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Chapter 10 - Motivating Employees
10-76
lecture enhancer 10-7
AMERICA’S MINIMUM WAGE DEBATE
Although the American economy is recovering, the job market is not. Low and minimum wage
work has driven much of the recovery while mid-level jobs that disappeared during the recession have
failed to rematerialize. Confronted with this bleak “new normal,” many people in both the private and
public sectors have called for an increase to the federal minimum wage. Advocates for change point to
cases like that of Anthony Goytia, who must supplement his salary as a Walmart clerk with catering jobs
and medical testing.
Stories like this one are becoming all too common for typical Americans who must work almost
nonstop in order to support their families. As income for the top bracket of earners rose 275 percent from
1979 to 2007, those at the bottom of the spectrum saw salaries rise by just 18 percent. In fact, the federal
minimum wage of $7.25 has lost 5.8 percent of its market value since being raised in 2009. With these
figures looming over much of the American public, President Obama recently called for Congress to in-
crease the benchmark salary to $10.10. Advocates claim this wage will increase people’s purchasing
power and make them more loyal to employers, thus reducing costly turnover.
However, opponents of raising the minimum wage argue the measure would actually kill jobs ra-
ther than create them. After all, many companies are already operating on thin margins in order to stay
afloat. A mandated salary increase could prevent some businesses from continuing to hire. McDonald’s,
for instance, has faced rounds of protests demanding that the chain raise wages to $15 an hour. The com-
pany responded to the criticism by saying such an increase would lead to “personnel decisions” (i.e. fir-
ings and cut hours) at 86 percent of locations. While McDonald’s attitude is reflective of most of the res-
taurant industry, Ron Shaich, the CEO of the bakery chain Panera, sees things differently. He backs a
minimum wage raise so long as it applies to all businesses. That way the increased costs will be relative
across the board, eliminating many of the measure’s negative effects.vi
lecture enhancer 10-8
RECOGNITION: MAKING HEROES
Rosabeth Moss Kanter, author of the book The Change Masters, concluded that companies often
make the mistake of equating pay with rewards. Pay is not a reward for outstanding performance; it is
compensation for doing the job in the first place. A reward should be a special gain for special achieve-
ments. Compensation is a right; recognition is a gift.
Recognition—saying “thank you” in public and perhaps giving a tangible gift along with the
words—has multiple functions beyond simple courtesy. To the employee, recognition signifies that
someone noticed and someone cares. To the rest of the organization, recognition creates role models—
heroes—and communicates the standards: These are the kinds of things that constitute great performance.
Kanter’s management consulting firm also found a remarkable correlation between recognition and inno-
vation.
Some basic rules should be followed in handing out praise and recognition:
1. Deliver recognition and reward in an open and publicized way. If not made public,
recognition loses much of its impact and defeats much of the purpose for which it is pro-
vided.
2. Timing is crucial. Recognize contribution throughout a project. Reward contribution
close to the time an achievement is realized. Time delays weaken the impact of most re-
wards.
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3. Tailor recognition and reward to the unique needs of the people involved. Have sev-
eral recognition and reward options to enable managers to acknowledge accomplishment
in ways appropriate to the particulars of a given situation.
4. Deliver recognition in a personal and honest manner. Avoid providing recognition
that is too “slick” or overproduced.
5. Strive for clear, unambiguous, and well-communicated connection between accom-
plishments and rewards. Be sure people understand why they receive awards and the
criteria used to determine rewards.
6. Recognize recognition. That is, recognize people who recognize others for doing what is
best for the company.
Celebrating and publicizing employee achievements need not be expensive. Kanter’s research
suggests some simple, low-cost ways to make employees “heroes,” such as having coffee with an em-
ployee or group of employees whom you do not normally see, or letting employees attend important
meetings in your place when you’re not available.
Others:
1. Send a letter to every team member at the conclusion of their work, thanking them for
their contribution.
2. Mention an employee’s outstanding work or ideas during your staff meetings or at meet-
ings with your peers and management.
3. Create a “Best Accomplishments of the Year” booklet, and include everyone’s picture,
name, and statement of their best achievement.
4. Show a personal interest in employees’ development and career after a special achieve-
ment, asking them how you can help them take the next step.
5. Invite employees to your home for special celebrations, and recognize them in front of
their colleagues and spouses.
lecture enhancer 10-9
MILLENIALS: GENERATION OF THE FUTURE
Millenials are unlike any other generation that has come before. With 80 million born between 1980
and 2000, Millenials represent the largest age group in American history. They are also perhaps the most self-
centered generation the world has ever seen. Fifty-eight percent more college students scored higher on a nar-
cissism test in 2009 than in 1982. Forty percent of Millenials believe they should be promoted at work every 2
years regardless of their performance. They’re also obsessed with fame: three times as many middle school
girls would rather be a personal assistant to a celebrity than a U. S. Senator.
Indeed, Millenials receive plenty of criticism for their incessant texting, tweeting and heightened opin-
ions about themselves. But then again, entitled tween Twitterers could be the result of a culture too reliant on
participation trophies. Starting in the 1970s, the so-called “Me Generation” went to great lengths to instill their
children with strong feelings of self-esteem. Critics of Millenials fear that this coddled generation isn’t pre-
pared to face the harsh reality of a world that doesn’t offer them constant praise. However, this rather broad
view of Millenials ignores some pertinent facts regarding our ever-changing world.
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Those who are lucky enough to have been born in a first-world country in the late 20th or early 21st
century live in a land of abundance. Information and opportunities once only available to the rich are now only
a click/tap/tweet away. Life expectancy is increasing at a breakneck pace, and new technologies are allowing
more women to be able to have children into their 40s. When such big life decisions can be easily postponed,
why wouldn’t a young, hungry go-getter take a job at a social media startup instead of beginning her ascent up
the corporate ladder? After all, social media didn’t even exist as an industry a decade ago. And with all these
innovative skills coupled with an eager desire to challenge the status quo, who knows what new technologies
will be produced at the hands of Millenials over the coming years. Take it from one of the biggest Millenial
boosters around, Tom Brokaw: “Their great mantra has been: Challenge convention. Find new and better ways
of doing things. And so that ethos transcends the wonky people who are inventing new apps and embraces the
whole economy.”vii
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critical
thinking exercises
Name: ___________________________
Date: ___________________________
critical thinking exercise 10-1
MANAGING A FAMILY BUSINESS
Nicholas Stavros opened his first restaurant in Cedar City 25 years ago. Stavros’s family-style
Greek food and atmosphere proved popular, and three additional restaurants were opened in outlying sub-
urbs. One of Papa Nick’s children now runs each: Maria’s Stavros, Peter’s Stavros, and Eric’s Stavros.
Nick Junior runs the original Nick’s Stavros.
The menu is consistent across all four restaurants, but each restaurant features a daily special pre-
pared by the local chef. Customer comment cards consistently rank the quality of food as very high.
Papa Nick now divides his time between the restaurants and the family’s real estate holdings. Ma-
jor decisions are made by Papa Nick. All employees at each restaurant report to the restaurant’s Stavros
manager, providing some degree of decentralization.
Customer comment cards have begun to show some problem areas at Peter’s Stavros Restaurant.
Service ratings have fallen to “fair,” and many customers have written specific comments about slow ser-
vice and poor wait service attitude.
Because it is the newest restaurant, Eric’s Stavros has received more resources for advertising and
promotion. The equipment is also significantly newer than that at the other three restaurants. Over time
Maria, Peter, and Nick Junior have come to resent the attention Eric has received. The tension has become
so high that the staff at Peter’s Stavros does not speak to the staff at Eric’s Stavros.
Papa Nick is reviewing two pieces of information. One, the profit margin from restaurant opera-
tions has declined over the past year. And, finally, several employees have mentioned their desire to join a
union.
Papa Nick has asked your advice for improving the performance of his restaurants. What advice
would you give him? Outline a plan of action, with goals and timelines.
Chapter 10 - Motivating Employees
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Name: ___________________________
Date: ___________________________
critical thinking exercise 10-2
DOES MONEY MOTIVATE?
Divide the class into groups of five or six students. Assign half the groups one of the following
hypotheses:
A. Money is an effective motivator.
B. Money does not motivate.
Have each group develop a detailed argument pro or con. After 10 minutes, each group should
nominate a debate leader. Give each debate leader 5 minutes to present their arguments to the class. (For
large classes, you may have to limit the number of presentations.)
At the end of the presentations, have the entire class vote on which argument they now endorse.
Chapter 10 - Motivating Employees
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Name: ___________________________
Date: ___________________________
critical thinking exercise 10-3
TESTING MASLOW’S HIERARCHY OF NEEDS
According to Abraham Maslow, we all have certain needs ranging from physical needs to self-
actualization. Maslow believed that when needs are unmet, they motivate us to behave a certain way.
When the needs are met, they no longer motivate us. He also said that when lower-order needs remain
unmet, we give them our attention and don’t attend to the higher needs.
Let’s test Maslow’s theory to see if it holds true. Which needs are you giving your attention to
right now (not for the day, not for the future, but for this minute)? Mark the need getting the most atten-
tion right now with a “0.” Look at each of the other needs; place a check mark next to those that have
been met. Each person should do this in private; no need for names on papers.
________ Self-actualization needs (accomplish goals and develop to potential)
________ Self-esteem needs (recognition, acknowledgment, and status)
________ Social needs (feeling loved and part of the group)
________ Safety needs (security at work and at home)
________ Physical needs (food, drink, warmth, etc.)
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notes on critical thinking exercise 10-3
Tally the results on the board. How many class members are focusing on each need? Have all the
lower-level needs for each person been met (checked off)?
What does this information tell you? Are some classmates hungry and concentrating on physical
needs? Others may be threatened by this exercise and may be sitting quietly tending to their safety needs.
Others may be quite loud and eagerly participating, meeting their social needs. Others are claiming that
their ideas are best, searching for recognition. Still others are calmly going about their business knowing
that they are doing all they can do and are happy with themselves.
The point is that different things motivate individuals. In order to effectively motivate their em-
ployees, managers must listen to their employees, learn what their needs are, and design motivators to
meet those needs. For example, if employees are physically uncomfortable or feel unsafe at work, they
will pay little attention to meeting company goals unless they perceive that meeting those goals will make
them feel comfortable or safe.
Chapter 10 - Motivating Employees
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Name: ___________________________
Date: ___________________________
critical thinking exercise 10-4
THE MANAGEMENT CHALLENGE
Antonio Lacosta is the plant manager at the North Monticello factory. He has always believed in
the abilities of his department heads and let them share in decision making. The four department heads
have each been with the company for over 20 years and are very loyal to the organization.
Lacosta called a meeting this morning to inform the department heads of a report just received
from the home office. It seems that the North Monticello plant has the highest costs of the 10 plants in the
company and has fallen behind in production during the past eight months. This plant is one of the older
plants, and the home office will be taking a close look at it. If costs can’t be brought under control and
production increased by 15% within six months, the North Adams plant will probably be closed. Some
senior workers may be transferred to other locations, but most employees will be terminated.
However, if new conditions are met, the company plans to spend over $40 million on new pro-
duction equipment, and all jobs would be secure. As Lacosta indicated, “If we can do the job over the
next six months, this plant will gain a new lease on life. But if we do not, we can expect the company to
shut us down permanently. I would like each of you four, as my major department leaders, to call a meet-
ing of your people today to inform them of this situation.”
If you were one of the department heads, how would you present the new situation to your work-
ers? Outline the meeting.
