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a.
II. Using Intrinsic Rewards to Motivate Employees
A. 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 can 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 to
enhance employee motivation toward positive organizational outcomes. Specific
implications for managers are below:
1. Recognize individual differences. Spend the time necessary to understand
and maximize their motivation potential.
3. Allow employees to participate in decisions that affect them. Employees can
solving productivity and quality problems.
5. Check the system for equity. Employees should perceive that experience,
skills, abilities, effort, and other obvious inputs explain differences in
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
by five core job dimensions (Exhibit 8-1):
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identifiable piece of work.
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.
6. The first three dimensions—skill variety, task identity, and task significance—
valuable, and worthwhile.
7. From a motivational standpoint, the JCM proposes that individuals obtain
(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).
Autonomy x Feedback
3
a. To be high on motivating potential, jobs must be high on at least one of the
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.
11. Research has examined the role of leadership (to be further discussed in
Chapter 12) and employee perceptions of job characteristics.
their employees.
b. Furthermore, research in government, private, and military R&D
organizations in Taiwan reached a similar conclusion—that supportive
professionals.
C. Job Rotation and Job Enrichment
1. Periodic shifting of an employee from one task to another.
a. Often referred to as cross-training.
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c. Job rotation does have drawbacks.
training.
ii. Moving a worker into a new position reduces overall productivity for
that role.
must adjust to new employees.
iv. Supervisors may have to spend more time answering questions and
monitoring the work of recently rotated employees.
D. Job Enrichment
2. Enriching a job in this way is different from enlarging it, or adding more tasks
meaning.
a. Job enrichment has its roots in Herzberg’s theories of providing hygiene,
3. Early reviews suggested that job enrichment can be effective at reducing
turnover, almost twice as effective as giving employees a “realistic preview”
E. 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
people.
2. In other words, how can managers design work so employees are motivated
to promote the well-being of the organization’s beneficiaries?
stories from customers who have found the company’s products or services to
be helpful.
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 arrangements (or flexible work arrangements).
Allows employees some discretion over when they arrive at and leave work.
(Exhibit 8-3)
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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 through virtual devices linked to the employer’s office.
a. Despite the benefits of telecommuting, large organizations such as Yahoo!
and Best Buy have eliminated it.
i. Writers, attorneys, analysts, and employees who spend most of their
time on computers or the telephone—such as telemarketers, customer
service representatives, reservation agents, and product support
specialists—are natural candidates.
ii. 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. Telecommuting is positively related to objective and super-visor rated
performance and job satisfaction; to a lesser degree, it reduces role
stress and turnover intentions.
ii. Moreover, employees who work virtually more than 2.5 days a week
tended to experience the benefits of reductions in work-family conflict
more intensely than those who are in the office the majority of their
work week. Beyond the benefits to organizations and their employees,
telecommuting has potential benefits to society.
metric tons per year.
iv. Environmental savings could come about from lower office energy
consumption, fewer traffic jams that emit greenhouse gasses, and a
reduced need for road repairs.
c. Downsides of telecommuting:
your performance negatively as well.
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iii. From the employee’s standpoint, telecommuting can increase feelings
relationship quality.
iv. Telecommuters are also vulnerable to the “out of sight, out of mind”
effect.
III. Employee Involvement and Participation
A. Introduction
productive, and more satisfied with their jobs.
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.
i. While U.S. employees readily accepted employee involvement
were rated low by those employees.
ii. These reactions are consistent with India’s high power-distance
culture, which accepts and expects differences in authority.
iii. Similarly, Chinese workers who were very accepting of traditional
Chinese values showed few benefits from participative decision
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.
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.
satisfaction.
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iii. This doesn’t mean participative management can’t be beneficial under
performance.
2. Representative participation
a. Most countries in Western Europe require companies to practice
participative management.
b. The goal is to redistribute power within an organization, putting labor on a
actually participate.
c. The two most common forms:
i. Works councils: groups of nominated or elected employees who must
be consulted when management makes decisions involving personnel.
ii. Board representatives: employees who sit on a company’s board of
directors and represent the interests of employees.
order for motivation to increase.
i. Thus, representative participation as a motivational tool is surpassed
by more direct participation methods.
IV. Using Rewards to Motivate Employees
A. Introduction
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.
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
and/or organizational measure of performance.
2. Variable-pay plans have long been used to compensate salespeople and
executives.
a. Globally, around 84% of companies have some form of variable-pay plan.
b. Unfortunately, most employees still don’t see a strong connection between
pay and performance.
management.
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i. It turns part of an organization’s fixed labor costs into a variable cost,
thus reducing expenses when performance declines.
than others.
iii. When pay is tied to performance, the employees’ earnings also
recognize contribution rather than being a form of entitlement.
iv. Over time, low performers’ pay stagnates, while high performers enjoy
pay increases commensurate with their contributions.
production completed.
a. A pure piece-rate plan provides no base salary and pays the employee only
for what he or she produces.
b. Although incentives are motivating and relevant for some jobs, it is
unrealistic to think they can constitute the only piece of some employees’
pay.
performance.
b. Creates perception of relationships between performance and rewards.
c. Most large organizations have merit pay plans, particularly for salaried
employees.
d. Despite their intuitive appeal, merit pay plans have several limitations.
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.
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.
b. Compensation can be direct cash outlays or, particularly for top managers,
allocations of stock options.
psychological ownership.
7. Employee stock ownership plans
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prices, as part of their benefits.
b. Research on ESOPs indicates they increase employee satisfaction and
innovation.
ownership.
(a) That is, in addition to their financial stake in the company, they
need to be kept regularly informed of the status of the business and
improve the organization’s performance.
ii. ESOP plans for top management can reduce unethical behavior.
8. Evaluation of variable pay
them.
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