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FOUNDATIONS OF EMPLOYEE MOTIVATION How Can I Apply Motivation Theories? © 2014 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors. MAJOR TOPICS I’LL LEARN AND QUESTIONS I SHOULD BE ABLE TO ANSWER 5.1THE WHAT AND WHY OF MOTIVATION MAJOR QUESTION: What is motivation and how does it affect my behavior? 5.2CONTENT THEORIES OF MOTIVATION MAJOR QUESTION: How would I compare and contrast the content theories of motivation? 5.3PROCESS THEORIES OF MOTIVATION MAJOR QUESTION: How would I compare and contrast the process theories of motivation? 5.4MOTIVATING EMPLOYEES THROUGH JOB DESIGN MAJOR QUESTION: What are the similarities and differences among top-down approaches, bottom-up approaches, and “idiosyncratic deals” in job design? INTEGRATIVE FRAMEWORK FOR UNDERSTANDING AND APPLYING OB This chapter focuses on one key individual-level process–motivation–that has positive relationships with a number of important outcomes. As you read the chapter, note what outcomes are influenced by employee motivation. Page 145 winning at work DISCUSSING PAY AT WORK Ever wonder how your pay compares to that of someone else at the same company? Brian Bader did. He had just been hired for a technology-support job at Apple for $12 per hour and was told not to discuss salary with other employees. This requirement just made him curious. He decided to ask coworkers about their salary and found that most people were being paid between $10 and $12 per hour. PAY INEQUITY Brian was not upset about his relative pay at first, but it later became the cause of his decision to quit his job. He learned from performance data that were shared with work teams that he was twice as productive as the lowest performer on the team yet earned only 20 percent more. “It irked me. If I’m doing double the work, why am I not seeing double the pay?” he said when interviewed for The Wall Street Journal.1 In OB we see his situation as an example of pay inequity. HOW DO COMPANIES HANDLE DECISIONS ABOUT PAY? Many companies tell employees not to discuss pay with coworkers. Others threaten to fire people who discuss pay at work. Why? Quite simply, when such disparities become public, they “can engender resentment, envy and dissatisfaction among workers.” Keeping salaries private also helps companies “to retain the upper hand on salary negotiation and hope to keep flawed or even discriminatory compensation systems under wraps.”2 Pay secrecy policies do not sit well with younger employees like Millennials, who are more willing to talk about pay and even discuss such things on social media. Other companies, like SumAll, are less secretive. This small data-analytics company in Manhattan believes that openness and transparency are more likely to motivate Millennials. SumAll allows employees to see “investor agreements, company financials, performance appraisals, hiring decisions and employees’ pay, along with each worker’s equity and bonuses” on a shared drive.3 Would you like to work at SumAll? SHOULD YOU DISCUSS PAY WHILE AT WORK? The answer depends on your role and position. Experts contend that the National Labor Relations Act prohibits companies from stopping the rank-and-file employees (i.e., people paid by the hour) from discussing salary and benefits packages outside of work time. This applies to social media as well. The rules are different, however, for managers and supervisors. They can legally be prevented from discussing pay.4 If you decide to discuss pay at work, keep the following recommendations in mind: (1) restrict your conversations to people you trust, (2) don’t brag about your pay, and (3) understand your company’s policy on the matter. FOR YOUWHAT’S AHEAD IN THIS CHAPTER We have all observed, or even worked in, dysfunctional organizations where managers don’t seem to have a clue about how to motivate workers. OB supplies proven methods of how to motivate employees. These aren’t just abstract theories. All spring from observation and study of the workplace, and they are validated in real-life testing. Business professionals treasure them as tools for making work better and more productive. We’ll show you how they work and give practical tips and suggestions for implementation. Page 146 5.1THE WHAT AND WHY OF MOTIVATION MAJOR QUESTION What is motivation and how does it affect my behavior? THE BIGGER PICTURE You may feel we’re about to get too personal. Intellectually you can identify motivation as a key process within the Integrative Framework to Understand and Apply OB, or study the psychological processes that drive it. But emotionally what you’re about to read may remind you of a time when you worked in a group or organization and something made you stop and ask yourself why you even bothered. Or on the contrary, maybe you’ve been surprised by how consumed you have been by a particular job or volunteer effort. For example, have you ever persisted at a difficult task when you seemed to be making no progress? Would you be willing to work extra hours for no pay? How about working extra hours for the chance of receiving more pay? Consider the deal offered by Hilcorp Energy, the third largest, privately held energy exploration and production company in the United States. The company “promised staff in 2010 that if the company doubles its production rate and reserves by 2015, every employee will get a check for $100,000.”5 Motivation theories help us understand our own behaviors in organizational settings and provide us tools for motivating others. Motivation: What Is It, and Why Is It Important? Motivation explains why we do the things we do. It explains why you are dressed the way you are right now and it can account for what you plan to do this evening. This chapter will guide how you can use principles of motivation to help achieve personal, team, and organizational goals. How Does It Work?The term motivation derives from the Latin word movere, meaning “to move.” In the present context, motivation refers to the psychological processes “that underlie the direction, intensity, and persistence of behavior or thought.”6 “Direction pertains to what an individual is attending to at a given time, intensity represents the amount of effort being invested in the activity, and persistence represents for how long that activity is the focus of one’s attention.”7 It can be tricky to understand motivation because you can’t actually see it or know it in someone else. Motivation is inferred from one’s behavior or from the results associated with behavior. Nonetheless, it is important to understand the principles of motivation if you want to direct your behavior toward achieving personal goals or to manage others in the pursuit of organizational goals. You could start with the Integrative Framework to Understand and Apply OB (see beginning of chapter). Motivation is fueled by inputs that come from person and environmental factors. For example, our personality, values, and needs motivate us to behave in ways that satisfy our needs and goals. Just the same, many environmental characteristics impact motivation, including job design, discussed later in this chapter, rewards systems (discussed in Chapter 6), leadership (reviewed in Chapter 13), and organizational climate (introduced in Chapter 4). Page 147 Performers in many arenas—not just competitive dancing—are motivated to excel by extrinsic factors, such as prize money, praise, recognition from others, and titles. However, often times the key motivators are also, or instead, intrinsic, like a feeling of challenge and accomplishment. There are two types of motivation: extrinsic motivation and intrinsic motivation. •Extrinsic motivation results from the potential or actual receipt of extrinsic rewards. Extrinsic rewards like recognition, money, or a promotion represent a “payoff” received from others for performing a particular task. For example, Hilcorp Energy gave 400 employees a bonus of $50,000 toward the purchase of a new car when they achieved a specific performance goal. Would $50,000 motivate you to work harder in the future? The company believed so. •Intrinsic motivation occurs when an individual is “turned on to one’s work because of the positive internal feelings that are generated by doing well, rather than being dependent on external factors (such as incentive pay or compliments from the boss) for the motivation to work effectively.”8 As you can see we create our own intrinsic motivation by giving ourselves intrinsic rewards such as positive emotions, satisfaction, and self-praise. Consider the intrinsic motivation being displayed by the 2014 winners of Dancing with the Stars—Meryl Davis and Maksim Chmerkovskiy. The joy on their faces demonstrates the engagement and fun they are having while dancing. Why Is Motivation Important?Quite simply, motivation is the fuel that drives results and performance. That said, however, there are five generic reasons why managers care about motivation. They are: 1.Join the organization. Managers want to motivate high-quality job applicants to come to work for them. 2.Stay with the organization. Research shows that higher performers are more likely to leave an organization than average employees. Managers clearly want to motivate talented employees to remain with the company in good times and bad.9 3.Be engaged at work. We discussed in Chapter 2 that only 60 percent of the global workforce is engaged while at work.10 Competitiveness suggests that it is crucial for managers to motivate employees in ways that lead to engagement. 4.Perform organizational citizenship behaviors (OCBs). OCBs were discussed in Chapter 2. They represent behaviors that go beyond the official duties or requirements of one’s job, and they are positively related to other important OB outcomes. 5.Help others. Collaboration and cooperation are key in today’s workplace. Managers want to motivate employees to help others in the pursuit of organizational goals. The Two Fundamental Perspectives on Motivation: An Overview Researchers have proposed two general categories of motivation theories: content theories and process theories. Content theories of motivation focus on identifying internal factors such as needs and satisfaction that energize employee motivation. Process theories of motivation focus on explaining the process by which internal factors and environmental characteristics influence employee motivation.11 Process theories are more dynamic than content theories. Page 148 5.2CONTENT THEORIES OF MOTIVATION MAJOR QUESTION How would I compare and contrast the content theories of motivation? THE BIGGER PICTURE You’ll find that many theories deal with the content of what motivates individuals. Much of this will hit close to home as you think about what really motivates you in school or at work. Many of these theories come from other disciplines. So in other courses you may have already encountered Maslow’s hierarchy of needs and related content theories like McGregor’s Theory X and Theory Y, acquired needs theory, self-determination theory, and Herzberg’s motivator-hygiene theory. Most content theories of motivation revolve around the notion that an employee’s needs influence motivation. Content theorists ask, “What are the different needs that activate motivation’s direction, intensity, and persistence.” Needs are defined as physiological or psychological deficiencies that arouse behavior. They can be strong or weak and are influenced by environmental factors. Thus, human needs vary over time and place. Content theories include: •McGregor’s Theory X and Theory Y •Maslow’s need hierarchy theory •Acquired needs theory •Self-determination theory •Herzberg’s motivator-hygiene theory McGregor’s Theory X and Theory Y Douglas McGregor wrote a book entitled The Human Side of Enterprise in which he outlined his theory.12 Drawing on his experience as a management consultant, McGregor formulated two sharply contrasting sets of assumptions about human nature. Theory X is a pessimistic view of employees: that they dislike work, must be monitored, and can only be motivated with rewards and punishment (“carrots and sticks”). McGregor felt this was the typical perspective of managers. To help managers break with this negative tradition, McGregor formulated his own Theory Y. Theory Y is a modern and positive set of assumptions about people at work: that they are self-engaged, committed, responsible, and creative. For example, a study of leaders in six top IT firms showed that Theory Y behaviors positively influenced virtual team members’ trust, cooperation, and technology adaptation.13 Maslow’s Need Hierarchy Theory: Five Levels of Needs In 1943, psychologist Abraham Maslow published his now-famous need hierarchy theory of motivation. Although the theory was based on his clinical observation of a few neurotic individuals, it has subsequently been used to explain the entire spectrum of human behavior. The need hierarchy theory states that motivation is a function of five basic needs: physiological, safety, love, esteem, and self-actualization. See Figure 5.1. Page 149 FIGURE 5.1MASLOW’S NEED HIERARCHY The Five LevelsMaslow proposed that the five needs are met sequentially and relate to each other in a prepotent hierarchy (see Figure 5.1). “Prepotent” means that the current most-pressing need would be met first before the next need becomes the most powerful or potent. In other words, he believed human needs generally emerge in a predictable stair-step fashion. Thus when physiological needs are met, safety needs emerge, and so on up the need hierarchy, one step at a time. Once a need is satisfied, it activates the next higher need in the hierarchy. This process continues until the need for self-actualization is activated.14 Although research does not clearly support this theory of motivation, it remains popular among managers. For example, Chip Conley, founder and former CEO of Joie de Vivre, a boutique hotel chain with 28 locations, wrote a book (Peak: How Great Companies Get Their Mojo from Maslow) explaining how he used Maslow’s theory to save the firm from going bankrupt. Conley believes that Maslow’s theory helped him build employee, customer, and investor loyalty.15 Using Maslow’s Theory to Motivate EmployeesFor managers, Maslow’s theory reminds us that employees have needs beyond earning a paycheck. For example, JM Family Enterprises, a Toyota distributor with 3,800 employees, is focused on helping employees cope with the cost of health care, a physiological need. The company offers primary health care, wellness exams, physicals, vaccines, and lab tests for employees at little or no cost.16 It also is important for managers to focus on satisfying employee needs related to self-concepts—self-esteem and self-actualization—because their satisfaction is significantly associated with a host of important OB outcomes. A final lesson revolves around the conclusion that satisfied needs lose their motivational potential. Therefore, managers are advised to motivate employees by devising programs or practices aimed at satisfying emerging or unmet needs. For example, a recent study by Adecco Group revealed that needs varied across generational groups. Younger workers wanted more flexibility than older employees and they expected to be promoted every two years. Managers should be careful when estimating employees’ needs because research has showed that they have inaccurate beliefs about what motivates employees. Managers mistakenly estimated the importance of external rewards like pay and promotions while underestimating the motivation potential of intrinsic rewards.17 Page 150 FIGURE 5.2MCCLELLAND’S THREE NEEDS Acquired Needs Theory: Achievement, Affiliation, and Power David McClelland, a well-known psychologist, has been studying the relationship between needs and behavior since the late 1940s. He proposed the acquired needs theory, which states that three needs—achievement, affiliation, and power—are the key drivers of employee behavior.18 He used the term “acquired needs” because he believes that we are not born with our needs; rather we learn or acquire needs as we go about living our lives. The Three Acquired NeedsMcClelland’s theory directs managers to drive employee motivation by appealing to three basic needs: •Need for achievement, the desire to excel, overcome obstacles, solve problems, and rival and surpass others. •Need for affiliation, the desire to maintain social relationships, to be liked, and to join groups. •Need for power, the desire to influence, coach, teach, or encourage others to achieve. Importantly, people vary in the extent to which they possess these needs, and often one need dominates the other two (see Figure 5.2). McClelland identified a positive and negative form of the power need. The positive side is called institutional power. It manifests in the desire to organize people in the pursuit of organizational goals and help people obtain the feeling of competence. The negative face of power is called the need for personal power. People with this need want to control others, and they often manipulate people for their own gratification. Are you curious about the status of your acquired needs? Can you guess which of the three needs is most dominant? Would you like to consider which of these needs is helping or hindering the achievement of your personal goals? Check your perceptions by taking the acquired needs Self-Assessment. SELF-ASSESSMENT 5.1What Is the Status of My Acquired Needs? Discover the status of your three acquired needs. Go to connect.mheducation.com and take Self-Assessment 5.1. Then consider the following questions: 1.Which of the three needs is dominant? Are you surprised by this result? 2.Which of the three needs is/are helping you to achieve your goals? 3.Are any of the needs affecting your level of flourishing (flourishing is discussed in Chapter 7)? Should you make any changes in your need states? Page 151 Sir James Dyson, founder of Dyson and inventor of the Dual Cyclone bagless vacuum cleaner, believes that the death of his father at an early age contributed to his achievement motivation. Do you think this is possible? Why? Using Acquired Needs Theory to Motivate EmployeesApplying the theory entails appealing to the preferences associated with each need when you (1) set goals, (2) provide feedback, (3) administer rewards, (4) assign tasks, and (5) design the job. Some suggestions are offered below.19 •Need for achievement. People motivated by this need, like James Dyson, inventor and manufacturer of the Dual Cyclone bagless vacuum cleaner, prefer working on challenging, but not impossible, tasks or projects. They like situations in which performance is due to effort and ability rather than luck, and like to be rewarded for their efforts. Factset Research Systems, a multinational financial data software company headquartered in Connecticut, used these recommendations to motivate employees. The company encouraged employees to pass the rigorous financial analyst certification exam, and they rewarded success with bonuses up to $17,500.20 High achievers also like to receive a fair and balanced amount of positive and negative feedback. This enables them to improve their performance. Finally, high achievers prefer to work with other high achievers or by themselves. They get frustrated with slackers. Entrepreneurs were found to possess a high need for achievement.21 •Need for affiliation. People motivated by this need like to work in teams and in organizational climates characterized as cooperative and collegial. They also don’t make the best managers because they tend to avoid conflict, have a hard time making difficult decisions without worrying about being disliked, and avoid giving others negative feedback.22 Think twice before asking these people to lead groups or projects. It’s also important to give balanced feedback to these people, but make it more personal. People high in affiliation may not like to stand out, so consider giving praise in private. Entrepreneurs were found to have lower needs for affiliation.23 •Need for power. People with a high need for power like to be in charge. They enjoy being in control of people and events and appreciate being recognized for this responsibility. You can delegate authority and responsibility to these people. The power need drives people to prefer goal-oriented tasks or projects, and they prefer direct feedback. Self-Determination Theory: Competence, Autonomy, and Relatedness Self-determination theory was developed by Edward Deci and Richard Ryan. In contrast to McClelland’s belief that needs are learned over time, this theory identifies innate needs that must be satisfied for us to flourish—see discussion in Chapter 7. Self-determination theory assumes that three innate needs influence our behavior and well-being—competence, autonomy, and relatedness.24 Self-Determination Theory Focuses on Intrinsic MotivationThis theory focuses on the needs that drive intrinsic motivation. It emphasizes intrinsic motivation because research shows that intrinsic motivation is longer lasting and has a more positive impact on task performance than extrinsic motivation.25 The three needs of competence, autonomy, and relatedness are proposed to produce intrinsic motivation, which in turn is expected to enhance task performance according to self-determination theory. Research supports this proposition.26 Page 152 The Three Innate NeedsAn innate need is something that we are born with. This suggests that everyone has a desire to satisfy all three of these needs in order to flourish. Managers thus are encouraged to recognize the importance of these three needs in themselves and others in order to foster work environments that fuel intrinsic motivation. The three innate needs are as follows: 1.Competence Needs—“I need to feel efficacious.” This is the desire to feel qualified, knowledgeable, and capable to complete an act, task, or goal. 2.Autonomy Needs—“I need to feel independent to influence my environment.” This is the desire to have freedom and discretion in determining what you want to do and how you want to do it. 3.Relatedness Needs—“I want to be connected with others.” This is the desire to feel part of a group, to belong, and to be connected with others. Although the above needs are proposed to be innate, their relative value can change over our lives and can vary across national cultures according to Deci and Ryan. Using Self-Determination Theory to Motivate EmployeesManagers can apply this theory by trying to create work environments that support and encourage the opportunity to experience competence, autonomy, and relatedness. Here are some specific suggestions: •Competence. Managers can provide tangible resources, time, contacts, and coaching to improve employee competence. (Coaching techniques are discussed in Chapter 6.) Managers can make sure that employees have the knowledge and information they need to perform their jobs. NetApp, a data storage company that was ranked as the 33rd best place to work in America in 2014 by Fortune, is noted for trying to enhance employees’ competence. Managers regularly notify the vice chairman, Tom Mendoza, when they “catch someone doing something right.” Mendoza then calls between 10 and 20 of these special employees every day to thank them.27 •Autonomy. Managers can empower employees and delegate meaningful assignments and tasks to enhance feelings of autonomy. Managers need to develop trust with their employees so they feel that their boss will back them up when they make decisions. Unilever is a great example of a company that helps to satisfy the need for autonomy. The company implemented what is called the Agile Working program. It allows “100,000 employees—everyone except factory production workers—to work anytime, anywhere, as long as they meet business needs. To support the effort, the company is investing in laptops, videoconferencing, soft-phones and smartphones, remote networks, webcams, and other technologies that help curtail travel.”28 •Relatedness. Many companies use fun and camaraderie to foster relatedness. Nugget Market, an upscale supermarket chain in Sacramento, builds related-ness by creating a family-type work environment. One employee described the climate in this way: “The company doesn’t see this as a workplace; they see it as a family. This is our home, where customers are treated as guests.”29 A positive and inspiring corporate vision also can be used to create a feeling of commitment to a common purpose. NetApp, just mentioned above, followed this suggestion by establishing a vision “to deliver the best possible results for the communities we serve by embracing and living a set of shared core values: Trust and Integrity, Leadership, Simplicity, Adaptability, Teamwork and Synergy, Go Beyond, Get Things Done.”30 Page 153 solving application Life Is Good Co. Builds an Onsite Tavern to Foster Relatedness Bert Jacobs, co-founder of the Life is Good Co., decided to open a tavern at corporate headquarters in Boston. The company, which designs, manufacturers, and sells clothing and accessories for men and women, has 4,500 retail store outlets in all 50 states. Jacobs told a reporter from The Wall Street Journal that he expects the tavern to build trust and enhance employees’ well-being. Why Build a Tavern? The idea is to blur the line between work and play, Jacobs said in an interview with The Wall Street Journal when announcing his plans. Jacobs wants the lounge, which will have lounge seating, a fireplace, and a stage, to become a place where employees come after work to just hang out. His motivation is to provide an environment that is “homey and a place where people can put their feet up and relax. It can be both a place of work and fun. Every day, every employee will have a choice of where they want to work in the office. They might want to work in the tavern for an hour or two.” The tavern will include booths where employees can meet with teammates for a meeting. He truly believes that the tavern will become a place for employees to bond, to feel a sense of belonging. It’s Not about Promoting Alcohol Jacobs was emphatic about stating “that we’re not promoting people to get drunk and go out and drive their cars. . . . If someone takes it too far and abuses it, they’re probably not going to work out here. But if someone likes a cold beer every now and then, then I’m not going to freak out about it.” Jacobs’ Goal Jacobs wants to create the tavern to increase trust among all employees and to enhance employee well-being. He simply wants a space where people can meet for fun or work in a relaxed environment. In the end, Jacobs believes that the tavern will enhance friendships and company performance.31 YOUR CALL Stop 1:What problem is Bert Jacobs trying to address? Stop 2:What OB concepts or theories support or refute what Jacobs is doing? Herzberg’s Motivator-Hygiene Theory: Two Ways to Improve Satisfaction Frederick Herzberg’s theory is based on a landmark study in which he interviewed 203 accountants and engineers.32 These interviews sought to determine the factors responsible for job satisfaction and dissatisfaction. The results uncovered separate and distinct clusters of factors associated with job satisfaction and dissatisfaction. This pattern led to the motivator-hygiene theory, which proposes that job satisfaction and dissatisfaction arise from two different sets of factors—satisfaction comes from motivating factors and dissatisfaction from hygiene factors. In this view, managers can embrace two means of improving motivation: by improving motivators that drive satisfaction and improving hygiene factors that otherwise reduce job satisfaction. •Hygiene factors—“What makes employees dissatisfied?” Job dissatisfaction was associated primarily with factors in the work context or environment. Herzberg labeled these as hygiene factors because each was associated with dissatisfaction. He hypothesized that such hygiene factors—including company policy and administration, technical supervision, salary, interpersonal relations with one’s supervisor, and working conditions—cause a person to move from a state of no dissatisfaction to dissatisfaction. He did not consider their removal as providing an immediate impact on satisfaction or increasing motivation (for that, see motivating factors following). At best, Herzberg proposed that individuals will experience the absence of job dissatisfaction when they have no grievances about hygiene factors. Page 154 FIGURE 5.3ROLE OF JOB CONTENT AND JOB CONTEXT IN JOB SATISFACTION AND DISSATISFACTION SOURCE: Adapted from D. A. Whitsett and E. K. Winslow, “An Analysis of Studies Critical of the Motivator-Hygiene Theory,” Personnel Psychology, Winter 1997, 391–415. •Motivating factors—“What makes employees satisfied?” Job satisfaction was more frequently associated with factors in the work content of the task being performed. Herzberg labeled these as motivating factors or motivators because each was associated with strong effort and good performance. He hypothesized that such motivating factors, or motivators—including achievement, recognition, characteristics of the work, responsibility, and advancement—cause a person to move from a state of no satisfaction to satisfaction. Therefore, Herzberg’s theory predicts managers can motivate individuals by incorporating motivators into an individual’s job. For Herzberg, the groups of hygiene and motivating factors did not interact. “The opposite of job satisfaction is not job dissatisfaction, but rather no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no dissatisfaction.”33 Herzberg conceptualizes dissatisfaction and satisfaction as two parallel continuums. The starting point represents a null state at which both dissatisfaction and satisfaction are absent. Theoretically an organization member could have good supervision, pay, and working conditions (no dissatisfaction) but a tedious and unchallenging task with little chance of advancement (no satisfaction). See Figure 5.3. Theory vs. PracticeFigure 5.3 shows how Herzberg looked at what created job satisfaction (as to job content) and what caused job dissatisfaction (as to job context). That is, he worked on two continuums, one for satisfaction and one for dissatisfaction, starting at a shared null point devoid of either. In practice, most managers work from the concept that removing dissatisfaction is just the first step in improving job satisfaction. Managerial View of Job Satisfaction and DissatisfactionIn practice managers learn from Herzberg but may apply his lessons differently from theory. Managers may even conceptualize a single continuum from dissatisfaction to satisfaction. Insights from Herzberg’s theory allow managers to consider the dimensions of both job content and job context so they can manage for greater job satisfaction overall. Employees at DreamWorks Animation and the Container Store might disagree that managing hygiene factors can only remove negative and not create positive job satisfaction. DreamWorks sends fresh-juice trucks to the campus every day and gives employees money to personalize their workstations. They also had a Banana Splats party after completing work on Madagascar 3. The Container Store has a strategy of paying hourly salespeople roughly double the industry average, approximately $46,925 a year in 2013.34 We suspect that this approach creates plenty of employee motivation. Page 155 FIGURE 5.4A COMPARISON OF NEED AND SATISFACTION THEORIES Using Herzberg’s Theory to Motivate EmployeesResearch does not support the two-factor aspect of his theory nor the proposition that hygiene factors are unrelated to job satisfaction. However, there are three practical applications of the theory that help explain why it remains an important theory of OB. 1.Hygiene First. There are practical reasons to eliminate dissatisfaction before trying to use motivators to increase motivation and performance. You will have a harder time motivating someone who is experiencing pay dissatisfaction or otherwise struggling with Herzberg’s hygiene factors. 2.Motivation Next. Once you remove dissatisfaction, you can hardly go wrong by building motivators into someone’s job. This suggestion represents the core idea behind the technique of job design that is discussed in the final section of this chapter. 3.A Few Well-Chosen Words. Finally, don’t underestimate the power of verbal recognition to reinforce good performance. Savvy managers supplement Herzberg’s motivators with communication. Positive recognition can fuel intrinsic motivation, particularly for people who are engaged in their work. Chapter 6 will provide guidelines on the best ways to provide this type of positive feedback. Figure 5.4 illustrates the overlap among the need and satisfaction theories discussed in this section. As you can see, the acquired needs and self-determination theories do not include lower-level needs. Remember, higher-level need satisfaction is more likely to foster well-being and flourishing. TAKE-AWAY APPLICATION—TAAP Considering all of the needs discussed within the content theories of motivation, and the list of motivators and hygiene factors: 1.Which ones have your highest levels of need satisfaction? 2.Which ones are most important for your success in school? How about in terms of your current/last/most-desired job? 3.Given that flourishing is related to satisfying higher-order needs, what can you do to increase your level of satisfaction for higher-level needs? Page 156 5.3PROCESS THEORIES OF MOTIVATION MAJOR QUESTION How would I compare and contrast the process theories of motivation? THE BIGGER PICTURE If you’ve ever felt that what others expect you to do conflicts in a big way with who you really are, you will be especially interested in this next group of theories of motivation. Process theories examine how internal factors and environmental characteristics influence employee motivation. You’ll be considering the three major process theories: equity/justice theory, expectancy theory, and goal-setting theory. Each theory offers unique ideas for motivating employees, or ways to help you understand how you feel about organizational expectations. Process theories of motivation attempt to describe how various person factors and environmental factors in the Integrative Framework affect motivation. They go beyond content theories by helping you understand why people with different needs and levels of satisfaction behave the way they do at work. (In contrast, content theories look at what motivates workers.) In this section we discuss three process theories of motivation: •Equity/justice theory •Expectancy theory •Goal-setting theory Julian Assange, Austalian publisher, journalist, and hacker, is best known as the editor-in-chief of WikiLeaks, which he cofounded in 2006. Assange became a person of interest to the United States when WikiLeaks published US military and diplomatic documents leaked by Chelsea Manning. He currently is facing sexual offense charges in Sweden and has obtained political asylum from Ecuador. He lives in the Embassy of Ecuador in London. Equity/Justice Theory: Am I Being Treated Fairly? Defined generally, equity theory is a model of motivation that explains how people strive for fairness and justice in social exchanges or give-and-take relationships. Equity theory is based on cognitive dissonance theory, discussed in Chapter 2. According to this theory, people are motivated to maintain consistency between their beliefs and their behavior. Perceived inconsistencies create cognitive dissonance (or psychological discomfort), which, in turn, motivates corrective action. Accordingly, when victimized by unfair social exchanges, our resulting cognitive dissonance prompts us to correct the situation. Our response may range from a slight change in attitude or behavior to extremes (in rare cases) like sabotage or workplace violence. For example, supporters of WikiLeaks conducted cyberattacks against MasterCard and Visa because they thought that these companies were unfairly trying to stifle WikiLeaks’ dissemination of secret US diplomatic communications. Both MasterCard and Visa systems were temporarily down as a result of these attacks.35 Page 157 Psychologist J. Stacy Adams pioneered the use of equity theory in the workplace. Let us begin by discussing his ideas and their current application. We then discuss the extension of equity theory into what is called justice theory. We conclude by discussing how to motivate employees with both equity and justice theory. The Elements of Equity Theory: Comparing My Outputs and Inputs with Those of OthersThe key elements of equity theory include outputs, inputs, and a comparison of the ratio of outputs to inputs; see Figure 5.5. •Outputs—“What do I perceive that I’m getting out of my job?” Organizations provide a variety of outcomes for our work, including such things as pay/bonuses, medical benefits, challenging assignments, job security, promotions, status symbols, recognition, and participating in important decisions. Outcomes vary widely, depending on one’s organization and rank. For example, very few companies use sabbaticals as an outcome due to their cost. In contrast, accounting and consulting firm Deloitte’s “sabbatical program lets select employees spend three to six months at a nonprofit while earning full benefits and 40% of pay.”36 FIGURE 5.5ELEMENTS OF EQUITY THEORY Equity theory compares how well you are doing to how well others are doing in similar jobs. Instead of focusing just on what you get out of the job (outputs) or what you put into the job (inputs), equity theory looks at the ratio between your ratio (of outputs to inputs) to the ratio of others. Note: Does positive inequity result in satisfaction? Some of us may feel so. But J. Stacy Adams recognized that employees often feel guilty about positive inequity, just as they might become angry about negative inequity. Your positive inequity is others’ negative inequity. If your coworkers saw you as being favored unfairly in a major way, wouldn’t they be outraged? How effective could you be in your job then? Page 158 •Inputs—“What do I perceive that I’m putting into my job?” An employee’s inputs, for which he or she expects a just return, include education/training, skills, creativity, seniority, age, personality traits, effort expended, experience, and personal appearance. •Comparison—“How does my ratio of outputs to inputs compare with relevant others?” Your feelings of inequity revolve around your evaluation of whether you are receiving adequate rewards to compensate for your collective inputs. In practice people perform these evaluations by comparing the perceived fairness of their output to input ratio to that of relevant others (see Figure 5.5). By dividing outputs by inputs, the larger the ratio, the greater the benefit. This comparative process was found to generalize across personalities and countries.37 People tend to compare themselves to other individuals with whom they have close interpersonal ties such as friends, and to whom they are similar, such as people performing the same job or individuals of the same gender or educational level, rather than to dissimilar others. For example, the authors of your textbook work for universities. We do not compare our salaries to that of the head football coach at our respective schools. But we do consider our pay relative to other college business professors. The Outcomes of an Equity ComparisonFigure 5.5 shows the three different equity relationships resulting from an equity comparison: equity, negative inequity, and positive inequity. Because equity is based on comparing ratios of outcomes to inputs, inequity will not necessarily be perceived just because someone else receives greater rewards. If the other person’s additional outcomes are due to his or her greater inputs, a sense of equity may still exist. However, if the comparison person enjoys greater outcomes for similar inputs, negative inequity will be perceived. On the other hand, a person will experience positive inequity when his or her outcome to input ratio is greater than that of a relevant comparison person. The Elements of Justice Theory: Distributive, Procedural, and Interactional JusticeBeginning in the later 1970s, researchers began to expand the role of equity theory in explaining employee attitudes and behavior. This led to a domain of research called organizational justice. Organizational justice reflects the extent to which people perceive that they are treated fairly at work. This, in turn, led to the identification of three different components of organizational justice: distributive, procedural, and interactional.38 •Distributive justice reflects the perceived fairness of how resources and rewards are distributed or allocated. •Procedural justice is defined as the perceived fairness of the process and procedures used to make allocation decisions. •Interactional justice relates to the “quality of the interpersonal treatment people receive when procedures are implemented.”39 This form of justice does not pertain to the outcomes or procedures associated with decision making, but rather it focuses on whether or not people believe they are treated fairly when decisions are implemented. Fair interpersonal treatment necessitates that managers communicate truthfully and treat people with courtesy and respect. Tools exist to help us improve our ability to gauge the level of fairness or justice that exists in a current or past job. Try the following Self-Assessment. It contains part of a survey that was developed to measure employees’ perceptions of fair interpersonal treatment. If you perceive your work organization as interpersonally unfair, you are probably dissatisfied and have contemplated quitting. In contrast, your organizational loyalty and attachment are likely greater if you believe you are treated fairly at work. Page 159 SELF-ASSESSMENT 5.2Measuring Perceived Interpersonal Treatment This Self-Assessment provides a measure of the extent to which a current or past employer is treating you fairly. If you want to know where you stand, go to connect.mheducation.com and take Self-Assessment 5.2. Then consider the following questions: 1.Does the level of fairness correlate to your work attitudes such as job satisfaction and organizational commitment? 2.What is causing your lowest level of perceived fairness? Can you do anything to change these feelings? 3.What do these results suggest about the type of company you would like to work for after graduation? The Outcomes Associated with JusticeDoesn’t it make sense that your perceptions of justice are related to outcomes in the Integrative Framework? Of course! This is why the study of organizational justice has flourished over the last 25 years. We created Figure 5.6 to summarize these research findings. The figure shows the strength of relationships between nine individual-level outcomes and the three components of organizational justice. By and large, distributive and procedural justice have consistently stronger relationships with outcomes. This suggests that managers would be better served paying attention to these two forms of justice. In contrast, interactional justice is not a leading indicator in any instance. You can also see that certain outcomes, such as job satisfaction and organizational commitment, have stronger relationships with justice. All told, however, the majority of relationships are weak between justice and important OB outcomes. This reinforces the conclusion that motivating people via justice works for some outcomes but not for others. Using Equity and Justice Theories to Motivate EmployeesFirst, it is helpful to understand how strongly employees may feel about a perceived inequitable or unjust work situation. Frequently the primary source of their frustration is likely to be pay. A nationwide Gallup poll revealed that 51 percent of Americans felt underpaid.40 You can motivate other employees by clearly understanding and communicating their opportunities to improve their situations. You can communicate reasonable expectations and make sure objective measures for rewards are well understood. Your knowledge of equity and justice theories will also allow you to hear out employees and better understand their concerns. We share five practical lessons that can be drawn from equity and justice theories as follows: 1.Employee Perceptions Are What Count. No matter how fair management thinks the organization’s policies, procedures, and reward system are, each employee’s perception of the equity of those factors is what counts. Consider the situation of several thousand employees at Morgan Stanley. The company decided to pay 2012 bonuses in four equal installments starting in May 2013 through January 2016. “Employees who quit or are laid off before the payments stand to lose their deferred compensation unless they negotiate a separate deal with the company.”41 Executives at the company think that this is a good way to reduce risky behavior while employees think it is unfair. What do you think? 2.Employees Want a Voice in Decisions That Affect Them. Managers benefit by allowing employees to participate in making decisions about important work outcomes. In general, employees’ perceptions of procedural justice are enhanced when they have a voice in the decision-making process. Voice is defined as “employees’ upward expression of challenging but constructive opinions, concerns, or ideas on work-related issues to their managers.”42 Managers are encouraged to seek employee input on organizational changes that are likely to impact the workforce. Sadly, a recent study suggests that many managers are reluctant to follow this recommendation. Results demonstrated that employees were evaluated more negatively when they engaged in challenging forms of voice. Managers also were less likely to use these employees’ ideas.43 Be careful when you challenge your boss’s decisions. Page 160 FIGURE 5.6OUTCOMES ASSOCIATED WITH JUSTICE COMPONENTS The three components of organizational justice have varying effects on workplace outcomes, listed here in rough order of strongest to weakest. Note that job satisfaction and organizational commitment lead the list of outcomes and most strongly align with justice components. SOURCES: J. M. Robbins, M. T. Ford, and L. E. Tetrick, “Perceived Unfairness and Employee Health: A Meta-Analytic Integration,” Journal of Applied Psychology, March 2012, 235–272; N. E. Fassina, D. A. Jones, and K. L. Uggerslev, “Meta-Analytic Tests of Relationships between Organizational Justice and Citizenship Behavior: Testing Agent-System and Shared-Variance Models,” Journal of Organizational Behavior, August 2008, 805–828; Y. Chen-Charash and P. E. Spector, “The Role of Justice in Organizations: A Meta-Analysis,” Organizational Behavior and Human Decision Processes, November 2001, 278–321; and J. A. Colquitt, D. E. Conlon, M. J. Wesson, C. O. L. H. Porter, and K. Y. Ng, “Justice at the Millenium: A Meta-Analytic Review of 25 Years of Organizational Justice Research,” Journal of Applied Psychology, June 2001, 426. 3.Employees Should Be Given an Appeals Process. Employees should be given the opportunity to appeal decisions that affect their welfare. Being able to appeal a decision fosters perceptions of distributive and procedural justice. Page 161 4.Leader Behavior Matters. Employees’ perceptions of justice are strongly influenced by the leadership behavior exhibited by their managers (leadership is discussed in Chapter 13). Thus, it is important for managers to consider the justice-related implications of their decisions, actions, and public communications. For example, employees at Honeywell felt better about being asked to take furloughs—in which people get unpaid leave but remain employed—when they learned that David Cote, the company’s chairman and CEO, did not take his $4 million bonus during the time employees were furloughed.44 5.A Climate for Justice Makes a Difference. Managers need to pay attention to the organization’s climate for justice. For example, an aggregation of 38 research studies demonstrated that an organization’s climate for justice was significantly related to team performance, an important outcome in the Integrative Framework for Understanding and Applying OB.45 Researchers also believe a climate of justice can significantly influence the type of customer service provided by employees. In turn, this level of service is likely to influence customers’ perceptions of “fair service” and their subsequent loyalty and satisfaction. And as for yourself? You can work to improve equity ratios through your behavior or your perceptions. For example, you could work to resolve negative inequity by asking for a raise or a promotion (raising your outputs) or by working fewer hours or exerting less effort (reducing inputs). You could also resolve the inequity cognitively, by adjusting your perceptions as to the value of your salary or other benefits (outcomes) or the value of the actual work done by you or your coworkers (inputs). Gabby Douglas began her gymnastics training at the age of seven, and battled back from a wrist fracture while a teenager, to become the first woman of color and the first African-American gymnast in Olympic history to become the individual all-around champion. She was also the first American gymnast to win gold in both the individual all-around and team competitions at the same Olympics. Gabby certainly had high expectations for success based on her training and experience. Expectancy Theory: Does My Effort Lead to Desired Outcomes? Expectancy theory holds that people are motivated to behave in ways that produce desired combinations of expected outcomes. Generally, expectancy theory can be used to predict behavior in any situation in which a choice between two or more alternatives must be made. For instance, it can be used to predict whether to quit or stay at a job; whether to exert substantial or minimal effort at a task; and whether to major in management, computer science, accounting, marketing, psychology, or communication. The most widely used version of expectancy theory was proposed by Yale professor Victor Vroom. We now consider the theory’s key elements and recommendations for its application. The Elements of Vroom’s Expectancy Theory: Expectancy, Instrumentality, and ValenceMotivation, according to Vroom, boils down to the decision of how much effort to exert in a specific task situation. This choice is based on a two-stage sequence of expectations (moving from effort to performance and from performance to outcome). First, motivation is affected by an individual’s expectation that a certain level of effort will produce the intended performance goal. For example, if you do not believe increasing the amount of time you spend studying will significantly raise your grade on an exam, you probably will not study any harder than usual. Motivation also is influenced by the employee’s perceived chances of getting various outcomes as a result of accomplishing his or her performance goal. Finally, individuals are motivated to the extent that they value the outcomes received (see Figure 5.7). Page 162 FIGURE 5.7MAJOR ELEMENTS OF EXPECTANCY THEORY Let us consider the three key elements of Vroom’s theory. 1.Expectancy—“Can I achieve my desired level of performance?” An expectancy represents an individual’s belief that a particular degree of effort will be followed by a particular level of performance. In other words, it is an effort → performance expectation. Expectancies take the form of subjective probabilities. As you may recall from a course in statistics, probabilities range from zero to one. An expectancy of zero indicates effort has no anticipated impact on performance. EXAMPLESuppose you do not know how to use Excel. No matter how much effort you exert, your perceived probability of creating complex spreadsheets that compute correlations would be zero. An expectancy of one suggests that performance is totally dependent on effort. If you decided to take an Excel training course and practice using the program a couple of hours a day for a few weeks (high effort), you should be able to create spreadsheets that compute correlations. Research reveals that employees’ expectancies are affected by a host of factors. Some of the more important ones include self-efficacy, time pressures, task difficulty, ability and knowledge, resources, and support from peers and one’s boss.46 2.Instrumentality—“What intrinsic and extrinsic rewards will I receive if I achieve my desired level of performance?” An instrumentality is how an individual perceives the movement from performance to outcome. It represents a person’s belief that a particular outcome is contingent on accomplishing a specific level of performance. Performance is instrumental when it leads to something else. Passing exams, for instance, is instrumental to graduating from college. The Problem-Solving Application illustrates how various boards of directors are reducing the instrumentality between CEO pay and corporate performance. 3.Valence—“How much do I value the rewards I receive? Valence refers to the positive or negative value people place on outcomes. Valence mirrors our personal preferences. For example, most employees have a positive valence for receiving additional money or recognition. In contrast, being laid off or being ridiculed for making a suggestion would likely be negatively valent for most individuals. In Vroom’s expectancy model, outcomes refer to different consequences that are contingent on performance, such as pay, promotions, recognition, or celebratory events. For example, Aflac hosted a six-day appreciation week that included theme park visits, showing motion pictures, and daily gifts.47 Would you value these rewards? Your answer would depend on your individual needs. Page 163 solving application Corporate Boards Decide to Lower the Instrumentalities between CEO Performance and Pay Alpha Natural Resources, a coal producer, gave its CEO, Kevin Crutchfield, a $528,000 bonus when the company had its largest financial loss in the company’s history. The board said it wanted to reward him for his “tremendous efforts” in improving worker safety. This “safety bonus” was not tied to any corporate goals, and the company had never paid a specific bonus just for safety. The board at generic drug maker Mylan made a similar decision. CEO Robert Coury received a $900,000 bonus despite poor financial results. The board felt that poor results were due to factors like the European sovereign-debt crisis and natural disasters in Japan. Not to be outdone, the board at Nationwide Mutual Insurance doubled the CEO’s bonus, “declaring that claims from U.S. tornados shouldn’t count against his performance metrics.” Is It Good to Relax Instrumentalities between Performance and Pay? Companies relax instrumentalities between performance and pay because they want to protect executives from being accountable for things outside their control, like a tornado or rising costs in natural resources. While this may make sense, it begs the question of what to do when good luck occurs. Companies do not typically constrain CEO pay when financial results are due to good luck. Blair Jones, an expert on executive compensation, noted that changing instrumentalities after the fact “only works if a board is willing to use it on the upside and the downside. . . . If it’s only used for the downside, it calls into question the process.”48 YOUR CALL Stop 1:How would you describe the problem facing Alpha Natural Resources, Mylan, and Nationwide? Stop 2:Did Alpha Natural Resources, Mylan, and Nationwide Mutual Insurance make decisions about CEO pay that were consistent with expectancy theory? Stop 3:What does OB theory suggest that these companies should have done to compensate their CEOs? According to expectancy theory, your motivation will be high when all three elements in the model are high. If any element is near zero, your motivation will be low. Whether you apply this theory on yourself, or managers apply it on their employees, it is critical to simultaneously consider the status of all three elements. TAKE-AWAY APPLICATION—TAAP This activity focuses on a past work- or school-related project that was unsuccessful. It would be best if it involved something that you would consider a failure. 1.Considering this project, what would you estimate was your expectancy for successfully completing the project? Use a 1–5 scale from (1) Very Low to (5) Very High. 2.What were the chances that you would receive outcomes/rewards that you valued had you successfully completed the project? Use a 1–5 scale from (1) Very Low to (5) Very High. 3.Considering the above two answers, what was your level of motivation? Was it high enough to achieve your performance goals? 4.What does expectancy theory suggest that you could have done to improve your chances of successfully completing the project? Provide specific suggestions. 5.How might you use the above steps to motivate yourself in the future? Page 164 Using Expectancy Theory to Motivate EmployeesThere is widespread agreement that attitudes and behavior are influenced when organizations link rewards to targeted behaviors. For example, a recent study of college students working on group projects showed that group members put more effort into their projects when instructors “clearly and forcefully” explained how high levels of effort lead to higher performance—an expectancy—and that higher performance results in positive outcomes like higher grades and better camaraderie—instrumentalities and valent outcomes.49 Expectancy theory has important practical implications for individual managers and organizations as a whole (see Table 5.1). The following three practical lessons are essential for applying expectancy theory: •Enhance effort → performance expectancies. This can be done by using tools and techniques associated with performance management, a topic discussed in Chapter 6. This leadership includes behaviors associated with goal setting, communication, feedback, coaching, providing consequences, and establishing/monitoring performance expectations. •Determine desired levels of performance and set SMART goals. Goals need to be Specific, Measurable, Attainable, Results oriented, and Time bound. Guidelines for establishing SMART goals are discussed in Chapter 6. •Link rewards to desired outcomes. This means that you need to get to know your employees so that you can reward them with outcomes they value. The following Problem-Solving Application illustrates expectancy theory in action at Westwood High School in Mesa, Arizona. solving application A High School Principal Uses Principles of Expectancy Theory to Motivate Students Tim Richard, principal at Westwood High School, decided to use a motivational program he called “celebration” to improve the grades of 1,200 students who were failing one or more courses. The school has a total of 3,000 students. How Does the Program Work? “Students are allowed to go outside and have fun with their friends for 28 minutes on four mornings a week,” the principal explained to the local newspaper. “But those who have even one F must stay inside for ‘remediation’—28 minutes of extra study, help from peer tutors or meetings with teachers.” Richard, who successfully implemented the program at a smaller high school, believes that the key to motivating students is to link a highly valued reward—socializing with friends outside—with grades. Socializing includes playing organized games, dancing and listening to music, eating snacks, and just plain hanging out. Results suggest that the program is working. Positive results were found within two to three months of starting the motivation program. Students with failing grades dropped to 900. The principal’s SMART goal is to achieve zero failing grades by the end of the year. What Is the Student Reaction? Students like the program. Ivana Baltazar, a 17-year-old senior, said, “you really appreciate celebration after you have been in remediation.” She raised an F in economics to a B after receiving help in remediation. Good academic students like Joseph Leung also like the program. He is a tutor to students with failing grades. He believes that “the tricky part is 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 failing is their work ethic.”50 YOUR CALL Stop 1:What problem is Tim Richard trying to address? Stop 2:What OB concepts or theories are consistent with Mr. Richard’s motivational program? Stop 3:Do you agree with Mr. Richard’s approach to improving student performance? Page 165 TABLE 5.1MANAGERIAL AND ORGANIZATIONAL IMPLICATIONS OF EXPECTANCY THEORY FOR MANAGERS FOR ORGANIZATIONS •Determine the outcomes that employees value. •Reward people for desired performance, and do not keep pay decisions secret. •Identify good performance so appropriate behaviors can be rewarded. •Design challenging jobs. •Make sure employees can achieve targeted performance levels. •Tie some rewards to group accomplishments to build teamwork and encourage cooperation. •Link desired outcomes to targeted levels of performance. •Reward managers for creating, monitoring, and maintaining expectancies, instrumentalities, and outcomes that lead to high effort and goal attainment. •Make sure changes in outcomes are large enough to motivate high effort. •Monitor employee motivation through interviews or anonymous questionnaires. •Monitor the reward system for inequities. •Accommodate individual differences by building flexibility into the motivation program. Goal-Setting Theory: How Can I Harness the Power of Goal Setting? Regardless of the nature of their specific achievements, successful people tend to have one thing in common: Their lives are goal oriented. This is as true for politicians seeking votes as it is for world-class athletes. Research also supports this anecdotal conclusion. The results of more than 1,000 studies from a wide range of countries clearly show that goal setting helps individuals, teams, and organizations as a whole to achieve success.51 We want to help you harness the power of goal setting in your life. This necessitates that we review a theory of goal setting within a work context, and then explain the mechanisms that make goal setting so effective. We don’t discuss the practical application of goal setting because it is presented in Chapter 6. Edwin Locke and Gary Latham’s Theory of Goal SettingAfter studying four decades of research on goal setting, two OB experts, Edwin Locke and Gary Latham, proposed a straightforward theory of goal setting. Here is how it works.52 •Goals that are specific and difficult lead to higher performance than general goals like “do your best” or “improve performance.” This is why it is essential to set specific, difficult goals. Goal specificity refers to the quantifiability of a goal. For example, a goal of increasing the score on your next OB test by 10 percent is more specific than the goal of trying to improve your grade on the next test. •Certain conditions are necessary for goal setting to work. People must have the ability and resources needed to achieve the goal, and they need to be committed to the goal. If these conditions are not met, goal setting does not lead to higher performance. Be sure that these conditions are in place as you pursue your goals. •Performance feedback and participation in deciding how to achieve goals are necessary but not sufficient for goal setting to work. Feedback and participation enhance performance only when they lead employees to set and commit to a specific, difficult goal. Take Jim’s Formal Wear, a tuxedo wholesaler in Illinois, for example. “Once a week, employees meet with their teams to discuss their efforts and what changes should be made the next week. Employees frequently suggest ways to improve efficiency or save money, such as reusing shipping boxes and hangers.”53 The learning point is that goals lead to higher performance when you use feedback and participation to stay focused and committed to a specific goal. Page 166 •Goal achievement leads to job satisfaction, which in turn reinforces employees to set and commit to even higher levels of performance. Goal setting sets in motion a positive cycle of upward performance. This informal group of NASA scientists and researchers has undertaken repeated climbs up Mt. Everest for research to help future space travelers. Do you think that these people are committed to the challenging goal of climbing Everest? If yes, what needs might motivate such commitment? In sum, it takes more than setting specific, difficult goals to motivate yourself or others via goal setting. It is critical that the supporting conditions are put into place in order to gain the maximum value of goal setting. What Are the Mechanisms Behind the Power of Goal Setting?Edwin Locke and Gary Latham, the same OB scholars who developed the motivational theory of goal setting just discussed, also identified the underlying mechanisms that explain how goals affect performance. There are four motivational mechanisms that fuel the power of goal setting. Page 167 1.Goals Direct Attention. Goals direct one’s attention and effort toward goalrelevant activities and away from goal-irrelevant activities. If, for example, you have a term project due in a few days, your thoughts and actions tend to revolve around completing that project. In reality, however, we often work on multiple goals at once. This highlights the importance of prioritizing your goals so that you effectively allocate your efforts over time.54 For example, Nustar Energy, one of the largest asphalt refiners and operators of petroleum product terminals and petroleum liquids pipelines in the United States, has decided to give safety greater priority in its goals than profits. This prioritization paid off as the company celebrated three years of zero time off due to injuries in 2012, and corporate profits are doing just fine.55 2.Goals Regulate Effort. Goals have an energizing function in that they motivate us to act. As you might expect, harder goals foster greater effort than easy goals. Time deadlines also factor into the motivational equation. We expend greater effort on projects and tasks when deadlines are approaching. For example, an instructor’s deadline for turning in your term project would prompt you to complete it, as opposed to going out with friends, watching television, or studying for another course. 3.Goals Increase Persistence. Within the context of goal setting, persistence represents the effort expended on a task over an extended period of time: It takes effort to run 100 meters; it takes persistence to run a 26-mile marathon. Persistent people tend to see obstacles as challenges to be overcome rather than as reasons to fail. A difficult goal that is important to an individual is a constant reminder to keep exerting effort in the appropriate direction. Peter Löscher, CEO of Siemens, wanted to build on the power of persistence by setting goals associated with “green consciousness” and increased wind-energy sales. To do this he hired Peter Solmssen from GE because “the one thing GE does better than anybody is execution,” said Solmssen. “They set a target, and they achieve it. That’s it.” With Solmssen’s help, Löscher’s new goal-driven approach led to increased wind-energy sales and a 48 percent increase in stock price.56 4.Goals Foster the Development and Application of Task Strategies and Action Plans. Goals prompt us to figure out how they can be accomplished. This is a cognitive process of creatively developing a plan that outlines the steps, tasks, or activities that must take place to accomplish a goal. For example, teams of employees at Tornier, a medical device manufacturer in Amsterdam, meet every 45, 60, or 90 days to create action plans for completing their goals. Implementation of the plans can take between six and 18 months depending on the complexity of the goal.57 A series of studies conducted in South Africa, Zimbabwe, and Namibia found that small businesses were more likely to grow and succeed if their owners engaged in “elaborate and proactive planning.”58 TAKE-AWAY APPLICATION—TAAP 1.Set a goal for performance on the next exam in this class by filling in the following statement. “I want to increase the score on my next exam by_% over the score on my previous exam.” If you have not had an exam yet, pick a percentage grade you would like to achieve on your first exam. 2.Create a short action plan by listing four or five tasks or activities that are needed to help you achieve your goal. Identify actions that go beyond just reading. 3.Identify how you will assess your progress in completing the tasks or activities in your action plan. 4.Now work the plan, and get ready for success. Page 168 5.4MOTIVATING EMPLOYEES THROUGH JOB DESIGN MAJOR QUESTION What are the similarities and differences among top-down approaches, bottom-up approaches, and “idiosyncratic deals” in job design? THE BIGGER PICTURE Sometimes how happy you are in your job depends on who designs it. From an OB perspective, job design focuses on motivating employees by considering the environmental factors within the Integrative Framework for Understanding and Applying OB. Objectively, the goal of job design is to structure jobs and the tasks needed to complete them in a way that creates intrinsic motivation. We’ll look at how potential motivation varies depending on who designs the job: management, you, or you in negotiation with management. Completing tasks is the core of any job, and job design focuses on increasing employee-intrinsic motivation by changing the type of tasks we complete in the course of doing our jobs. Job design, also referred to as job redesign or work design, “refers to any set of activities that involve the alteration of specific jobs or interdependent systems of jobs with the intent of improving the quality of employee job experience and their on-the-job productivity.”59 As you can see from this definition, job design focuses on motivating employees by considering the environmental factors within the Integrative Framework. In the last decade, more approaches to job design are now available. •Top-Down. Managers changed employees’ tasks with the intent of increasing motivation and productivity. In other words, job design was management led. •Bottom-Up. In the last 10 years, this perspective gave way to what have been called bottom-up processes, based on the idea that employees can proactively change or redesign their own jobs, thereby boosting their own motivation and engagement. Job design is driven by employees rather than managers according to bottom-up processes. •I-Deals. The latest approach to job design attempts to merge these two historical perspectives and is referred to as idiosyncratic deals. This view envisions job design as a process in which employees and individual managers jointly negotiate the types of tasks employees complete at work. In other words, the process of job design is jointly owned by employees and managers. Page 169 This section provides an overview of these three conceptually different approaches to job design.60 More coverage is given to top-down techniques and models because they have been used for longer periods of time and more research is available to evaluate their effectiveness. Top-Down Approaches—“Management Designs Your Job” In top-down approaches management creates efficient and meaningful combinations of work tasks for employees. If done correctly, in theory employees will display higher performance, job satisfaction, and employee engagement, and lower absenteeism and turnover. All of these are relevant outcomes in the Integrative Framework. But there are different approaches at work in top-down job creation. The five principal approaches are scientific management, job enlargement, job rotation, job enrichment, and the job characteristics model. Scientific ManagementScientific management draws from research in industrial engineering and is most heavily influenced by the work of Frederick Taylor. Taylor, a mechanical engineer, developed the principles of scientific management based on research and experimentation to determine the most efficient way to perform jobs. Scientific management is “that kind of management which conducts a business or affairs by standards established by facts or truths gained through systematic observation, experiment, or reasoning.”61 Designing jobs according to the principles of scientific management has both positive and negative consequences. Positively, employee efficiency and productivity are increased. On the other hand, research reveals that simplified, repetitive jobs also lead to job dissatisfaction, poor mental health, higher levels of stress, and low sense of accomplishment and personal growth.62 Recognition of these negative consequences paved the way for the next four top-down approaches. This automotive assembly line, which is using robotics, is a great example of scientific management. The principles of scientific management have aided auto manufacturers to produce cars more efficiently and with higher quality. Job EnlargementCompanies first used this technique in the late 1940s in response to complaints about tedious and overspecialized jobs created from the principles of scientific management. Job enlargement involves putting more variety into a worker’s job by combining specialized tasks of comparable difficulty. Some call this horizontally loading the job. Researchers recommend using job enlargement as part of a broader approach that uses multiple motivational methods because, by itself, job enlargement does not have a significant and lasting positive effect on job performance.63 Job RotationAs with job enlargement, companies use job rotation to give employees greater variety in their work. Job rotation calls for moving employees from one specialized job to another. Rather than performing only one job, workers are trained and given the opportunity to perform two or more separate jobs on a rotating basis. Proposed benefits of job rotation include the following:64 •Increased engagement and motivation by providing employees with a broader perspective of the organization. •Increased worker flexibility and easier scheduling because employees are cross-trained to perform different jobs. •A vehicle to increase employees’ knowledge and abilities, thus improving an employee’s promotability and building a pipeline of internal talent. You will find that more and more companies are hiring new college graduates into what are called “rotational programs.” Many of our students have accepted such positions after graduation. Finally, the technique of job rotation has morphed into what is called job swapping, which tends to be used more frequently with senior-level managers. (See the Example box.) Page 170 EXAMPLEJob Swapping Is the Latest Application of Job Rotation Nadim Hossain, vice president of marketing at San Francisco-based PowerReviews, went to a recent meeting in which he met with a marketing team and provided input on a proposed ad. Interestingly, he did not do this for his employer. Fortune magazine reported on what he was up to. “He traded roles for the day with Jon Miller, VP of marketing and co-founder of San Mateo, Calif., software firm Marketo, hoping to gain some insight into his own role by experiencing someone else’s.” This experiment is an example of an external job swap. Both individuals felt like they benefited from the experience. Mr. Hossain said that he got many ideas about how to motivate his sales team, and Mr. Miller left with a better idea of the challenges faced by chief marketing officers. Job Swapping Can Be Done InternallySome companies are reluctant to do external “job swaps” because of confidentiality but take advantage of internal opportunities. For example, Jay Miletsky, CEO of online video start-up MyPod Studios, decided to change roles with an internal developer for a day. Sunil Verma, from mobile-ad company Velti, swaps jobs with executive-level peers every quarter in order to increase teamwork and improve communication. Steve Cody, CEO of Peppercom, a PR firm in New York, uses the practice to gain an understanding of the work experiences of entry-level employees. “He traded places with junior-level employees, including his receptionist, a junior account manager, and an account supervisor. He cleaned conference rooms, hung up coats, answered phones, and wrote press releases.” Mr. Cody believes that he gained appreciation for employees’ need for work-life balance based on the experience. “If you’re open to a swap, you’ll come out of it a much better leader,” he said.65 YOUR THOUGHTS? 1.What are the pros and cons of job swaps? 2.What would be your ideal job swap? 3.If you managed a business, how would you feel about this option for your employees? Job EnrichmentJob enrichment is the practical application of Frederick Herzberg’s motivator-hygiene theory of job satisfaction discussed earlier in this chapter. Specifically, job enrichment entails modifying a job such that an employee has the opportunity to experience achievement, recognition, stimulating work, responsibility, and advancement. These characteristics are incorporated into a job through vertical loading. Rather than giving employees additional tasks of similar difficulty (horizontal loading), vertical loading consists of giving workers more autonomy and responsibility. Intuit, for example, attempts to do this by encouraging employees “to spend 10% of their time pursuing projects they’re passionate about.”66 The Job Characteristics ModelTwo OB researchers, J. Richard Hackman and Greg Oldham, played a central role in developing the job characteristics approach. These researchers tried to determine how work can be structured so that employees experience intrinsic motivation. Hackman and Oldham proposed that intrinsic motivation is determined by three psychological states. In turn, these psychological states are fostered by the presence of five core job characteristics. The model is illustrated in Figure 5.8. In summary, the goal of the job characteristic model is to promote high intrinsic motivation by designing jobs that possess the five core job characteristics. Let us examine the core job characteristics. The five core job characteristics are as follows: •Skill variety. The extent to which the job requires an individual to perform a variety of tasks that require him or her to use different skills and abilities. Page 171 FIGURE 5.8THE JOB CHARACTERISTICS MODEL SOURCE: From J Richard Hackman and Greg R Oldham, Work Redesign (Prentice Hall Organizational Development Series), 1st ed © 1980, p 90. Reproduced by permission of Pearson Education, Upper Saddle River, NJ. •Task identity. The extent to which the job requires an individual to perform a whole or completely identifiable piece of work. In other words, task identity is high when a person works on a product or project from beginning to end and sees a tangible result. •Task significance. The extent to which the job affects the lives of other people within or outside the organization. •Autonomy. The extent to which the job enables an individual to experience freedom, independence, and discretion in both scheduling and determining the procedures used in completing the job. •Feedback. The extent to which an individual receives direct and clear information about how effectively he or she is performing the job.67 Moderators. See the box “Moderators” in Figure 5.8. Hackman and Oldham recognized that everyone does not want a job containing high amounts of the five core job characteristics. They incorporated this recognition into their model by identifying three person factors (inputs in our Integrative Framework) that affect or moderate how individuals respond to job enrichment: Page 172 •Knowledge and skill. •Growth need strength (representing the desire to grow and develop as an individual). •Context satisfactions (representing the extent to which employees are satisfied with various aspects of their job, such as satisfaction with pay, coworkers, and supervision). The effect of these variables plays out in the degree to which core job characteristics affect the critical psychological states, and how those states lead to intrinsic job satisfaction and related outcomes. In Practice. Research underscores three practical implications of the job characteristics model. 1.This model can be used to increase employee job satisfaction.68 2.Managers can enhance employees’ intrinsic motivation and performance, while reducing absenteeism and stress, by increasing the core job characteristics.69 EXAMPLENugget Market, rated as the 37th best place to work for by Fortune in 2012, uses a creative recognition program to enhance motivation and performance. “Employee rallies are an everyday event at this nine-store supermarket chain, where a big flat-screen monitor in each store delivers awards and pumps up the troops. Workers who watch diligently can get $20-$1,500 bonuses.”70 3.Managers are likely to find noticeable increases in the quality of performance after a job redesign program. Results from 21 experimental studies revealed that job redesign resulted in a median increase of 28 percent in the quality of performance.71 Bottom-Up Approaches—“You Design Your Own Job” As the term bottom-up suggests, this approach to