MGMT Chapter 6 - FR
95. ClamCo, a large energy company, was once a bureaucratic organization that valued long service and promotions through a steep hierarchy. After several years of difficult change, it is now a much flatter organization that places more responsibility with self-directed work teams. Explain what changes ClamCo probably would have made to align its reward system with this new corporate philosophy.
Earlier, ClamCo relied on seniority and job status-based rewards. It rewarded people with longer service, possibly with higher pay, larger pensions, and longer vacations. It relied on status-based rewards so that employees were motivated to rise through the hierarchy. For example, ClamCo probably defined each job narrowly and carefully measured its worth using quantitative job evaluation techniques. The company probably also rewarded job status through perquisites such as larger offices and preferred parking. In its reformation as a leaner, flatter organization, ClamCo would ideally move away from a status-based reward system toward a competency-based reward system. It would identify competencies for each broadly defined job group and reward people who excel on these competencies. It would use a pay structure with wide ranges so that employees move within the band, rather than expecting pay increases through promotions. Competency rewards would also include skill-based pay for members of self-directed work teams. This increases employee flexibility through multi-skilling.
97. Compare and contrast gainsharing with employee share ownership plans.
Employee share ownership plans (ESOPs) include any arrangement where employees are encouraged to buy shares of the company. The financial incentive occurs as dividends and market appreciation of the stock. Gainsharing, on the other hand, more directly rewards employees for reducing costs and increasing efficiency. Thus, gainsharing rewards employees for specific accomplishments (reducing waste), whereas ESOPs reward employees for holding shares in the company. ESOPs are similar to gainsharing to the extent that they encourage employees to minimize waste, but the reward (share values and dividends) is much less direct. ESOPs are organizational-level rewards because share values and dividends are based on corporate-wide performance. Gainsharing, on the other hand, is typically a team-based reward (although it can be applied across the entire organization). Employees in each work unit receive a bonus based on productivity improvements within the entire unit.
101. The chief executive officer of a mid-sized manufacturing company has hired you to design the work site and to make any other changes necessary for employees to feel more empowered. Briefly define "empowerment," and describe three important conditions you would ensure to improve empowerment among the employees.
Empowerment is defined as a psychological concept represented by four dimensions: self-determination, meaning, competence, and impact of the individual's role in the organization. The textbook describes several factors that support empowerment. Students can describe any three of these, preferably the most important factors. Autonomy: To generate beliefs about self-determination, employees must work in jobs with a high degree of autonomy with minimal bureaucratic control. Task identity: To maintain a sense of meaningfulness, jobs must have high levels of task identity. Task significance: This is needed to maintain a sense of meaningfulness. Job feedback: To maintain a sense of self-confidence, jobs must provide sufficient feedback. Information and resources: Employees experience more empowerment in organizations where information and other resources are easily accessible. Learning orientation culture: Empowerment also requires a learning orientation culture. In other words, empowerment flourishes in organizations that appreciate the value of the employee learning and that accept reasonable mistakes as a natural part of the learning process. Trust in employees: Empowerment requires corporate leaders who trust employees and are willing to take the risks that empowerment creates.
99. Briefly explain the benefits and problems of job specialization.
Job specialization potentially improves work efficiency. One reason for this higher efficiency is that employees spend less time changing activities because they have fewer tasks to juggle. Even when people can change tasks quickly, their mental attention lingers on the previous task, which slows down performance on the new task. A second reason for increased work efficiency is that specialized jobs, require fewer physical and mental skills to accomplish the assigned work, so less time and fewer resources are needed for training. A third reason is that shorter work cycles give employees more frequent practice with the task, so jobs are mastered more quickly. A fourth reason specialization tends to increase work efficiency is that employees with specific aptitudes or skills can be matched more precisely to the jobs for which they are best suited. On the other hand, too much specialization will reduce employee performance because it begins to have a negative effect on employee motivation. Job specialization often reduces work quality because employees see only a small part of the process. At extreme levels of specialization, employees are bored with their work, are more likely to quit or be absent from their jobs, and are less likely to care about product/service quality. The company may have more difficulty hiring people for the job or may face unionization, both of which may increase wage rates. These problems offset the efficiency gains from specialization.
102. Self-leadership provides a different way of thinking about motivating employees. Identify and fully describe three of the elements of the self-leadership model, and briefly explain how self-leadership differs from other applied motivation practices.
Self-leadership refers to the process of influencing oneself to establish the self-direction and self-motivation needed to perform a task. This differs from other applied motivation practices because it recognizes that employees motivate themselves, whereas the other concepts assume that companies must do things to motivate employees. There are five elements in the self-leadership model. Students can fully describe any three of these. 1. Personal goal setting: Effective organizations establish norms whereby employees have a natural tendency to set their own goals to motivate themselves. This applies the ideas on goal setting, such as identifying goals that are specific, relevant, and challenging. Goals are set alone, rather than being assigned by or jointly decided with a supervisor. 2. Constructive thought patterns: This includes both self-talk and mental imagery. Self-talk refers to any situation in which a person talks to him- or herself about his or her own thoughts or actions. The statements that we make to ourselves affect our self-efficacy, which, in turn, can influence our behavior and performance in a particular situation. Self-talk also affects how well we figure out the best way to accomplish new or complex tasks. Mental imagery involves mentally practicing a task and imagining successfully performing it beforehand. By mentally walking through the activities required to accomplish the task, we begin to see problems that may occur. Imagining successful performance of the task beforehand increases goal commitment and motivates us to complete the task effectively. 3. Designing natural rewards: Employees can find ways to make the job itself more motivating. One way to build natural rewards into the job is to alter the way a task is accomplished. People often have enough discretion in their jobs to make slight changes to suit their needs and preferences. 4. Self-monitoring: This is the process of keeping track of one's progress toward a goal. It includes the notion of consciously checking naturally occurring feedback at regular intervals. Self-monitoring also includes designing artificial feedback (e.g., computer printouts, instrument dials, etc.) where natural feedback does not occur. 5. Self-reinforcement: Self-reinforcement occurs whenever an employee has control over a reinforcer but doesn't "take" the reinforcer until completing a self-set goal. This might involve taking a break after completing a task to a preset goal, or it may involve changing to a more interesting task after completing a boring task.
98. Briefly describe some of the important strategies for improving reward effectiveness.
Some of the important strategies for improving reward effectiveness are: Link rewards to performance: Inconsistencies and bias can be minimized through gainsharing, ESOPs, and other plans that use objective performance measures. Where subjective measures of performance are necessary, companies should rely on multiple sources of information. Companies also need to apply rewards soon after the performance occurs, and in a large-enough dose (such as a bonus rather than a pay increase) so that employees experience positive emotions when they receive the reward. Ensure that rewards are relevant: Companies need to align rewards with performance within the employees control. The more employees see a "line of sight" between their daily actions and the reward, the more they are motivated to improve performance. Reward systems also need to correct for situational factors. Salespeople in one region may have higher sales because the economy is stronger there than elsewhere, so sales bonuses need to be adjusted for such economic factors. Use team rewards for interdependent jobs: Team rewards are better than individual rewards when employees work in highly interdependent jobs, because it is difficult to measure individual performance in these situations. Team rewards also encourage cooperation, which is more important when work is highly interdependent. They also tend to support employee preferences for team-based work. Ensure that rewards are valued: It seems obvious that rewards work best when they are valued. Yet companies sometimes make false assumptions about what employees want, with unfortunate consequences. The solution, of course, is to ask employees what they value. Watch out for unintended consequences: Performance-based reward systems sometimes have an unexpected—and undesirable—effect on employee behaviors. The solution here is to carefully think through the consequences of rewards and, where possible, test incentives in a pilot project before applying them across the organization.
103. Your supervisor is intrigued by the concept of self-leadership and wants to know more about it. Discuss how she can encourage self-leadership and which conditions would encourage self-leadership to be more likely to occur.
Students should distinguish between personal and situational factors that facilitate self-leadership. Personal factors: As with other initiatives, behavior begins with the individual himself/herself. For example people who have higher levels of conscientiousness and extroversion are more likely to engage in self-leadership. This is also the case with individuals who have a positive self-concept and internal locus of control. Situational factors: Employees who are given a high degree of autonomy tend to engage in self-leadership. Bosses can encourage their staff to engage in self-leadership when they empower rather than control them. Moreover, companies that emphasize continuous measurement of performance may lead staff to engage in more self-monitoring, which is an important component of self-leadership.
94. Briefly describe how organizations reward people for job status. Discuss three potential problems with rewarding employees for their job status.
Students' answers will vary. Almost every organization rewards employees to some extent on the basis of the status worth of the jobs they occupy. In some parts of the world, companies measure job worth through job evaluations. Most job evaluation methods give higher value to jobs that require more skill and effort, have more responsibility, and have more difficult working conditions. Along with receiving higher pay, employees with more valued jobs sometimes receive larger offices, company-paid vehicles, and other perks. Job status-based rewards try to improve feelings of fairness, such that people in higher valued jobs should get higher pay. These rewards also motivate employees to compete for promotions. However, job status-based rewards can result in three potential problems. First, job status-based rewards potentially encourage bureaucratic hierarchy rather than market responsiveness. Second, these rewards reinforce a status mentality, whereas Generation-X and Generation-Y employees expect a more egalitarian workplace. Third, status-based pay potentially motivates employees to compete with each other for higher status jobs and to raise the value of their own jobs by exaggerating job duties and hoarding resources.
96. Describe a reward system that would best motivate employees to learn several jobs. Identify potential disadvantages of this reward system.
The best type of reward system to motivate employees to learn more jobs is a competency-based reward system and, in particular, a skill-based pay (SBP) plan. In a skill-based pay plan, employees earn higher pay rates with the number of skill modules they have mastered, even though they perform only one job at a particular time. Competency-based rewards motivate employees to learn new skills. This tends to improve organizational effectiveness by creating a more flexible workforce; more employees possess multiple skills and can perform a variety of jobs, and they are more adaptive to embracing new practices in a dynamic environment. However, competency-based pay plans have not always worked out as well as promised by their advocates. They are often over-designed, making it difficult to communicate these plans to employees. Skill-based pay systems measure specific skills, so they are usually more objective. However, they are expensive because employees spend more time learning new tasks.
100. Explain the three critical psychological states that affect employee motivation and satisfaction in the context of the job characteristics model.
The first critical psychological state is experienced meaningfulness—the belief that one's work is worthwhile or important. Skill variety, task identity, and task significance directly contribute to the job's meaningfulness. If the job has high levels of all three characteristics, employees are likely to feel that their jobs are highly meaningful. The meaningfulness of a job drops as one or more of these characteristics declines. The second psychological state is experienced responsibility. Work motivation and performance increase when employees feel personally accountable for the outcomes of their efforts. Autonomy directly contributes to this feeling of experienced responsibility. Employees must be assigned control of their work environment to feel responsible for their successes and failures. The third critical psychological state is knowledge of results. Employees want information about the consequences of their work effort. Knowledge of results can originate from coworkers, supervisors, or clients. However, job design focuses on knowledge of results from the work itself.
