MGTA03 CHAPTER 10.docx

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26 Apr 2012
MGTA03 CHAPTER 10 11/24/2011 8:18:00 AM
Psychological contract: the set of expectations held by an employee
concerning what he or she will contribute to an organization
(contributions) and what the organization will provide the employee
(inducements) in return
Less formal and less rigidly defined than a legal contract
If either party perceives an inequity in the contract, that party may
seek a change
o Employee: ask for a pay raise/promotion/bigger office, or
seek another job
o Organization: train workers, transfer them to new jobs, firing
Because of the downturn in the Canadian economy, organizations
are more likely to provide lavish benefits packages as opposed to
assurance of job permanence as inducement
Human relations: interactions between employers and employees and their
attitudes toward one another
Foundation of good HR is a satisfied and motivated workforce
Job satisfaction: the pleasure and feeling of accomplishment employees
derive from performing their jobs well
Satisfied workers: if they enjoy their work, they are relatively
satisfied likely to have high morale
o Have many rewards:
o More likely to work hard and try to make useful contributions
to the organization
o Have fewer grievances and less likely to engage in negative
o More likely to come to work everyday and remain with the
o By ensuring satisfied workers, managers gain an efficient and
smooth-running company
Dissatisfied workers: if they do not enjoy their work, they are
relatively dissatisfied
o Have many costs:
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o Far more likely to be absent due to minor illnesses, personal
reasons, or a general disinclination to go to work
Morale: the generally positive or negative mental attitude of employees
toward their work and workplace
The degree to which they perceive their needs are being met by
their jobs
Determined by job satisfaction, satisfaction with: pay, benefits, co-
workers, promotion opportunities
Low morale may result in high turnover
Turnover: the percentage of an organization’s workforce that
leaves and must be replaced
o Normal turnover weeds out low-performing workers
o High levels result in numerous vacancies, disruption in
production, decreased productivity, and high retraining costs
Motivation: the set of forces that causes people to behave in certain ways
One part of the managerial function of directing
Managers must understand differences in behaviour and the
reasons for them
Classical theory of motivation: a theory of motivation that presumes that
workers are motivated almost solely by money
Frederick Taylor, The Principles of Scientific Management:
o Proposed a way for both companies and employees to benefit
form this widely accepted view of the workplace
o If workers are motivated by money, then paying them more
would prompt them to produce more
o The firm that analyzed jobs and found ways to better perform
them would be able to produce goods more cheaply, make
higher profits, and thus pay (and motivate) workers better
than its competitors
o This approach is known as scientific management
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Scientific management: breaking down jobs into easily repeated
components, and devising more efficient tools and machines for
performing them
Hawthorne effect: the tendency for workers’ productivity to increase when
they feel they are receiving special attention from management
Increasing lighting levels improved productivity, but so did dimming
the lights; increasing pay failed to increase productivity
Managers have very different beliefs about how best to use the
human resources at a firm’s disposal
McGregor favoured Theory Y beliefs
He argued Theory Y managers are more likely to have satisfied,
motivated employees
Highlights behaviour of managers in light of their attitudes towards
Theory X: a management approach based on the belief that people must be
forced to be productive because they are naturally lazy, irresponsible, and
5 key assumptions with Theory X:
1. People are lazy
2. People lack ambition and dislike responsibility
3. People are self-centred
4. People resist change
5. People are gullible and not very bright
Theory Y: a management approach based on the belief that people want to
be productive because they are naturally energetic, responsible, and co-
5 key assumptions with Theory Y:
1. People are energetic
2. People are ambitious and seek responsibility
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