Part 4 Creating the Human Resource Advantage 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
9-2 CHAPTER 9 Motivating the Workforce CHAPTER 10 Managing Human Resources APPENDIX C Personal Career Plan
9-3 Learning Objectives LO 9-1 LO 9-2 LO 9-3 LO 9-4 LO 9-5 Define human relations and determine why its study is important. Summarize early studies that laid the groundwork for understanding employee motivation. Compare and contrast the human-relations theories of Abraham Maslow and Frederick Herzberg. Investigate various theories of motivation, including Theories X, Y, and Z; equity theory; and expectancy theory. Describe some of the strategies that managers use to motivate employees. LO 9-6 Critique a business s program for motivating its sales force.
9-4 Nature of Human Relations Human Relations The study of the behavior of individuals and groups in organizational settings Involves motivating employees to achieve organizational objectives efficiently and effectively Become increasingly important over the years Motivation An inner drive that directs a person s behavior toward goals A goal is the satisfaction of some need, and a need is the difference between a desired state and an actual state Both needs and goals can be motivated
9-5 ~ Many companies offer onsite day care as a benefit for employees who have children ~ Company benefits such as these tend to increase employee satisfaction and motivation Motivation
9-6 Motivating the Workforce Human relations is concerned with the needs of employees, their goals and how they try to achieve them, and the impact of those needs and goals on job performance Motivating employees to stay engaged is a key responsibility of management Engagement involves emotional involvement and commitment Being engaged results in carrying out the expectations and obligations of employment
9-7 David Lee Roth s Methods of Motivation Motivating employees to stay engaged is a key responsibility of management To test if his onsite production managers were fully engaged in their jobs: Former Van Halen frontman David Lee Roth placed a line in the band s rider asking for a bowl of M&Ms with the brown ones removed Meant to test local stage production crews attention to detail Their shows were highly technical David Lee Roth would demand a complete recheck of everything if he found brown M&Ms in the bowl
9-8 The Motivation Process
9-9 Morale Morale An employee s attitude toward his or her job, employer, and colleagues One prominent aspect of human relations Even small symbols of recognition, such as an Employee of the Month parking space, can serve as strong motivators for employees
9-10 High Morale and Low Morale High morale contributes to: High levels of productivity High returns to stakeholders Employee loyalty Low morale may cause: High rates of absenteeism Absenteeism can cost a company as much as 36% of payroll High rates of employee turnover
9-11 Rewards Intrinsic Rewards The personal satisfaction and enjoyment that you feel after attaining a goal In this class, you may feel personal enjoyment in learning how business works and aspire to have a career in business or to operate your own business one day Extrinsic Rewards Benefits and/or recognition received from someone else In this class, your grade is extrinsic recognition of your efforts and success in the class
9-12 Morale Boosters Respect Appreciation Promotions Positive organizational culture Adequate compensation A pleasant work environment Involvement How to Retain Good Employees
9-13 Costco s Happy Employees Costco Wholesale, the second largest retailer in America, knows how to retain happy employees Pays an average annual rate of $20.89/hour plus overtime Gives 5 weeks of vacation/year Matches 401(k) contributions ~90% of employees are covered by company-sponsored health insurance Was even able to give raises when the economic recession hit Has not had any major labor disputes in its more than 30 years of existence
9-14 How to Motivate Employees Many companies offer a diverse array of benefits designed to improve the quality of employees lives and increase their morale and satisfaction.
9-15 Historical Perspectives on Employee Motivation Classical Theory of Motivation Theory suggesting that money is the sole motivator for workers Early 20 th century Frederick W. Taylor and Frank & Lillian Gilbreth Analyzed how workers perform specific work tasks in an effort to improve the employees productivity Led to the application of scientific principles to management
9-16 Classical Theory of Motivation To improve productivity managers should: Break down each job into its component tasks (specialization) Determine the best way to perform each task Specify the output to be achieved by a worker performing the task Incentives motivate employees to be more productive Link workers pay directly to their output
9-17 The Hawthorne Studies The Hawthorne Studies 1924-1932 at the Hawthorne Works Plant Marks beginning of concern for human relations in the workplace Elton Mayo: Postulated that physical conditions in workplace stimulate productivity Productivity increased regardless of the physical conditions (the Hawthorne effect) Findings show that social and psychological factors could significantly affect productivity and morale
9-18 Hawthorne Discoveries From 1924-1932 researchers studied a group of workers at the Hawthorne Works Plant of the Western Electric Company and measured their productivity under various physical conditions Questioned about their behavior, employees expressed satisfaction because: Their co-workers in the experiments were friendly Their supervisors had asked for their help and cooperation in the study Responded to attention received not the changing physical work conditions Social and psychological factors affect productivity and morale
9-19 Hawthorne Outcomes ~ Hawthorne experiments revealed that human factors do influence workers behavior ~ Managers who understand the needs, beliefs, and expectations greatest success in motivating employees ~ Some companies let people bring their pets to work as an added incentive to make the workplace seem more friendly
9-20 Job Aspects Important to Employee Satisfaction Aside from salary, which one of the following aspects of your job is most tied to your satisfaction?
9-21 Theories of Employee Motivation Maslow s Hierarchy of Needs Expectancy Theory Herzberg s Two-Factor Theory Equity Theory Theories of Employee Motivation McGregor s Theory X and Theory Y Variations on Theory Z Theory Z
9-22 Maslow s Hierarchy of Needs Maslow s Hierarchy A theory that arranges the five basic needs of people physiological, security, social, esteem, and selfactualization into the order in which people strive to satisfy them
9-23 Maslow s Hierarchy of Needs (cont.) Physiological Needs The most basic human needs to be satisfied water, food, shelter, and clothing Security Needs The need to protect oneself from physical and economic harm Social Needs The need for love, companionship, and friendship the desire for acceptance by others Esteem Needs The need for respect both self-respect and respect from others Self-Actualization Needs The need to be the best one can be; at the top of Maslow s hierarchy
9-24 Herzberg s Two-Factor Theory Hygiene Factors Aspects of Herzberg s theory of motivation that focus on the work setting and not the content of the work; these aspects include adequate wages, comfortable and safe working conditions, fair company policies, and job security Motivational Factors Aspects of Herzberg s theory of motivation that focus on the content of the work itself; these aspects include achievement, recognition, involvement, responsibility, and advancement
9-25 Herzberg s Hygiene and Motivational Factors Salary and security make it possible for employees to satisfy physiological and security needs identified by Maslow Herzberg s motivational factors and Maslow s esteem and self-actualization needs are similar
9-26 Customer-Centric Processes Hotels are adopting more customer-centric processes in order to better their experiences Doubletree (franchise owned by Hilton Hotels & Resorts) Created CARE committee for each of its locations Committee composed of employees from all departments Can ensure maximum operational performance and customer satisfaction Marriott International Employees leave personal noted for guests Their loyalty program is above comparison
9-27 McGregor s Theory X Theory X McGregor s traditional view of management whereby it is assumed that workers generally dislike work and must be forced to do their jobs The average person naturally dislikes work and will avoid it when possible Most workers must be coerced, controlled, directed, or threatened with punishment to get them to work toward the achievement of organizational objectives The average worker prefers to be directed and to avoid responsibility, has relatively little ambition, and wants security Theory X style of management focuses on physiological and security needs and virtually ignores the higher needs discussed by Maslow
9-28 McGregor s Theory Y Theory Y McGregor s humanistic view of management whereby it is assumed that workers like to work and that under proper conditions employees will seek out responsibility in an attempt to satisfy their social, esteem, and self-actualization needs Theory Y managers: Maintain less control and supervision Do not use fear as the primary motivator Are more democratic in decision making Allowing subordinates to participate in process
9-29 McGregor s Theory Y Assumptions Theory Y assumes: The expenditure of physical and mental effort in work is as natural as play or rest People will exercise self-direction and self-control to achieve objectives to which they are committed People will commit to objectives when they realize that the achievements of those goals will bring them personal reward The average person will accept and seek responsibility Imagination, ingenuity, and creativity can help solve organizational problems, but most organizations do not make adequate use of these characteristics in their employees Organizations today do not make full use of workers intellectual potential
9-30 Theory Z Theory Z A management philosophy that stresses employee participation in all aspects of company decision making Incorporates many elements associated with the Japanese approach to management (trust and intimacy) but Japanese ideas have been adapted for use in the U.S. Results in employees feeling organizational ownership Research has found that such feelings of ownership may produce positive attitudinal and behavioral effects for employees
9-31 Comparison of American, Japanese, and Theory Z Management Styles
9-32 Variations on Theory Z Theory Z has been adapted and modified for use in a number of U.S. companies Quality circles (quality-assurance teams) Are small, usually having 5-8 members who discuss ways to reduce waste, eliminate problems, and improve quality, communication, and work satisfaction Often modified and operate under names such as: participative management, employee involvement, or self-directed work teams They strive to give employees more control over their jobs while making them more responsible for the outcome of their efforts
9-33 Equity Theory Equity Theory An assumption that how much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange Equity is a subjective notion Equity theory might explain why many consumers are upset about CEO compensation Corporations have now begun to tie CEO compensation with company performance Feelings of inequity may underlie some unethical or illegal behavior in business
9-34 Personal Input-Output Ratio Each worker regularly develops a personal input-output ratio by taking stock of his/her contribution (inputs) to the organization in: Time, effort, skills, and experience And Assessing the rewards (outputs) offered by the organization in: Pay, benefits, recognition, and promotions Worker compares his/her ratio to the input-output ratio of some other person A comparison other who may be a co-worker, friend in another organization, or average of several people If 2 ratios are close, the individual will feel that he/she is being treated equitably
9-35 Expectancy Theory Expectancy Theory The assumption that motivation depends not only on how much a person wants something but also on how likely he or she is to get it A person who wants something and has reason to be optimistic will be strongly motivated If you do not believe you are likely to get what you want, you may not be motivated to try to get it, even though you really want it
9-36 What Motivation Depends On Your motivation depends not only on how much you want something, but also on how likely you are to get it 1. You really want a promotion 2. Taken night classes to improve skills 3. Made a large, significant sale 4. Feel confident you are qualified to handle new position 5. Therefore, you are motivated to try to get promotion
9-37 Positive Reinforcement When employees are recognized for a job well done, they are more likely to put forth the same amount of effort or more in their future tasks Positive reinforcement is so effective because it clearly and immediately defines the kind of behaviors that are appreciated by employers This tactic works especially well with employees who naturally take pride in their work and are inherently motivated to do well However, it still has positive results among the less naturally motivated employees Positive reinforcement also empowers employees through selfconfidence making them more adaptable and open to change
9-38 Behavior Modification Behavior Modification Changing behavior and encouraging appropriate actions by relating the consequences of behavior to the behavior itself Behavior that is rewarded will tend to be repeated Behavior that is punished will tend to be eliminated The two strategies may not be equally effective Punishing unacceptable behavior may provide quick results but may lead to employee dissatisfaction and increased turnover In general, rewarding appropriate behavior is a more effective way to modify behavior
9-39 Job Rotation, Job Enlargement, and Job Enrichment Job Rotation Movement of employees from one job to another in an effort to relieve the boredom often associated with job specialization Job Enlargement The addition of more tasks to a job instead of treating each task as separate Job Enrichment The incorporation of motivational factors, such as opportunity for achievement, recognition, responsibility, and advancement, into a job
9-40 Flexible Scheduling Strategies Many managers have turned to flexible scheduling strategies Due to poor morale and high absenteeism as well as a diverse workforce with changing needs Flextime A program that allows employees to choose their starting and ending times, provided that they are at work during a specified core period Compressed Workweek A four-day (or shorter) period during which an employee works 40 hours
9-41 Flextime, Showing Core and Flexible Hours Flextime provides many benefits, including improved ability to recruit and retain workers who wish to balance work and home life More flexible schedules are associated with healthier lifestyle choices such as increased physical activity and healthier sleep habits
9-42 Job Sharing Job Sharing Performance of one full-time job by two people on part-time hours Allowing full-time workers to work part time for a certain period of time Allowing workers to work from home either full or part time
9-43 SAS Family Several of the companies listed on Fortune s Best Companies to Work For list receive this recognition for how well they treat their employees. Good treatment of employees leads to higher motivation levels and overall company productivity SAS, a business analytics company, made the number two spot on Fortune s list in 2014 They effectively motivate their employees with extensive benefits that go beyond the traditional set of benefits companies usually offer SAS values their employees families by offering full family health care coverage, adoption services and educational training They also value the employees well-being by offering fitness and recreational facilities and programs To see other of examples of companies that effectively motivate their employees, see the following link: Fortune's Best Companies 2014
9-44 Importance of Motivational Strategies Fosters employee loyalty Boosts productivity Influences many areas such as pay, promotion, job design, training opportunities, and reporting relationships Employees are motivated by the nature of the relationships they have with their supervisors, by the nature of their jobs, and by characteristics of the organization Businesses have come up with different ways to motivate employees, including rewards to show the company s appreciation
9-45 Economic Environment and Motivation The economic environment can change an employee s motivation: In a recession economy, morale can drop because of the need to cut jobs Firm may have to work harder to keep good employees and to motivate all employees to work to overcome obstacles In good economic times, employees may be more demanding and be on the lookout for better opportunities New rewards or incentives may help motivate workers
9-46 Companies with Excellent Motivational Strategies
9-47 Solve the Dilemma Motivating to Win Eagle Pharmaceutical has long been recognized for its innovative techniques for motivating its salesforce Features the salesperson who has been most successful in previous quarter in company newsletter Touchdown Receive football jersey Plaque $1000 worth of Eagle s stock Superbowl Club for employees who reach/exceed their sales goals Heisman Award trip to Caribbean to top 20 salespeople
9-48 Solve the Dilemma Motivating to Win (cont.) Video conference hookup Between honored salesperson and 4 regional sales managers to share some tactics and strategies winning salesperson uses Managers summarize these ideas and pass them along to their salespeople Discussion Questions Which motivational theories are in use at Eagle? What is the value of getting employees to compete against a goal instead of against one another? Put yourself in the shoes of one of the four regional sales managers and argue against potential cutbacks to the motivational program.
9-49 Discussion? Why do managers need to understand the needs of their employees?? Contrast the assumptions of theory X and theory Y. Why has theory Y replaced X in management today?? Name and describe some flexible scheduling strategies. How can flexible schedules help motivate workers?? Identify and describe the job-design strategies.