Motivating Employees��(Chapter 10)

Yavuz Karazeybek

The Value of Motivation

• Business idea is crucial for success in business. But employees also an important factor that affects the success of a business.
• Employees should be motivated even if they have the skills required.
• Unmotivated employees can not increase the performance of the business
• Firms may choose to hire people who are naturally motivated
• They will still need a work environment that motivates them.

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The Value of Motivation

• Assume Anna and Marie are equally intelligent and same effort
• Same industry, same salaries etc.
• Anna will be much more motivated than Marie
• Firms have major influence on the motivation of their employees
• Motivated employees = higher productivity = higher production levels = higher profits

The Value of Motivation

• How to motivate employees?
• There is no single motivational tool
• Individuals have different characteristics so ideal motivational tool may vary among employees

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Theories on Motivation

• The motivation of employees is influenced bu job satisfaction
• Job satisfaction: the degree to which employees are satisfied with their jobs
• Firms should focus on satisfying their employees
• Some of the popular theories on motivation
• Hawthorne Studies
• Maslow’s Hierarchy of Needs
• Herzberg’s Job Satisfaction Study
• McGregor’s Theory X and Theory Y
• Theory Z
• Expectancy Theory
• Equity Theory
• Reinforcement Theory

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Hawthorne Studies

• Researchers studied workers in a Western Electric Plant (late 1920s)
• They were identifying how different conditions affect the level of production
• When lighting was increased, the production level increased
• The production level also increased when lighting was reduced!
• They also changed break periods: production level increased for both shorter and longer breaks
• Participation is the key
• Giving more attention to workers, allowing to participate
• These studies ignited the further research on motivation

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Maslow’s Hierarchy of Needs

• Abraham Maslow (1943) a psychologist, developed the hierarchy of needs theory
• People rank their needs and there are 5 general categories
• Once they achieve a given category of needs, they become motivated and motivated to reach the next one
• Most crucial needs on the bottom

Maslow’s Hierarchy of Needs

• Physiological Needs:
• Basic requirements for survival
• Food, shelter
• Safety Needs:
• Job security, safe working conditions
• Social Needs
• The need to be a part of a group
• Socializing events
• Esteem Needs
• Respect, prestige, recognition
• Promotions
• Self-Actualization
• The need to fully reach one’s potential

• This hierarchic structure may be useful for motivating employees

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• Different employees may be in different places in the hierarchy

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• Managers may focus on satisfying the needs considering each employees’ place in the hierarchy

Herzberg’s Job Satisfaction Study

• Frederick Herzberg (1950s) surveyed accountants and engineers about job satisfaction
• He aimed to identify the factors that made employees
• Dissatisfied with their jobs
• Satisfied with their jobs

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Herzberg’s Job Satisfaction Study

• Hygiene Factors: Work related factors that can fulfill basic needs and prevent job dissatisfaction
• Motivational Factors: Work related factors that can lead to job satisfaction and motivate employees
• Bad working conditions or inadequate salaries may cause dissatisfaction but if you want to motivate your employees those factors may not be affective
• You may offer more responsibility or recognition to your employees in order to motivate them

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• Hygiene Factors : Basics of Maslow’s Hierarchy
• Motivational Factors: Higher levels on Maslow’s Hierarchy

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McGregor’s Theory X and Theory Y

• Douglas McGregor developed Theory X and Y.
• Each theory represents managers’ possible perception of workers

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McGregor’s Theory X and Theory Y

• The way managers view employees can influence the way they treat the employees
• Managers who accept Theory X:
• Tight control over workers
• Little or no delegation of authority
• Closely monitor workers
• Managers who accept Theory Y:
• Delegate more authority
• More oppurtunities for creativity
• This perspective supports achieve respect and recognition

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Theory Z (1980s)

• Based on Japanese style: allowing all employees to participate in decision making
• Participation can increase job satisfaction because of giving responsibility to employees
• Job descriptions tend to be less specialized in order to allow employees to develop varied skills

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Expectancy Theory

• Expectancy theory suggests that an employee’s efforts are influenced by the expected outcome (reward) for those efforts.
• Employees will be more motivated to achieve goals if they are achievable and offer rewards.
• Rewards must be desirable
• Employees must believe they have a chance to earn it
• Determine valid performance indicators

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Equity Theory

• It suggests that compensation should be equitable, or in proportion to each employee’s contribution.
• If employees believe that they are undercompensated, they may request greater compensation. If it is not increased this may lead job dissatisfaction and they may reduce their contribution
• Managers’ perspective may be different than the employees’
• Firm should define how to measure contributions and compensate accordingly

Reinforcement Theory

• It suggests that reinforcement can influence behavior
• Positive Reinforcement: It motivates employees by providing rewards for high performance
• Rewards may be oral compliment, promotion or large bonuses
• The more they appreciate reinforcement the more they will be motivated
• Negative Reinforcement: It motivates employees by encouraging them to behave in a manner that avoids unfavorable consequences
• Employees may be motivated to complete assignments today to avoid having to admit the delay in a group meeting
• Reprimand to job termination
• If firms dont use negative reinforcements for employees who performed poorly, others’ performance may decline

Motivational Guidelines

1. Employees generally compare their compensations with others. To prevent job dissatisfaction managers should ensure that employees are compensated for their contributions

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2. Even if employees are offered high compensation, they may not be motivated. Focus on social needs, responsibility, self-esteem to satisfy and motivate them

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3. Employees may be motivated if they believe that it is possible to achieve performance levels. They will work hard to get the reward.

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Motivating Disgruntled Employees

• Some employees may not be motivated regardless of the efforts
• If no form of motivation is effective, the threat of being fired may be used to motivate them
• If firms do not discipline disgruntled employees who perform poorly, others will lose their enthusiasm
• Especially if they have to cover the work assignments that the disgruntled employees neglect

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Enhancing Job Satisfaction and Motivation

• Key characteristics that affect job satifaction: Money, security, work Schedule and invovement at work
• Firms provide job enrichment programs to motivate employees
• Some of the popular enrichment programs
• Adequate compensation program
• Job security
• Flexible work Schedule
• Employee involvement programs

Adequate Compensation Program

• Adequate compensations may not be enough to motivate employees
• Firms may choose to give highest percentage raises for the employees who show highest performance
• Merit system: A compensation system that allocates raises according to performance (positive and regative reinforcement?)
• Across-the-board system: a compensation system that allocates similar raises to all employees
• Incentive plans: They provide employees with various forms of compensation if they meet specific performance goals

Developing a Compensation Plan

• Align compenstation with business goals
• Compensation formulas should ve set after the goals established
• Ensure employees rewarded to satisfy business goals
• Align compensation with specific employee goals
• Individual goals increase motivation
• May be group goals-each worker may affect other group members
• Establish achievable goals for employees
• Goals should be achiavable and desirable
• Decide on the goals at the beginning of the year
• Allow employee input on the compensation plan
• Receiving input from the employees

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Job Security

• Employees who have job security may be more motivated to perform well
• They are less likely to ve distracted to look for another job which offer more security
• Firms may not offer guaranteed job security because of economic realities
• They may provide more security by training their employees to handle various tasks so they can be assigned other duties if their usual assignments are no longer needed

Flexible Work Schedule

• Flextime programs: They allow for a more flexible work Schedule
• Compressed workweek: It compresses the workload into fewer days per week.
• 5 days x 8 hours = 4 days x 10 hours
• It allow employees to have 3 day weekends
• When employees are on a schedule that they prefer, they are more motivated
• Job sharing: 2 or more worker share a particular work Schedule
• Part-time jobs
• Remote jobs

Employee Involvement Programs

• Employees are more motivated when they play a bigger role in the firm
• There are various methods to allow more employee involvement and responsibility
• Job Enlargement: A program to expand the jobs assigned to employees
• Motivating employees and reduce operationg expenses
• Job Rotation: It allows a set of employees to periodically rotate their job assignments.
• Reduce boredom and prepare for another position (not being fired)

Employee Involvement Programs

• Empowerment and Participative Management:
• Empowerment: It allows employees the power to make more decision (delegating more authority)
• Participative Management: Employees are allowed to participate in various decision (asking for suggestions)
• Higher level of involvement by employees is supported by Theory Z
• Management by objectives: Employees work with their managers to set their goals and determine the manner in which they will complete their tasks.

Employee Involvement Programs

• Teamwork: A group of employees with varied job positions have the responsibility to achieve a specific goal.
• Open-Book Management: It educates employees on their contribution to the firm and enables them to periodically assess their own performance levels
• Employees know about the performance metrics that are relevant to the owner

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Thanks for listening