Motivating and Rewarding Employee Performance

Diagram and summarize the MARS model. Describe four-drive theory and explain how these drives influence motivation and behavior. Describe the characteristics of effective goal setting and feedback. Diagram the expectancy theory model and discuss its practical implications for motivating employees. Discuss the advantages and disadvantages of the four reward objectives. Discuss ways to measure employee performance more accurately. Summarize the equity theory model, including how people try to reduce feelings of inequity. Diagram the job characteristics model of job design. Define empowerment and identify strategies to support empowerment. Learning Objectives

Employees emotional and rational motivation Their perceived ability to perform the job Their clear understanding of the organization’s vision Their belief that they have been given the resources to get the job done It encompasses the four main factors that contribute to employee performance Employee Engagement

I can motivate people Fear is a damn good motivator I know what motivates me, so I know what motivates my employees Increased job satisfaction means increased job performance Motivation: True or False? Source: Managementhelp.org

MARS Model Situational factors Ability Motivation (effort) *Direction *Intensity *Persistence Employee behavior and results Role Perceptions

Ability – consists of both the natural aptitudes and learned capabilities required to successfully complete a task Important factor of employee development Role perceptions – they understand the specifics, importance, and preferred behaviors of the tasks. Ways to improve is through job description and ongoing coaching Ability & Role Perceptions

Managing Employee Motivation 1. Drives and needs Motivation (effort) *Direction *Intensity *Persistence Employee behavior and results 3. Extrinsic and intrinsic rewards 2. Goals, expectations, and feedback

Maslow’s Needs Hierarchy

Called in Sick? Source: USA Today Snapshots

Question Money is a powerful motivator. If an organization wants to be motivate employees, all its managers need to do is give them more money. Do you agree? Explain.

Employees have different needs at different times Employees have several interdependent needs, not just one dominant need At some point, most employees want to achieve their full potential (self-actualization) Employee needs are influenced by values and norms Management Implications of Maslow’s Theory

Learned Needs Theory Need for Achievement (nAch) Need for Affiliation (nAff) Need for Power (nPow)

Four-Drive Theory Motivation Drive to acquire Social norms Past experience Personal values Drive to bond Mental skill set resolves competing drive demands Goal-directing choice and effort Drive to learn Drive to defend

Goal Setting • The process of motivating employees and clarifying their role perceptions by establishing performance objectives • A goal is a desirable future state that an organization or person attempts to realize • Goal setting improves role perceptions and consequently clarifies the direction of employee effort

Raj, a new manager at Telcom International, in his first meeting at the company told his employees that the sales goals were significantly enhanced for this year and he expects all of his employees to buckle down and work hard to meet the goals. Raj’s instructions violates which of the aspects of effective goal-setting? Precise and measurable Equitable Expectancy-oriented Timely Question

Expectancy Theory of Motivation Outcome valence(the outcome’s positive or negative value to the employee) E-to-P expectancy (probability that effort will result in a specific level of performance) P-to-O expectancy (probability that performance will result in specific outcomes) Outcome 1 + or - Effort Outcome 1 + or - Performance Outcome 1 + or -

Extrinsic Rewards – anything received from another person that the recipient values and is contingent on his or her behavior or results Paychecks, performance bonuses, praise, and other forms of recognition Intrinsic Rewards – a positive emotional experience resulting directly and naturally from the individual’s behavior or results Learning a new task, feeling of accomplishment, etc. Rewards

Motivation Through Extrinsic Rewards

How to Accurately Evaluate Employee Performance? • Use more objective measures of performance • Use anchored performance appraisal instruments • Use multiple sources of performance information • Use performance appraisal training

Pay for performance – On average two-thirds of a Nucor steelworker’s pay is based on a production bonus Listen to the frontline – According to the Execs, almost all of the best ideas come from the factory floor Push-down authority – minimizing layers of management Protect your culture –compatibility of culture with its egalitarian philosophy and team spirit is a big focus of its acquisition research Best Practices at Nucor Source: Business Week, May 1, 2006

Correcting Inequity Feelings • Change Inputs • Change Outcomes • Change Perceptions • Leave the Situation

Job Characteristics Model Core job characteristics Critical psychological states Outcomes Skill variety Task identity Task significance Work motivation Growth satisfaction General Satisfaction Work effectiveness Meaningfulness Autonomy Responsibility Feedback from job Knowledge of results Individual differences *Knowledge and skill *Context satisfaction *Growth need strength

Skill variety – the use of different skills and talents to complete a variety of work activities Task identity – the degree to which a job requires completion of a whole or identifiable piece of work Task significance – the degree to which the job affects the organization and society Autonomy – provide freedom, independence, and discretion in scheduling work and procedures Job feedback – the degree to which employees can tell how well they are doing Core Job Characteristics

Job enrichment • A job design practice in which employees are given more responsibility for scheduling, coordinating, and planning their own work • Combine highly interdependent tasks into one job • Establishing client relationships • Give employees more autonomy over their work

Loyal vs. Trapped? Source: CIO, October 1, 2003

A psychological concept represented by four dimensions: Self-determination – they have freedom, interdependence, and discretion over their work activities Meaning – they care about their work and believe that what they do is important Competence – their ability to perform the work well and have a capability to grow with new challenges Impact – Active participants in the organization; that is, their decisions and actions influence the company’s success Empowerment

Don’t ask for worker input – use it. Tell your people you care about them. Show employees what they are learning Support people when they make a mistake. Set clear goals and celebrate accomplishments. Inspiring Employees Source: Business Week, May 1, 2006

Motivating and Rewarding Employee Performance