Chapter 8
Motivation:
From Concepts to Applications
LEARNING OBJECTIVES
After studying this chapter, students should be able to:
8-1. Describe how the job characteristics model motivates by changing the work
environment.
8-2. Compare the main ways jobs can be redesigned.
8-3. Explain how specific alternative work arrangements can motivate employees.
8-4. Describe how employee involvement measures can motivate employees.
8-5. Demonstrate how the different types of variable-pay programs can increase employee
motivation.
8-6. Show how flexible benefits turn benefits into motivators.
8-7. Identify the motivational benefits of intrinsic rewards.
INSTRUCTOR RESOURCES
Instructors may wish to use the following resources when presenting this chapter.
Text Exercises
Myth or Science?: “Money Can’t Buy Happiness”
Personal Inventory Assessments: Diagnosing the Need for Team Building
Career OBjectives: How Can I Get Flextime?
An Ethical Choice: Sweatshops and Worker Safety
Point/Counterpoint: “Face-Time” Matters
Questions for Review
Experiential Exercise: Occupations and the Job Characteristics Model
Ethical Dilemma: Inmates for Hire
Text Cases
Case Incident 1: Motivation for Leisure
Case Incident 2: Pay Raises Every Day
Instructor’s Choice
This section presents an exercise that is NOT found in the student’s textbook. Instructor’s Choice
reinforces the text’s emphasis through various activities. Some Instructor’s Choice activities are
centered on debates, group exercises, Internet research, and student experiences. Some can be
used in class in their entirety, while others require some additional work on the student’s part.
The course instructor may choose to use these at any time throughout the class—some may be
more effective as icebreakers, while some may be used to pull together various concepts covered
in the chapter.
Web Exercises
At the end of each chapter of this Instructor’s Manual, you will find suggested exercises and
ideas for researching OB topics on the Internet. The exercises “Exploring OB Topics on the
Web” are set up so that you can simply photocopy the pages, distribute them to your class, and
make assignments accordingly. You may want to assign the exercises as an out-of-class activity
or as lab activities with your class.
Summary and Implications for Managers
Understanding what motivates individuals is ultimately key to organizational performance.
Employees whose differences are recognized, who feel valued, and who have the opportunity to
work in jobs that are tailored to their strengths and interests will be motivated to perform at the
highest levels. Employee participation can also increase employee productivity, commitment to
work goals, motivation, and job satisfaction.
However, we cannot overlook the powerful role of organizational rewards in influencing
motivation. Pay, benefits, and intrinsic rewards must be carefully and thoughtfully designed in
order to enhance employee motivation toward positive organizational outcomes. Specific
implications for managers are below:
Recognize individual differences. Spend the time necessary to understand what’s
important to each employee. Design jobs to align with individual needs and maximize
their motivation potential.
Use goals and feedback. You should give employees firm, specific goals, and they should
get feedback on how well they are faring in pursuit of those goals.
Allow employees to participate in decisions that affect them. Employees can contribute to
setting work goals, choosing their own benefits packages, and solving productivity and
quality problems.
Link rewards to performance. Rewards should be contingent on performance, and
employees must perceive the link between the two.
Check the system for equity. Employees should perceive that experience, skills, abilities,
effort, and other obvious inputs explain differences in performance and hence in pay, job
assignments, and other obvious rewards.
This chapter begins with a vignette describing the ongoing saga of Lee Farkas, former CEO of mortgage firm TBW.
As we can see, money can be an extremely powerful motivator. For most individuals, though, pay is not the only
motivator. It is a central means of motivation, but what you’re actually doing for the money matters, too. The
process of motivating employees is complex, and people feel strongly about the implications of change to their
extrinsic or intrinsic benefits.
In Chapter 7, we focused on motivation theories. While it’s important to understand the underlying concepts, it’s
also important to see how you can use them as a manager. In this chapter, we apply motivation concepts to
practices, beginning with job design.
BRIEF CHAPTER OUTLINE
I. Motivating by Job Design: The Job Characteristics Model (Exhibit 8-1)
A. The job characteristics model (JCM) proposed that any job may be described by five
core job dimensions:
1. Skill variety: the degree to which the job requires a variety of different activities, so
the worker can use a number of different skills and talent.
2. Task identity: the degree to which the job requires completion of a whole and
identifiable piece of work.
3. Task significance: the degree to which the job affects the lives or work of other
people.
4. Autonomy: the degree to which the job provides the worker freedom, independence,
and discretion in scheduling the work and determining the procedures to be used in
carrying it out.
5. Feedback: the degree to which carrying out the work activities generates direct and
clear information about your own performance.
B. Much evidence supports the JCM concept that the presence of a set of job characteristics
—variety, identity, significance, autonomy, and feedback—does generate higher and
more satisfying job performance.
1. We can combine the core dimensions of the JCM into a single
predictive index, called the motivating potential score (MPS)
and calculated as follows:
2. MPS = Skill variety + Task identity + Task signiticance x Autonomy x
Feedback
3
C. But we can better calculate motivating potential by simply adding the characteristics
rather than using the formula.
D. A few studies have tested the job characteristics model in different cultures, but the
results aren’t consistent.
E. Job Redesign
1. Introduction
a. Repetitive jobs provide little variety, autonomy, or motivation. People generally
seek out jobs that are challenging and stimulating.
2. Job rotation
a. Periodic shifting of an employee from one task to another.
b. Often referred to as cross-training.
c. Strengths of job rotation are that it reduces boredom, increases motivation, and
helps employees better understand their work contributions.
d. Drawbacks include creates disruptions, extra time for supervisors addressing
questions, training time, and efficiencies.
F. Relational Job Design
1. While redesigning jobs on the basis of job characteristics theory is likely to make
work more intrinsically motivating to people, more contemporary research is
focusing on how to make jobs more prosocially motivating to people.
2. In other words, how can managers design work so employees are motivated to
promote the well-being of the organization’s beneficiaries?
a. This view of relational job design shifts the spotlight from the employee to
those whose lives are affected by the job that employee performs.
3. One way to make jobs more prosocially motivating is to better connect employees
with the beneficiaries of their work, for example, by relating stories from customers
who have found the company’s products or services to be helpful.
4. Meeting beneficiaries firsthand allows employees to see that their actions affect a
real, live person, and that their jobs have tangible consequences.
5. In addition, connections with beneficiaries make customers or clients more accessible
in memory and more emotionally vivid, which leads employees to consider the effects
of their actions more.
6. Finally, connections allow employees to easily take the perspective of beneficiaries,
which fosters higher levels of commitment.
II. Alternative Work Arrangements
A. Flextime
1. Flextime or flexible work hours. Allows employees some discretion over when they
arrive at and leave work. (Exhibit 8-2)
a. Benefits include reduced absenteeism, increased productivity, reduced overtime
expense, reduced hostility toward management, and increased autonomy and
responsibility for employees.
b. Major drawback is that it’s not applicable to all jobs.
B. Job Sharing
1. Job sharing. Allows two or more individuals to split a traditional 40-hour-a-week
job.
a. Only 18 percent of large organizations offered job sharing in 2014, a 29 percent
decline from 2008.
b. Job sharing allows an organization to draw on the talents of more than one
individual in any given job.
c. It also opens the opportunity to acquire skilled workers—for instance, women
with young children and retirees—who might not be available on a full-time
basis.
d. From the employee’s perspective, job sharing increases flexibility and can
increase motivation and satisfaction when a 40-hour-a-week job is just not
practical.
e. In the United States, the national Affordable Care Act may create an incentive for
companies to increase job sharing arrangements in order to avoid the fees
employees must pay the government for full-time employees.
C. Telecommuting
1. Telecommuting. Employees who do their work at home at least two days a week on a
computer that is linked to their office.
a. Despite the benefits of telecommuting, large organizations such as Yahoo! and
Best Buy have eliminated it.
i. While the movement away from telecommuting by some companies made
headlines, it appears that for most organizations, it remains popular.
ii. Almost 50 percent of managers in Germany, the United Kingdom, and the
United States are permitted telecommuting options.
iii. In developing countries, this percentage is between 10 and 20 percent.
b. Potential benefits of telecommuting:
i. Larger labor pool
ii. Higher productivity
iii. Improved morale
iv. Reduced office-space costs
c. Downsides of telecommuting:
i. Employer
(a) Less direct supervision of employees
(b) Difficulty coordinating teamwork
(c) Reduced knowledge transfer
ii. Employee
(a) Increased feelings of isolation
(b) Reduced job satisfaction
(c) Less “face-time”
III. Employee Involvement and Participation
A. Introduction
1. Employee involvement and participation (EIP) is a participative process that uses
employees’ input to increase their commitment to the organization’s success.
2. Employee involvement programs differ among countries.
a. A study of four countries, including the United States and India, confirmed the
importance of modifying practices to reflect national culture.
B. Examples of Employee Involvement Programs
1. Participative management
a. Common to all participative management programs is joint decision making, in
which subordinates share a significant degree of decision making power with their
immediate superiors.
b. Participative management has, at times, been promoted as a panacea for poor
morale and low productivity.
c. But for it to work, employees must have trust and confidence in their leaders.
d. Leaders should refrain from coercive techniques and instead stress the
organizational consequences of decision making to employees.
e. Studies of the participation–performance relationship have yielded mixed
findings.
2. Representative participation
a. Almost every country in Western Europe requires companies to practice
representative participation.
b. The goal is to redistribute power within an organization, putting labor on a more
equal footing with the interests of management and stockholders by letting
workers be represented by a small group of employees who actually participate.
c. The two most common forms of representation are work councils and board
representatives.
IV. Using Rewards to Motivate Employees
A. Introduction
1. As we saw in Chapter 3, pay is not a primary factor driving job satisfaction. However,
it does motivate people, and companies often underestimate its importance in keeping
top talent.
B. What to Pay: Establishing the Pay Structure
1. Complex process that entails balancing internal equity and external equity.
2. Some organizations prefer to pay leaders by paying above market.
3. Paying more may net better-qualified and more highly motivated employees who may
stay with the firm longer.
C. How to Pay: Rewarding Individual Employees Through Variable-Pay Programs
1. Introduction
a. A number of organizations are moving away from paying solely on credentials or
length of service.
b. Piece-rate plans, merit-based pay, bonuses, profit sharing, gain sharing, and
employee stock ownership plans are all forms of a variable-pay program, which
bases a portion of an employee’s pay on some individual and/or organizational
measure of performance.
c. Earnings therefore fluctuate up and down.
2. Variable-pay plans have long been used to compensate salespeople and executives.
a. Globally, around 80 percent of companies offer some form of variable-pay plan.
b. In Latin America, more than 90 percent of companies offer some sort of variable
pay.
c. Unfortunately, most employees still don’t see a strong connection between pay
and performance.
d. The fluctuation in variable pay is what makes these programs attractive to
management.
3. Piece-rate pay plans—workers are paid a fixed sum for each unit of production
completed.
a. A pure piece-rate plan provides no base salary and pays the employee only for
what he or she produces.
b. The chief concern of both individual and team piece-rate workers is financial risk.
c. Although incentives are motivating and relevant for some jobs, it is unrealistic to
think they can constitute the only piece of some employees’ pay.
4. Merit-based pay plans—based on performance appraisal ratings.
a. Main advantage is that it allows employers to differentiate pay based on
performance.
b. Create perceptions of relationships between performance and rewards.
c. Despite their intuitive appeal, merit pay plans have several limitations.
i. One is that they are typically based on an annual performance appraisal and
thus are only as valid as the performance ratings.
ii. Another limitation is that the pay-raise pool fluctuates on economic or other
conditions that have little to do with individual performance.
iii. Finally, unions typically resist merit pay plans.
5. Bonuses
a. An annual bonus is a significant component of total compensation for many jobs.
b. Bonus plans increasingly include lower-ranking employees; many companies now
routinely reward productive employees with bonuses in the thousands of dollars
when profits improve.
c. Downsides of bonuses: employees’ pay is more vulnerable to cuts.
6. Profit-sharing plans
a. Profit-sharing plans are organization-wide programs that distribute
compensation based on some established formula centered around a company’s
profitability.
7. Employee stock ownership plans
a. An employee stock ownership plan (ESOP) is a company-established benefit
plan in which employees acquire stock, often at below-market prices, as part of
their benefits.
b. Research on ESOPs indicates they increase employee satisfaction and innovation.
8. Evaluation of variable pay
a. Do variable-pay programs increase motivation and productivity?
b. Generally, yes, but that doesn’t mean everyone is equally motivated by them.
V. Using Benefits to Motivate Employees
1. Flexible benefits: developing a benefits package
a. Flexible benefits individualize rewards by allowing each employee to choose the
compensation package that best satisfies his or her current needs and situation.
b. Flexible benefits can accommodate differences in employee needs based on age,
marital status, spouses’ benefit status, and number and age of dependents.
c. Today, almost all major corporations in the United States offer flexible benefits.
d. However, it may be surprising that their usage is not yet global.
VI. Using Intrinsic Rewards to Motivate Employees
A. Intrinsic Rewards: Employee Recognition Programs
1. Organizations are increasingly recognizing that important work rewards can be both
intrinsic and extrinsic.
a. Rewards are intrinsic in the form of employee recognition programs and
extrinsic in the form of compensation systems.
b. Despite the increased popularity of employee recognition programs, critics argue
they are highly susceptible to political manipulation by management.
VII. Summary and Implications for Managers
A. Understanding what motivates individuals is ultimately key to organizational
performance.
B. Employees whose differences are recognized, who feel valued, and who have the
opportunity to work in jobs that are tailored to their strengths and interests will be
motivated to perform at the highest levels.
C. Employee participation also can increase employee productivity, commitment to work
goals, motivation, and job satisfaction.
D. However, we cannot overlook the powerful role of organizational rewards in influencing
motivation.
E. Pay, benefits, and intrinsic rewards must be carefully and thoughtfully designed in order
to enhance employee motivation toward positive organizational outcomes. Specific
implications for managers are below:
1. Recognize individual differences. Spend the time necessary to understand what’s
important to each employee. Design jobs to align with individual needs and maximize
their motivation potential.
2. Use goals and feedback. You should give employees firm, specific goals, and they
should get feedback on how well they are faring in pursuit of those goals.
3. Allow employees to participate in decisions that affect them. Employees can
contribute to setting work goals, choosing their own benefits packages, and solving
productivity and quality problems.
4. Link rewards to performance. Rewards should be contingent on performance, and
employees must perceive the link between the two.
5. Check the system for equity. Employees should perceive that experience, skills,
abilities, effort, and other obvious inputs explain differences in performance and
hence in pay, job assignments, and other obvious rewards.
EXPANDED CHAPTER OUTLINE
I. Motivating by Job Design: The Job Characteristics Model
A. Job design suggests that the way elements in a job are organized can influence employee
effort, and the job characteristics model, discussed next can serve as a framework to
identify opportunities for changes to those elements.
B. The Job Characteristics Model (JCM) proposed that any job may be described by five
core job dimensions (Exhibit 8-1):
1. Skill variety: the degree to which the job requires a variety of different activities, so
the worker can use a number of different skills and talent.
2. Task identity: the degree to which the job requires completion of a whole and
identifiable piece of work.
3. Task significance: the degree to which the job has a substantial impact on the lives or
work of other people.
4. Autonomy: the degree to which the job provides the worker freedom, independence,
and discretion in scheduling the work and determining the procedures to be used in
carrying it out.
5. Feedback: the degree to which carrying out the work activities generates direct and
clear information about the effectiveness of your own performance.
6. The first three dimensions—skill variety, task identity, and task significance—
combine to create meaningful work the incumbent will view as important, valuable,
and worthwhile.
7. From a motivational standpoint, the JCM proposes that individuals obtain internal
rewards when they learn (knowledge of results) that they personally (experienced
responsibility) have performed well on a task they care about (experienced
meaningfulness).
8. Individuals with a high growth need are more likely to experience the critical
psychological states when their jobs are enriched—and respond to them more
positively—than are their counterparts with low growth need.
9. We can combine the core dimensions into a single predictive index called the
motivating potential score (MPS).
10. MPS = Skill variety + Task identity + Task signiticance x
Autonomy x Feedback
3
a. To be high on motivating potential, jobs must be high on at least one of the three
factors that lead to experienced meaningfulness, and high on both autonomy and
feedback.
b. If jobs score high on motivating potential, the model predicts motivation,
performance, and satisfaction will improve and absence and turnover will be
reduced.
c. But we can better calculate motivating potential by simply adding the
characteristics rather than using the formula.
11. A few studies have tested the job characteristics model in different cultures, but the
results aren’t consistent.
a. One study suggested that when employees are “other oriented” (concerned with
the welfare of others at work), the relationship between intrinsic job
characteristics and job satisfaction was weaker.
i. The fact that the job characteristics model is relatively individualistic
(considering the relationship between the employee and his or her work)
suggests job enrichment strategies may not have the same effects in
collectivistic cultures as in individualistic cultures (such as the United States).
b. Another study suggested the degree to which jobs had intrinsic job characteristics
predicted job satisfaction and job involvement equally well for U.S., Japanese,
and Hungarian employees.
C. Job Redesign
1. Introduction
a. Repetitive jobs provide little variety, autonomy, or motivation. People generally
seek out jobs that are challenging and stimulating.
2. Job rotation
a. Often referred to as cross-training.
b. Periodic shifting of an employee from one task to another.
c. Strengths of job rotation are that it reduces boredom, increases motivation, and
helps employees better understand their work contributions.
d. Weaknesses include: disruptions, extra time for supervisors addressing questions,
training time, and efficiencies.
D. Relational Job Design
1. While redesigning jobs on the basis of job characteristics theory is likely to make
work more intrinsically motivating to people, more contemporary research is
focusing on how to make jobs more prosocially motivating to people.
2. In other words, how can managers design work so employees are motivated to
promote the well-being of the organization’s beneficiaries?
a. This view of relational job design shifts the spotlight from the employee to
those whose lives are affected by the job that the employee performs.
3. One way to make jobs more prosocially motivating is to better connect employees
with the beneficiaries of their work, for example, by relating stories from customers
who have found the company’s products or services to be helpful.
4. Meeting beneficiaries firsthand allows employees to see that their actions affect a
real, live person, and that their jobs have tangible consequences.
5. In addition, connections with beneficiaries make customers or clients more accessible
in memory and more emotionally vivid, which leads employees to consider the effects
of their actions more.
6. Finally, connections allow employees to easily take the perspective of beneficiaries,
which fosters higher levels of commitment.
II. Alternative Work Arrangements
A. Flextime
1. Flextime or flexible work hours. Allows employees some discretion over when they
arrive at and leave work. (Exhibit 8-3)
a. Benefits include reduced absenteeism, increased productivity, reduced overtime
expense, and reduced hostility toward management, and increased autonomy and
responsibility for employees.
b. Major drawback is that it’s not applicable to all jobs or every worker.
2. Job sharing. Allows two or more individuals to split a traditional 40-hour-a-week
job.
a. Only 18 percent of larger organizations now offer job sharing, a 29 percent
decline from 2008.
i. Reasons it is not more widely adopted are likely the difficulty of finding
compatible partners to share a job and the historically negative perceptions of
individuals not completely committed to their job and employer.
ii. Job sharing allows an organization to draw on the talents of more than one
individual in a given job.
3. Telecommuting. Employees who do their work at home at least two days a week on a
computer that is linked to their office.
a. Despite the benefits of telecommuting, large organizations such as Yahoo! and
Best Buy have eliminated it.
i. While the movement away from telecommuting by some companies made
headlines, it appears that for most organizations, it remains popular.
ii. Almost 50 percent of managers in Germany, the United Kingdom, and the
United States are permitted telecommuting options.
iii. In developing countries, this percentage is between 10 and 20 percent.
iv. Writers, attorneys, analysts, and employees who spend the majority of their
time on computers or the telephone—such as telemarketers, customer service
representatives, reservation agents, and product support specialists—are
natural candidates.
v. As telecommuters, they can access information on their computers at home as
easily as in the company’s office.
b. Potential benefits of telecommuting
i. Larger labor pool
ii. Higher productivity
iii. Less turnover
iv. Improved morale
v. Reduced office-space costs
c. Downsides of Telecommuting
i. Employer
(a) Less direct supervision of employees
(b) Difficult coordinating teamwork
(c) Reduced knowledge transfer
ii. Employee
(a) Increased feeling of isolation
(b) Reduced job satisfaction
(c) Less ‘face-time’
III. Employee Involvement and Participation
A. Introduction
1. Employee involvement is a participative process that uses employees’ input to
increase their commitment to the organization’s success.
a. The logic is that if we engage workers in decisions that affect them and increase
their autonomy and control over their work lives, they will become more
motivated, more committed to the organization, more productive, and more
satisfied with their jobs.