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o Punish only undesirable behavior.
o Give reprimands or disciplinary actions as soon as possible.
o Be clear about what behavior is undesirable.
o Administer punishment in private.
o Combine punishment and positive reinforcement.
12.6 Using Compensation, Nonmonetary Incentives, & Other
Rewards: In Search of the Positive Work Environment
POWERPOINT SLIDES:
#37 Using Compensation, Nonmonetary Incentives, and Other Rewards to Motivate
#38 Popular Incentive Compensation Plans
#40 Nonmonetary Ways of Motivating Employees
#41 Finding Meaning in Work
Section 12.6 discusses compensation and nonmonetary incentives. The incentive compensation
approaches of pay for performance, bonuses, profit sharing, gainsharing, stock options, and pay
for knowledge are described. Money is often a main motivator of performance, but it is not the
Topics and Tips for Discussion:
1. Discuss the advantages and disadvantages of using profit sharing, gainsharing, stock
options, and skill-based pay as forms of incentive compensation.
One advantage of profit-sharing plans is that they focus employee efforts on the metric
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disadvantage of stock options, but stock options, especially for CEOs and upper-level
2. Thinking of your current company (or a previous one), describe the nonmonetary ways of
motivating employees used by the company.
Nonmonetary ways of motivating employees include: (1) programs that support work–life
balance, (2) providing opportunities for skill development, (3) providing a positive work
3. Evaluate the extent to which you are flourishing. What elements of PERMA do you need
to improve?
Flourishing represents the extent to which our lives contain PERMA. The more positive
emotions, engagement, relationships, meaning, and achievement you have in your life,
Section 12.6 Key Concepts:
Motivation and Money
● Motivating isn’t just about money.
● Surveys have found that most workers rate having a caring boss higher than they value
monetary benefits.
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● The Great Place to Work Institute has determined that great employers have three traits in
common: pride in the company, camaraderie with colleagues, and employee trust in
management.
● Most people are paid an hourly wage or a weekly or monthly salary, methods that are
easy for an organization to administer but give employees little incentive to work hard.
● For incentive plans to work, certain criteria are advisable:
Popular Incentive Compensation Plans
● Popular incentive compensation plans include pay for performance, bonuses, profit
sharing, gainsharing, stock options, and pay for knowledge.
● Pay for performance, also known as merit pay, bases pay on one’s results.
o With a piece rate approach, employees are paid according to how much output
they produce.
● Bonuses are cash awards given to employees who achieve specific performance
objectives.
● Profit sharing is the distribution to employees of a percentage of the company’s profits.
● Gainsharing is the distribution of savings or “gains” to groups of employees who
reduced costs and increased measurable productivity.
● With stock options, certain employees are given the right to buy stock at a future date for
a discounted price.
● Pay for knowledge, also known as skill-based pay, ties employee pay to the number of
job relevant skills or academic degrees they earn.
Connect® Exercise
CLICK AND DRAG: Popular Incentive Compensation Plans
Summary of Activity:
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In this Click and Drag exercise, students will match incentive compensation plans with their
appropriate examples.
Nonmonetary Ways of Motivating Employees
● Nonmonetary ways of motivating employees include addressing employees’ needs for
work-life balance, their needs to expand their skills, their needs for a positive work
environment, and their needs to find meaning in their work.
● The Need for Work-Life Balance
o For many employees, work-life balance is the key determinant of career success.
o Work-life benefits are employer-sponsored benefit programs or initiatives
designed to help all employees balance work life with home life.
● The Need to Expand Skills
o Training programs can keep employees engaged with their work since they may
● The Need for a Positive Work Environment
o Well-being is the combined impact of five elements—positive emotions,
engagement, relationships, meaning, and achievement (PERMA).
Interactive Classroom Material:
PRACTICAL ACTION: How Managers Can Encourage Gratitude
This Practical Action lays out several ways in which managers can encourage and practice
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Click for follow-up activity.
● The Need to Matter—Finding Meaning in Work
o Workers now want to be with an organization that allows them to feel they matter.
o Meaningfulness is the sense of belonging to and serving something that you
believe is bigger than the self.
Interactive Classroom Material:
EXAMPLE: Successful Workspaces
This Example discusses workspace setups. Traditional office spaces are now more prone to be
Click for follow-up activity.
Group Exercise #2: What Motivates You?
Exercise Objectives:
1. To determine the causes of students’ motivation in a previous work environment.
12.7 Career Corner: Managing Your Career Readiness
POWERPOINT SLIDES:
#42 Model of Career Readiness
#43 Managing Your Career Readiness
Section 12.7 describes six steps for applying the principles of self-management, an important
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goals. After the to-do list is created, you prioritize the tasks in the order in which you need to
complete them. Establish start and stop dates for each task once you have made your task list.
Finally, as you work the plan, reward yourself and adjust as needed.
One way that you could begin your coverage of these topics is to have the students watch the
CBS video “The ‘Dark Horse.” This approximately 5-minute video profiles how “dark horses”
have redefined success. A dark horse is a person who has triumphed against the odds—a winner
that nobody saw coming. They don’t define success based on wealth, status, and power, but
rather based on happiness and fulfilment. For a supplemental activity, you could have the
Topics and Tips for Discussion:
1. Why is self-motivation an important skill for managers to have?
2. What is your “Wildly Important Goal” for your career?
Have the students reflect on goals that could take them from 10 years to the rest of their
life to achieve. To help them create a Wildly Important Goal, have them try to picture a
3. Why is it sometimes difficult for people to prioritize the tasks they need to accomplish to
achieve their goals?
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When faced with a long list of tasks, people often opt to focus on the “easy to complete”
tasks rather than harder ones. Since it is motivating to be able to check something off the
to-do-list, people sometimes focus on the wrong goals. Rather than starting with the
shortest task first, consider starting with a lengthier task first.
Section 12.7 Key Concepts:
Self-motivation
• Ability to work productively without constant direction, instruction, and praise
Six steps to apply the principles of self-management
1) Identify Your “Wildly Important” Long-Term Goal.
3) Create a “To–Do” List for Accomplishing Your Short-Term Goals.
5) Create a Time Schedule.
6) Work the Plan, Reward Yourself, and Adjust as Needed.
Connect® Exercise
CLICK AND DRAG: Applying the Principles of Self-Management
Summary of Activity:
In this Click and Drag exercise, students will match principles of self-management with their
appropriate examples.
Career Corner Group Exercise: Using Self-Motivation on a Daily Basis
Exercise Objectives:
2. Students will enhance their understanding of how goals and action plans drive self-motivation.
Click for follow-up activity.
CAREER
READINESS
CAREER
READINESS
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MANAGEMENT IN ACTION
MOTIVATION CHALLENGES IN THE FAST-FOOD WORLD
Problem-Solving Perspective
1. What is the underlying problem in this case from the fast-food industry’s perspective?
2. What are the causes of this problem?
3. If you were a consultant to a food industry CEO, what recommendations would you make
for fixing this problem?
Application of Chapter Content
1. What are the major motivation issues at play in the fast-food industry according to the
major needs-based theories of motivation (Maslow’s hierarchy, McClellands’s acquired
needs, and Deci and Ryan’s self-determination)?
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Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
coworkers, and customers and danger around inadequate time to clean up messes and let
oil cool before changing; esteem needs are not met because of the stigma around working
at fast-food restaurants and the inability to earn promotions. According to McClelland’s
acquired needs, the most unmet need is that of achievement—again, the lack of
opportunity for promotion plays a role here as well as the lack of opportunity to be
creative or take ownership over any of the processes because they are so routinized.
According to the theory of self-determination, an additional need that isn’t met is the
feeling of being competent, especially when parts of the job are being taken over by
robots that are accentuating the low level of skill needed to perform the work.
2. What would Herzberg’s theory say about hygiene and motivating factors present in fast–
food industry jobs?
3. What do you think are the major drivers of the equity issues faced by fast-food employees?
4. How might expectancy theory alleviate some of the problems related to high turnover rates
in the fast-food industry?
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Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
then the instrumentality of the job for them will be very low. A similar argument could be
made for an employee who desires a living wage or benefits but can only get a part-time
position. Another question that applicants and employees must grapple with is how much
they want the outcome. If all they desire is some level of income, as was the case when
fast-food workers were mostly teenagers, then the job may hold strong valence.
Ultimately, the expectancy theory model should be used to help identify applicants and
employees who are likely to be motivated by the work in order to reduce turnover.
5. Use the job characteristics model to assess fast-food jobs and suggest how they might be
improved to increase their motivating potential.
According to the job characteristics model, there are several core characteristics that are
lacking in fast-food jobs. For example, there is very little skill variety and autonomy in
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LEGAL/ETHICAL CHALLENGE
ARE WORKPLACE WELLNESS PROGRAMS USING PROPER MOTIVATIONAL TOOLS?
Solving the Challenge
Should organizations tie employee rewards to employee health outcomes in voluntary WWPs?
1. I am not in favor of tying employee rewards to health outcomes. Collecting and
protecting employee medical information presents substantial risks including possible
data breaches. Employees should have equal access to low-cost, quality health care,
2. I think it’s a good idea to tie rewards to employee health outcomes and to include waivers
for employees to sign to authorize the release of their health information when they opt in
to WWPs. Those who can improve their health-related outcomes should be rewarded for
helping reduce the employer’s health care costs.
3. I think it is a good idea to tie rewards to employee health outcomes, provided those
outcomes can be measured reliably and accurately. Also, it is only fair to reward people
for meeting goals they are actually able to control. Increasing stress-relieving practices
such as meditation may be a more realistic goal for someone with hypertension than
blood-pressure reduction. Employers should work with employees to come up with
realistic, achievable, personalized goals.
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TEXTBOOK EXAMPLES
EXAMPLE: The “Chief Emotion Officer”: A Hotel CEO Applies Maslow’s Hierarchy to
Employees, Customers, & Investors
Chip Conley is CEO and founder of boutique hotel company Joie de Vivre (JDV). In Peak: How
Great Companies Get Their Mojo from Maslow, he describes how JDV uses Maslow’s theory to
motivate the business’ three key stakeholders—employees, customers, and investors—by
tapping into the power of self-actualization to create peak performance.
YOUR CALL
Part of the appeal of Maslow’s hierarchy, says social psychologist Douglas Kenrick of Arizona
State University, is that the pyramid “captures a complicated idea in a very simple way.” Do you
agree? How do you think managers at large can use this theory?
Student responses will vary on agreeing or not with Douglas Kenrick. Managers need to
understand what their employees’ needs are before designing rewards programs. Is it job
security because there is a safety need, or is there a lack of socialization in the workplace, and
more retreats are necessary to address the love need?
SUPPLEMENTAL ACTIVITIES
One way to build on this Example is to have the students watch the CBS Sunday Morning video
“Antoine’s: A French Quarter Tradition.” This 5-minute video profiles how one family-owned
business focuses on employee and customer needs as part of its key to success. Consider using
the following discussion questions:
1. Explain how assigning waiters based on family connections, rather than based on seating
location in the restaurant, fosters employee motivation.
Return.
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EXAMPLE: Transparency at Buffer
This Example details the use of transparency not only in organizational goals and financial
achievements, but more specifically in worker pay levels. Every salary at Buffer is determined
YOUR CALL
1. What do you think about Buffer’s approach toward transparency? Can you identify any
drawbacks?
2. Do you want to work for an organization that values open access to information?
SUPPLEMENTAL ACTIVITIES
Have students watch the approximately 8-minute TEDx video “Why Do We Keep Our Salaries
Secret?” This video discusses the history of pay secrecy vs. transparency. One interesting point
David Burkus makes is that pay secrecy can actually help companies save money by creating
information asymmetry, where management can hire workers for less than others are making
because they don’t have to disclose that information. It puts applicants or those negotiating for a
promotion at a disadvantage. Consider asking students:
1. Explain how pay secrecy can be linked to gender inequality in pay. Do you think pay
transparency will actually have an effect on this gap?
2. Why would pay secrecy contribute to strife in the office?
3. What are the motivational outcomes of pay transparency—for employees? For management?
For applicants? For investors?
Return.
EXAMPLE: Reducing the F’s: Applying Expectancy Theory to Failing Students
Dr. Tim Richard has used a motivational program called Celebration/Remediation to improve the
grades of students. At Westwood, the program worked like this: “Students who are passing all
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their classes get a 25- to 30-minute daily break for ‘celebration time’ with friends. Those who
have even one F must stay inside for ‘remediation’—extra study, help from peer tutors, or
meetings with teachers.”
YOUR CALL:
The tricky part, observes Westwood student tutor Joseph Leung, is addressing expectancy—
”getting people out of the mindset that they can’t succeed… A lot of times they just haven’t done
their homework. I try to help them understand that the difference between a person passing and
Richard’s program can be utilized in performance evaluations in business. Employees need to
realize that if they perform, they will receive an outcome (instrumentality). The outcome must be
something that the employee appreciates (valence), or else it will make no difference if it is
received or not. An outcome related to celebrating employee achievements at work and
SUPPLEMENTAL ACTIVITIES
One way that you could build on this Example is to have the students watch the PBS NewsHour
video “What Can Motivate Low-Income High School Kids to Apply to College?” In this 4-
minute video, author Keith Frome discusses the role of peer leadership in motivating students to
complete the college application process. Consider using the following questions for a
supplementary discussion:
1. Using equity theory, explain the value of student or peer leadership when encouraging
students to complete the college application process.
3. Explain how goal setting theory could be used to motivate more low-income students to
complete the college application process.
Return.
EXAMPLE: Do Job Characteristics Matter in The Modern Workforce?
This Example offers examples of several companies that utilize elements of the Job
Characteristics Model to improve worker motivation. The University of Michigan makes call
center work more meaningful, Hubspot encourages autonomy, and Cargill emphasizes feedback.
YOUR CALL:
1. Which of these job characteristics are most important to you?
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This should encourage a lively discussion as students will differ on why one element is more
important to them than another. Encourage them to discuss why certain elements motivate them
more than others—what do they get from it? You can also discuss the difference in intrinsic
versus extrinsic rewards and motivation.
2. How do you think you will facilitate things like meaningfulness, responsibility, and feedback
as a manager?
Students may not have enough experience to really answer this immediately. Try asking them to
consider their current or past jobs. Did their managers encourage any of these elements? If so,
did it work? What could have been done better? This could lead to a discussion full of interesting
examples to examine.
SUPPLEMENTAL ACTIVITIES
To build on the Example, have your students read the short HBR article “Every Generation
Wants Meaningful Work—But Thinks Other Age Groups Are in It for the Money.” This
interesting article looks at how each generation defines meaningful work. Each generation seems
to have a slightly different definition, and there is internal consistency in the cohorts to that
meaning. However, a study revealed that they really all want the same thing, but believe the
other generations only want money. Consider leading a discussion using questions such as:
What would make work meaningful for you? (If you have any non-traditional aged students in
your class, try comparing their definitions to the younger students’ definitions.) How do you
think this differs, if it does, from what your parents or grandparents find as meaningful in their
work?
Your generation is labeled as Gen Z or the Post-Millennials, or the iGeneration. Do you think
your emphasis on what makes work meaningful differs from previous generations? How? Why?
You will most likely manage in a multi-generational company in the future. How will you
approach the problem of trying to help members of different generations find meaning in their
work?
Return.
EXAMPLE: Successful Workspaces
This Example discusses workspace setups. Traditional office spaces are now more prone to be
cubicles and/or open-plan offices, with few or no walls. The question is if these more
contemporary office setups are really increasing performance or distractions.
YOUR CALL
What kind of office surroundings would work best for you?
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SUPPLEMENTAL ACTIVITIES
One way to build on this Example is to have the students read The Wall Street Journal article
“When Your Gym Is Your Office.” This article and its corresponding 3-minute video profile the
growing trend of health-club members doing work where they work out. Consider using the
following discussion prompts:
1. Discuss how working at a gym could foster a positive work environment.
2. Discuss what actions gyms should take if they want to encourage more of their members to
3. Thinking back to the material in Chapter 11, identify personality dimensions and individual
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TEXTBOOK PRACTICAL ACTIONS
PRACTICAL ACTION: How Managers Can Encourage Gratitude
This Practical Action lays out several ways in which managers can encourage and practice
gratitude in the workplace: be specific, use gratitude to build relationships, be public with
gratitude, encourage peer-to-peer gratitude, may it easy for others to practice gratitude, and
recognize the power of praise.
YOUR CALL
1. Can you recall a time when someone expressed sincere gratitude for your contributions to a
project? How did this make you feel?
Students may be reluctant at first to speak up. You can encourage their participation by relating
a story from your life. Once one person speaks up, others will follow suit until most hands will be
raised. Be sure to “express gratitude” to them for their participation!
2. What creative suggestions can you come up with to encourage more gratitude in your
organization?
Their answers may arise from the discussion in the first part of the Your Call. They felt good
when someone expressed gratitude. How can they pass that feeling forward? Encourage them to
SUPPLEMENTAL ACTIVITIES
Have your students watch a TEDx video of Mike Robbins’ “The Power of Appreciation.” This is
a fairly long video at just over 18 minutes; however, students will find it inspirational and
meaningful. This video discusses the difference between recognition and appreciation and why
appreciation is so powerful both in our personal and our working lives. He points to research that
shows both productivity and job satisfaction are positively affected by appreciation from others.
He points to three things we need to do to engage in appreciation. 1. We need to really look hard
for things to appreciate in others. 2. We need to remind ourselves to do this continually, even if it
means putting it in our calendars until it becomes a part of daily life. 3. We need to learn to
appreciate compliments.
If you don’t have time to show it in class, consider assigning it as pre-work. Then lead a class
discussion using questions such as:
1. Do any of the motivational theories we have been discussing explain the impact of
appreciation? Which ones? How?
2. Think of a time when someone expressed appreciation for you. How did it feel? Would you
want to pass that feeling forward to others?
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