 Motivational  .

Employee
Tools- Involvement
 (Incentives, Programs,
 Variable Pay
 Job design,
Programs,
 Goal setting
 Skill Based Pay
(MBO), Plans,
 Employee  Flexible Benefit),
Recognition  Issues in
Programs, Motivation.
© 2009 Prentice-Hall Inc. All rights reserved. 7-1
 a)
a) Motivational
Motivational tools
tools
 By job design-
1. Job characteristic model and Job designing by-
Rewards
 Variable pay plan
a) job rotation,
a)Piece Rate:
b) job enlargement, and
b)Merit-Based:
c) job enrichment
c)Bonuses:
d) Job simplification
 Skill-Based Programs
 Alternative work arrangement a) Profit Sharing
a) Flextime. (flexible work hours). a)Gain Sharing
b) Job Sharing- b)Employee Stock Ownership Plans (ESOPs)
c) Telecommuting- Flexible benefit
d) The Virtual Office b) Modular Plans
 Employ involvement program c) Core-Plus Plans
1. Participative Management d) Flexible Spending Plans
2. Representative Participation  Recogisition program
1. Works councils a) Intrinsic Rewards: Stimulate Intrinsic
2. Board representative Motivation
3. Quality Circle b) Benefits of Programs
c) Drawbacks of Programs

7-2
 Motivational
Motivational tools
tools
 By job design-
1. Job characteristic model and
2. Alternative work arrangement
 Employ involvement program
1. Participative Management
2. Representative Participation
1. Works councils
2. Board representative
3. Quality Circle
 Using rewards
 Piece Rate Profit Sharing
 Merit-Based: Gain Sharing:
Employee Stock Ownership Plans (ESOPs)
 Bonuses:
© 2009 Prentice-Hall Inc. All rights reserved. 7-3
 Motivation
Motivation by
by Job
Job Design:
Design: The
The JCM
JCM
The Job Characteristics Model (JCM)
(Skill variety, Task identity, Task significance, Autonomy,
Feedback).
How Can Jobs Be Redesigned?
 job rotation,
 job enlargement, and
 job enrichment

7-4
Motivation
Motivation by
by Job
Job Design:
Design: The
The JCM
JCM
Alternative Work Arrangements
 Flextime (flexible work hours).
 Job Sharing.
 Telecommuting
 The Virtual Office

7-5
Motivation
Motivation by
by Job
Job Design:
Design: The
The JCM
JCM
Ability and Opportunity
 Success on a job is facilitated or hindered by the
existence or absence of support resources.
 A popular although arguably simplistic way of thinking
about employee performance is as a function of the
interaction of ability and motivation; that is,
performance = f(A  M).
 If either is inadequate, performance will be negatively
affected. We need to add opportunity to perform to our
equation—performance = f(A  M  O).

7-6
 Motivation
Motivation by
by Job
Job Design:
Design: The
The JCM
JCM
How Can Jobs Be Redesigned?
Ways to reshape jobs so that they are more challenging,
stimulating, and motivating. Work arrangement(or
rearrangement) aimed at reducing or overcoming job
dissatisfaction and employee alignment arising from repetitive
and mechanistic tasks. Through job design, organization try to
raise productivity levels by offering non-monetary rewards such
as greater satisfaction from a sense of personal achievement in
meeting the increased challenge and responsibility of one's work.
 Job enlargement,
 job enrichment,
 job rotation, and
 job simplification
are the various techniques used in a job design.
7-7
Motivation
Motivation by
by Job
Job Design:
Design: The
The JCM
JCM
 Job Characteristics Model (JCM)
Hackman and Oldham’s model proposes that any job can be
described through five core job dimensions:
Skill variety
Task identity
Task significance
Autonomy
Feedback
The way elements in a job are organized (job design) impacts
motivation, satisfaction, and performance.

7-8
 Motivation
Motivation by
by Job
Job Design:
Design: The
The JCM
JCM
Skill variety – Degree to which the job requires a variety of different
activities, so the worker can use a number of different skills and
talent. Requirements for different tasks in the job.
Task identity – The degree to which the job requires completion of a
whole and identifiable piece of work . Completion of a whole piece of
work.
Task significance – The degree to which the job has a substantial
impact on the lives or work of other people. The job’s impact on
others.
•Autonomy – The degree to which the job provides substantial
freedom, independence, and discretion to the individual in
scheduling the work and determining the procedures to be used in
carrying it out Level of discretion in decision making.
•Feedback – Amount of direct and clear information on performance.
7-9
 Motivation
Motivation by
by Job
Job Design:
Design: The
The JCM
JCM

The links between job dimensions and the outcomes are

moderated by the strength of the individual’s growth need.
Individuals with a high growth need are more likely to experience
the psychological states when their jobs are enriched.

Motivating potential score (MPS)

7-10
The
The Job
Job Characteristics
Characteristics Model
Model

Employee growth-need strength moderates the relationships. 7-11

Motivating
Motivating Potential
Potential Score
Score (MPS)
(MPS)
 The Five core dimensions can be combined into a single
predictive index of motivation, called- MPS
– People who work on jobs with high core dimensions are
generally more motivated, satisfied, and productive.
– Job dimensions operate through the psychological states in
influencing personal and work outcome variables rather
than influencing them directly.

 While the JCM framework is supported by research, the

MPS model isn’t practical and doesn’t work well.

7-12
How
How Can
Can Jobs
Jobs Be
Be Redesigned?
Redesigned?
Repetitive jobs provide little variety,
autonomy, or motivation. People generally
seek out jobs that are challenging and
stimulating.
Job Rotation
– The periodic shifting of a worker from one
task to another

Job Enlargement
– The horizontal expansion of jobs

Job Enrichment
– The vertical expansion of jobs
7-13
 How
How Can
Can Jobs
Jobs Be
Be Redesigned?
Redesigned?
Job Rotation
 Often referred to as cross-training
 Periodic shifting of an employee from one task to another
 When activity is no longer challenging, the employee is shifted to a different task.

 Strengths of job rotation include:

1. reduces boredom,
2. increases motivation, and
3. helps employees better understand their work contributions.
 Indirect benefits in that employees with wider range of skills give management
more flexibility in scheduling, adapting to changes and filling vacancies

 Weaknesses include:
1. creates disruptions,
2. extra time for supervisors addressing questions,
3. training time and efficiencies
7-14
 How
How Can
Can Jobs
Jobs Be
Be Redesigned?
Redesigned?
Job Enlargement (Horizontal loading)
 Increasing the number and variety of tasks / responsibility that an individual performs
 Creates more diversity
 Difference between enlargement and rotation is that enlargement redesigns jobs where
rotation does not.
 Job enlargement interventions usually have led to less than successful outcomes.
Advantage
1. Avoid monotony (which is the result of specialization and division of work)
2. Decrease production cost
3. Increase efficiency, satisfaction and motivation
Disadvantage
1. Additional training cost
2. Employee may demand increase pay due to increased responsibility
3. Productivity may fall during redesigning of job

7-15
 How
How Can
Can Jobs
Jobs Be
Be Redesigned?
Redesigned?
Job Enrichment
Refers to the vertical expansion of jobs It is direct outgrowth of
Herzberg’s 2 factor theory. It adds responsibility and opportunity
related to existing task for personal growth.
Overall evidence indicates that job enrichment reduces
absenteeism and turnover costs and increases satisfaction.
Advantage
1.Increases the degree to which the worker controls the planning,
execution, and evaluation of the work
2.Allows worker to complete an entire activity
3.Increases employee’s freedom and independence
4.Increases responsibility and provides feedback

7-16
Guidelines
Guidelines for
for Enriching
Enriching aa Job
Job

7-17
 Alternative
Alternative Work
Work Arrangements
Arrangements

1. Flextime. (flexible work hours).

Employees work during a common core time period each day but have discretion
in forming their total workday from a flexible set of hours outside the core.

Allows employees some discretion over when they arrive at and leave work.
Benefits include
1. reduced absenteeism,
2. increased productivity,
3. reduced overtime expense, and
4. reduced hostility toward management, and
5. increased autonomy and responsibility for employees.
Major drawback is that it’s not applicable to all jobs. 7-18
 Another
Another Alternative:
Alternative: Telecommuting
Telecommuting
 Job Sharing- The practice of having two or more people split a
40-hour-a-week job. Allows two or more individuals to split a
traditional 40-hour a week job. Not very popular because
finding compatible partner is difficult.
 Telecommuting- Employees who do their work at home at
least two days a week on a computer that is linked to their
office .
Typical Telecommuting Jobs
– Professional and other knowledge-related tasks
– Routine information-handling tasks
– Mobile activities
 The Virtual Office- Employees
work out of their home on
a relatively permanent basis.
7-19
Reasons
Reasons for
for and
and against
against Telecommuting
Telecommuting

Advantages Disadvantages
– Larger labor pool  Employer
– Higher productivity – Less direct supervision of
employees
– Less turnover
– Difficult to coordinate
– Improved morale teamwork
– Reduced office-space costs – Difficult to evaluate non-
quantitative performance
 Employee
– May not be as noticed for his
or her efforts

7-20
Motivation
Motivation IsIs Not
Not the
the Whole
Whole Story
Story

P = f(A x M x O)
7-21
 Don’t
Don’t Forget
Forget Ability
Ability and
and Opportunity
Opportunity
 Success on a job is facilitated or hindered by the existence or
absence of support resources.
 A popular although arguably simplistic way of thinking about
employee performance is as a function of the interaction of ability
and motivation; that is, performance = f(A  M).
 If either is inadequate, performance will be negatively affected.
We need to add opportunity to perform to our equation—
performance = f(A  M  O).
 When you attempt to assess why an employee may not be
performing to the level that you believe he or she is capable of,
look to the environment to see if it is supportive.
 Opportunity in terms of-
1. Tools and equipment
2. Materials an supply
3. Favorable work environment- rules regulations, peer, senior, information of
work, time decision authority etc 7-22
Types
Types of
of Employee
Employee Involvement
Involvement Programs
Programs
 Participative Management
– Subordinates share a significant degree of decision-making
power with their immediate superiors
 Representative Participation
– Works councils
• Groups of nominated or elected employees who must be
consulted for any personnel decisions
– Board representative
• An employee sits on a company’s board of directors and
represents the interests of the firm’s employees
 Quality Circle
– A work group of employees who meet regularly to discuss
their quality problems, investigate causes, recommend
solutions, and take corrective actions

7-23
 Types
Types of
of Employee
Employee Involvement
Involvement Programs
Programs
Participative Management
The distinct characteristic common to all participative management programs is
that subordinates actually share a significant immediate degree of decision-
making power with their superiors.
A catchall term covering a variety of techniques-
1. Participation or participative management,
2. Workplace democracy,
3. Empowerment, and
4. Employee ownership.
 It increases productivity, motivation, commitment and satisfaction.
 However, it is not appropriate for every organization.
 For it to work, there must be adequate time to participate,
 The issues in which employees get involved must be relevant to their interests,
 Employees must have the ability (intelligence, technical knowledge,
communication skills) to participate, and
 The organization’s culture must support employee involvement.
7-24
 Types
Types of
of Employee
Employee Involvement
Involvement Programs
Programs
Participative Management (cont.)
.
Why would management want to share its decision-making power
with subordinates?
1. Managers often do not know everything their employees do.
2. Better decisions
3. Increased commitment to decisions
4. Intrinsically rewarding employees makes their jobs more
interesting and meaningful
5. Dozens of studies have been conducted but the findings are
mixed. It appears that participation typically has only a modest
influence on productivity, motivation, and job satisfaction.

7-25
 Types
Types of
of Employee
Employee Involvement
Involvement Programs
Programs
Representative Participation
Representative participation: Almost every country in Western Europe
has some type of legislation requiring it. It is the most widely
legislated form of employee involvement around the world.
 The goal is to redistribute power within an organization, putting
labor on a more equal footing with the interests of management and
stockholders.
 The two most common forms:
• Works councils link employees with management. They are groups
of nominated or elected employees who must be consulted when
management makes decisions involving personnel.
• Board representatives are employees who sit on a company’s board
of directors and represent the interests of the firm’s employees.

7-26
 Types
Types of
of Employee
Employee Involvement
Involvement Programs
Programs
Representative Participation (cont.)
 In some countries, large companies may be legally required to make
sure that employee representatives have the same number of board
seats as stockholder representatives.

 The overall influence seems to be minimal. The evidence suggests

that works councils are dominated by management and have little
impact on employees or the organization.

 If one were interested in changing employee attitudes or in improving

organizational performance, representative participation would be a
poor choice.

7-27
 Types
Types of
of Employee
Employee Involvement
Involvement Programs
Programs
Quality Circles
 Quality circles became popular in North America and Europe during the 1980s.
 A quality circle consists of a work group of eight to ten employees and
supervisors who have a shared area of responsibility.
 Key components are:
1. They meet regularly on company time to discuss their quality
problems, investigate causes of the problems, recommend
solutions, and take corrective actions.

2. They take over the responsibility for solving quality problems

and they generate and evaluate their own feedback.

3. Management typically retains control over the final

implementation decision.
7-28
 Types
Types of
of Employee
Employee Involvement
Involvement Programs
Programs
Quality Circles (cont.)

 A review of the evidence indicates that they are likely to

positively affect productivity, however, they tend to show little
or no effect on employee satisfaction.

 QCs seem to be a fad that has come and gone.

• First is the little bit of time (usually just an hour per week) that
actually deals with employee involvement.

 Second, the ease of implementing quality circles often worked

against them. The lack of planning and top-management
commitment often contributed to quality circle failures

7-29
Motivational
Motivational Theory
Theory Links
Links to
to EI
EI Programs
Programs

7-30
Four
Four Major
Major Strategic
Strategic Reward
Reward Decisions
Decisions

1. What to pay? (pay

structure)
2. How to pay individuals?
(variable pay plans and
skill-based pay plans)
3. What benefits to offer? Do
we offer choice of
benefits? (flexible benefits)
4. How to build recognition
programs?

7-31
 1.
1. What
What to
to Pay
Pay –Establishing
–Establishing aa Pay
Pay Structure
Structure
 Internal equity
– The worth of the job to the organization
– Determined by job evaluations
 External equity
– The competitiveness of the company’s pay relative to pay
elsewhere in the industry
– Determined through pay surveys
 Choose organizational position
– Pay leaders
• Greater employee loyalty
• Attracts better-quality employees
– Pay laggards – accept high turnover for low hourly costs

7-32
2.
2. How
Howto
toPay-
Pay-Rewarding
RewardingIndividual
IndividualEmployees
EmployeesThrough
Through
Variable
VariablePay
PayPrograms
Programs
 Types of Variable Pay Programs
A portion of an employee’s pay is based on some individual
and/or organizational measure of performance
–Piece Rate:
• Workers are paid a fixed sum for each unit of production
completed
• Weakness: not feasible for many jobs
–Merit-Based:
• Based on performance appraisal ratings
• Gap increasing between average and top-performers
• Weaknesses: validity of system based on annual appraisals,
pay pool can be small, unions strongly resist
–Bonuses:
• Rewards recent performance
• Weakness: employees consider this a pay
7-33
 2.
2. How
How to
to Pay
Pay -- Skill-Based
Skill-Based Pay
Pay Programs
Programs
 Types of Skill-Based Programs: is alternative to job based
pay-
Also known as competency- or knowledge-based pay - sets pay
based on skills or number of jobs an employee can perform
–Profit Sharing:
• Organization-wide programs that distribute compensation based on
some established formula designed around a company’s
profitability(in terms of cash or stock option)
–Gain Sharing:
• An incentive plan in which improvements in group productivity
determine the total amount of money that is allocated (increase in
productivity does not always mean profit), Productivity is an
internal factor where as profit is internal and external factor
–Employee Stock Ownership Plans (ESOPs)
• Company-established benefit plans in which employees acquire
stock as part of their benefits
7-34
Evaluation
Evaluation of
of Variable
Variable and
and Skill-based
Skill-based Pay
Pay
To some extent, variable pay does increase
motivation and productivity

Benefits of Skill-based Pay Plans

– Provide staffing flexibility
– Facilitate communication across the organization
– Lessen “protection of territory” behaviors
– Meet the needs of employees for advancement
– Lead to performance improvements
Drawbacks:
– Lack of additional learning opportunities
– Continuing to pay employees for obsolete skills
– Paying for skills of no immediate use to the organization
– Paying for a skill, not for performance of the skill. This
plan deals with quality and team work not with level of
performance.
– People will opt for any any training

7-35
3.
3. What
What Benefits
Benefits to
to Offer
Offer -- Flexible
Flexible Benefits
Benefits
Employees tailor their benefit program to meet their
personal need by picking and choosing from a menu of
benefit options.
Modular Plans
– Predesigned benefits packages for specific groups of
employees
Core-Plus Plans
– A core of essential benefits and a menu-like selection of
other benefit options
Flexible Spending Plans
– Allow employees to use their tax-free benefit dollars to
purchase benefits and pay service premiums

7-36
4.
4. How
How to
to Build
Build Recognition
Recognition Programs
Programs
 Intrinsic Rewards: Stimulate Intrinsic Motivation
– Personal attention given to employee
– Approval and appreciation for a job well done
– Growing in popularity and usage
 Benefits of Programs
– Fulfill employees’ desire for recognition
– Inexpensive to implement
– Encourage repetition of desired behaviors
 Drawbacks of Programs
– Susceptible to manipulation by management

7-37
Special
Special issues
issues in
in motivation
motivation
 Motivating professional
 Motivating contingent worker
 Motivating diversified work force
 Motivating low skill service worker
 Motivating people doing highly repetitive task

7-38
Special
Special issues
issues in
in motivation
motivation
 Motivating professional- they are well paid. They get great deal of
intrinsic satisfaction from work they do and have long term
commitment with their field of expertise than organisation. They
are more loyal to their profession.
Motivation-
1. Money and promotion has low priority
2. They need to update their knowledge regularly.(skill development
opportunity like- training, development, seminars, work shop etc.
motivates them)
3. Challenging job
4. Reward with recognition
5. Creating alternative career path, allowing them to earn more money
and status without assuming managerial responsibility.

7-39
 Special
Special issues
issues in
in motivation
motivation
 Motivating contingent worker-
Contingent employee do not have job security and stability in the organization that a
permanent employee has. Eg. temporary employee, part time, working from home,
short term hirer, on call worker, day laborer, independent contractor, leases worker
etc.
Motivation
1. Freedom to work
2. Opportunity for permanent status,
3. developing sellable skills
 Motivating diversified work force
Need to understand and respond to diversity. Flexibility in
1. work hour
2. Compensation plan
3. Benefit
4. Physical work setting

7-40
Special
Special issues
issues in
in motivation
motivation
 Motivating low skill service worker
1. Increase pay/ promotion
2. Flexible work schedule
3. Recruit young or retirees who have low financial need
4. respect
 Motivating people doing highly repetitive task
1. Careful selection of people, who have tolerance for ambiguity.
2. Try automation of job (ATM)
3. High pay- less turn over- but not high motivation
4. Create pleasant work environment.
5. Ample work breaks
6. Employee supervisions
7-41
 Global
Global Implications
Implications
 Job Characteristics and Job Enrichment
– Inconsistent results across cultures
 Telecommuting
– U.S. does this more, but EU workers are interested in it
 Variable Pay
– Not much research available, but some possible hypotheses
on relationships
 Flexible Benefits
– This concept is becoming more prevalent globally
 Employee Benefits
– Practices must be modified to match culture

7-42
Summary
Summary and
and Managerial
Managerial Implications
Implications
 To Motivate Employees
– Recognize individual differences- link to ability and then
give opportunity.
– Use goals and feedback
– Allow employees to participate in decisions that affect them
– Link rewards to performance
– Check the reward system for equity

7-43