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Chapter 6

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Queen's University
COMM 151
Christopher Miners

COMM 151 – Chapter 6 Notes – Motivation in Practice Money as a Motivator  Pay is motivational for people who have strong lower-level needs  Expectancy Theory states that pay satisfies a variety of needs therefore it should be a good motivator to the extent that it is clearly tied to performance  Pay for performance plans have increased performance and lower turnover  Piece Rate: A pay system in which individual workers are paid a certain sum of money for each unit of production completed – incentive = make more units, get more money  Wage incentive plans: Various systems that link pay to performance on production jobs  Usually leads to a big increase in productivity  Problems with Wage Incentive a) Lowered Quality  Increase productivity at the expense of quality, want to make more units b) Differential Opportunity  Workers will differ in the expectancy that they can produce at a level  If the supply of raw materials or equipment varies in different workplaces, some workers will be at a disadvantage under an incentive system c) Reduced Cooperation  Decrease cooperation among workers and team work due to the pressure to produce as much as possible to earn a higher pay d) Incompatible Job Design  The way jobs are designed can make it difficult to implement wage incentives  On an assembly it is difficult to reward individual contribution to productivity  When working in teams, as the size of the team increases the relationship between an individual’s productivity his/her pay decreases e) Restriction of Productivity: The artificial limitation of work output that can occur under wage incentive plans  Workers feel that increased productivity due to the incentive will lead to reduction in the workforce so they limit their production performance  Merit pay plans: Systems that attempt to link pay to performance on white-collar jobs  CEO’s are paid bonus when firm is profitable  Managers evaluate employees via rating scale or written description to award bonuses  Individuals that see a strong link between rewards & performance tend to perform better  Merit pay used to attract and retain employees as alternatives to wage increases  This method is ineffective: Employees don’t see correlation between pay & performance  Problems with Merit Pay Plans  Low Discrimination  Managers unable to differentiate between good and poor performers  Managers feel that they have to rate their employees as equals performers in order to be fair – some employees are over or under rewarded  Small Increases – too small to be effective motivators  Merit is abandoned when inflation occurs or when they encounter economic difficulties – when motivation is needed, they don’t give it  Organization fails to communicate how much it has raised merit  Lump sum bonus: Merit pay that is awarded in a single payment and not built into base pay 1 COMM 151 – Chapter 6 Notes – Motivation in Practice  Pay Secrecy  No means of comparing the merit pay to other employees even if distributed equally  Employees “invent” salaries therefore reduce satisfaction and motivation as peers underestimate the pay of their superiors while managers overestimate Using Pay to Motivate Teamwork – Refer to pg. 191  Firms replaced or supplemented individual incentive pay with plans designed to foster more cooperation and teamwork – orgs choose pay plans that supplement their strategic needs  Profit Sharing: The return of some company profit to employees in the form of cash or bonus a retirement supplement – based on years of service, base pay, and performance  Unlikely that this is highly motivational  Too many factors can affect profits example the economic conditions  Works best for smaller firms where it is easier to see one’s actual impact on profit  Employee Stock Ownership Plans (ESOPs): Allow employees to own a set of a company’s shares and provide employees with a stake in the company’s future earnings and success  They attract and retain talent, motivate employee performance, focus their attention, etc.  Creates a culture of ownership and improves employee retention & profitability  Align employees goal w. the interest of the organization because they want org to do well  Best for smaller firms  Gain sharing: A group pay incentive plan based on productivity or performance improvements over which the workforce has some control  Include reductions in labour, materials or supplies  When costs decrease company pays a monthly bonus so the employees receive a gain  Builds trust and commitment to the formulas to calculate the gains  Includes the entire workforce  Aligns company goals  Skill-Based Pay: People are paid according to the number of job skills they have acquired  Encouraging people to learn a variety of tasks  More skills = more pay  Encourage employee flexibility in tasks on self-managed teams  this gives them a broader picture of work process  High training costs since people are learning so many new things  Keeps employees on task Job Design as Motivator  Using job design as a motivator represents an attempt to capitalize on intrinsic motivation  The goal of job design is to identify the characteristics that make some tasks more motivating than others and capture these characteristics in the design of other jobs 2 COMM 151 – Chapter 6 Notes – Motivation in Practice Traditional Views of Job Design  In industrial revolution, the design of non-managerial jobs was job simplification  Complex machinery with an uneducated, untrained workforce recognized that specialization was the key to efficient productivity – simple jobs = anyone can do it  scientific management  Motivation strategies included close supervision and piece-rate pay Job Scope and Motivation  Job scope: The breadth and depth of the job  Breadth: Refers to the number of different activities performed on a job  Depth: The degree of discretion or control a worker has over how work tasks are performed  Broad jobs require workers to do a number of different tasks while deep jobs emphasize freedom in planning how to do the job  Jobs with great breadth and depth are called high-scope, low breadth and depth are low-scope  Professor is a high scope job while assembly line is a low-scope job due to the single task  Maslow’s need Hierarchy and ERG theory indicate that people can fulfill higher order needs by performing high scope jobs  Expectancy theory says that high scope jobs provide intrinsic motivation if the outcomes derived from such jobs are attractive  One way to increase the scope is to through stretch assignments that offer employees challenging opportunities to broaden their skills and work on tasks with new responsibilities  Job rotation: Rotating employees to different tasks & jobs in an organization to increase scope  Effective for developing new skills and prepares employees for future roles Job Characteristics Model – Refer to PowerPoint and pg. 194  Core Job Characteristics 1. Skill Variety: Opportunity to a variety of job activities using various skills and talents 2. Autonomy: Freedom to schedule one own work activities and decide work procedures 3. Task Significance: Impact the job has on other people – where does my job fit in? 4. Task identity: The extent to which a job involves doing a complete piece of work from beginning to end 5. Feedback: Information about the effectiveness of one’s work performance  Job Diagnostic Survey (JDS) created to measure the core characteristics of jobs  Report the amount of various core characteristics contained in their jobs  Reveal managerial jobs have more of above characteristics than keypunching jobs   Critical Psychological States  Work will be more motivating when it is meaningful, when the worker feels responsible, for outcomes, and when the worker has knowledge about their work progress  When an individual uses a variety skills to do “whole” job, he/she perceives work to be meaningful; have autonomy, feel responsible for outcomes; feedback about performance, they will have knowledge of work progress 3 COMM 151 – Chapter 6 Notes – Motivation in Practice  Outcomes  Presence of the psychological states leads to outcomes – importantly, intrinsic motivation  When an individual is truly in control of job and provides good feedback about the performance, the key prerequisites for intrinsic motivation are present  Outcomes include increased productivity and reduced absenteeism and turnover  Moderators  Jobs in high motivating potential don’t always lead to favourable outcomes so there should be moderator variables that intervene between job characteristics and outcomes  One of these moderators is the job-relevant knowledge and skill of the worker  Workers w. weak knowledge/skill won’t respond well to jobs with high motivating potential since such jobs will be to demanding for them  Another moderator is Growth need strength – The extent to which people desire to achieve higher order need satisfaction by performing their jobs  People with high growth needs should be more responsive to more challenging work  Workers that are dissatisfied with context factors about the job (ex. pay) will be less responsive to challenging work than those satisfied  Research Evidence  Jobs characteristics are measured by JDS  Workers respond more favourably to jobs that are higher in motivational potential  Found that all 5 core job characteristics were positively related to the outcomes in model as well as others like supervisor, co-worker, promotion, and compensation sat
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