Management 7-8

Maslow's hierarchy of needs

1. physiological 2. safety 3. social 4. esteem 5. self-actualization

Employee Stock Ownership Plan (ESOP)

A company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits. Increases employee satisfaction and innovation. Employees need to psychologically experience ownership. Can reduce unethical behavior.

Bonuses

An annual bonus is a significant component of total compensation for many jobs. Increasingly include lower-ranking employees. Many companies now routinely reward production employees with bonuses when profits improve. Downside: employees' pay is more vulnerable to cuts.

Merit-Based Pay

Based on performance appraisal ratings. Allows employers to differentiate pay based on performance. Creates perceptions of relationships between performance and rewards. Limitations: Based on annual performance appraisal; merit pool fluctuations based on economic conditions; unions typically resist merit-based pay plans.

Skill-Based Pay

Bases pay levels on how many skills employees have or how many jobs they can do. Increases the flexibility of the workforce. Facilitates communication across the organization because people gain a better understanding of each other's jobs. Limitations: People can "top-out" and learn all the skills. Don't address performance.

When employees perceive an inequity, they can be predicted to make one of six choices:

Change their inputs. Change their outcomes. Distort perceptions of self. Distort perceptions of others. Choose a different referent. Leave the field.

Evaluation of Variable Pay

Do variable-pay programs increase motivation and productivity? The answer is a qualified yes. Studies generally support the idea that organizations with profit-sharing plans have higher levels of profitability than those without them. Are there cultural differences? Maybe, but more research is needed.

An employee will be motivated to exert a high level of effort when he or she believes that:

Effort will lead to a good performance appraisal. A good appraisal will lead to rewards. The rewards will satisfy his or her personal goals.

Telecommuting

Employees who do their work at home at least two days a week on a computer that is linked to their office. Virtual office Well-known organizations actively encourage telecommuting

Telecommuting Disadvantages

Employer Less direct supervision of employees. Difficult to coordinate teamwork. Difficult to evaluate non-quantitative performance. Employee May not be noticed for his or her efforts.

Three other factors influencing the goals-performance relationship:

Goal commitment Task characteristics National culture

Goal-Setting Theory

Goals tell an employee what needs to be done and how much effort is needed. Specific goals increase performance. Difficult goals, when accepted, result in higher performance than do easy goals. Feedback leads to higher performance than does non-feedback.

The three key elements of motivation are:

Intensity: concerned with how hard a person tries. Direction: the orientation that benefits the organization. Persistence: a measure of how long a person can maintain his/her effort.

why has McClelland's theory had the best support?

It has less practical effect than the others. Because McClelland argued that the three needs are subconscious—we may rank high on them but not know it—measuring them is not easy. The process is time consuming and expensive, and few organizations have been willing to invest in measuring McClelland's concept.

Participative management

Joint decision making. Acts as a panacea for poor morale and low productivity. Trust and confidence in leaders is essential. Studies of the participation-performance have yielded mixed results.

Telecommuting Advantages

Larger labor pool Higher productivity Less turnover Improved morale Reduced office-space costs

Criticisms of Herzberg's theory:

Limited because it relies on self-reports. Reliability of methodology is questioned. No overall measure of satisfaction was utilized. Herzberg assumed a relationship between satisfaction and productivity, but the research methodology he used looked only at satisfaction, not at productivity.

There are three basic types of programs:

Modular plans Core-plus plans Flexible spending plans

Profit-Sharing Plans

Organization-wide programs that distribute compensation based on some established formula centered around a company's profitability. Appear to have positive effects on employee attitudes at the organizational level. Employees have a feeling of psychological ownership.

Examples of Employee Involvement Programs

Participative management Representative participation

Self-Determination Theory

Proposes that people prefer to feel they have control over their actions. Research on self-determination theory has focused on cognitive evaluation theory. People paid for work feel less like they want to do it and more like they have to it. Proposes that in addition to being driven by a need for autonomy, people seek ways to achieve competence and positive connections to others.

Job Rotation

Referred to as cross-training. Periodic shifting from one task to another. Strengths: reduces boredom, increases motivation, and helps employees better understand their work contributions. Weaknesses: creates disruptions, requires extra time for supervisors addressing questions and training time, and reduced efficiencies.

What makes people more engaged in their job?

The degree to which an employee believes it is meaningful to engage in work. A match between the individual's values and the organization's. Leadership behaviors that inspire workers to a greater sense of mission.

The Social and Physical Context Of Work

The job characteristics model shows most employees are more motivated and satisfied when their intrinsic work tasks are engaging. Research demonstrates that social aspects and work context are as important as other job design features

McClelland's Theory of Needs

The theory focuses on three needs: Need for achievement (nAch): drive to excel, to achieve in relation to a set of standards, to strive to succeed. Need for power (nPow): need to make others behave in a way that they would not have behaved otherwise. Need for affiliation (nAfl): desire for friendly and close interpersonal relationships.

Implications of self-efficacy theory:

Training programs often make use of enactive mastery by having people practice and build their skills. Intelligence and personality are absent from Bandura's list, but they can increase self-efficacy.

Job Sharing

Two or more people split a 40-hour-a-week job. Declining in use. Can be difficult to find compatible pairs of employees who can successfully coordinate the intricacies of one job. Increases flexibility and can increase motivation and satisfaction when a 40-hour-a-week job is just not practical.

Gainsharing

Uses improvements in group productivity from one period to the next to determine the total amount of money allocated. Common among large manufacturing companies and in some healthcare organizations. Ties rewards to productivity gains rather than profits. Employees can receive incentive awards even when the organization isn't profitable. Because the benefits accrue to groups of workers, high performers pressure weaker ones to work harder, improving performance for the group as a whole.

Piece-Rate Pay

Workers are paid a fixed sum for each unit of production completed. A pure piece-rate plan provides no base salary and pays the employee only for what he or she produces. Limitation: not a feasible approach for many jobs. Although incentives are motivating and relevant for some jobs, it is unrealistic to think they can constitute the only piece of employees' pay.

Representative participation

Workers are represented by a small group of employees who actually participate in decision making. Almost every country in Western Europe requires representative participation. The two most common forms: Works councils Board representatives

Core-plus plans

a core of essential benefits and a menu-like selection of other benefit options.

Employee Involvement

a participative process that uses employees' input to increase their commitment to the organization's success.

Intrinsic Factors

achievement, recognition, work itself, responsibility, advancement, growth satisfaction at work

Self-efficacy theory

an individual's belief that he or she is capable of performing a task. Enactive mastery: improving self-efficacy by performing the task Vicarious modeling: you learn through someone else and then you can do it Verbal persuasion: someone tells you, you can do it so you do it. Arousal: heightened state to encourage you to perform the task.

Expectancy theory

argues that a tendency to act in a certain way depends on an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.

Theory X

assumptions are basically negative. Employees inherently dislike work and must be coerced into performing. lower-order needs dominate individuals.

Theory Y

assumptions are basically positive. Employees can view work as being as natural as rest or play. higher-order needs dominate individuals

Reinforcement theory

behavior is a function of its consequences. Takes a behavioristic view, arguing that reinforcement conditions behavior. Behavior is environmentally caused. reinforcement theory ignores feelings, attitudes, expectations, and other cognitive variables known to affect behavior.

Hygiene Factors

company policy and administration, supervision and salary- that when adequate in a job placate workers. when these are adequate, people will not be dissatisfied. (related to the work environment itself)

Self-concordance

considers how strongly people's reasons for pursuing goals are consistent with their interests and core values.

Flexible spending plans

employees set aside pretax dollars up to the amount offered in the plan to pay for particular benefits, such as healthcare and dental premiums.

prevention focus

focus strive to fulfill duties and obligations and avoid conditions that pull them away from desired goals.

Flexible benefits

individualize rewards. Allow each employee to choose the compensation package that best satisfies his or her current needs and situation. Replaces the "one-benefit-plan-fits-all" programs designed for a male with a wife and two children at home that dominated organizations for more than 50 years.

Operant conditioning theory

people learn to behave to get something they want or to avoid something they don't want.

Extrinsic Factors

policy administration, supervision, relationship with supervisors, work conditions, salary, relationship with peers dissatisfaction at work

Modular plans

pre-designed with each module put together to meet the needs of a specific group of employees.

Two-Factor Theory (Herzbergs Theory)

relates intrinsic factors to job satisfaction and associates extrinsic factors with dissatisfaction

promotion focus

strive for advancement and accomplishment and approach conditions that move them closer toward desired goals.

Job engagement

the investment of an employee's physical, cognitive, and emotional energies into job performance.

Motivation

the processes that account for an individual's intensity, direction, and persistence of effort toward attaining a goal.

Social-learning theory

we can learn through both observation and direct experience. Models are central, and four processes determine their influence on an individual: Attentional processes Retention processes Motor reproduction processes Reinforcement processes