BUSINESS CUSTOM 2/E VOL. 1 Chapter 10 Readings (very detailed and helpful)

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26 Feb 2011
Chapter 10: Motivating and leading employees
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
oIf psychological contracts are created, maintained, and managed effectively, the result is
likely to be works who are satisfied and motivated…on the other hand, poorly managed
psychological contracts may result in dissatisfied, unmotivated workers
Human relations: interactions between employers and employees and their attitude
toward one another
Job satisfaction: the pleasure and feeling of accomplishment employees derive from
performing their jobs well
Morale: the generally positive or negative attitude of employees toward their work and
Why businesses need satisfied employees:
By ensuring that employees are satisfied, management gains a more efficient and smooth-
running company
Satisfied workerswork hard and try to make useful contributions to the organization
Dissatisfied workers…likely to be absent due to minor illnesses, personal reasons, or a
general disinclination to go to work
Low morale results in high turnover
oTurnover: the percentage of an organizations workforce that leaves and must be replaced
Motivation: the set of forces that causes people to behave in certain ways
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Classical Theory and Scientific Management:
oClassical theory of motivation: a theory of motivation that presumes that workers are
motivated almost solely by money
oScientific management: breaking down jobs into easily repeated components, and
devising more efficient tools and machines for performing them
Frederick Taylor (the scientific management), an industrial engineer wrote The
Principles of Scientific Management (1911) and proposed that if workers are
motivated by money…then paying them more would prompt them to produce
more…time-and-motion studies were performed for ways of better efficiency
Behaviour Theory: The Hawthorne Studies
In 1952, a group of Harvard researchers began a study at the Hawthorne Works of
Western Electrictheir intent is to examine the relationship b/w changes in the physical
environment and worker output, with an eye to increasing productivity
Increasing lighting levels improved productivity but so did lowering lighting levels but
raising pay didnt increase productivity
oHawthorne effect: the tendency for workers; productivity to increase when they feel they
are receiving special attention from management
Contemporary Motivation Theories:
The human-resource model: theories X and Y
oBehavioural scientist Douglas McGregor concluded that managers had radically different
beliefs about how best to use the HR at a firms disposal
oTheory X: a management approach based on the belief that people must be forced to be
productive because they are naturally lazy, irresponsible, and uncooperative
oTheory Y: A management approach based on the belief that people want to be productive
because they are naturally energetic, responsible, and co-operative
McGregor favoured theory Y and believed that managers are more likely to have
satisfied, motivated employees
Theory X Theory Y
1.People are Lazy 1.People are energetic
2.People lack ambition and dislike
2.People are ambitious and seek responsibility
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3.People are self centered3.People can be selfless
4.People resist change4.People want to contribute to change &
5.People are gullible and not very bright 5.People are intelligent
Maslows hierarchy of Needs Model
oPsychologist Abraham Maslow came up with this model
oHierarchy of human needs model: 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…five levels are:
What people want:How business responds:
Self-Actualization Ability to grow & develop
Interesting & challenging job
EsteemStatus, respect honours Title, big office, parking spot
Social Love, affection, FriendshipFriends @ work, belong to
Security Physical & emotional securityJob security, pension, health
Physiological Food, ShelterSalary or wage
oOnce one set of needs has been satisfied, it ceases to motivate behavior
oExamples: (1) if you feel secure in your job, a new pension plan will probably be less
important to you than the chance to make new friends and join an informal network
among your co-workers (2) suppose that you are seeking to meet your esteem needs by
working as divisional manger at a major company. If you learn that you division—and
consequently your job—may be eliminated, you might very well find the promise of job
security at a new firm as motivating as a promotion once would have been at you old
Two-factor theory
oAfter studying a group of accountants and engineers, psychologist Fredrick Herzberg
concluded that job satisfaction and dissatisfaction depend on two factors: hygiene factors,
such as working conditions, and motivating factors, such as recognition for a job well
oTwo-factor theory: a theory of human relations developed by Frederick Herzberg that
identifies factors that must be present for employees to be satisfied with their jobs and
factor that, if increased, lead employees to work harder
Motivation factorsHygiene factors
Achievement Supervisors
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