Chapter 6…Designing a Motivating Work Environment

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Talya Bauer and Berrin Erdogan

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Learning Objectives

 Describe the history of job design approaches

 Understand how to increase the motivating potential of a job

 Understand why goals should be SMART

 Set SMART goals

 Give performance feedback effectively

 Describe individual, team, and

organization based incentives that can be used to motivate the workforce

Chapter 6 Designing a Motivating Work Environment

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Motivation at Nucor Motivation at Nucor

Producing steel is hot and demanding work. Employees who are motivated are much more

productive as evidenced by Nucor’s success.

Producing steel is hot and demanding work. Employees who are motivated are much more

productive as evidenced by Nucor’s success.

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Scientific Management and Job Specialization

“Taylorism” …see “notes”

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Scientific Management and Job Specialization

This Ford panel assembly line in Berlin, Germany, is an example of specialization. Each person on the line has a different job.

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Alternatives to Job Specialization Alternatives to Job Specialization

…new skills learned, cross- trained employees, and reduced employee boredom

…employee has more responsibility, often greater performance & lower turnover

…similar benefits to job rotation…teaches multiple

tasks…reduces boredom

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Job Characteristics Model Job Characteristics Model

***…Five core job dimensions, leading to three critical psychological states, which lead to work-related outcomes.

…see

“notes”

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Calculate Motivation Potential Score (MPS)

MPS

x Autonomy x Feedback

Skill Variety + Task Identity + Task Significance

( (

3

According to the formula, autonomy and feedback are the more important elements

in deciding motivating potential.

…if someone’s job is completely lacking in autonomy (or feedback), the motivating potential score will be low.

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OB Toolbox

Increase the Feedback You Receive: Seek It!

OB Toolbox

Increase the Feedback You Receive: Seek It!

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Empowerment Empowerment

Empowerment – the removal of conditions that make a person

powerless.

Structural empowerment – the aspects of the work environment that give employees discretion and autonomy,

and enable them to do their jobs…

effectively.

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• Is job rotation suitable to just lower level employees, or is it possible to use it at higher levels in the organization?

• What is the difference between job enlargement and job enrichment? Which of these approaches is more useful in dealing with the boredom and monotony of job

specialization?

• Consider a job you held in the past. Analyze the job using the framework of the job characteristics model.

• Does a job with a high motivation potential motivate all employees? Under which conditions is the model less successful in motivating employees?

• How would you increase the empowerment levels of employees?

Discussion Discussion

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OB Toolbox

Tips for Empowering Employees OB Toolbox

Tips for Empowering Employees

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Goal-Setting Theory Goal-Setting Theory

…is one of the most influential and practical methods of motivation.

It has been rated as the most important (of 73 theories), supported in over 1,000 studies, and is used by thousands of organizations.

…is one of the most influential and practical methods of motivation.

It has been rated as the most important (of 73 theories), supported in over 1,000 studies, and is used by thousands of

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SMART Goals SMART Goals

“increasing sales to a

region by 10%”

…when goals are specific,

performance tends to be

higher.

…effective goals are difficult, not easy.

…people with difficult goals outperform those

with easier goals.

…difficult goals, yet based on reality.

…if viewed as impossible, won’t be

motivating.

…goal should contain a statement regarding

when the proposed performance level

will be reached.

SMART goal: “to eliminate 25% of the solid waste from U.S. stores by the year 2009”…Wal-Mart

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Why Do SMART Goals Motivate?

Ex. reduce ship- ment of defective products by 5% by

September.

…tells people not to stop until the goal

is accomplished.

…when people proceed to reach

their goals, they feel a sense of accomplishment.

…Urges people to rethink how they are working.

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When Are Goals More Effective?

…three conditions that contribute to effectiveness.

Employees should receive feedback on progress toward

goal accomplishment.

Employees should have the skills, knowledge, and abilities to reach their goals.

…The degree to which a person is dedicated

to reaching the goal.

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Downsides to Goal Setting Downsides to Goal Setting

Learning Learning decreases decreases Adaptability Adaptability

declines declines

Narrow thinking Narrow thinking

may develop may develop Ethical problems Ethical problems

increase increase

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Management by Objectives Management by Objectives

…A systematic approach to ensure that individual and

organizational goals are aligned is MBO.

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• Give an example of a SMART goal.

• If a manager tells you to “sell as much as you can,” is this goal likely to be effective? Why or why not?

• How would you ensure that employees are committed to the goals set for them?

• A company is interested in increasing customer loyalty.

Using the MBO approach, what would be the

department- and individual-level goals supporting this organization wide goal?

• Discuss an experience you have had with goals. Explain how goal setting affected motivation and performance.

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Performance Appraisal Performance Appraisal

Many companies have a formal, companywide process of providing feedback to employees.

Performance appraisal – a process in which a rater or

raters evaluate the performance of another

employee.

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Performance Appraisal Questions Performance Appraisal Questions

Quarterly or annually?

…give employees feedback;

distribute rewards such as bonuses, pay raises, and

promotions; document termination of employees

Traditionally, the rater has been the supervisor.

360-degree feedback – A system where feedback is gathered from supervisors,

peers, subordinates, and sometimes even customers.

Three characteristics include adequate notice, fair hearing, and judgment

based on evidence.

…see

“notes”

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Absolute versus Relative Ranking Appraisals

Viewed more negatively by employees

Ex. You get an A if you get over 90%.

Ex. You get an A if you are one of the top 10%

of the students in class.

…what most prefer…

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OB Toolbox

Conducting an Effective Performance Appraisal Meeting OB Toolbox

Conducting an Effective Performance Appraisal Meeting

…see

“notes”

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Bias in Performance Appraisals Bias in Performance Appraisals

Unfair Appraisal

If you like or dislike the employee, these feelings may bias the ratings.

Managers often give higher ratings than warranted (i.e. desire to avoid confrontation,

agreeable personality, etc.)…makes ratings relatively useless for determining rewards, etc.

Raters may have stereotypes regarding the gender, race age or another characteristic

of the person being rated.

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• What are the disadvantages of using only supervisors as the rater? What are the disadvantages of using peers,

subordinates, and customers as raters?

• Do you believe that self-appraisals are valid? Why would it be helpful to add self-appraisals to the appraisal process? Can you think of any downsides to using them?

• Why do some managers intentionally give an employee a higher rating than deserved? What are the disadvantages of biased ratings? How could this tendency be prevented?

• Some recommend that performance appraisals be abolished altogether. What do you think about this approach? What are the downsides of eliminating appraisals altogether?

• If your objective is to minimize the effects of rater biases, what type of appraisal system would you design?

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Performance Incentives Performance Incentives

…see

“notes”

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Performance Incentives Performance Incentives

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• Have you ever been rewarded under any of the incentive

systems described in this chapter? What was your experience with them?

• What are the advantages and disadvantages of bonuses compared to merit pay? Which one would you use if you were a manager at a company?

• What are the advantages of using awards as opposed to cash as an incentive?

• How effective are stock options in motivation employees?

Why do companies offer them?

• Which of the incentive systems in this section do the best job of tying pay to individual performance? Which ones do the worst jobs?

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Motivating Employees and Ethics Motivating Employees and Ethics

When goal accomplishment is rewarded, and when

rewards are desirable,

employees will have two basic options:

When goal accomplishment is rewarded, and when

rewards are desirable,

employees will have two basic options:

Work hard to reach goals Work hard to reach goals

Cheat to reach goals Cheat to reach goals

Companies can reduce the temptation to behave unethically

by rewarding ethical behavior.

Also, consider creating multiple levels of goals (for

those that come close to reaching

their goals).

Enforce an ethical code of conduct and withhold

rewards.

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Motivating Employees around the Globe

Goals

perceived as difficult

Motivation Motivation American

employees Chinese

employees

…perhaps because they believe their performance

depends on their effort

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• Do you have any experience with goal setting leading to unethical behaviors?

• Many observers and employees are concerned about the spread between CEO pay and average employee pay. Is it ethical for CEOs to be paid so much more than other employees? Under which conditions would it be

unethical?

• How would you determine whether a certain incentive scheme or a type of performance appraisal could be transferred to a different culture?