG1 Time-Motion Studies -- Studies of which tasks must be performed to complete a job and the time needed to do each task. Led to the development of the Principle of Motion Economy -- Every job can be broken down into a series of elementary motions; developed by Frank and Lillian Gilbreth UPSET at UPS (Legal Briefcase) UPS drivers work under strict rules and work requirements. Performance pressure has taken a toll on drivers who report increased stress, anxiety and back pain. UPS is employing new technologies and planning to increase productivity without overtaxing drivers

4 ARE YOU STRESSED? Warnings of Employee Stress Negative attitudes about work Drops in productivity Chronic lateness Absenteeism Careless with details Unable to work with others Withdrawal from co-workers Easily upset or angered Frederick Taylor: The Father of Scientific Management LG HAWTHORNE STUDIES: PURPOSE AND RESULTS Researchers studied worker efficiency under different levels of light. Productivity increased regardless of light condition. Researchers decided it was a human or psychological factor at play. Hawthorne Effect -- People act differently when they know they are being studied. Elton Mayo and the Hawthorne Studies LG MASLOW S THEORY of MOTIVATION Hierarchy of Needs -- Theory of motivation based on unmet human needs from basic physiological needs to safety, social and esteem needs to self-actualization needs. Needs that have already been met do not motivate. If a need is filled, another higher-level need emerges. Motivation and Maslow s Hierarchy of Needs LG

5 MASLOW S HIERARCHY of NEEDS Motivation and Maslow s Hierarchy of Needs LG HERZBERG S MOTIVATING FACTORS Herzberg s research centered on two questions: - What factors controlled by managers are most effective in increasing worker motivation? - How do workers rank jobrelated factors in order of importance related to motivation? Herzberg s Factors LG JOB CONTENT Herzberg found job content factors were most important to workers workers like to feel they contribute to the company. Motivators -- Job factors that cause employees to be productive and that give them satisfaction. Herzberg s Factors LG

6 JOB ENVIRONMENT Job environment factors maintained satisfaction but did not motivate employees. Hygiene Factors -- Job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased. Herzberg s Factors LG HERZBERG S MOTIVATORS and HYGIENE FACTORS Herzberg s Factors LG4 Motivators Work itself Achievement Recognition Responsibility Growth and advancement Hygiene Factors Company policy and administration Supervision Working conditions Interpersonal relations Salary, status and job security COMPARISON of the THEORIES of MASLOW and HERZBERG Herzberg s Factors LG

7 PROGRESS ASSESSMENT What are the similarities and differences between Taylor s time-motion studies and Mayo s Hawthorne studies? How did Mayo s findings influence scientific management? Explain the distinction between what Herzberg called motivators and hygiene factors. Progress Assessment THEORY X and THEORY Y McGregor s Theory X and Theory Y LG5 Douglas McGregor proposed managers had two different sets of assumptions concerning workers. Their attitudes about motivating workers was tied to these assumptions. McGregor called them Theory X and Theory Y ASSUMPTIONS of THEORY X MANAGERS Workers dislike work and seek to avoid it. Workers must be forced or threatened with punishment to get them to perform. Workers prefer to be directed and avoid responsibility Only effective motivators are fear and money. McGregor s Theory X and Theory Y LG

8 ASSUMPTIONS of THEORY Y MANAGERS People like work, it s a part of life. Workers seek goals they are committed toward. Commitment to goals depends on perceived rewards. People can use creativity to solve problems. Intellectual capacity is only partially realized. People are motivated by a variety of rewards. McGregor s Theory X and Theory Y LG THEORY Z William Ouchi researched cultural differences between the U.S. (Type A) and Japan (Type J). Type J committed to the organization and group. Type A focused on the individual. Theory Z is the hybrid approach of Types A and J. Ouchi s Theory Z LG THEORY Z Ouchi s Theory Z LG

9 GOAL-SETTING THEORY Goal-Setting Theory -- Setting ambitious but attainable goals can motivate workers and improve performance if the goals are accepted, accompanied by feedback, and facilitated. Goal-Setting Theory and Management by Objectives APPLYING GOAL-SETTING THEORY Goal-Setting Theory and Management by Objectives Management by Objectives (MBO) -- Involves a cycle of discussion, review and evaluation of objectives among top and middle-level managers, supervisors and employees. Managers formulate goals in cooperation with everyone. Need to monitor results and reward achievement ORGANIZATIONS USING MBO Goal-Setting Theory and Management by Objectives Toyota Motor Company Emerson Electric Company U.S. Department of Defense

10 EXPECTANCY THEORY in MOTIVATION Expectancy Theory -- The amount of effort employees exert on a specific task depends on their expectations of the outcome. Meeting Employee Expectations: Expectancy Theory Employees ask: Can I accomplish the task? What s my reward? Is the reward worth the effort? Expectations can vary from person to person EXPECTANCY THEORY Meeting Employee Expectations: Expectancy Theory NADLER & LAWLER S MODIFICATION Researchers Nadler and Lalwer modified expectancy theory and suggested five steps for managers: 1. Determine what rewards employees value. 2. Determine worker s performance standard. 3. Make sure performance standards are attainable. 4. Tie rewards to performance. 5. Be sure employees feel rewards are adequate. Meeting Employee Expectations: Expectancy Theory

11 USING REINFORCEMENT THEORY Reinforcement Theory -- Positive and negative reinforcers motivate a person to behave in certain ways. Positive reinforcement includes praise, pay increases and recognition. Negative reinforcement includes reprimands, reduced pay, and layoff or firing. Extinction is a way of trying to stop behavior by not responding to it. Reinforcing Employee Performance: Reinforcement Theory REINFORCEMENT THEORY Reinforcing Employee Performance: Reinforcement Theory EQUITY THEORY Equity Theory -- Employees try to maintain equity between inputs and outputs compared to others in similar positions. Workers often base perception of their outcomes to a specific person or group. Perceived inequities can lead to reduced quality and productivity, absenteeism even resignation. Treating Employees Fairly: Equity Theory

12 PROGRESS ASSESSMENT Briefly explain the managerial attitudes behind Theories X, Y and Z. Explain goal-setting theory. Evaluate expectancy theory. When could expectancy theory apply to your efforts or lack of effort? Explain the principles of equity theory. Progress Assessment ENRICHING JOBS Motivation Through Job Enrichment LG7 Job Enrichment -- A motivational strategy that emphasizes motivating the worker through the job itself. Based on Herzberg s motivators, such as responsibility, achievement and recognition KEY CHARACTERISTICS of WORK Motivation Through Job Enrichment LG7 1. Skill Variety 2. Task Identity 3. Task Significance 4. Autonomy 5. Feedback

13 GREEN TEAM, GO! (Thinking Green) Steve Sarowitz of Paylocity formed a Green Team to make the business more eco-friendly. The Green Team expanded company recycling, increased telecommuting and switched from paper cups to ceramic cups. Employees were excited by the challenge because it went beyond their traditional jobs TYPES of JOB ENRICHMENT Motivation Through Job Enrichment LG7 Job Enlargement -- A job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment. Job Rotation -- A job enrichment strategy that involves moving employees from one job to another USING OPEN COMMUNICATION Create a culture that rewards listening. Train managers to listen. Use effective questioning techniques. Remove barriers to open communication. Ask employees what s important to them. Through Open Communication LG

14 BIG MOTIVATORS for SMALL BUSINESS (Spotlight on Small Business) Things like weekly trips to the movies and afterwork parties help keep employees motivated. Communication, mentoring and group bonding are key elements to success. Open communication and increased responsibility for employees makes them feel a real part of the firm RECOGNIZING GOOD WORK Raises are not the only ways to recognize an employee s performance. Recognition can also include: - Paid time off - Flexible scheduling - Work from home opportunities - Paid child or elder care - Stock options or profit sharing - Company awards - Company events or teams Recognizing a Job Well Done LG WORK WELL with OTHERS Keys for Productive Teamwork Have a common understanding of your task. Clarify roles and responsibilities. Set rules. Get to know each other. Communicate openly and often. Recognizing a Job Well Done LG7 Source: Wall Street Journal Research, September

15 WHAT S GOOD for YOU Most Positive Remedies for Employee Moral Recognizing a Job Well Done LG WHAT S BAD for YOU Most Negative Actions for Employee Morale Recognizing a Job Well Done LG MOTIVATING EMPLOYEES ACROSS the GLOBE Cultural differences make worker motivation a challenging task for global managers. High-Context cultures require relationships and group trust before performance. Low-Context cultures believe relationship building distracts from tasks. Employees Across the Globe LG

16 MOTIVATING ACROSS the GENERATIONS Baby Boomers ( ) - Experienced great economic prosperity, job security, optimism about their future. Generation X ( ) - Raised in dual-career families, attended day care, feeling of insecurity about jobs Generation Y or Millenials ( ) - Raised by indulgent parents, used to many comforts like computers and cell phones Employees Across Generations LG GENERATION X in the WORKPLACE Desire economic security but focus more on career security more than job security. Good motivators as managers due to emphasis on results rather than work hours. Tend to be flexible and good at collaboration and consensus building. Very effective at giving employee feedback and praise. Employees Across Generations LG MILLENIALS in the WORKPLACE Tend to be impatient, skeptical, blunt and expressive. Are tech-savvy and able to grasp new concepts. Able to multi-task and are efficient. Highlight a strong sense of commitment. Place a high value on work-life balance. Fun and stimulation are key job requirements. Employees Across Generations LG

17 The BEST COMPANIES for WORKERS Company Location Employees Across Generations LG8 NetApp Edward Jones Boston Consulting Group Google Wegmans Food Markets Cisco Systems Sunnyvale, California St. Louis, Missouri Boston, Massachusetts Mountain View, California Rochester, New York San Jose, California Source: Fortune Magazine, accessed September PROGRESS ASSESSMENT What are several steps firms can take to increase internal communications and motivation? What problems may emerge when firms try to implement participative management? Progress Assessment Why is it important to adjust motivational styles to individual employees? Are there any general principles of motivation that today s managers should follow?