Impact of Job Enrichment and Enlargement on Employee Satisfaction - PowerPoint

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Impact of Job Enrichment and Enlargement on Employee Satisfaction - PowerPoint Powered By Docstoc
					      CHAPTER 5
           Reward Systems
• Are used to motivate employees
• Extrinsic rewards come from sources
  that are outside of the individual, e.g. pay
  and benefits
• Intrinsic rewards are self-administered,
  i.e., arising from within the person, e.g.
  accomplishment, responsibility
 The Role of Compensation
• The most obvious form of reward that
  employees receive in the work
• Edward E. Lawler III studied the use of
  many different types of rewards and the
  use of pay as a means of motivating
 The Role of Compensation
• Pay is an optimal reward for several
  – Virtually all recipients value it
  – Its size is flexible, i.e., it can be divided into
    various-sized portions
  – Its value is relatively constant
  – The relationship of pay to performance upon
    which it is paid must be obvious, must be
Relating Pay and Performance
• Attempts to relate pay and performance
vary widely, but generally differ on three
• Organizational Unit
• Method of measuring performance
• Form of monetary reward
         Lawler’s Studies
• Combinations of the various ways in
  which companies have tried to link pay
  with performance, across all three of the
  – Unit
  – Performance
  – Pay
   Lawler’s Studies (cont.)
• Findings:
  – Perception that pay is tied to performance is
    enhanced when rewards are administered on
    basis of individual performance, rather than
  – Objective measures of performance also
    elicit higher ratings
  – Bonus schemes link pay with performance
    better than salaries
   Lawler’s studies (cont.)
• Suggests that no one single pay incentive
  plan exists; rather, one must consider the
  unique chararcteristics of each situation
  How Effective are Incentive
• They can increase productivity by 15%
  to 35%, but their popularity has declined
  in recent decades
• Adversarial relationships resulted from
  employees’ feelings that management was
  trying to manipulate employees; workers
  may slow down work pace in order to
  deceive time study consultants
  How Effective are Incentive
       Plans? (cont.)
• Class consciousness may result when
  employees note that incentive schemes
  are used more often for lower level
  workers than they are for upper level
  management employees
• Societal Changes have reduced the
  effectiveness of incentive schemes
    Incentive Plans in the
• Lawler suggests combination of profit
  sharing, stock ownership, gain sharing
• Profit sharing and stock ownership are
  more commonly used than gain sharing;
  employees share directly in profits of
  total organization
    Incentive Plans in the
        Future (cont.)
• Gain sharing ties an individual’s bonuses
  to the performance of a business unit
Variable Pay-for-Performance
• Typically starts with reduced wages or
• Offers attractive bonuses to employees
  for attaining specific performance targets
  or goals
• 35% of Fortune 500 companies are
  experimenting with some form of pay-
  for-performance plan
 Variable Pay for Performance
• Works better in service industries
            Goal Setting
• Managers and employees can work
  together to achieve specific outcomes
  with a clear understanding of explicit
      Goal Setting (cont.)
• Research suggests that three goal
  attributes greatly enhance goal-related
  – Goal specificity
  – Goal difficulty
  – Goal acceptance
   Management by Objective
• MBO sets goal theory into practice
• Employees engage in one-on-one goal
  setting sessions with supervisors; both
  providing inputs
• Deadlines are established for
  measurement of accomplishment
• Paths to the desired goals and removal of
  possible obstacles are discussed
   Management by Objective
• Review dates are also established
    Controversy over MBO
• Lack of support from top-level
• Inability of managers to assume coaching
  posture due to their own insecurities
• System is so results oriented that some
  people believe that the ends justify the
  means and engage in illegal or unethical
    Controversy over MBO
• System relies heavily on trust between
  subordinates and superiors or it fails
• Some scholars view the system as a tool
  that is justifiable only under exactly the
  right conditions
      Track Record of MBO
• Fairly good
• One recent literature review examined
  findings from 70 MBO programs
  – Productivity gains averaged 47%
  – Employee attendance improved by 24%
  – When top level managers were committed to
    programs, productivity increased by 57%
• Performance expectations are
  communicated both verbally and
  nonverbally, often without conscious
    Self-Fulfilling Prophecies
• Self-fulfilling prophecies: behavioral
  responses that an employee may engage
  in based on their perception that someone
  expected them to behave in that fashion
• Pygmalion in the Classroom: study
  conducted by Rosenthal and Jacobson
  focuses on the power of self-fulfilling
    Self-Fulfilling Prophecies
• Managers can use self-fulfilling prophecy
  to foster motivation by displaying
  enthusiasm for the work unit’s mission
    Self-Fulfilling Prophecies
• Self-fulfilling prophecy plays a role in
  performance appraisals if they rely too
  heavily on subjective appraisals of
  performance; employees may
  subsequently perform in exactly the way
  they perceive they are expected to
    Self-Fulfilling Prophecies
• Expectations influence both our
  perception of others and the behaviors of
   Employee Empowerment
• Motivation can be enhanced by
  increasing one’s self-control at work
• Empowerment encompasses a number of
  specific techniques:
  – Job redesign
  – Quality circles
  – Self-directed work teams
             Job Redesign
• Division of labor is a principle that has
  served to industrialize our nation
• Specialization of labor can improve
  productivity up to a point, but beyond
  that worker dissatisfaction can set in,
  with workers becoming hostile, and
  absenteeism or turnover resulting
       Job Redesign (cont.)
• Challenge is to achieve just the right
  amount of job simplification which
  maximizes productivity without risking
  worker discontent
• Trends now point toward more
  humanization of work, with less
 Methods of Job Redesign
• Job enlargement
• Job rotation
• Job enrichment
         Job Enlargement
• Known as horizontal job expansion,
  involves an increase in the variety of an
  employee’s activities
• Findings indicate that job enlargement
  does improve worker satisfaction and the
  quality of production
• It does not appear to affect the quantity
  of production
           Job Rotation
• Job remains the same, but the personnel
  who perform the task are systematically
• Organizations use it as a training device
  to improve a worker’s flexibility
• Findings suggest that job rotation may be
  the only available means to introduce
  variety in some job settings
          Job Enrichment
• Known as vertical job expansion
• Introduced by Fred Herzberg
• Involves changing the content of jobs by
  introducing autonomy and self-
  regulation, where both factors lead to
  positive changes in worker behavior
      Job Enrichment (cont.)
• Jobs are enriched by introducing
  motivating factors, detailed in two-factor
• Controversy over job enrichment is
  rooted in the assertion that some people
  simply are not motivated by enriched
Job Characteristics Theory
• Authored by Hackman and Oldham to
  provide a comprehensive theory of job
• Explains how various job dimensions
  affect worker behavior
• Accounts for the possible influence of
  individual differences on the desire for
  enriched work
Job Characteristics Theory
• Explains the interaction between
  characteristics of a given job and the
  impact these characteristics have on
  three key psychological states that we
  experience in our work efforts (Fig 5.2)
• The three psychological states are:
  – Experience meaningfulness of work
Job Characteristics Theory
  – Experience responsibility for outcomes of
  – Knowledge of actual results of work
• Each state is critical and affected by job
  characteristics: skill variety, task
  significance, task identity, task
  significance, autonomy, and feedback
Job Characteristics Theory
• The psychological states and the job
  characteristics, in turn, indicate job
  “outcomes”, e.g. high internal work
  motivation, high general job satisfaction,
  high growth satisfaction, low turnover
  and absenteeism, high quality work
Job Characteristics Theory
• The entire model is moderated by
  individual differences, e.g. an individual’s
  respective desires to work in enriched
       Other Job Redesign
• Flextime
• Modified work week
• Telecommuting
• Work schedule that gives employees some
  discretion in arranging their working
• Employer specifies some core time that
  the employee must be present at work,
  leaving the remaining work week open
  for discretion
        Flextime (cont.)
• Absenteeism and turnover are lower with
       Modified Work Weeks
• Use “unusual” work schedules compared to
  traditional 9 to 5 grind, e.g. working 10 hours a
  day, four days a week
• Employees may experience increased levels of
• Research produced mixed findings with regard
  to the effectiveness of such programs, but many
  forecasters predict that a 4-40 workweek lies in
  our future
• The linking of one’s home computer with
  the employer’s computer system which
  permits the completion of all or part of
  one’s job at home
• Tends to occur in information-intensive
  and information-processing industries
    Telecommuting (cont.)
• Advantages to employers include reduced
  need for office space, employee’s content
  over being close to families, higher job
  satisfaction levels
• Downside include employees that
  telecommute are out of the information
  and political loop of communication, e.g.
  social isolation
           Quality Circles
• Created in the U.S., introduced to Japan
  after WWII
• Employee committees of eight to ten
  workers who meet once a week, on
  company time, to discuss production and
  problems with product quality
      Quality Circles (cont.)
• Characteristics of Quality Circles
  – Membership is voluntary
  – Members are trained in problem-solving
  – Members of circles must be assured that
    they will not lose their jobs or have their
    responsibilities reduced as a result of their
    Quality Circles (cont.)
– Members develop solutions to problems that
  they submit to management through formal
– Members monitor the outcomes of their
     Traits of Successful
       Quality Circles
• Commitment by top-level management
• Successful programs are more likely to
  have group facilitators who have been
  trained in group relations and problem-
  solving strategies
• Recognition must be given to individuals
  and circles for suggesting workable
  solutions to operational problems
  Criticisms of Quality Circles
• Question of cost effectiveness, employees
  taken away from jobs
• Motives of people who volunteer to serve
  in circles is not understood
• Not possible to study them via rigorous
  scientific fashion because they are
Self-Directed Work Teams
• Groups of 6 to 18 employees that are fully
  responsible for creating a specified
• Each member shares responsibility for
• Information shared openly
Self-Directed Work Teams
• Domains once reserved for superiors, e.g.
  setting priorities, production planning,
  work assignments, given to group; even
  interpersonal problems
• Attractive due to success stories that
  recount improved productivity coupled
  with reduced cost, e.g. Xerox
Self-Directed Work Teams
• Defining elements of SDWT’s:
  –   Team meetings
  –   Mandatory job rotation
  –   Skill-based pay
  –   Increased training
Self-Directed Work Teams
• Mandatory job rotation is a key element
• Members gain knowledge of a broader
  range and are able to help others
• Less “downtime” due to a single member
  lacking the know-how to remedy
• Employees have an incentive to learn a
  greater variety of tasks or skills
Self-Directed Work Teams
• Organization gains by having a more
  flexible and more talented workforce
• In order to learn new skills, employees
  must spend more time in on-the-job
• Positive motivational effect helps make
  up for time lost due to training
   Total Quality Management
• Set of principles that embodies a strong
  emphasis on establishing and maintaining
  a high level of quality
• Key principles:
  –   Getting it right the first time
  –   Focusing on the customer or client
  –   Emphasizing continuous improvement
  –   Mutual respect among coworkers
   Total Quality Management
• Downside: Slack needs to be built into
  production schedules to allow for
  training time
• SDWT’s are often introduced into
  companies as part of an overall change in
  emphasis that focuses on enhancing the
  quality of output or services
    Consequence of SDWT
• Fewer supervisors
• Flatter organizations with fewer layers of
• Sizable investment required in area of
• Employees that have received maximum
  of training opportunities have little other
  incentive to continue to prosper
     Potential Problems and
      Criticisms of SDWT
• Unionized organizations that use
  SDWT’s are sometimes less successful
  – Retrofitting=introducing SDWT’s to
    unionized environments
  – Greenfield Site=entirely new facility based
    on SDWT principles
  – Organized labor founded on principle of
    seniority based job assignments often
    suspicious of SDWT’s
   Potential Problems and
  Criticisms of SDWT (cont.)
• Criticisms of SDWT
  – Unethical to try to build employee’s
    commitment in a calculated and deliberate
  – Countered by focusing on management’s
    basic intent: is it to attain a basic level of
    effectiveness that is mutually beneficial to
    employees and management?
        Future of SDWT
• Likely to spread to a greater variety of
• Replace quality circles

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