Psychological contracts in organizations
• Psychological contract—is the set of expectations held by an employee
concerning what he or she will contribute to an organization and what the organization
will provide the employee in return
• All organizations face basic challenge of managing psychological
contracts—they want value from employees and give employees the right incentives
• Valuable but underpaid employees may perform below their capabilities
or leave for better jobs
• But overpaying employees who contribute little incurs unnecessary costs
• The foundation of a good human relations—is a satisfied and motivated
workforce
The importance of job satisfaction and morale
• Job satisfaction—the pleasure and feeling of accomplishment employees
derive from performing their jobs well—if they enjoy their work, they are relatively
satisfied, but if not, they are relatively dissatisfied
• Satisfied employees are likely to have high morale—the generally
positive or negative mental attitudes of employees toward their work and workplace
Why businesses need satisfied employees
• When workers are enthusiastic and satisfied—they are more committed to
their work and organization, and are more likely to work harder and make useful
contributions to the organization
• Probably have fewer frievances and are less likely to engage in negative
behaviours and are more likely to come to work everyday and stay remain with the
organization
• Dissatisfied workers are more likely to be absent due to minor illnesses,
personal reasons or a general disinclination to go to work
• Low morale may result in high turnover—the percentage of an
organizations workforce that leaves and must be replaced
• Some turnover is necessary and healthy way to weed out low performing
workers, but high levels have many negative consequences—decreased productivity,
disruption in productionMotivation in the workplace
• Employee motivation is even more critical to a firms success
• Motivation—is the set of forces that causes people to behave in certain
ways
Classical theory and scientific management
• Classical theory of motivation—according to this workers are motivated
almost solely by money
• Scientific management—breaking down jobs into easily repeated
components and devising more efficient tools and machines for performing them
• Reasoned that if workers are motivated by money, then paying them more
would prompt them to produce more
Behaviour theory: the hawthorn studies
• Results from the experiment—was that increasing lighting levels
improved productivity, but so did lowering lighting levels
• Raising the pay of workers failed to increase their productivity
• The explanation for the lighting phenomenon lay in workers response to
attention—they determined that any action on the part of the management that made
workers believe they were receiving special attention caused worker productivity to rise
• Hawthorne effect—the tendency for worker’s productivity to increase
when they feel they are receiving special attention from management
Contemporary motivation theories
• The human resources model: theories X and Y—researcher concluded that
managers had radically different beliefs about how best to use the HR at a firms
disposal—he classified them into theories X and Y
• Theory X—management approach based on the belief that people must be
forced to be productive because they are naturally lazy, irresponsible and
uncooperative—so they think to either punish or reward to be productive
• Theory y—a management approach based on the belief that people want
to be productive because they are naturally energetic, responsible and cooperative • Argued that theory Y managers are more likely to be satisfied, motivated
employees
• Theory x and y distinctions are simplistic and don’t offer concrete basis
for action, their value lies primarily in their ability to highlight and analyze the behaviour
of managers in light of their attitudes toward employees
• Maslow’s hierarchy of needs models—theory of motivation describing five
levels of human needs and arguing that basic needs must be fulfilled before people work
to satisfy higher level needs—he classified these into 5 basic types
• Physiological needs—those necessary for survival—food, water,
shelter and sleep
• Security needs—need for stability and protection from the
unknown— so pension plans and job security
• Social needs—need for friendship and companionship
• Esteem needs—need for status and recognition as well as the need
for self respect—eg. Respected job titles and large offices
• Self actualization needs—needs for self fulfillment—include need
to grow and develop one’s capabilities and to achieve new and meaningful goals
• According to maslow—once one set of needs has been satisfied, it ceases
to motivate behaviour
• Two factor theory—theory of human relations developed by Frederick
Herzberg that identifies factors that must be present for employees to be satisfied with
their jobs and facts that if increased lead employees to work harder
• The two factors were—hygiene factors—such as working
conditions and motivating factors—such as recognition for a job well done
• According to two factor theory—hygiene factors affect motivation
and satisfaction only if they are absent or fail to meet expectations
• Motivating factors lie on a continuum from satisfaction to no
satisfaction
• Hygiene factors on the other hand are likely to produce feelings
that lie on a continuum from dissatisfaction to no satisfaction • While motivating factors are directly related to teh work that
employees actually perform hygiene factors refer to the environment in which
they perform it
• This theory suggests that managers should follow a two step
approach to enhancing motivation—they must ensure that hygiene factors are
acceptable and they must offer motivation factors
Strategies for enhancing job satisfaction and morale
Reinforcement/behaviour modification
• Many companies try to control or modify worker’s behaviours through
systematic rewards and punishments for specific behaviours
• So they define specific behaviours they want their employee to exhibit and
specific behaviours they want to eliminate—then they try to shape employee behaviour
by linking reinforcement with desired behaviours and punishment with undesired
behaviours
• Reinforcement—controlling and modifying employee behaviour through
the use of systematic rewards and punishments for specific behaviours
• When rewards are tied directly to performance they serve as positive
reinforcement
• Punishment is designed to change behaviour by presenting people with
unpleasant consequences if they fail to change in desirable ways
• Extensive rewards work best when people are learning new behaviours,
new skills or new jobs—as workers become more adept, rewards can be used less
frequently—most managers prefer giving rewards
Management by objectives
• Is a system of collaborative goal setting that extends from the top of an
organization to its bottom
• Mainly concerned with helping managers implement and carry out their
plans
• MBO involves managers and subordinates in setting goals and evaluating
process
• Once program is set up, the first step is establishing overall organizational
goals—which will be evaluated to determine the success of the program • Collaborative activity is the key to MBO, ot can also serve as a program
for improving satisfaction and motivation
• Motivational impact is the biggest advantage of MBO—when employees
sit down with managers to set goals they learn more about company wide objectives, feel
that they are important and see how they can improve company wide performance
• If an MBO system is properly used, employees should h
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