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Chapter 10

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Management (MGT)
Chris Bovaird

CHAPTER 10: MOTIVATING AND LEADING EMPLOYEES PSYCHOLOGICAL CONTRACTS IN ORGANIZATIONS -in some ways, a psychological contract resembles a legal contract (signed when buying car or house) but less formal and less rigidly defined -psychological contract: set of expectations held by an employee concerning what he/she will contribute to an organization (contributions) and what the organization will provide the employee (inducements) in return -if either party perceives an inequity in contract, that party may seek a change -may ask for raise, promotion, etc or put forth less effort or look for better job -organization can also initiate change by training workers to improve their skills, transferring them to new jobs, or terminating them -valuable but underpaid employees may perform below their capabilities or leave for better job -overpaying employees who contribute little incurs unnecessary costs -human relations: interactions b/w employers & employees & their attitudes toward one another -foundation of good human relations is a satisfied and motivated workforce -downsizing and cutbacks in Canada during past 10 years has complicated process of managing psychological contracts -now job permanence less likely, so alternative inducements may be needed instead -if psychological contracts are created, maintained and managed effectively, result is likely to be workers who are satisfied and motivated -job satisfaction and high morale can be indefinable in workplace THE IMPORTANCE OF JOB SATISFACTION AND MORALE -job satisfaction: degree of enjoyment that people derive from performing their jobs -satisfied employees are likely to have high morale -morale: overall attitude (+ or -) that employees have toward their workplace -reflects degree to which they perceive that their needs are being met by their jobs Why Businesses Need Satisfied Employees -satisfied workers more likely to work hard and try to make useful contributions to organization -will also have fewer grievances and less likely to engage in negative behaviours -more likely to come to work every day and more likely to remain with organization -ensuring employees are satisfied=more efficient and smooth-running company -dissatisfied workers more likely to be absent due to minor illnesses, personal reasons, or general disinclination to go to work -low morale may also result in high turnover -turnover: percentage of organization’s workforce that leaves and must be replaced -some turnover is natural and healthy way to weed out low performing workers -high levels of turnover have many negative consequences -Canada in 2005: 8% avg turnover rate -retail had highest rate (20.4%) -lowest rate in natural resources and communications/telecommunications MOTIVATION IN THE WORKPLACE -motivation is one part of the managerial function of directing -motivation: set of forces that causes people to behave in certain ways -3 major approaches to motivation in workplace: 1) Classical Theory and Scientific Management -classical theory of motivation: workers are motivated almost solely by money -Frederick Taylor said if workers are motivated by money, then paying them more would prompt them to produce more money—pay and motivate workers better than its competitors -scientific management: breaking down jobs into easily repeated components, and devising more efficient tools and machines for performing them Taylor’s approach 2) Behaviour Theory: The Hawthorne Studies -increasing lighting levels improved productivity but so did lowering lighting levels -raising pay of workers failed to increase their productivity -explanation for lighting phenomenon lay in workers’ response to attention -Hawthorne effect: tendency for workers’ productivity to increase when they feel they’re receiving special attention from management 3) Contemporary Motivation Theories -following Hawthorne studies, more focused attention on importance of good human relations in motivating employee performance -major motivation theories: human resources model, the hierarchy of needs model, two-factor theory, expectancy theory, equity theory, and goal-setting theory The Human-Resources Model: Theories X and Y -Douglas McGregor concluded that managers had radically diff beliefs about how best to use human resources at a firm’s disposal -these beliefs classified into sets of assumptions that he labeled “Theory X” and “Theory Y” -Theory X: management approach based on belief that ppl must be forced (by punishment or rewards) to be productive b/c they’re naturally lazy, irresponsible, and uncooperative -Theory Y: management approach based on belief that people want to be productive b/c they’re naturally energetic, responsible, and co-operative -Theory Y managers more likely to have satisfied, motivated employees -both theories highlight and analyze behaviour of managers in light of their attitudes toward employees Maslow’s Hierarchy of Needs Model -hierarchy of human needs model: (Abraham Maslow) proposed that people have number of diff needs that they attempt to satisfy in their work -these needs classified into 5 basic types and suggested that they’re arranged in hierarchy of importance (Fig 10.1) -Maslow: needs are hierarchical b/c lower-level needs must be met before a person will try to satisfy those on a higher level -physiological needs are necessary for survival (food, water, shelter, sleep) -businesses address this by providing both comfortable working environments and salaries sufficient to buy food and shelter -security needs include needs for stability and protection from unknown -employers off pension plans and job security -social needs include needs for friendship and companionship -making friends at work can help to satisfy social needs as can the feeling that you “belong” in a company -esteem needs include need for status and recognition as well as need for self-respect -respected job titles and large offices are among things that businesses can provide to address these needs -self-actualization needs are needs for self-fulfillment -needs to grow and develop one’s capabilities and to achieve new and meaningful goals -challenging job assignments can help satisfy these needs -Maslow: once one set of needs has been satisfied, it ceases to motivate behaviour -hierarchy varies widely for diff people and diff cultures Two-Factor Theory -Frederick Herzberg concluded that job satisfaction and dissatisfaction depend on 2 factors: -hygiene factors such as working conditions and motivating factors such as recognition -two-factor theory: theory of human relations by Frederick Herzberg that identifies factors that must be present for employees to be satisfied with their jobs and factors that, if increased, lead employees to work harder -hygiene factors affect motivation & satisfaction only if they’re absent or fail to meet expectations; if working conditions improved= ppl not satisfied but become not dissatisfied -if workers receive no recognition for successful work, they may be neither dissatisfied nor satisfied; if recognition provided, they’ll likely become more satisfied -motivating factors lie along continuum from satisfaction to no satisfaction -hygiene factors likely to produce feelings that lie on continuum from dissatisfaction to no dissatisfaction -motivating factors directly related to work that employees actually perform -hygiene factors refer to enviro in which they perform it -this theory suggests that manager should follow a two-step approach to enhancing motivation -works in some professional settings but not as effective in clerical and manufacturing settings -one person’s hygiene factor may be another person’s motivating factor STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE -wide range of programs designed to make jobs more interesting and rewarding and work environment more pleasant -5 most common types of programs: 1) Reinforcement/Behaviour Modification Theory -many companies try to control and even alter or modify, workers’ behaviour through systematic rewards and punishments for specific behaviours -reinforcment: controlling and modifying employee behaviour through use of systematic rewards and punishments for specific behaviour -piecework rewards: when workers are paid for each piece or product completed -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 ppl are learning new behaviours, new skills, or new jobs -rewards can be used less frequently as workers become more adept -such actions contribute to positive employer-employee relationship thus managers generally prefer giving rewards and placing positive value on performance -most managers dislike punishing employees; many couple punishment with rewards for good behaviour 2) Management by Objectives -management by objectives (MBO): system of collaborative goal setting that extends from top of an organization to its bottom -concerned mainly with helping managers implement and carry out their plans -MBO involves managers and subordinates in setting goals and evaluating progress -once program’s set up, first step is establishing overall organizational goals -these goals will ultimately be evaluated to determine the success of the program -collaborative activity—communicating, meeting, counseling, etc—is key to MBO -in addition to acting as planning tool, MBO can serve as program for improving satisfaction and motivation -motivational impact is best advantage of MBO -when employees site down w/ managers to set goals, they learn more about company-wide objectives, feel that they’re part of team and see how they can improve company-wide performance by achieving their own goals -if MBO system is used properly, employees should leave meetings not only with understanding of value of their contributions but also with fair rewards for their performances -should also accept and be committed to moderately difficult and specific goals they’ve helped set for themselves -MBO process begins when VP of sales develops general goals for entire sales force and continues up to VP of sales who gives final approval to overall sales objectives of company 3) Participative Management -participative management: method of increasing employees’ job satisfaction by giving them a voice in how they do their jobs and how the company is managed -participation generally makes employees feel more committed to organizational goals b/c they’ve he
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