Lesson One – Introduction to OB
Organizational behaviour is a field of study devoted to understanding, explaining and ultimately
improving the attitudes and behaviours of individuals and groups in organizations. Example:
Relationship between learning and job performance.
Human resource management takes the theories and principles studied in OB and explore the ‘nuts and
bolts’ applications of those principles in organizations. Example: Structure training programs to promote
Strategic management focuses on the product choices and industry characteristics that affect an
organizations profitability. Example: Firm diversification/Firm profitability.
Management scholar placed heavy emphasis on specialization, coordination, and efficiency.
Scientific management uses scientific methods to design optimal and efficient work processes and tasks.
Bureaucracy is an organizational form that emphasizes the control and coordination of its members
through a strict chain of command, formal rules and procedures, high specialization, and centralized
Human relations movement is a field of study that recognizes that the psychological attributes of
individual workers and the social forces within work groups have important effects on work behaviours.
There has been a shift of focus from structure and control to motivation, satisfaction, leadership, culture
and values towards the organization.
Emphasis on ‘contingency approach’: No one right way of running organizations. Depends (contingent)
upon situation/’context’ and values. OB calls it an integrative model, attempting to tie all major areas
together, via 3 categories: Individual ‘outcomes’, Individual ‘mechanisms’, Individual, group, and
1. Job performance 2. Organizational commitment
1. Job satisfaction 2. Stress 3. Motivation 4. Trust, Justice and Ethics 5. Learning and
Individual, group and organizational context:
1. Personality, cultural values and ability 2. Team characteristics and processes 3. Power and
influence 4. Leadership styles and behaviours 5. Organizational structure 6. Organizational
culture Resource based view is a model that argues that rare and inimitable resources help firms maintain
competitive advantage. Resources value = Rare + Inimitable (History, Small Decisions, Socially complex
History is a collective pool of experience, wisdom and knowledge created by people that benefits the
Numerous small decisions are people making many small decisions every day that are invisible to
Socially complex resources are resources created by people, such as culture, teamwork, trust and
reputation; the source of competitive advantage is known, but the method of replicating the advantage
Five criteria for determining the top corporate cultures:
1. Vision and leadership 2. Cultural alignment, sustainability and measurement 3. Rewards,
recognition and innovative business achievement 4. Corporate financial performance 5.
Corporate social responsibility
Rule of one-eighth is the belief that at best one-eighth, or 12% of organizational will actually do what is
required to build profits by putting people first.
Theory is a collection of verbal and symbolic assertions that specify how and why variables are related as
well as the conditions in which they should be related.
Hypotheses are written predictions that specify relationships between variables.
Correlation is the statistical relationship between two variables; it can be positive or negative and range
from 0 to+- 1. > 0.5 strong correlation, < 0.1 – weak correlation, = 0.3 moderate correlation.
Meta-analysis is a method that combines the results of multiple scientific studies by essentially
calculating a weighted average correlation across studies.
Those business organizations which value OB according to the text have higher chance of
surviving/prospering. There is a 19% higher survival rate for new public companies –”initial public
offerings”. Lesson Two – Perception and individual differences
Perception is the cognitive process of interpreting one’s social environment. It’s how we perceive and
understand other people and their behaviour.
Social cognition is how people perceive one another.
Attention is being consciously aware of something or someone.
Four-stage social cognition process sequence:
1. Selective Attention/Comprehension
Attention ‘in’ (to one’s memory), or ‘out’ (to the external environment); ‘salient stimuli’ stand
out to attract our attention; if late, notice all clocks. Also negative bias (see bad things more
than good stimuli)
2. Encoding and Simplification
Via categorization and ‘schema’ (mental representations). Schema is a mental picture of an
event or object. Encoding process interprets/evaluates events/environment. Interpretations
vary according to: Different info in the schemata used for interpretation. Moods/emotions
influencing our evaluations of others (name of new car < ticket). Recently used cognitive
categories tending to influence current encoding process (hospital visit > illnesses > am I sick?).
Personal differences influencing encoding (depressed individuals think more negatively)
3. Storage and Retention
In our long-term memory. a/ Events memory. b/ semantic memory (general knowledge and
concepts in world). c/ persons memory (old Auntie Annie -90 when I was a kid)
4. Retrieval and Response
Used to make judgments/decisions. Often short-cut to retrieving an old (previously used)
judgment, rather than re-processing all of info. Beware of effect on formal decision-making
A wide variety of managerial activities, organizational processes, and issues are thus affected by
perception on hiring, performance appraisal, leadership, communication, interpersonal influence,
workplace aggression, bullying and antisocial behaviour, as well as overall physical and psychological
Hiring - Implicit recognition is any thought or belief that is automatically activated without conscious
awareness. Using biased decisions during hiring is an example.
Performance appraisal – Faulty perceptions about what constitutes good versus poor performance can
lead to inaccurate performance appraisals which erode work motivation, commitment and loyalty. Managers are advised to use more objectively- based measures as much as possible because subjective
are prone to bias and inaccuracy. Set targets where applicable (sales, cost control etc.). Don’t totally
ignore ‘subjective’ (less quantifiable) factors (pleasant disposition, helpfulness etc.). Training in
Performance Appraisal should help rate employee performance more accurately.
Leadership - Evaluations of leader effectiveness are heavily influenced by ‘schemata’ (mental construct)
of what constitutes good/bad leadership. E.g. Positive feedback, setting specific goals, maintaining
performance standards, assigning specific task to individuals, trying to get group to work as a team.
Negative feedback; performed poorly, no explanation, changing plans and unclear details.
Communication and interpersonal influence – People interpret communication by using schemata
developed through personal past experiences. Avoid the following: Being ‘pushover’ (giving up on idea
rather than defending it). ‘Robotic’ (too rigid, understand point of view). ‘Used car salesperson’ (too
pushy, closed minded, argumentative). ‘Charity case’ (too pleading, desperate).
Workplace aggression – This is often based on employee’s perception of being treated unfairly. So be
careful to avoid encouraging that perception.
Physical and psychological well-being – negativity bias can lead to both physical and psychological
problems. Attempt to avoid the tendency of giving negative thoughts to much attention. Physical
exercise keeps the brain more upbeat (endorfins). Helps keep ageing work-force positive.
Stereotypes and other perceptual errors:
Stereotyping is a set of beliefs about the characteristics of a group. Can be positive or negative: e.g.
Dutch people always clean (Hence Dutch Cleaner). However, more common to encounter negative e.g.
preconceived notions regarding actual/potential abilities, based on age, gender, ethnicity, physical
characteristics, class etc.
There is a four step process of stereotyping:
1. Categorization according to criteria –e.g. ethnicity.
2. Assumption that all that category share same characteristics (e.g all teenagers irresponsible)
3. Interpretation of behaviour according to stereotype (that 18 y.o is late –what do you expect?’)
4. Overestimation of frequency of ‘stereotypical behaviours’ (reinforcing original perception)
When salient info is highly inconsistent with original stereotype, may amend perception e.g. interacting
with highly responsible teenage caregivers/lifeguards; being treated generously by Scottish groups.
A sex-role stereotype is a belief about appropriate roles for men and women. For example, males were
preferred by 2:1 ratio over females for perceived effectiveness in leadership.
Age stereotype is a belief about how ageing is regarded as a badge of honour, the ‘elder’ worthy of
respect (held more knowledge, considered wiser, and ascribed more social status). In modern societies,
ageing has been associated with weakening and dependency. Thus the stereotyping, that older workers are less productive, perform less well, are less reliable. Job satisfaction, involvement, motivation and
commitment all appear to increase with age, according to Susan Rhodes’ meta-analysis of 185 studies. A
different study suggested that age/performance related positively for 25-30 age cohort, then plateaued.
Job experience seemed better related than age to performance. Older workers exhibited less turnover
and less absenteeism too.
Racial/Ethnic/Religious stereotype - Visible minorities according to StatsCan Census data have higher
unemployment rates than others. Worse if you consider visible minorities better qualified than average.
At an organizational level discrimination often subtle, so difficult to confront.
Disability stereotype – Disabled people likewise have higher unemployment rates and lower incomes
than the rest of the population. Inability to perform, or stereotyping?
Perceived causes of observed behaviour. E.g.: manager thinks worker is under-performing, because he’s
lazy; however, truth might be he doesn’t know what to do. Reality usually more complex –e.g. worker
didn’t understand everything, was embarrassed to ask, lost motivation.
Three commonly used dimensions of behaviour:
1. Consensus: Comparing an individual’s behaviour to that of his peers. (high when acts same)
2. Distinctiveness: Comparing behaviour on one task with other tasks. (high performed differently)
3. Consistency: Is an individual’s performance stable or erratic? (high same performance)
Behaviour attributed to external causes when: Managers perceive: High consensus, high distinctiveness,
low consistency (over time). E.g. situation/context is to blame for low performance, not individual
Conversely, personal factors attributed when: Low consensus (other co-workers doing OK), low
distinctiveness (not just one task), high consistency (happens often). E.g. Actor A is evidently ‘goofing
Fundamental attribution bias is ignoring environmental factors that affect behaviour. E.g bus driver
speeding on highway: dangerous driver? Or schedule not giving time to drive within speed limit?
Self-serving bias is taking more personal responsibility for success than failure. E.g salesman lost a
contract: stiff competition blamed, not lack of effort on his part.
Managerial Applications/Implications - Managers tend to disproportionately attribute behaviour to
internal causes. i.e. blame the individual, rather than the situation. This will be demotivating and lead to
wrong decisions: transfers, layoffs, wrong promotions etc. So attribution training valuable for managers.
But also valuable for employees, to combat low self-esteem, reduced motivation, when they’ve been
subjected to biased attribution. Thus attribution realignment proposed. Lesson Three – Effective communication
Communication is the interpersonal exchange of information and understanding. It is the exchange of
info between a sender and receiver, and inference of meaning between the actors involved.
Communication is vital to society, essentiality seen esp. in crises/emergencies, where real-time access to
info/communication makes difference between life and death.
Perceptual model of communication is the process in which receivers create their own meaning. It
includes the following stages:
Encoding (code/language used)
Message (guard 23 can be trusted)
Medium selection (drums, pen/paper, radio)
Decoding (morse code, language translation)
Creating meaning ( new guard OK)
Feedback (express reaction)
Noise (interference with transmission process)
Three barriers to effective communication:
1. Personal – Any individual attribute that hinders communication. (Skill level, how information is
interpreted, trust, stereotypes, ego, poor listening skills, evaluate others, inability to listen with
understanding, non-verbal communication)
2. Physical (Office design open concept, physical noise, closed door, lack of infrastructure, lack of
technology, excess objects such as 3 laptops)
3. Semantic – the study of words (abbreviations, slang, acronyms, jargon which represents
language or terminology that is specific to a particular profession, group or company)
Information richness is the information-carrying capacity of data.
Contingency model depends upon complexity of message/communication/situation. Use lean medium
(bulletin board) when low complexity of interaction between transmitter and recipient is required (low
need to interact). Use rich medium (meeting the recipient face to face) when important to interact. If it’s
a complex situation, use as rich of an interaction as possible.
Interpersonal communication quality within an organization is important. There are three types of
interpersonal communication. Assertive style is expressive and self-enhancing behaviour but does not
take advantage of others. Aggressive style is expressive and self-enhancing behaviour but takes
advantage of others. Non-assertive style is timid and self-denying behaviour.
Sources of non-verbal communication
Non-verbal communication are messages sent or received through means other than spoken words. Sources include:
Body gestures for example, snoring in class (bored). Crying, screaming, winking (generally
initiating). Shaking or nodding head (generally feedback).
Touch (symbol of like)
Listening is actively decoding and interpreting verbal messages. The different types of listening styles
Appreciative (relaxed manner)
Empathetic (focus on emotions/body lang)
Comprehensive (organizing thoughts)
Discerning (understand main and important points)
Effective listening can be achieved using the following methods. Give speaker full attention, withhold
judgment till end, listen for central ideas, focus on content, not style of presentation.
Globalization - In past couple of decades, Asia has reaped economic benefits of getting “wired”. In next
couple of decades, Africa’s turn? (1 billion waiting). Organizational implications include: Lots more
potential for remote work locations, call centres. Beware: Unlawful access to data bases, loss of
managerial control thru’ decentralization, scams, major systemic frauds.
Enormous business opportunities in Asia/Latin America/Africa/Middle East (emerging economies)
More caveats - Info overload, time wastage (surfing, reading spam etc.), overuse -> superficiality
Informal communication channel does not follow the chain of command or legitimate organizational
Grapevine is an unofficial communication system that follows no chain of authority or formal structure.
It is usually faster, but may be less accurate.
Liaison individuals are those who consistently pass along grapevine information to others.
Organizational moles are those who use the grapevine to enhance their power and status. More
powerful organizational actors generally have greater access to information. Lesson Four – Behavioural outcomes
Split into three categories: task performance, citizenship behaviour and counterproductive behaviour.
Task performance and citizenship behaviour are beneficial and therefore are seen as positive where as
counterproductive behaviour is negative.
Job performance are employee behaviours that contribute either positively or negatively to the
accomplishment of organizational goals.
Task performance are employee behaviours that are directly involved in the transformation of
organizational resources into the goods or services that the organizational produces.
Routine task performance are well-known or habitual responses by employees to predictable task
Adaptive task performance are thoughtful responses by an employee to a unique or unusual task
Job analysis is a process by which an organization determines requirements of specific jobs.
The national occupational classification is a national database of occupations in Canada, organizing over
30000 job titles into 520 occupational group descriptions.
Citizenship behaviour is defined as voluntary employee behaviours that contribute to organizational
goals by improving the context in which work takes place.
Interpersonal citizenship behaviour is going beyond normal job expectations to assist, support and
develop co-workers and colleagues.
Helping is assisting co-workers who have heavy workloads, aiding them with personal matters, and
showing new employees the ropes when they are first on the job.
Courtesy is sharing important information with co-workers.
Sportsmanship is maintaining a positive attitude with co-workers through good and bad times.
Organizational citizenship behaviour is going beyond normal expectations to improve operations of the
organization as well as defending the organization and being loyal to it.
Voice is when an employee speaks up to offer constructive suggestions for change, often in reaction to a
negative work event.
Civic virtue is participation in the company operations at a deeper than normal level through voluntary
meetings, readings and keeping up with news that affects the company.
Boosterism is positively representing the organization when in public. Counterproductive behaviour
Counterproductive behaviour is employee behaviours that intentionally hinder organizational goal
accomplishment. Minor interpersonal: Gossiping and incivility. Major interpersonal: Harassment and
abuse. Minor Organizational: Wasting resources, substance abuse. Major organizational: Sabotage and
Property deviance are behaviours that harm the organizations assets and possessions.
Sabotage is purposeful destruction of equipment, organizational processes, or company products.
Theft is stealing company products or equipment from the organization.
Production deviance is intentionally reducing organizational efficiency of work output.
Wasting resources is using too many materials or too much time to do little work.
Substance abuse is the abuse of drugs or alcohol before coming to work or during the job.
Political deviance are behaviours that intentionally disadvantage other individuals.
Gossiping are casual conversations about other people in which the facts are not confirmed as true.
Incivility is communication that is rude, impolite, discourteous and lacking in good manners.
Personal aggression is hostile verbal and physical actions directed toward other employees.
Harassment is unwanted physical contact or verbal remarks from a colleague.
Abuse is employee assault or endangerment from which physical or psychological injuries may occur.
Management by objectives (MBO) is a management philosophy that bases employee evaluations on
weather specific performance goals have been met. Agreement between manager and subordinate as
to goals/objectives for specified period. Usually specific and quantifiable. Important that objectives are
not imposed, but ‘consensual’.
Behaviourally anchored rating scales (BARS) is the use of examples of critical incidents to evaluate an
employee’s job performance behaviours directly. Focuses on behaviours themselves, rather than results.
Generally supervisors score ranking from 1-5, over a number of salient activities.
360-degree feedback is a performance evaluation system that uses the ratings provided by supervisors,
co-workers, sub-coordinates, customers and the employees themselves. Attempt to overcome potential
subjective/objective problem, by getting others to contribute to evaluation. Often peer group
evaluation. Withdrawal behaviour
Exit is a response to a negative work event by which one becomes often absent from work or voluntarily
leaves the organization.
Neglect is a passive, destructive response to a negative work event in which ones interest and effort in
Psychological withdrawal is mentally escaping the work environment.
Daydreaming is a form of psychological withdrawal in which ones work is interrupted by random
thoughts or concerns.
Socializing is a form of psychological withdrawal in which one verbally chats with co-workers about non-
Looking busy is a form of psychological withdrawal in which one attempts to appear consumer with
work when not performing actual work tasks.
Moonlighting is a form of psychological withdrawal in which employees use work, time and resources to
do non-work related activities.
Cyber loafing is a form of psychological withdrawal in which employees surf the internet, email and
instant message to avoid doing work related activities.
Physical withdrawal is a physical escape from the work environment.
Tardiness is a form of physical withdrawal in which employees arrive late to work or leave work early.
Long breaks is a form of physical withdrawal in which employees take longer than normal lunches or
breaks to spend less time at work.
Missing meetings is a form of physical withdrawal in which employees neglect important work functions
while away from the office.
Absenteeism is a form of physical withdrawal in which employees do not show up for an entire day of
work. Lesson Five – Commitment/Attitudes, Moods and Emotions
Organizational commitment is an employee’s desire to remain a member of an organization.
Withdrawal behaviour are employee actions that are intended to avoid work situations.
There are three types of commitment: Affective, continuance and normative.
Affective commitment is an employee’s desire to remain a member of an organization due to a feeling
of emotional attachment. Like the place, friends there (‘socialization!’), enjoy the work etc.
Continuance commitment is an employee’s desire to remain a member of an organization due to an
awareness of the costs of leaving. Economic/Cost based.
Normative commitment is an employee’s desire to remain a member of an organization due to a feeling
of obligation. For example a debt is owed to the boss so you try to stay to cover up the loss. No
guarantee of lifelong employment; why would remaining employees feel morally committed? They may
be next to be fired! To encourage normative commitment, organizations need to invest in enhancing
their credibility: valuable programmes of training and development; genuine plans for promotion.
Focus of commitment are the people, places and things that inspire a desire to remain a member of an
organization. Focus of commitment may change in career term. At end may be affective (go to work to
Social influence model is a model that suggests that employees with direct linkages to co-workers who
leave the organization will themselves become more likely to leave.
Erosion model is a model that suggests that employees with fewer bonds with co-workers are more
likely to quit the organization.
Continuance commitment is less strong than others, since employee is weighing costs/benefits of
staying or leaving. In U.K. younger professional workers not expected/expecting to stay long, ‘cos better
experience and prospects of moving up, if change jobs every 2-3 years. Called ‘upward spiral mobility’. In
Japan, traditionally expected to join and stay.
Embeddedness is an employee’s connection to and sense of fit in the organization and community.
Embeddedness factor will temper urge to leave –house prices may make relocating financially
worrisome. Org’n may ‘bribe’ employees (buy commitment) by offering subsidized housing/mortgage,
which lost if leave.
Text identifies 3 facets of embeddedness: Links to people (connections), Fit (with job/community),
Sacrifice (costs of leaving). Suggests these can operate at both levels: Organization and community. Job satisfaction
Job satisfaction is a pleasurable emotional state resulting from appraisal of one’s job or job experiences:
represents how one feels/thinks about job.
Values are things that people consciously or unconsciously want to seek or attain.
Value-percept theory is a theory that argues that job satisfaction depends on whether the employee
perceives that his or her job supplies those things that he or she values. V want– Vhave= Vimportance
Satisfaction is connected to values associated with job/work. E.g.
1. PAY (fair, given the job, & secure)
2. PROMOTIONS (depending on ambition –not everyone values them equally! Do you?)
3. SUPERVISION (fair, consistent, trustworthy –valuable, likeable)
4. CO-WORKERS (similar and supportive work ethic; helpful/enjoyable peer group dynamics)
5. WORK ITSELF (sense of achievement, creativity, autonomy, stimulation, utilization of abilities)
6. ALTRUISM (ability to help others –cf ‘citizenship’)
7. STATUS (standing –how much job-related? how much other e.g. professional; academic;
language; ethnicity; gender; family; residential; location; economic/financial)
8. ENVIRONMENT (impact on it, in addition to degree of comfort/safety at work –recall Bhopal
leak, BP/Gulf Spill)
Satisfaction correlations show that the highest by far for work itself High/strong for supervision and co-
worker, Moderate for promotion, Lowest for pay! Text suggests we don’t think about our pay all the
Pay satisfaction is employees feelings about the compensation for their jobs.
Promoton satisfaction is employees feelings about how the company handles promotions.
Supervision satisfaction is employees feelings about their boss, including his or her competencu,
communication and personality.
Co-worker satisfaction is employees feelings about their co-workers, including their abilities and
Satisfaction with work itself is employes feelings about their actual work tasks.
Job characteristics theory
Job characteristics theory argues that five core characteristics (variety, identity, significance, autonomy
and feedback) combine to result in high levels of satisfaction with the work itself.
Variety is the degree to which a job requires different activities and skills. Identity is the degree to which a job offers completion of a whole identifiable piece of work.
Significance is the degree to which a job really matters and impacts society as a whole.
Autonomy is the degree to which a job allows individual freedom and discretion regarding how the work
is to be done.
Feedback is the degree to which the job itself provides information about how well the job holder is
Research suggests that three critical psychological states make work satisfying.
Meaningfulness of work is a psychological state indicating the degree to which work tasks are viewed as
something that counts in the employees system of philosophies and beliefs.
Responsibility of outcomes is a psychological state indicating the degree to which employees feel they
are key drivers of the quality of work output.
Knowledge of results is a psychological state indicating the extent to which employees are aware of how
well or how poorly they are doing.
Knowledge and skill is the degree to which employees have the aptitude and competence needed to
success on their job.
Growth need strength is the degree to which employees desire to develop themselves further.
Job enrichment is when job duties and responsibilities are expanded to provide increased levels of core
Least satisfying jobs often most routine/repetitive. So seek out individuals with low creative/stimulation
needs (e.g. “mentally challenged”). Automate process entirely (vending machines; continuous process
engineering e.g. plastics, oil refining etc). Increase use of robots to replace/assist in most dirty/boring
Moods more generalized feelings, potentially last long time, not directed at particular person/situation.
Bad can be intense (depressed, suicidal) or mild (bored); Good can be intense (euphoric) or mild
(content). More intense mood, more engaged.
Pleasantness is the degree to which an employee is in a good versus bad mood.
Engagement is how active or sluggish a mood is.
Quite intense feelings, often short-term, directed at person/situation. Positive: joy, pride, relief, hope,
love, compassion. Negative: anger, anxiety, fear, guilt, shame, envy, sadness, disgust.
Emotional labour is when employees manage their emotions to complete their job duties successfully. Emotional contagion is the idea that emotions can be transferred from one person to another.
Short term effect in organizations
Per text, moods/emotions may explain daily fluctuations in job satisfaction, but generally short-term.
Long-term factors remain V I S A F for work; Variety, identity, significance, autonomy, feedback. Pay,
promotion, supervision, co-worker interaction, for rest of job satisfaction.
Impact of Job Satisfaction? Moderate positive effect on job performance, in all 3 categories: Task
performance, citizenship behaviour, and reduction of counterproductive behaviour. Strong positive
effect on organizational commitment, for emotional and normative components. However, no
correlation with continuance commitment.
Improvement Potential for Satisfaction? Take ‘satisfaction survey’ and use results to improve areas
which indicate problems. E.g. ‘work too boring’ -> job enrichment initiative (or lots of investment in
Robotics). Generally recognized survey tools: Job Descriptive Index (JDI). Job in General Scale (JIG).
JDI is a facet measure of job satisfaction that assesses an individual’s satisfaction with pay, promotion
opportunities, supervision, co-workers, and the work itself. Lesson Six – Motivation
Motivation is a set of energetic forces that determine the direction, intensity and persistence of an
employees work effort.
Expectancy theory is a theory that describes the cognitive process employees go through to make
choices among different voluntary responses. Formally, expectancy is a subjective probability (e.g. 50%,
or .5) assigned to the chances that a specified amount of effort (e.g. 20 hours study) will result in a
specific level of performance (e.g. getting a B grade in exam).
Self-efficacy is the belief that a person has the capabilities needed to perform the behaviours required
on some task. All 4 will affect how well we analyse task requirements as employees, and how we assess
our available resources (personal and situational). All will come together to generate our sense of self-
efficacy. It is influenced by:
Past accomplishments is the level of success or failure with similar job tasks in the past.
Vicarious experiences are observations of and discussions with others who have performed some work
Verbal persuasion are pep talks that lead employees to believe that they can get the job done.
Emotional cues are positive or negative feelings that can help or hinder a task accomplishment.
Instrumentality is the belief that successful performance will result in the attainment of some outcomes.
Low instrumentality at work: e.g. only 35% felt that good performance was instrumental in obtaining
Valence is the anticipated value of the outcome. How valuable is the outcome to the employee.
Needs analysis, Maslow’s heritage. Abraham Maslow (1940s!) posited a hierarchy of needs, not just for
employees, but for all humanity, as follows: Self-Actualization/Self Esteem/Autonomy,
Responsibility/Love, Belongingness, Affiliation/Physiological, Safety, Security. Maslow did not expect
many individuals to attain highest level in hierarchy. Presumption for some time that lower level needs
had to be satisfied before individual would address him/herself to higher.
Intrinsic motivation is to obtain a reward from feeling of job well done. Skill and knowledge
development; self-expression; enjoyment; lack of anxiety/frustration/boredom.
Extrinsic motivation is to receive reward apart from feeling of job well done, e.g. pay, promotion, status
enhancement/recognition etc. Need for external motivators pretty universal (most of us need to get
paid!). Examples: praise/recognition; time off; security; promotion; perks; lack of
Goal setting theory is a theory that views goals as the primary drivers of the intensity and persistence of
effort. If make goals challenging but not impossible, get best response from employees –too hard demoralizes. Theory is that ‘assigned’ goal may trigger employee to ‘internalize’ goal as her/his own,
which will translate into creating employee strategies to address primary task.
The three moderators are
1. Feedback’ –letting employee know how well s/he is achieving assigned goal
2. Task complexity –goal setting works better for simpler tasks
3. Goal commitment –higher the employee commitment, more effective the goal setting
Strategies to promote goal commitment are:
Rewards - specific to goal attainment (bonus)
Publicity - may create social pressure)
Support –from supervisors, if goal seen as tough
Participation –some level of collaboration, to promote goal ‘ownership’
Resources –ensure they’re available, and remove constraints.
SMART goals is an acronym that stands for specific, measureable, achievable, results-based, time-
Equity theory suggests that employees create a mental image of the outcomes they receive for their job
inputs, in comparison to other individuals. Outcomes not just $, but include status (size/prestige of
company car/plane/office space/appellation –’V.P. Finance’); plus even intrinsic rewards (book/painting
If ‘balanced’, employee maintains commitment to effort. If ‘under-reward inequity’, empl. registers
‘equity distress’. May try to increase outcomes, e.g. by asking boss for a raise/2 weeks paid leave. Or
reduce inputs by working less hard (‘reducing effort’). -Note link to psych’l withd’l. If feel
overcompensated for relative to inputs, compared to ‘significant other’, equity distress registers as
‘over-reward inequity’! May work harder, return $ (bank execs’ bonus).
Cognitive distortion is a re-evaluation of the inputs an employee brings to a job, often occurring in
response to equity distress.
Comparison types: 1. Job –same job in same org’n 2. Company –same org’n, but different job 3.
Occupational –(esp. professional): same job, (e.g. internal auditor), different org’n 4. Educational –e.g.
other MBA’s 5. Age –e.g. other 30-34 y.o.s