Transcript
7/31/2019 Lec 8 Application of Motivation
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Motivation Management by objectives(MBO) Employee Recognition programs Employee Involvement programmes
Performance Appraisal Environmental Change Economic Considerations
Variable pay programs Piece rate pay plan Wage incentives Profit sharing Gain sharing Skill-based pay Flexible benefits
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Management by objectives A program that encompasses specific goals,
participatively set, for an explicit time period, with
feedback on goal progress. Four ingredients:
Goal specificity
Participative decision making
Explicit time period
Performance feedback
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Linking MBO with goal-setting
Consistent with goal setting:
MBO would be most effective when the goals are
difficult enough to require the person to do somestretching.
Disagreement between MBO and goal setting:
MBO strongly advocates participation. Goal settingtheory demonstrates that assigning goals tosubordinates works well.
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When does MBO fail:
Unrealistic expectations regarding results
Lack of commitment by top management
Inability or unwillingness by management toallocate rewards based on goal accomplishment.
Cultural incompatibilities
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Employee recognition programs Consist of personal attention, expressing interest, approval
and appreciation for a job well done.
Linking with reinforcement theory:
Agreement: rewarding a behaviour with recognition
immediately following that behaviour is likely to encourage
its repetition.
In practice:
Suggestion systems
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Employee Involvement programs
Participative management
Representative participation
Quality circles
Employee Stock Ownership Plans
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Participative management
Requires employees to take joint decisions (involves
teams, committees group meetings, understand managers
work and responsibility for decisions).
Evaluation: modest influence on productivity, motivation
and job satisfaction
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Representative Participation
Workers participate in organizational decision making
through a small group of representative employees.
Forms: work councils, Board representatives
Evaluation: improves motivation of people working in
councils and board but it does not motivate others.
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Quality circles
A work group of employees who meet regularly to
discuss their quality problems, investigate causes,
recommend solutions, and take corrective actions. Evaluation: QCs have shown positive influence on
productivity but no influence on employee satisfaction
because very little time is spent on meetings and the
outcome is not accepted by managements in most
cases.
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Employee Stock Ownership Plans
Company established benefit plans in which employees
acquire stock as part of their benefits.
Evaluation: ESOPs increase employee satisfaction but ithas less impact on performance.
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Linking Employee Involvement Programs
and Motivation Theories:
Theory Y Participative Management
Two factor theory Intrinsic motivation
(enriched work)
ERG theory Recognition, responsibility,
growth and enhanced self-esteem
Equity theory
Reinforcement theory
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Performance Appraisal Purpose of Performance Appraisal
Judgment Techniques
Job BehaviorAssessment Centres
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Variable pay programs A portion of an employees pay is based on some individual
and/or organizational measure of performance.
Forms:
Piece rate wages: Workers are paid a fixed sum for each unit ofproduction completed.
Bonus: Annual bonus
Profit sharing plans: Organization-wide programs that distribute
compensation based on some established formula designedaround a companys profitability.
Gain sharing: An incentive plan in which improvements in groupproductivity determine the total amount of money that isallocated.
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n ng ar a e-pay programs anExpectancy Theory:
Individuals should perceive a strong relationship between
their performance and the rewards they receive if
motivation is to be maximized.
In practice:
Variable pay is rapidly replacing the annual increment.
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Skill-based pay plans
Pay levels are based on how many skills employees have or
how many jobs they can do.
A survey of Fortune 1000 firms say that skill based pay hasbeen successful in increasing organizational performance.
Demerits:
People may leave an organization after learning all the skills.
Skills can become obsolete.
People may acquire skills not needed by their current job.
Skill based plans dont address the level of performance.
t
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n ng - ase pay p ans toMotivation Theories:
ERG Theory : Learninga higher order
need.
McClellends Theory : learning new skills will
help high achievers findtheir jobs morechallenging
Reinforcement Theory : skill based pay is a
reinforcer.
Equity Theory : skill based pay increases
the perception of equity
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In practice
Skill based pay is adopted in organizations facing
aggressive foreign competition.
Skill based pay is moving from the shop floor to the
white-collar workforce.
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ex e ene s
Employees tailor their benefit program to meet their
personal needs by picking and choosing from a menu
of benefit options. Ex: Medical benefits, cafeteria expenses, etc.
Linking Flexible Benefits and Expectancy Theory:
Flexible benefits individualise rewards by allowing each
employee to choose the compensation package that best
satisfies his or her current needs
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Environmental ChangeJob Enrichment
-Combining tasks, creating natural work units,establishing relationship, expanding job vertically, openingfeedback channels
Job Enlargement
Job Rotation
Job Reengineering-Policies, Technology, Competition,Information system, cost benefits, future challenges
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