Relationship Between Motivation to Employee Performance by bif17546


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   Emily Haisley
   Fall 2005
     Cases
          Lincoln Electric groups
          Lincoln Electric overview
          Submission process
     Popular but mistaken theories
          Mazlow’s hierarchy, Theory X and Y, Herzberg’s 2-
           factor theory
     Current, well validated motivation theories
          Expectancy Theory, Goal-setting theory
     Procedural and distributive justice
     Punishment
     Readings

                Work to
              Satisfy Drive

 Satisfied     Reduction
Need/Goal      of Tension
 Working to satisfy a goal or drive:
 The essence of motivation
Motivation - set of processes that arouse, direct, and maintain human
       behavior toward attaining some goal or need

        Arousal - drive or energy behind
                        our actions
                -Yerkes-Dodson Law:

        Direction - choices regarding
                which goals to pursue

        Maintaining - commitment to a goal
Maslow’s Hierarchy of Needs Theory
                              As each of these need becomes
                              satisfied (starting at bottom) the
                              next need becomes activated.
                    Self-     Very little evidence found in
                Actualization support of theory.




 McGregor’s Theory X and Theory Y

    Theory X Workers                           Theory Y Workers
   • Dislike work                              • View work as natural
   • Must be threatened                        • Self-directed
     with punishment
                                               • Exercise self-control
   • Avoid responsibilities
                                               • Accept responsibility
   • Seek formal direction
                                               • Seek responsibility
   • Require security
                                               • Make innovative
   • Little ambition                             decisions

McGregor believes that Theory Y assumptions are more correct. However,
there is no strong evidence that encouraging Theory Y assumptions
increases motivation.
Herzberg’s Two-Factor Theory: What do people
want from their jobs?
          Hygiene factors affect             Motivator factors affect
           job dissatisfaction                  job satisfaction
      • Quality of supervision             • Promotional opportunities
      • Pay                                • Opportunities for personal
      • Company policies                     growth
      • Physical working                   • Recognition
        conditions                         • Responsibility
      • Relations with others              • Achievement
      • Job security

   High      Wants when                0         Wants when             High
             dissatisfied                        satisfied

Theory rejected due to methodological problems and assumption that satisfaction
and motivation are highly linked.
Expectancy Theory
    Motivational Force = Expectancy X Instrumentality X Valence

   Expectancy probability: based on perceived effort-performance
    relationship, dependent on past experience, self-confidence, and
    perceived difficulty of goal
     If I work harder will I produce more?

   Instrumentality probability: based on perceived performance-
    reward relationship, dependent on beliefs about incentive system
     If I produce more, will I get promoted faster?

   Valence: the individuals valuation of the reward. Function of
    needs, goals, values
     Do I want a promotion? Is it worth the extra effort?

Q: Where does a piece work system lie on the dimensions of this
              Expectancy Theory: An Overview

  Effort                                        Skills and

Performance            X
                 Instrumentality   Motivation                       Job

 Rewards               X
                   Valence of
                                            Role perceptions
                                            and opportunities
Goal Setting Theory
Locke and Latham’s Goal-Setting Theory -
  having a goal serves as a motivator because it
   people’s beliefs about their ability to perform the task
                 - self-efficacy
   the degree to which people invest themselves in the task
                 - goal commitment is determined by the extent to
                          which an individual desires to attain the
                          goal and believes that s/he has a reason-
                          able chance of doing so
   the reference point and defines a loss and a gain
SMART Goals                      Clearly defined the
                                 performance: e.g. instead of
                                 “I want you to increase
                                 sales”, “ I want to see a
                                 10% increase in sales by
                                 January 2000 in X kinds of
                    Measurable   accounts”.

     Specific                           Achievable

                                     Goal Setting: Some Impressive Effects

Percentage of Maximum Weight

                                               Goal level
     Carried on Each Trip

                                80                                        Performance at the goal level
                                                                         was sustained seven years after
                                                                              the goal was first set

                                60                                There was a
                                                            dramatic improvement
                                                             in performance after
                                                                 a goal was set

                                       1 2 3    4 5 6 7 8 9 10 11 12                                Seven
                                     Before     After                                             Years Later
                                      goal      goal
                                                       Four-Week Periods
The Goal-Setting Process

             Set goals following SMART rules

        Involve employees in goal-setting to gain
        commitment and acceptance

        Monitor and provide support and regular

        Increased motivation and performance
A necessary precondition for motivation:
  Procedural fairness/justice - perceived fairness of
  the process used for resource allocation decisions
  Distributive fairness/justice (Equity theory) -
  perceived fairness of the outcomes themselves
      3 Distributive Logics:

Q: Why is fairness important?
    - it makes rewards and incentives believable and
      -   strong desire to punish those behaving unfairly
Procedural Justice
For the outcome to be fair, the procedures must be fair
 Structural side of procedural justice
       give people a say in how decisions are made - voice
       provide an opportunity for errors to be corrected - appeal
       apply rules and policies consistently
       make decisions in an unbiased manner
   Interactional justice is the social side of procedural
    justice: quality of interpersonal treatment received at
    the hands of decision maker
       informational justification
       social sensitivity
Distributive justice based on equity
Adams’ Equity Theory - people strive to
 maintain a ratio of their own outcomes
 (rewards) to their own inputs (contributions)
 equal to the outcome/input ratio of others with
 whom they compare themselves
     Outcomes - the rewards, such as salary,
      recognition, promotions, security, autonomy, etc.
     Inputs - people’s contributions to their jobs; effort,
      time, reliability, cooperation, sharing resources,
    Equity Theory
Motivation results from
   A person’s rewards-to-effort ratio
   Reward-to-effort ratios are not absolute
    but relative                                            Self              Coworkers
 When persons perceive they are relatively                                     Input
  under-rewarded, they
         lose motivation and shirk                 Outcomes                    Outcomes

   When persons perceive they are relatively
    over-rewarded, they
         become motivated to exceed standards
                                                                2.0         co-worker

   When persons perceive they are fairly                       1.0
    rewarded, they are motivated to work to                                         Self
                                                                      1.0     2.0
   Relative to peers, status quo, or time

Q: According to equity theory, why is a piece work system so motivating?
The Evolution of Equity

                         UNEQUAL PAY

 Monkeys have a sense of justice!! They will down tools if they see
 another monkey get paid more for the same job.
 Monkeys were happy receiving a piece of cucumber. But if they saw
 another monkey getting a piece of grape - a more coveted food item - they
 took offense. Some still took the cucumber, but others even disdained to
 eat it. The animal's umbrage was even greater if the other monkey was
 rewarded for doing nothing.
Using Reinforcement in Organizations

    Tell employees explicitly what’s rewarded
    Be consistent
    Deliver rewards promptly, or at least tell people
     immediately that they will be getting a reward later
    Even small rewards can be effective
       Verbal “well done”
       Send a note of praise

       Recognition - plaque

       Give them a day off, or tell them to leave early

       Take them to lunch

    The motivating effects of rewards may be enhanced by
     making them public
Q: How does a piece work system stack up?
But there is a role for punishment in

               Terrible Terry Tate says:
Keys to punishing effectively
   Deliver punishment immediately after undesirable
   Give moderate levels of punishment - not to high or too
   Punish the undesirable behavior, not the person - be
       focus on what person can do to avoid disapproval
   Use punishment consistently - all the time, for all
   Clearly communicate reasons for the punishment
       identify undesirable behaviors that precipitated the disciplinary
   Do not follow punishment with non-contingent rewards
       represents inadvertent reward for unwanted behavior
   Praise in public; punish in private?
Using Positive Reinforcement to Motivate
A portion of an employee’s pay is based on some
  measure of performance
Individual-level rewards
      Piece-rate plans or commissions
      Bonus tied to individual goal achievement, not
       organizational performance
      Merit pay
Group-level rewards
Organizational-level rewards (incentive and risk
  sharing system)
      Profit sharing, gainsharing bonuses (increases in
      Stock options
Key Elements
   Must ensure procedural and distributive
   Must set rewards at the right level
       E.g. group level pay may create competition
        between groups
   May increase employment stability because
    firm can avoid downsizing
   Employees must be compensated correctly
    for the risk that they bear.
Happy workers are not necessarily productive
workers, but satisfaction is certainly good for business
The performance-satisfaction relationship

Performance and satisfaction may both be
 cause by a 3rd variable
    Role ambiguity
    Self esteem
    Organizational commitment
    Positive affect

Performance  satisfaction?
Increasing mental challenge
Job Rotation - periodic shifting of an
   employee from one task to another
Job enlargement - Increasing the number and
   variety of tasks that an individual performed
Job enrichment - increases the degree to
   which the worker controls the planning,
   execution, and evaluation of his or her work
Form natural work units
Establish client relationships
Open feedback channels
    Poor Performance? Do a Motivation Audit
   Failure to see relationship between effort and performance
        Does the individual have the necessary skill set?
   Failure to see relationship between performance and
        Are rewards and incentives provided on a performance-contingent
   Is there a failure to set clear, specific, challenging but
    attainable goals?
   Is there a belief that the organizational rewards are unfair?
        Are rewards and punishments applied consistently and fairly?
        Is your variable pay system viewed as equitable?
   Survey satisfaction using the Job Characteristics Model.

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