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Chapter 10

RSM 100 - Chapter 10 - Summary Notes

Rotman Commerce
Course Code
John Oesch

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RSM 100Y Chapter 10: Motivating and Leading Employees
Psychological Contract
Informal contract between employee and firm, where an employee has a specific
set of expectations of what they will receive (inducements) for their contributions.
Job Satisfaction: Pleasure and feeling of accomplishment employees
Morale: Positive or negative mental attitudes of employees
Low Morale = High Turnover
Motivation = Making people do things
Classical Theory and Scientific Management
Classical Theory = Pay people more They do more work
Scientific Management = Maximize efficiency of a job (Time-and-motion studies)
Hawthorne Studies
Hawthorne Effect
Productivity increases when workers receive attention from management
Human Resources Theory X and Theory Y
Theory X
People are naturally lazy/unproductive; must be punished or rewarded to do work
Theory Y
People are naturally energetic, self-motivated and productive
Maslow’s Hierarchy of Needs Model
Lower Level needs need to be satisfied before higher level ones
1. Physiological Needs
a. Necessary for Survival (Food, water, shelter, sleep)
2. Security Needs
a. Protection and stability from unknown (Pension, EI, Job Security)
3. Social Needs
a. Includes needs for friendship/relationships (Company Culture)
4. Esteem Needs
a. Need for recognition and self-respect (Promotions, titles, raises)
5. Self-Actualization Needs
a. Inner growth and development (Overcoming Challenging Tasks)
As a level of need is satisfied, it no longer motivates someone.
Fred Herzberg
Job depends on HYGIENE (work conditions) and MOTIVATING (rewards) factors
Workers can be dissatisfied, neutral, or satisfied. For example, if there are crappy
working conditions and no motivating factors, they will be dissatisfied. If working
conditions improve, they will be neutral. If recognition is given for work, then they
will become satisfied as they are now motivated as well.
Motivation: Satisfaction No Satisfaction
- Achievement
- Recognition (Money/raise)
- Responsibility & Growth
Hygiene: Dissatisfaction No Dissatisfaction
- Supervisors
- Working Conditions (Money/Pay)
- Interpersonal Relations
Expectancy Theory
People are motivated to work towards rewards that they see as attainable
Performance-Reward Issue: Current performance not sufficient for reward
Rewards-Personal Goal: Eligible for promotion, but other factors are mitigating
Equity Theory
People compare (1) What they contribute to a job and what they get in return
(2) What their peers put into/get out of a job (input/output ratio)
Indiv. Effort Indiv. Performance Organizational Rewards Personal Goals
(Effort-Performance Issue) (Performance-Reward) (Rewards Personal Goal)
Goal-Setting Theory
People perform better when they set measurable, time-framed goals.
Reinforcement & Behavior Modification Theory
Reinforcement = Reward for positive things exhibited while working
Positive Reinforcement Rewards tied to performance directly
Punishment = Presenting people with unpleasant consequences
Negative Reinforcement Taking something away from someone
Management by Objectives
System of collaborative goal setting that extends throughout an organization
MBO = Setting goals and evaluating their progress
Key to MBO is collaboration and communication, this it can also act as a plan to
increase job satisfaction and motivation (biggest impact of BMO).
Participative Management
Employees given a voice on how to do their jobs + How the company is run.
Motivation to the point where the will provide “bend over backward” service.
Team Management
Teams are less effective in rigidly structured bureaucratic organizations.
More effective in smaller organizations to speed up decision making and
enhance the corporate culture (increase motivation and satisfaction)
Job Enrichment and Job Design
Job Enrichment:
Add one or more motivating factors to job activities (Flexibility in scheduling)
Job Redesign:
Increases satisfaction to improve worker-job fit… Motivates those who need to
have career growth opportunities in their job
Combining Tasks: Put stuff together to make work more rewarding
Despecialize division of labour
Forming Natural Work Groups: Let a group of people decide how to divide
up the work among themselves to accomplish a specific task
Client Relationships: Gives job variety, and sense of control. Also provides
a forum for immediate feedback.
Modified Work Schedules
Flextime: Allows selection in terms of work hours (Must work 8 hours sometime
between 6 AM to 7 PM each day)
The Compressed Workweek Work less days per week, but more hours per day.
Telecommuting: Do some work away from the office