Part 4

Creating the Human

Resource Advantage

© 2015 McGraw-Hill Education.

CHAPTER 9 Motivating the Workforce

CHAPTER 10 Managing Human Resources

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Learning Objectives

LO 9-1 Define human relations and determine why its study is important.

LO 9-2 Summarize early studies that laid the groundwork for understanding employee motivation.

LO 9-3 Compare and contrast the human-relations theories of Abraham Maslow and Frederick Herzberg.

LO 9-4 Investigate various theories of motivation, including Theories X, Y, and Z; equity theory; and expectancy theory.

LO 9-5 Describe some of the strategies that managers use to motivate employees.

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Nature of Human Relations

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Human Relations• The study of the behavior of individuals and

groups in organizational settings

Motivation • An inner drive that directs a person’s behavior

toward goals• A goal is the satisfaction of some need, and

a need is the difference between a desired state and an actual state

Motivating the Workforce

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Human relations is concerned with the needs of employees, their goals and how they try to achieve them, and the impact of those needs and goals on job performance

Motivating employees to stay engaged is a key responsibility of management

Engagement involves emotional involvement and commitment

Being engaged results in carrying out the expectations and obligations of employment

The Motivation Process

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Morale

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A prominent aspect of human relations

High morale contributes to high levels of productivity, high returns to stakeholders, and employee loyalty

Morale • An employee’s attitude toward his or her job, employer,

and colleagues

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Morale

High morale contributes to:

• High levels of productivity

• High returns to stakeholders

• Employee loyalty

Low morale may cause:

• High rates of absenteeism• Absenteeism can cost

a company as much as 36% of payroll

• High rates of employee turnover

Morale Boosters

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Respect Positive organizational culture

Appreciation Adequate compensation

Promotions A pleasant work environment

Involvement

Tips for the Leader about Employee Motivation

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Rewards

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• The personal satisfaction and enjoyment that you feel after attaining a goal

• In this class, you may feel personal enjoyment in learning how business works and aspire to have a career in business or to operate your own business one day

Intrinsic Rewards

• Benefits and/or recognition received from someone else

• In this class, your grade is extrinsic recognition of your efforts and success in the class

Extrinsic Rewards

Top 10 Ways to Retain Great Employees

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Historical Perspectives on Employee Motivation

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• Theory suggesting that money is the sole motivator for workers

• Early 20th century• Frederick W. Taylor and Frank & Lillian

Gilbreth• Analyzed how workers perform

specific work tasks in an effort to improve the employees’ productivity

• Led to the application of scientific principles to management

Classical Theory of Motivation

Classical Theory of Motivation

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To improve productivity managers should:

Break down each job into its component tasks (specialization)

Determine the best way to perform each task

Specify the output to be achieved by a worker performing the task

Incentives motivate employees to be more productive

Link workers’ pay directly to their output

Historical Perspectives on Employee Motivation

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•1924-1932 at the Hawthorne Works Plant•Marks beginning of concern for human relations in the workplace•Elton Mayo:•Postulated that physical conditions in workplace stimulate productivity•Productivity increased regardless of the physical conditions (the Hawthorne effect)•Findings show that social and psychological factors could significantly affect productivity and morale

The Hawthorne

Studies

Hawthorne Studies

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Working conditions are important

However, the Hawthorne studies, which were carried out at the electric company shown here beginning in the 1920s, found that the workers became more productive because of the attention they received—regardless of their working conditions.

Job Aspects Important to Employee Satisfaction

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Aside from salary, which one of the following aspects of your job is most tied to your satisfaction?

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Theories of Employee Motivation

Maslow’s Hierarchy of Needs

Herzberg’s Two-Factor Theory

McGregor’s Theory X and

Theory Y

Theory Z

Variations on Theory Z

Equity Theory

Expectancy Theory

Maslow’s Hierarchy of Needs

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Maslow’s Hierarchy

•A theory that arranges the five basic needs of people—physiological, security, social, esteem, and self-actualization—into the order in which people strive to satisfy them

Maslow’s Hierarchy of Needs

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Physiological Needs• The most basic human needs to be satisfied—water, food,

shelter, and clothing

Security Needs

• The need to protect oneself from physical and economic harm

Social Needs• The need for love, companionship, and friendship—the desire

for acceptance by others

Esteem Needs• The need for respect—both self-respect and respect from

others

Self-Actualization Needs• The need to be the best one can be; at the top of Maslow’s

hierarchy

Herzberg’s Two-Factor Theory

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Hygiene Factors• Aspects of Herzberg’s theory of motivation that focus

on the work setting and not the content of the work; these aspects include adequate wages, comfortable and safe working conditions, fair company policies, and job security

Motivational Factors

• Aspects of Herzberg’s theory of motivation that focus on the content of the work itself; these aspects include achievement, recognition, involvement, responsibility, and advancement

McGregor’s Theory X and Theory Y

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The average person naturally dislikes work and will avoid it when possible

Most workers must be coerced, controlled, directed, or threatened with punishment to get them to work toward the achievement of organizational objectives

The average worker prefers to be directed and to avoid responsibility, has relatively little ambition, and wants security

Theory X

• McGregor’s traditional view of management whereby it is assumed that workers generally dislike work and must be forced to do their jobs

McGregor’s Theory X and Theory Y

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Theory Y assumes: The expenditure of physical and mental effort in work

is as natural as play or rest

Theory Y

• McGregor’s humanistic view of management whereby it is assumed that workers like to work and that under proper conditions employees will seek out responsibility in an attempt to satisfy their social, esteem, and self-actualization needs

Theory X style of management focuses on physiological and security needs and virtually ignores the higher needs discussed by Maslow

McGregor’s Theory X and Theory Y

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Theory Y assumptions (continued):

People will exercise self-direction and self-control to achieve objectives to which they are committed

People will commit to objectives when they realize that the achievements of those goals will bring them personal reward

The average person will accept and seek responsibility

Imagination, ingenuity, and creativity can help solve organizational problems, but most organizations do not make adequate use of these characteristics in their employees

Organizations today do not make full use of workers’ intellectual potential

Theory Z

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Incorporates many elements associated with the Japanese approach to management (trust and intimacy) but Japanese ideas have been adapted for use in the U.S.

Results in employees feeling organizational ownership Research has found that such feelings of ownership

may produce positive attitudinal and behavioral effects for employees

Theory Z

• A management philosophy that stresses employee participation in all aspects of company decision making

Comparison of American, Japanese, and Theory Z Management Styles

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Variations on Theory Z

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Theory Z has been adapted and modified for use in a number of U.S. companies Quality circles (quality-assurance teams) – Are small,

usually having 5-8 members who discuss ways to reduce waste, eliminate problems, and improve quality, communication, and work satisfaction

Often modified and operate under names such as: participative management, employee involvement, or self-directed work teams

They strive to give employees more control over their jobs while making them more responsible for the outcome of their efforts

Equity Theory

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Equity is a subjective notion

Equity theory might explain why many consumers are upset about CEO compensation Corporations have now begun to tie CEO

compensation with company performance

Feelings of inequity may underlie some unethical or illegal behavior in business

Equity Theory

• An assumption that how much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange

Expectancy Theory

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A person who wants something and has reason to be optimistic will be strongly motivated

If you do not believe you are likely to get what you want, you may not be motivated to try to get it, even though you really want it

Expectancy Theory

• The assumption that motivation depends not only on how much a person wants something but also on how likely he or she is to get it

Positive Reinforcement

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When employees are recognized for a job well done, they are more likely to put forth the same amount of effort or more in their future tasks

Positive reinforcement is so effective because it clearly and immediately defines the kind of behaviors that are appreciated by employers

This tactic works especially well with employees who naturally take pride in their work and are inherently motivated to do well

However, it still has positive results among the less naturally motivated employees

Positive reinforcement also empowers employees through self-confidence making them more adaptable and open to change

SOURCE: Dr. Seidenfeld. “Using Positive Reinforcement in Employee Motivation”. www.forensicmag.com. September 2, 2013. http://www.forensicmag.com/articles/2013/09/using-positive-reinforcement-employee-motivation#.UknuWtJ4zId. (accessed September 30, 2013).

Strategies for Motivating Employees

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Behavior that is rewarded will tend to be repeated

Behavior that is punished will tend to be eliminated

The two strategies may not be equally effective Punishing unacceptable behavior may provide quick

results but may lead to employee dissatisfaction and increased turnover

In general, rewarding appropriate behavior is a more effective way to modify behavior

Behavior Modification

• Changing behavior and encouraging appropriate actions by relating the consequences of behavior to the behavior itself

Strategies for Motivating Employees

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Job Rotation

• Movement of employees from one job to another in an effort to relieve the boredom often associated with job specialization

Job Enlargement

• The addition of more tasks to a job instead of treating each task as separate

Job Enrichment• The incorporation of motivational factors, such as

opportunity for achievement, recognition, responsibility, and advancement, into a job

Strategies for Motivating Employees

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• Flexible scheduling strategies:

Flextime

• A program that allows employees to choose their starting and ending times, provided that they are at work during a specified core period

Compressed Workweek

• A four-day (or shorter) period during which an employee works 40 hours

Strategies for Motivating Employees

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• Flexible scheduling strategies:

• Allowing full-time workers to work part time for a certain period

• Allowing workers to work from home either full or part time

Job Sharing

• Performance of one full-time job by two people on part-time hours

Flextime, Showing Core and Flexible Hours

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• Flextime provides many benefits, including improved ability to recruit and retain workers who wish to balance work and home life

• More flexible schedules are associated with healthier lifestyle choices such as increased physical activity and healthier sleep habits

SAS Family

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Several of the companies listed on Fortune’s “Best Companies to Work For” list receive this recognition for how well they treat their employees. Good treatment of employees leads to higher motivation levels and overall company productivity

SAS, a business analytics company, made the number two spot on Fortune’s list in 2013 They effectively motivate their employees with extensive benefits

that go beyond the traditional set of benefits companies usually offer

SAS values their employees’ families by offering full family health care coverage, adoption services and educational training

They also value the employees’ well-being by offering fitness and recreational facilities and programs

To see other of examples of companies that effectively motivate their employees, see the following link: http://money.cnn.com/magazines/fortune/best-companies/

SOURCE: SAS. “SAS Family – US”. www.sas.com. http://www.sas.com/company/sasfamily/. (accessed September 30, 2013).

Importance of Motivational Strategies

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Fosters employee loyalty

Boosts productivity

Influences many areas such as pay, promotion, job design, training opportunities, and reporting relationships

Employees are motivated by the nature of the relationships they have with their supervisors, by the nature of their jobs, and by characteristics of the organization

Importance of Motivational Strategies

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The economic environment can change an employee’s motivation: In a recession economy, morale can drop because

of the need to cut jobs

Firm may have to work harder to keep good employees and to motivate all employees to work to overcome obstacles

In good economic times, employees may be more demanding and be on the lookout for better opportunities

New rewards or incentives may help motivate workers

Best Companies to Work For

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Discussion

? Why do managers need to understand the needs of their employees?

? Contrast the assumptions of theory X and theory Y. Why has theory Y replaced X in management today?

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