Management notes- Chapter 10
Psychological contract: 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 employees ( inducements) in return.
-If either side perceives inequity in the contract, that party may seek a change.
-If it is created, managed and maintained well, workers are more likely to be motivated.
!>Employee may look for another job, employer may ﬁre.
!>Psychological contracts has become harder to due to the changing market.
! ! Job security in today"s workforce is less likely, therefore, other
! ! inducements must be made to cover up the gap.
Human relations: Interactions between employers and employees and their attitudes
!>Under valued employees may perform under capabilities or leave for a better
Importance of Job Satisfaction and Morale
Job satisfaction: The degree of employment that people derive from performing their
! ! jobs. If people enjoy their job, they are relatively satisﬁed.
!-Higher satisfaction lead to higher morale
Morale: The overall attitude that employees have toward their workplace. It reﬂects the
!degree to which they perceive that their needs are being met by their jobs.
!>It is determined by many things such as job satisfaction, and satisfaction with
!things such as pay, beneﬁts, co-workers, and promotion opportunities.
-Satisﬁed workers are more likely to work hard and try to make useful contributions to
the organization. They are also less likely to engage in negative behaviours (e.g
-Satisﬁed workers also decrease absenteeism and results in a lower turnover.
Turnover: The percentage of an organization"s workforce that leaves and must be
!>Low turnovers are natural, however, high percentage may have negative
!consequences, including numerous vacancies, disruption in production,
!decreased productivity, and high retraining costs.
!>The avg turnover rate in Canada was 8% in 2005 up from 6.6% in 2004
Motivation in the Workplace
Motivation: The set of forces that causes people to behave in certain ways.
!>A very critical part to a ﬁrm"s success. Therefore, managers must understand
!the differences in employee behaviour and the reasons for them.
Many theories have been developed to adress the issues of motivation.
The three major approaches to motivation are:
!classical theory and scientiﬁc management, behavior theory, and contemporary
Class Theory of motivation: The only way to motivate workers is by money.
!-Over the years has been proven to be wrong.