Chapter9Chapter9 PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved. MotivationMotivation.

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PowerPoint Presentation by Charlie Cook© Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved.

MotivationMotivationMotivationMotivation

Essentials ofContemporary Management

© Copyright 2004 McGraw-Hill. All rights reserved. 9–2

Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

• After studying the chapter, you should be able to:After studying the chapter, you should be able to:

Explain what Explain what motivationmotivation is and why is and why managers need to be concerned about it.managers need to be concerned about it.

Describe from the perspectives of Describe from the perspectives of expectancy theoryexpectancy theory and and equity theoryequity theory what managers should do to have a highly what managers should do to have a highly motivated workforce.motivated workforce.

Explain how Explain how goals and needsgoals and needs motivate motivate people and what kinds of goals are especially people and what kinds of goals are especially likely to result in high performance.likely to result in high performance.


Learning Objectives (cont’d)Learning Objectives (cont’d)Learning Objectives (cont’d)Learning Objectives (cont’d)

Identify the motivation lessons that Identify the motivation lessons that managers can learn from managers can learn from operant operant conditioning theoryconditioning theory and and social learning social learning theorytheory..

Explain why and how managers can use Explain why and how managers can use paypay as a major motivation tool.as a major motivation tool.


The Nature of MotivationThe Nature of MotivationThe Nature of MotivationThe Nature of Motivation

• MotivationMotivationThe psychological forces acting on an The psychological forces acting on an

individual that determine:individual that determine:

• Direction—possible behaviors the individual Direction—possible behaviors the individual could engage in.could engage in.

• Effort—how hard the individual will work.Effort—how hard the individual will work.

• Persistence—whether the individual will keep Persistence—whether the individual will keep trying or give up.trying or give up.

Explains why people behave the way they do Explains why people behave the way they do in organizations.in organizations.


The Nature of Motivation (cont’d)The Nature of Motivation (cont’d)The Nature of Motivation (cont’d)The Nature of Motivation (cont’d)

• Intrinsically Motivated BehaviorIntrinsically Motivated BehaviorBehavior that is performed for its own sake.Behavior that is performed for its own sake.

• The source of the motivation that comes from The source of the motivation that comes from actually engaging in the behavior.actually engaging in the behavior.

• The sense of accomplishment and achievement The sense of accomplishment and achievement derived from doing the work itselfderived from doing the work itself


The Nature of Motivation (cont’d)The Nature of Motivation (cont’d)The Nature of Motivation (cont’d)The Nature of Motivation (cont’d)

• Extrinsically Motivated BehaviorExtrinsically Motivated BehaviorBehavior that is performed to acquire Behavior that is performed to acquire

material or social rewards or to avoid material or social rewards or to avoid punishment.punishment.

• The source of the motivation is the The source of the motivation is the consequences of the behavior and not the consequences of the behavior and not the behavior itself.behavior itself.


Sources of MotivationSources of MotivationSources of MotivationSources of Motivation

Nature of the Nature of the OrganizationOrganization

Nature of the Nature of the OrganizationOrganization

Personal Personal CharacteristicsCharacteristics

Personal Personal CharacteristicsCharacteristics

Nature of theNature of theJobJob

Nature of theNature of theJobJob

Individual Individual MotivationMotivation

Individual Individual MotivationMotivation


Outcomes and InputsOutcomes and InputsOutcomes and InputsOutcomes and Inputs

• OutcomeOutcomeAnything a person gets from a job or an Anything a person gets from a job or an

organization:organization:

• Pay, job security, autonomy, accomplishment.Pay, job security, autonomy, accomplishment.

• InputInputAnything a person contributes to his or her Anything a person contributes to his or her

job or organization:job or organization:

• Time, effort, skills, knowledge, work behaviors.Time, effort, skills, knowledge, work behaviors.


The Motivation EquationThe Motivation EquationThe Motivation EquationThe Motivation Equation

Figure 9.1


Expectancy TheoryExpectancy TheoryExpectancy TheoryExpectancy Theory

• Motivation will be high when workers believe:Motivation will be high when workers believe:High levels of effort will lead to high High levels of effort will lead to high

performance. performance. High performance will lead to the attainment of High performance will lead to the attainment of

desired outcomes.desired outcomes.

• Major Factors of Motivation Major Factors of Motivation ExpectancyExpectancy—the belief that effort (input) will —the belief that effort (input) will

result in a certain level of performance.result in a certain level of performance.InstrumentalityInstrumentality—the belief that performance —the belief that performance

results in the attainment of outcomes.results in the attainment of outcomes.ValenceValence—how desirable each of the available —how desirable each of the available

outcomes from the job is to a person.outcomes from the job is to a person.


Expectancy, Instrumentality, and ValenceExpectancy, Instrumentality, and ValenceExpectancy, Instrumentality, and ValenceExpectancy, Instrumentality, and Valence

Figure 9.2


Expectancy Theory in PracticeExpectancy Theory in PracticeExpectancy Theory in PracticeExpectancy Theory in Practice

Expectancy: Effort will result in a level of Expectancy: Effort will result in a level of performance.performance.

• Employees will work work hard if they believe Employees will work work hard if they believe they can attain high performancethey can attain high performance—organizations —organizations must provide the resources that support must provide the resources that support performance.performance.

Instrumentality: Performance leads to Instrumentality: Performance leads to outcomes.outcomes.

• Workers are only motivated if they think Workers are only motivated if they think performance leads to an outcomeperformance leads to an outcome—managers —managers must link must link performance to outcomes.performance to outcomes.


Expectancy Theory in PracticeExpectancy Theory in PracticeExpectancy Theory in PracticeExpectancy Theory in Practice

Valence: How desirable an outcome is to a Valence: How desirable an outcome is to a person.person.

• Workers have preferences for outcomesWorkers have preferences for outcomes——mmanagers must determine which outcomes are anagers must determine which outcomes are valued.valued.


Expectancy and MotivationExpectancy and MotivationExpectancy and MotivationExpectancy and Motivation

• Motivation is highest when expectancy, Motivation is highest when expectancy, instrumentality, and valence levels are high.instrumentality, and valence levels are high.If one of the values is low, motivation will be If one of the values is low, motivation will be

low:low:

• Workers do not believe they can perform well.Workers do not believe they can perform well.

• Workers do not believe that performance and Workers do not believe that performance and rewards are closely linked.rewards are closely linked.

• Workers do not value the rewards offered for Workers do not value the rewards offered for performance.performance.


Expectancy TheoryExpectancy TheoryExpectancy TheoryExpectancy Theory

Figure 9.3


Need TheoriesNeed TheoriesNeed TheoriesNeed Theories

• Need Need A requirement for survival and well-being.A requirement for survival and well-being.

• Need TheoriesNeed TheoriesTheories of motivation that focus on what Theories of motivation that focus on what

needs people are trying to satisfy at work and needs people are trying to satisfy at work and what outcomes will satisfy those needs.what outcomes will satisfy those needs.

Basis premise is that people are motivated to Basis premise is that people are motivated to obtain outcomes at work to satisfy their needs.obtain outcomes at work to satisfy their needs.

• Managers must determine what needs a worker Managers must determine what needs a worker wants satisfied and ensure that a person receives wants satisfied and ensure that a person receives the outcomes when performing well.the outcomes when performing well.


Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of NeedsMaslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

Table 9.1

Self-Self-actualizationactualization

Self-Self-actualizationactualization

Realize one’sRealize one’s full potentialfull potential

Realize one’sRealize one’s full potentialfull potential

Use abilities Use abilities to the fullestto the fullest

Use abilities Use abilities to the fullestto the fullest

EsteemEsteemEsteemEsteem Feel good Feel good about oneselfabout oneself

Feel good Feel good about oneselfabout oneself

PromotionsPromotions and recognitionand recognition

PromotionsPromotions and recognitionand recognition

BelongingnessBelongingnessBelongingnessBelongingness Social Social interaction, loveinteraction, love

Social Social interaction, loveinteraction, love

Interpersonal Interpersonal relations, partiesrelations, parties

Interpersonal Interpersonal relations, partiesrelations, parties

SafetySafetySafetySafety Security, stabilitySecurity, stabilitySecurity, stabilitySecurity, stability Job security, Job security, health insurancehealth insurance

Job security, Job security, health insurancehealth insurance

PhysiologicalPhysiologicalPhysiologicalPhysiological Food, water, Food, water, sheltershelter

Food, water, Food, water, sheltershelter

Basic pay level Basic pay level to buy itemsto buy items

Basic pay level Basic pay level to buy itemsto buy items

NeedsNeeds DescriptionDescription ExamplesExamples

Lower-level needs must be satisfied Lower-level needs must be satisfied before higher-level needs are addressed.before higher-level needs are addressed.

Highest-level Highest-level needsneeds

Lowest-level Lowest-level needsneeds


Herzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene Theory

• Focuses on outcomes that lead to higher Focuses on outcomes that lead to higher motivation and job satisfaction, and those motivation and job satisfaction, and those outcomes that can prevent dissatisfaction.outcomes that can prevent dissatisfaction.Motivator needs relate to the nature of the Motivator needs relate to the nature of the

work itselfwork itself—a—autonomy, responsibility, utonomy, responsibility, interesting work.interesting work.

Hygiene needs are related to the physical and Hygiene needs are related to the physical and psychological context of the workpsychological context of the work—comfortable —comfortable work environment, pay, job security.work environment, pay, job security.

• Unsatisfied hygiene needs create dissatisfaction; Unsatisfied hygiene needs create dissatisfaction; satisfaction of hygiene needs does satisfaction of hygiene needs does notnot lead to lead to motivation or job satisfaction.motivation or job satisfaction.


McClelland’s Needs for Achievement, McClelland’s Needs for Achievement, Affiliation, and PowerAffiliation, and Power

McClelland’s Needs for Achievement, McClelland’s Needs for Achievement, Affiliation, and PowerAffiliation, and Power

• Need for AchievementNeed for AchievementA strong need to perform challenging tasks A strong need to perform challenging tasks

well and meet personal standards for well and meet personal standards for excellence.excellence.

• Need for AffiliationNeed for AffiliationA concern for good interpersonal relations, A concern for good interpersonal relations,

being liked, and getting along.being liked, and getting along.

• Need for PowerNeed for PowerA desire to control or influence others.A desire to control or influence others.


Adam’s Equity TheoryAdam’s Equity TheoryAdam’s Equity TheoryAdam’s Equity Theory

• Focuses on people’s perceptions of the Focuses on people’s perceptions of the fairness (or lack of fairness) of their work fairness (or lack of fairness) of their work outcomes in proportion to their work inputs.outcomes in proportion to their work inputs.A relative outcome to input ratio comparison A relative outcome to input ratio comparison

to oneself or to another person (referent) to oneself or to another person (referent) perceived as similar to oneself. perceived as similar to oneself.

Equity exists when a person perceives that Equity exists when a person perceives that their outcome/input ratio to be equal to the their outcome/input ratio to be equal to the referent’s ratio.referent’s ratio.

• If the referent receives more outcomes, they If the referent receives more outcomes, they should also give more inputs to achieve equity.should also give more inputs to achieve equity.


Equity TheoryEquity TheoryEquity TheoryEquity Theory

Table 9.2

Condition Person Referent Example

EquityEquityEquityEquity OutcomesOutcomes = = OutcomesOutcomesInputs InputsInputs Inputs

OutcomesOutcomes = = OutcomesOutcomesInputs InputsInputs Inputs

Worker contributesWorker contributesmore inputs but alsomore inputs but also

gets more outputsgets more outputsthan referentthan referent

Worker contributesWorker contributesmore inputs but alsomore inputs but also


UnderpaymentEquity

UnderpaymentEquity

Outcomes < OutcomesInputs Inputs

Outcomes < OutcomesInputs Inputs

Worker contributesmore inputs but also

gets the same outputsas referent

Worker contributesmore inputs but also

gets the same outputsas referent

OverpaymentOverpaymentEquityEquity

OverpaymentOverpaymentEquityEquity

OutcomesOutcomes > > OutcomesOutcomesInputs InputsInputs Inputs

OutcomesOutcomes > > OutcomesOutcomesInputs InputsInputs Inputs

Worker contributesWorker contributessame inputs but alsosame inputs but also


Worker contributesWorker contributessame inputs but alsosame inputs but also



Equity Theory (cont’d)Equity Theory (cont’d)Equity Theory (cont’d)Equity Theory (cont’d)

• Inequity exists when worker’s outcome/input Inequity exists when worker’s outcome/input ratio is not equal to referent.ratio is not equal to referent.Underpayment inequity: ratio is less than the Underpayment inequity: ratio is less than the

referent.referent.

• Workers feel they are not getting the outcomes Workers feel they are not getting the outcomes they should for their inputs.they should for their inputs.

Overpayment inequity: ratio is higher than Overpayment inequity: ratio is higher than the referent.the referent.

• Workers feel they are getting more outcomes Workers feel they are getting more outcomes than they should for their inputs.than they should for their inputs.


Equity Theory (cont’d)Equity Theory (cont’d)Equity Theory (cont’d)Equity Theory (cont’d)

• Restoring Equity: Inequity creates tension in Restoring Equity: Inequity creates tension in workers causing them to attempt to restore workers causing them to attempt to restore equity.equity.In underpayment, workers may reduce input In underpayment, workers may reduce input

levels to correct (rebalance) the ratio or seek levels to correct (rebalance) the ratio or seek a raise.a raise.

In overpayment, workers may change the In overpayment, workers may change the referent person and readjust their ratio referent person and readjust their ratio perception.perception.

If inequity persists, workers will often choose If inequity persists, workers will often choose leave the organization.leave the organization.


Goal Setting TheoryGoal Setting TheoryGoal Setting TheoryGoal Setting Theory

• Focuses on identifying the types of goals that Focuses on identifying the types of goals that are effective in producing high levels of are effective in producing high levels of motivation and explaining why goals have motivation and explaining why goals have these effects.these effects.

• Considers how managers can ensure that Considers how managers can ensure that workers focus their inputs (efforts) in the workers focus their inputs (efforts) in the direction of high performance and the direction of high performance and the achievement of organizational goals.achievement of organizational goals.


Goal Setting Theory (cont’d)Goal Setting Theory (cont’d)Goal Setting Theory (cont’d)Goal Setting Theory (cont’d)

• GoalGoalWhat a person is trying to accomplish.What a person is trying to accomplish.

• Characteristics of Motivating GoalsCharacteristics of Motivating GoalsSpecific and not vague in providing directionSpecific and not vague in providing directionDifficult but not impossible to attainDifficult but not impossible to attainAccepted and committed to by workersAccepted and committed to by workersFeedback on goal attainment is important.Feedback on goal attainment is important.

• Goals point out what is important to the firm.Goals point out what is important to the firm.Workers should be encouraged to develop Workers should be encouraged to develop

action plans to attain goals.action plans to attain goals.


Learning TheoriesLearning TheoriesLearning TheoriesLearning Theories

• Theories that focus on increasing motivation Theories that focus on increasing motivation and performance by linking outcomes to and performance by linking outcomes to performance and the attainment of goals.performance and the attainment of goals.

• LearningLearningA relatively permanent change in person’s A relatively permanent change in person’s

knowledge or behavior that results from knowledge or behavior that results from practice or experience.practice or experience.


Operant Conditioning TheoryOperant Conditioning TheoryOperant Conditioning TheoryOperant Conditioning Theory

• Operant ConditioningOperant ConditioningPeople learn to perform behaviors that lead People learn to perform behaviors that lead

to desired consequences and learn not to to desired consequences and learn not to perform behaviors that lead to undesired perform behaviors that lead to undesired consequences.consequences.

Linking specific behaviors to the attainment Linking specific behaviors to the attainment of specific outcomes can motivate high of specific outcomes can motivate high performance and prevent behaviors that performance and prevent behaviors that detract from organizational effectiveness.detract from organizational effectiveness.


Operant Conditioning ToolsOperant Conditioning ToolsOperant Conditioning ToolsOperant Conditioning Tools

• Positive ReinforcementPositive ReinforcementGetting desired outcomes for performing Getting desired outcomes for performing

needed work behaviors.needed work behaviors.

• Positive reinforcers: pay, praises, or promotions.Positive reinforcers: pay, praises, or promotions.

• Negative ReinforcementNegative ReinforcementEliminating undesired outcomes once the Eliminating undesired outcomes once the

desired behavior occurs.desired behavior occurs.

• Negative reinforcers: criticisms, pay cuts, Negative reinforcers: criticisms, pay cuts, suspension.suspension.

• Is not the same as punishment.Is not the same as punishment.


Operant Conditioning Tools (cont’d)Operant Conditioning Tools (cont’d)Operant Conditioning Tools (cont’d)Operant Conditioning Tools (cont’d)

• ExtinctionExtinctionCurtailing the performance of a dysfunctional Curtailing the performance of a dysfunctional

behavior by eliminating whatever is behavior by eliminating whatever is reinforcing it. reinforcing it.

• Behavior is not rewarded and over time, the Behavior is not rewarded and over time, the worker stops performing it.worker stops performing it.

• PunishmentPunishmentAdministering an undesired/negative Administering an undesired/negative

consequence to immediately stop a consequence to immediately stop a dysfunctional behavior.dysfunctional behavior.

• Manager administers an undesired consequence Manager administers an undesired consequence to worker (verbal reprimand, demotion, pay cut).to worker (verbal reprimand, demotion, pay cut).


Guidelines for Administering Guidelines for Administering PunishmentPunishment

Guidelines for Administering Guidelines for Administering PunishmentPunishment

• Downplay the emotional element involved in Downplay the emotional element involved in punishment.punishment.Punish the behavior, not the person.Punish the behavior, not the person.

• Punish behaviors as soon as possible after Punish behaviors as soon as possible after they occur.they occur.Swift punishment increases the connection Swift punishment increases the connection

between punishment and behavior.between punishment and behavior.

• Avoid punishing someone in front of others.Avoid punishing someone in front of others.Punish the behavior, not the person.Punish the behavior, not the person.People learn for punishment of others.People learn for punishment of others.


Social Learning TheorySocial Learning TheorySocial Learning TheorySocial Learning Theory

• A theory that takes into account how learning A theory that takes into account how learning and motivation are influenced by people’s and motivation are influenced by people’s thoughts and beliefs and their observations of thoughts and beliefs and their observations of other people’s behavior.other people’s behavior.

• Vicarious Learning (Observational Learning)Vicarious Learning (Observational Learning)When a learner is motivated to perform a When a learner is motivated to perform a

behavior by watching another person behavior by watching another person perform and be rewarded.perform and be rewarded.

• People are motivated to imitate models who are People are motivated to imitate models who are highly competent, expert, receive attractive highly competent, expert, receive attractive reinforcers, and are friendly or approachable.reinforcers, and are friendly or approachable.


Social Learning Theory (cont’d)Social Learning Theory (cont’d)Social Learning Theory (cont’d)Social Learning Theory (cont’d)

• Conditions for Social LearningConditions for Social LearningThe learner observes the model performing The learner observes the model performing

the behavior.the behavior.The learner accurately perceives the model’s The learner accurately perceives the model’s

behavior.behavior.The learner remembers the behavior.The learner remembers the behavior.The learner has the skills and abilities The learner has the skills and abilities

needed to perform the behavior.needed to perform the behavior.The learner sees or knows that the model is The learner sees or knows that the model is

positively reinforced for the behavior.positively reinforced for the behavior.


Social Learning Theory (cont’d)Social Learning Theory (cont’d)Social Learning Theory (cont’d)Social Learning Theory (cont’d)

• Self-ReinforcementSelf-ReinforcementAny desired or attractive outcome or award Any desired or attractive outcome or award

that a person can give himself or herself for that a person can give himself or herself for good performance.good performance.

• ““The self-management of behavior”The self-management of behavior”

• Self-efficacySelf-efficacyA person’s belief about his or her ability to A person’s belief about his or her ability to

perform a behavior successfully.perform a behavior successfully.

• Influences motivation both when managers Influences motivation both when managers provide reinforcement and when workers provide reinforcement and when workers themselves provide it.themselves provide it.


Pay and MotivationPay and MotivationPay and MotivationPay and Motivation

• Pay as a MotivatorPay as a MotivatorExpectancyExpectancy

• Pay is an instrumentality (and outcome)Pay is an instrumentality (and outcome)

• Expectancy must be high for motivation to be Expectancy must be high for motivation to be high.high.

Need TheoryNeed Theory

• Pay is used to satisfy many needs.Pay is used to satisfy many needs.

Equity TheoryEquity Theory

• Pay is given in proportion to inputs.Pay is given in proportion to inputs.


Pay and MotivationPay and MotivationPay and MotivationPay and Motivation

• Pay as a Motivator (cont’d)Pay as a Motivator (cont’d)Goal Setting TheoryGoal Setting Theory

• Pay is linked to attainment of goals.Pay is linked to attainment of goals.

Learning TheoryLearning Theory

• The distribution of outcomes (pay) is contingent The distribution of outcomes (pay) is contingent upon the performance of functional behaviors.upon the performance of functional behaviors.


Merit Pay and PerformanceMerit Pay and PerformanceMerit Pay and PerformanceMerit Pay and Performance

• Merit Pay PlanMerit Pay PlanA compensation plan that bases pay on A compensation plan that bases pay on

individual, group and/or organization individual, group and/or organization performance.performance.

• Individual plan: when individual performance Individual plan: when individual performance (sales) can accurately measured.(sales) can accurately measured.

• Group plan: when group that works closely Group plan: when group that works closely together is measured and rewarded as a group.together is measured and rewarded as a group.

• Organization plan: when group or individual Organization plan: when group or individual outcomes are not easily measured.outcomes are not easily measured.


Salary Increase or Bonus?Salary Increase or Bonus?Salary Increase or Bonus?Salary Increase or Bonus?

• Motivational Value of a Bonus Is Higher When:Motivational Value of a Bonus Is Higher When:Salary levels are unrelated to current Salary levels are unrelated to current

performance.performance.Changes in other compensation items (cost of Changes in other compensation items (cost of

living, seniority) are not having a large effect in living, seniority) are not having a large effect in increasing compensation.increasing compensation.

Salaries rarely change and performance does.Salaries rarely change and performance does.

• Benefits of Using BonusesBenefits of Using BonusesDo not become permanent part of Do not become permanent part of

compensation.compensation.Are more directly tied to current performance.Are more directly tied to current performance.Provide more flexibility in distributing rewards.Provide more flexibility in distributing rewards.


Salary Increase or Bonus? (cont’d)Salary Increase or Bonus? (cont’d)Salary Increase or Bonus? (cont’d)Salary Increase or Bonus? (cont’d)

• Employee Stock OptionEmployee Stock OptionA financial instrument that entitles the A financial instrument that entitles the

bearer to buy shares of an organization’s bearer to buy shares of an organization’s stock at a certain price during a certain stock at a certain price during a certain period of time or under certain conditions.period of time or under certain conditions.

Uses:Uses:

• To attract high-level managers.To attract high-level managers.

• To motivate employee performance through To motivate employee performance through ownership in the firm.ownership in the firm.


Examples of Merit Pay PlansExamples of Merit Pay PlansExamples of Merit Pay PlansExamples of Merit Pay Plans

• Piece-rate PayPiece-rate PayEmployee’s pay is based on the number of Employee’s pay is based on the number of

units that the employee produces.units that the employee produces.

• Commission PayCommission PayEmployee’s pay is based on a percentage of Employee’s pay is based on a percentage of

sales that an employee makes personally.sales that an employee makes personally.

• Organization-based Merit PlansOrganization-based Merit PlansScanlon planScanlon plan—focuses on reduced expenses —focuses on reduced expenses

or cutting costs.or cutting costs.Profit sharingProfit sharing—employees receive a share of —employees receive a share of

an organization’s profits.an organization’s profits.

Chapter9Chapter9 PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved. MotivationMotivation.

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