ZeePedia

COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE

<< COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE >>
img
Introduction to Business ­MGT 211
VU
Lesson 19
COMPENSATION AND BENEFITS (Continued)
Psychological contracts in the workplace are the set of expectations held by employees
concerning what they will contribute to an organization (contributions) and what the
organization will in return provide to them (inducements).  Psychological contracts have
changed significantly in the last decade. Employers offer less security, but more benefits,
while employees offer less loyalty, but are often willing to work longer hours and assume more
responsibility.
Good human relations--positive interactions between employers and employees--lead to high
levels of job satisfaction and morale. As a result, employees are more productive and more
loyal, with a lower level of grievances, absenteeism, and turnover.
Theories of employee motivation have changed dramatically over the years.  The most
important models are summarized below:
·  Classical Theory:  People are motivated solely by money.  This theory impacted
business via scientific management, which focused on analyzing jobs and finding more
efficient ways to perform tasks.
·
Behavior Theory:  People's needs play a role in motivation.  Employees perform
better when they believe that management is paying attention to them. This theory
was first demonstrated in the Hawthorne studies (1927-1932 at the Western Electric
Hawthorne works in Chicago).
·
Human Resources Model: There are two kinds of managers--Theory X managers
who believe that people are inherently uncooperative and must be constantly punished
or rewarded, and Theory Y managers who believe that people are naturally responsible
and self motivated to be productive.
·
Maslow's Hierarchy of Needs Model:  People have different needs which they
attempt to satisfy in their work. Lower level needs must be satisfied before people
seek to meet higher level needs.
·
Two-Factor Theory: If basic hygiene needs are not met, workers will be dissatisfied.
Only by increasing more complex motivation factors can companies increase employee
performance.
·
Expectancy Theory: People will work hard if they believe that their efforts will lead to
desired rewards.
·
Equity Theory: Motivation depends on the way employees evaluate their treatment by
an organization, relative to its treatment of other workers.
Managers can use several strategies to improve employee satisfaction and motivation. The
principle of reinforcement or behavior modification theory proposes that rewards and
punishments can control behavior. Management by objectives, participative management,
and empowerment can improve human relations by increasing the level of employee
commitment and involvement in the organizational team. Job enrichment, job redesign, and
modified work schedules can build job satisfaction by adding motivation factors to jobs in
which they are normally lacking.
88
img
Introduction to Business ­MGT 211
VU
Effective managerial leadership is a key contributor to employee satisfaction and motivation.
Autocratic managers typically issue orders that they expect employees to obey. Democratic
managers generally seek subordinates' input into decisions. Free-rein managers more often
advise than make actual decisions. The contingency approach to leadership suggests that
managers should assess each situation individually, and exercise a leadership style based on
the elements of the situation.
1. PSYCHOLOGICAL CONTRACTS IN ORGANIZATIONS
Set of expectations held by an employee concerning what he or she will contribute to an
organization (referred to as contributions) and what the organization will in return provide
the employee (referred to as inducements). All organizations face the basic challenge of
managing psychological contracts. The massive wave of downsizing and cutbacks that
swept the U.S. economy in the 1980s and early 1990s has complicated that challenge.
Because job permanence is less likely now, alternative inducements such as lavish
benefits packages may be needed instead.
Human Relations--Interactions between employers and employees and their attitudes
toward one another
2. THE IMPORTANCE OF SATISFACTION AND MORALE
Job Satisfaction--degree of enjoyment that people derive from performing their jobs.
Satisfied employees are likely to have higher morale, fewer grievances, and fewer
negative behaviors than dissatisfied counterparts.
Morale--overall attitude that employees have toward their workplace. Low morale may
result in high turnover, with negative consequences for production schedules,
productivity,
and
skill
level
within
the
firm.
Turnover--Annual percentage of an organization's workforce that leaves and must be
replaced
a. Recent Trends in Managing Satisfaction and Morale
i. Many major companies went through periods of massive layoffs and
cutbacks during the late 1980s through the mid-1990s, creating a sense
of job insecurity.
ii. A booming economy and the creation of thousands of new jobs led to
low unemployment in most industries and regions by the late 1990s.
As a result, companies found themselves having to work harder not only
to retain current employees but also to offer creative incentives to attract
new employees. Innovative benefits and perks have soared as firms try
to maintain job satisfaction and employee morale and make themselves
more attractive places to work.
iii. The 2000s have brought back layoffs and cutbacks. Workers appear
satisfied enough.
3. MOTIVATION IN THE WORKPLACE
Employee motivation is even more critical to a firm's success than job satisfaction and
morale.
a. Classical Theory--theory holding that workers are motivated solely by money.
i. Scientific  Management­an  approach  to  employee  motivation
incorporating the classical theory of motivation.
89
img
Introduction to Business ­MGT 211
VU
ii. Frederick Taylor (Principles of Scientific Management, 1911) reasoned
that if workers were motivated by money, paying the more should
prompt them to produce more. At the same time, firms that analyzed
jobs and found better ways to perform them would be able to produce
goods more cheaply, make more profits, and be able to pay and
motivate workers better than its competitors.
iii. Time-and-motion studies­industrial-engineering techniques applied to
each facet of a job in order to determine how to perform it most
efficiently
b. Behavior Theory: The Hawthorne Studies--a set of experiments aimed at
examining the relationship between changes in the physical environment and
worker output.
i. In 1925 Harvard researchers studied Hawthorne Works of Western
Electric, outside Chicago. Their experiment with increasing lighting
levels to examine the relationship between changes in the physical
environment and worker output showed the surprising result that both
higher and lower levels increased productivity, while increased pay
failed to do so.
ii. The answer proved to be that workers were reacting to the attention
they were receiving, leading to the conclusion that productivity rose in
response to almost any management action that workers interpreted as
special attention.
iii. Hawthorne Effect--tendency for productivity to increase when workers
believe they are receiving special attention from management.
c. Contemporary Motivational Theories--Following the Hawthorne studies,
managers and researchers focused more attention on the importance of good
human relations in motivating employee performance. Most motivation theorists
are concerned with the ways in which management thinks about and treats
employees.
i. Human Resources Model: Theories X and Y--Douglas McGregor's
theory of motivation suggesting that managers have radically different
beliefs about how best to use the human resources employed by a firm.
1. Theory X--theory of motivation holding that people are naturally
irresponsible and uncooperative.
2. Theory Y--theory of motivation holding that people are naturally
responsible, growth oriented, self-motivated, and interested in
being productive.
ii. Maslow's  Hierarchy  of  Needs  Model--Psychologist  Abraham
Maslow's theory of motivation proposing that people have several
different  needs  that  they  attempt  to  satisfy  in  their  work.
These needs are hierarchical in importance; lower-level needs must be
met before a person will try to satisfy higher-level needs. Once a set of
needs has been satisfied, it ceases to motivate behavior.
Two-Factor Theory--Frederick Herzberg's theory of motivation holding that job
satisfaction
depends
on
two
types
of
factors,
hygiene
and
motivation.
This theory suggests that managers should follow a two-step approach to enhancing
motivation--first, ensure that hygiene factors (working conditions, policies) are acceptable,
and then offer motivation factors such as recognition and added responsibility.
90
img
Introduction to Business ­MGT 211
VU
i. Expectancy Theory--theory of motivation holding that people are motivated to work
toward rewards that they want and that they believe they have a reasonable chance
of obtaining. In this theory, a reward that is out of reach is likely to be undesirable
even if it is intrinsically positive.
ii. Equity Theory--theory of motivation holding that people evaluate their treatment by
employers relative to the treatment of others. People derive a ratio of contribution to
return from analyzing what they contribute to their jobs (inputs) and what they receive
in return (outputs); they then compare their own ratios with those of other employees.
The ratios do not have to be the same, only fair.
91
Table of Contents:
  1. INTRODUCTION:CONCEPT OF BUSINESS, KINDS OF INDSTRY, TYPES OF TRADE
  2. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:THE ECONOMIC ENVIRONMENT
  3. BUSINESS ORGANIZATION:Sole Proprietorship, Joint Stock Company, Combination
  4. SOLE PROPRIETORSHIP AND ITS CHARACTERISTICS:ADVANTAGES OF SOLE PROPRIETORSHIP
  5. PARTNERSHIP AND ITS CHARACTERISTICS:ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP
  6. PARTNERSHIP (Continued):KINDS OF PARTNERS, PARTNERSHIP AT WILL
  7. PARTNERSHIP (Continued):PARTNESHIP AGREEMENT, CONCLUSION, DUTIES OF PARTNERS
  8. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:ETHICS IN THE WORKPLACE, SOCIAL RESPONSIBILITY
  9. JOINT STOCK COMPANY:PRIVATE COMPANY, PROMOTION STAGE, INCORPORATION STAGE
  10. LEGAL DOCUMENTS ISSUED BY A COMPANY:MEMORANDUM OF ASSOCIATION, CONTENTS OF ARTICLES
  11. WINDING UP OF COMPANY:VOLUNTARY WIDNIGN UP, KINDS OF SHARE CAPITAL
  12. COOPERATIVE SOCIETY:ADVANTAGES OF COOPERATIVE SOCIETY
  13. WHO ARE MANAGERS?:THE MANAGEMENT PROCESS, BASIC MANAGEMENT SKILLS
  14. HUMAN RESOURCE MANAGEMENT:Human Resource Planning
  15. STAFFING:STAFFING THE ORGANIZATION
  16. STAFF TRAINING & DEVELOPMENT:Typical Topics of Employee Training, Training Methods
  17. BUSINESS MANAGER’S RESPONSIBILITY PROFILE:Accountability, Specific responsibilities
  18. COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
  19. COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE
  20. STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE
  21. MANAGERIAL STYLES AND LEADERSHIP:Changing Patterns of Leadership
  22. MARKETING:What Is Marketing?, Marketing: Providing Value and Satisfaction
  23. THE MARKETING ENVIRONMENT:THE MARKETING MIX, Product differentiation
  24. MARKET RESEARCH:Market information, Market Segmentation, Market Trends
  25. MARKET RESEARCH PROCESS:Select the research design, Collecting and analyzing data
  26. MARKETING RESEARCH:Data Warehousing and Data Mining
  27. LEARNING EXPERIENCES OF STUDENTS EARNING LOWER LEVEL CREDIT:Discussion Topics, Market Segmentation
  28. UNDERSTANDING CONSUMER BEHAVIOR:The Consumer Buying Process
  29. THE DISTRIBUTION MIX:Intermediaries and Distribution Channels, Distribution of Business Products
  30. PHYSICAL DISTRIBUTION:Transportation Operations, Distribution as a Marketing Strategy
  31. PROMOTION:Information and Exchange Values, Promotional Strategies
  32. ADVERTISING PROMOTION:Advertising Strategies, Advertising Media
  33. PERSONAL SELLING:Personal Selling Situations, The Personal Selling Process
  34. SALES PROMOTIONS:Publicity and Public Relations, Promotional Practices in Small Business
  35. THE PRODUCTIVITY:Responding to the Productivity Challenge, Domestic Productivity
  36. THE PLANNING PROCESS:Strengths, Weaknesses, Threats
  37. TOTAL QUALITY MANAGEMENT:Planning for Quality, Controlling for Quality
  38. TOTAL QUALITY MANAGEMENT (continued):Tools for Total Quality Management
  39. TOTAL QUALITY MANAGEMENT (continued):Process Re-engineering, Emphasizing Quality of Work Life
  40. BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks
  41. NON-VERBAL COMMUNICATION MODES:Body Movement, Facial Expressions
  42. BUSINESS ORGANIZATIONS:Organization as a System
  43. ACCOUNTING:Accounting Information System, Financial versus Managerial Accounting
  44. TOOLS OF THE ACCOUNTING TRADE:Double-Entry Accounting, Assets
  45. FINANCIAL MANAGEMENT:The Role of the Financial Manager, Short-Term (Operating) Expenditures