◦Provide you with a thorough understanding of the dynamics of motivation and the ways in which rewards can be used to motivate employees.

◦Examine the Content, Process, and Reinforcement Theories of Motivation, and

◦Take a look at the connection between Motivation and Compensation.

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MOTIVATION is the term used to describe the forces within the individual that account for the level, direction, and persistence of effort expended at work.

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A REWARD is a work outcome of positive value to the individual.

◦EXTRINSIC REWARDS are externally administered (e.g., pay and verbal praise); the motivational stimulus originates outside the person.

◦INTRINSIC REWARDS are self-administered; they occur "naturally" as a person performs a task. The feelings of competency, personal development, and self-control people experience in their work.

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Both Intrinsic and Extrinsic rewards can help the manager to lead effectively through motivation, and to achieve maximum motivational impact, it is necessary to:

◦Respect diversity and individual differences.

◦Clearly understand what people want from work.

◦Allocate rewards to satisfy the interests of both individuals and the organization.

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Content Theory◦Needs are physiological and psychological deficiencies that an individual feels some compulsion to eliminate.

Process Theory◦People give meaning to rewards and the work opportunities available to them.

Reinforcement Theory◦People's behavior is influenced by its

environmental consequences.

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Maslow's Hierarchy of Needs Theory◦ Lower Order Needs

Physiological Safety Social

◦Higher Order Needs Esteem Self-actualization

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Deficit Principle ◦Holds that a satisfied need is not a

motivator of behavior; people act to satisfy needs in which a deficit exists.

Progression Principle◦Holds that the five needs exist in a strict

hierarchy of prepotency such that a need at one level doesn't become activated until the next lower-level need is satisfied.

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An extension of Maslow's theory that proposes the existence of three needs as opposed to five.◦ Existence Needs: Desires for

physiological and material well-being.◦ Relationship Needs: Desires for

satisfying interpersonal relationships.◦ Growth Needs: Desires for continued

psychological growth and development.

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ERG Theory◦Does not assume that lower-level needs

must be satisfied before higher-level needs become activated and,

◦This theory includes a unique "frustration-regression" principle whereby an already satisfied lower-level need becomes reactivated when a higher-level need is frustrated.

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Hygiene Factors◦Working Conditions◦ Interpersonal Relations◦Organizational Policies ◦Quality of Supervision◦Base Wage or Salary

Improvements in Hygiene Factors can prevent and/or eliminate job dissatisfaction; they will not improve job satisfaction.

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Satisfier Factors◦Sense of Achievement◦Feeling of Recognition◦Sense of Responsibility◦Opportunity for Advancement◦Feelings of Personal Growth

Improvements in Satisfier Factors can increase job satisfaction; they will not prevent job dissatisfaction.

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David McClelland proposes that people acquire needs through their life experiences.

He uses a Thematic Apperception Test (TAT) to measure the strengths of three acquired needs:

Achievement - Power - Affiliation

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◦Need for Achievement (nAch) The desire to do something better or more

efficiently, to solve problems, or to master complex tasks.

◦Need for Power (nPower) The desire to control other persons, to

influence their behavior, or to be responsible for other people. A finer distinction can be made between:

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The need for Personal Power and, The need for Social Power

◦ Need for Affiliation (nAff) The desire to establish and maintain friendly

and warm relations with other persons.

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The most important need for executive success is the need for social

power.

Persons with a high need for affiliation may not make the best managers.

While nPower is often accompanied by a high need for achievement the later need in itself is not consistently associated with executive success.

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Equity Theory

◦Asserts that when people believe that they have been treated inequitably in comparison to others, they eliminate the discomfort and restore equity.

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Equity Theory (cont)◦Perceived Equity - occurs whenever a person perceives that their personal rewards/inputs ratio is equivalent to the rewards/inputs ratio of a comparison other.

◦Perceived Inequity - occurs whenever one's rewards/input ratio is perceived to be unequal...

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“People will do what they can do when they want to do it.” The question is ‘what makes them want to do it?’

Vroom suggests that the motivation to work depends on the relationships between the following three expectancy factors:

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Expectancy: A person's belief that working hard will result in a desired level of task performance.

Instrumentality: A person's belief that successful task performance will be followed by rewards and other potential outcomes.

Valence: The value a person assigns to possible rewards and other work-related outcomes.

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Implies that for motivation to be high, Expectancy, Instrumentality and Valence must be high.

Motivation =

Expectancy x Instrumentality x Valence

A zero at any location on the right side of the equation will result in zero

motivation.

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To Maximize Expectancy

◦Select workers with ability

◦Train workers to use ability

◦Support work effort

◦Clarify performance goals

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To Maximize Instrumentality◦Clarify psychological contracts◦Communicate performance-outcome possibilities◦Demonstrate what rewards are contingent on performance

To Maximize Valence◦ID needs and adjust rewards to match

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The basic premise is that well-set and well-managed task goals are important sources for motivation.

Task goals, in the form of clear and desirable performance targets, ◦Provide direction, ◦Energize persistent long-term work efforts, ◦Clarify performance expectations, and ◦Serve as a basis for feedback.

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Set Specific Goals Set Challenging Goals Build Goal Acceptance and

Commitment Clarify Goal Priorities Reward Goal Accomplishment

Management-by-Objectives ( MBO ) is one example of a goal-setting system which promotes participation.

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Unlike the prior motivation theories which rely on cognitive explanations of behavior, reinforcement theory focuses instead on the impact which external environmental consequences have on behavior.

The law of effects states that behavior followed by pleasant consequences is likely to be repeated; behavior followed by unpleasant consequences is not likely to be repeated.

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Operant Conditioning◦A term popularized by B. F. Skinner, is the process of controlling behavior by manipulating its consequences; i.e., learning by reinforcement.

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Organizational Behavior Modification

◦Involves the application of operant conditioning techniques to influence human behavior in work settings. (Reinforcing desirable behaviors while denying reinforcement for unwanted behaviors.)

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There Are Two Types of Reinforcement:◦ Positive Reinforcement

Increases the frequency of a behavior through the contingent presentation of a desirable consequence.

◦ Negative Reinforcement Increases the frequency of a behavior

through the contingent removal of an undesirable consequence.

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Punishment: decreases the frequency of a behavior through the contingent presentation of an unpleasant consequence.

Extinction: decreases the frequency of a behavior through the contingent removal of a pleasant consequence.

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Law of Contingent Reinforcement ◦ In order for a reward to have maximum

reinforcing value, it must be delivered only if the desired behavior is exhibited.

Law of Immediate Reinforcement

◦The more immediate the delivery of a reward after the occurrence of a desirable behavior, the greater the reinforcing value of the reward.

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Shaping◦The creation of a new behavior by the

positive reinforcement of successive approximations of the desired behavior. Intermittent reinforcement only rewards

behavior periodically. Continuous reinforcement administers a

reward each time a desired behavior occurs.

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Clearly identify desired work behaviors Maintain diverse inventory of rewards Inform everyone what must be done to

get rewards. Recognize individual differences when

allocating rewards. Follow the laws of immediate and

contingent reinforcements.

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Tell the person what is being done wrong.

Tell the person what is right.

Make sure the punishment matches the behavior.

Administer the punishment in private.

Follow the laws of immediate and contingent reinforcement.

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There is considerable debate over the ethics of using OB MOD to influence behavior.

But as the text notes, "the real question may be not whether it is ethical to control behavior, but whether it is ethical not to control behavior well enough that the goals of both the organization and the individual are well served."

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Motivation leads to Effort which, along with appropriate Abilities and Organizational Support, lead to Performance.

This model illustrates how Rewards for performance, when they are perceived as Equitable and possess Reinforcement Value, can produce satisfaction.

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Incentive Compensation Systems◦Bonus systems in which employees at all

levels participate.◦Bonus Pay Plans◦Profit-Sharing Plans◦Gain-Sharing Plans◦Employee Stock Ownership Plans

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Pay for Knowledge◦Skill-based pay ties pay to the number of

job-relevant skills an employee masters. Entrepreneurial pay requires

individuals to put part of their pay at risk, in return for the right to pursue entrepreneurial ideas, and share in any resulting profits.

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ThanksRB

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