Pride/Hughes/Kapoor Business, 10th Edition

Audio Review Transcript
Chapter 10 Motivating and Satisfying Employees and Teams

2. Understand some major historical perspectives on motivation         
Managers and researchers began studying motivation about a century ago. Since then, several theories have been the subject of studies, and each has taught us a little more about it. Let’s look at some of these early perspectives. Toward the end of the 19th century, Frederick W. Taylor became interested in improving the efficiency of individual workers. This interest led to scientific management, the application of scientific principles to the management of work and workers. Taylor suggested that each job be broken down into its separate tasks. Then managers should determine the best way to perform each task and the output that should be expected. Next, managers should assign the best person for each job and train that person accordingly. Taylor also believed that people work only to earn money and that therefore money should parallel output. This gave rise to the piece-rate system, a compensation system under which employees are paid a certain amount for each unit of output they produce.
The next major experiment was conducted between 1927 and 1932 by Elton Mayo and is called the Hawthorne Studies. The objective was to determine the effects of the work environment on worker productivity. The first set of experiments used various levels of lighting in the plant for one group, and a stable level of light in the control group. The surprise result was that productivity increased in both groups. Then Mayo used the piece-rate system with groups of workers, rather than individuals and was surprised to find that output remained constant. Researchers concluded that human factors were responsible for the results. In the lighting experiment, a sense of involvement pervaded both groups, making them feel important. In the second experiment, a desire for social acceptance meant that groups maintained a steady pace. These conclusions as well as others spawned the human relations movement in management, whose premise was that happy, satisfied workers perform better.
Abraham Maslow developed a theory of motivation based on a hierarchy of needs, or personal requirements. Maslow’s hierarchy of needs is a sequence of human needs in order of their importance. He illustrated his hierarchy using a triangle shape, and described each of the five levels of needs, starting at the bottom. Physiological needs are the things we require for survival, such as food, water, clothing, shelter, and sleep. In a business setting, the equivalent is adequate wages. Next are safety needs, the things we require for physical and emotional security. Organizations satisfy these needs through job security, health insurance, pension plans, and safe working conditions. On the third step of the hierarchy are social needs, our requirements for love and affection and a sense of belonging. These needs are usually satisfied through relationships in the work environment and in the informal organization, as well as in social networks with family and friends outside the organization. Moving up to the next level are the esteem needs, our need for respect, recognition, and a sense of our own accomplishment and worth. Personal accomplishment, promotion, and various honors and awards help satisfy these needs. Finally, at the top are the self-actualization needs, the need to grow and develop and to become all that we are capable of being. These are difficult to satisfy and the means tend to vary with the individual. Maslow suggested that people start on the bottom and work their way up the needs ladder.
In the late 1950s, Frederick Herzberg interviewed 200 accountants and engineers in his research on job satisfaction. Herzberg learned that job satisfaction and dissatisfaction were not opposite ends of one scale, but that the factors that led to either satisfaction or dissatisfaction were entirely different. The idea that satisfaction and dissatisfaction are separate and distinct dimensions led to the motivation-hygiene theory. Those factors that increase motivation, but whose absence does not necessarily result in dissatisfaction are called motivation factors. They include such things as achievement, responsibility, recognition, and growth. Job factors that reduce dissatisfaction when present to an acceptable degree, but that do not necessarily result in high levels of motivation are called hygiene factors. These factors include working conditions, job security, supervisors, and company policies. When hygiene factors are absent, they act as dissatisfiers.
In 1960 Douglas McGregor published a book in which he set forth the concepts of Theory X and Theory Y, assumptions that underlie management’s attitudes regarding worker behavior. Theory X is a concept of employee motivation generally consistent with Taylor’s scientific management. It assumes that employees dislike work and will function only in a highly controlled work environment. This translates to management’s belief that (1) people dislike work and try to avoid it, (2) managers must coerce, control, and threaten employees to achieve organizational goals, and (3) people must be led because they have little ambition and will not seek responsibility. In contrast, Theory Y is a concept of employee motivation generally consistent with the human relations movement. It assumes that employees accept responsibility and work toward organizational goals if by so doing they also achieve personal goals. So, according to Theory Y, (1) people feel work is an important part of their lives, (2) people will work toward goals to which they are committed, (3) people become committed to goals when those goals will bring personal rewards, (4) people seek out and accept responsibility, (5) employees have the potential to help accomplish organizational goals, and (6) organizations do not make full use of their human resources. Though quite different in nature, Theory X and Theory Y increased managers’ awareness of the importance of social factors in the workplace.
In the 1970s, William Ouchi studied business practices at American and Japanese firms. He concluded that different management systems dominate in these two countries. Japan was dominated by what Ouchi called type J firms. These were characterized by lifetime employment, group decision making with collective responsibility for the outcomes, slow evaluation and promotion, and a holistic concern for employees as people. He felt that American business was dominated by type A firms, which emphasized short-term employment, individual decision making and responsibility for outcomes, rapid evaluation and promotion, and a segmented concern for employees only as employees. He also found that a few successful American firms blended some of these characteristics. From this research, he proposed Theory Z, the belief that some middle ground between type A and type J practices is best for American business.
Other research led mangers to consider various aspects of reinforcement theory, a theory of motivation based on the premise that behavior that is rewarded is likely to be repeated, whereas behavior that is punished is less likely to recur. A positive reinforcement is one that strengthens desired behavior, such as praise. A negative reinforcement strengthens desired behavior by eliminating an undesirable task or situation. Punishment is an undesired consequence of undesirable behavior, such as a reprimand or getting fired. Extinction is when a behavior is eliminated due to management’s lack of response to it. (LO 2 ends)

Pride/Hughes/Kapoor Business, 10th Edition

Audio Review Transcript
Chapter 10 Motivating and Satisfying Employees and Teams

1. Explain what motivation is

To achieve its goals, an organization has to provide not only raw materials, facilities, and equipment, but it also has to motivate its employees. But what exactly is motivation? Motivation is the individual, internal process that energizes, directs, and sustains behavior. It is the personal force that causes us to behave in a particular way. People can be motivated by very different factors in a workplace, making motivation a challenge for managers. Related to the concept of motivation is morale, an employee’s feelings about his or her job, superiors, and the firm itself. High morale is a result of satisfying an employee’s needs, such as for recognition or for financial security. (LO 1 ends)

2. Understand some major historical perspectives on motivation         
Managers and researchers began studying motivation about a century ago. Since then, several theories have been the subject of studies, and each has taught us a little more about it. Let’s look at some of these early perspectives. Toward the end of the 19th century, Frederick W. Taylor became interested in improving the efficiency of individual workers. This interest led to scientific management, the application of scientific principles to the management of work and workers. Taylor suggested that each job be broken down into its separate tasks. Then managers should determine the best way to perform each task and the output that should be expected. Next, managers should assign the best person for each job and train that person accordingly. Taylor also believed that people work only to earn money and that therefore money should parallel output. This gave rise to the piece-rate system, a compensation system under which employees are paid a certain amount for each unit of output they produce.
The next major experiment was conducted between 1927 and 1932 by Elton Mayo and is called the Hawthorne Studies. The objective was to determine the effects of the work environment on worker productivity. The first set of experiments used various levels of lighting in the plant for one group, and a stable level of light in the control group. The surprise result was that productivity increased in both groups. Then Mayo used the piece-rate system with groups of workers, rather than individuals and was surprised to find that output remained constant. Researchers concluded that human factors were responsible for the results. In the lighting experiment, a sense of involvement pervaded both groups, making them feel important. In the second experiment, a desire for social acceptance meant that groups maintained a steady pace. These conclusions as well as others spawned the human relations movement in management, whose premise was that happy, satisfied workers perform better.
Abraham Maslow developed a theory of motivation based on a hierarchy of needs, or personal requirements. Maslow’s hierarchy of needs is a sequence of human needs in order of their importance. He illustrated his hierarchy using a triangle shape, and described each of the five levels of needs, starting at the bottom. Physiological needs are the things we require for survival, such as food, water, clothing, shelter, and sleep. In a business setting, the equivalent is adequate wages. Next are safety needs, the things we require for physical and emotional security. Organizations satisfy these needs through job security, health insurance, pension plans, and safe working conditions. On the third step of the hierarchy are social needs, our requirements for love and affection and a sense of belonging. These needs are usually satisfied through relationships in the work environment and in the informal organization, as well as in social networks with family and friends outside the organization. Moving up to the next level are the esteem needs, our need for respect, recognition, and a sense of our own accomplishment and worth. Personal accomplishment, promotion, and various honors and awards help satisfy these needs. Finally, at the top are the self-actualization needs, the need to grow and develop and to become all that we are capable of being. These are difficult to satisfy and the means tend to vary with the individual. Maslow suggested that people start on the bottom and work their way up the needs ladder.
In the late 1950s, Frederick Herzberg interviewed 200 accountants and engineers in his research on job satisfaction. Herzberg learned that job satisfaction and dissatisfaction were not opposite ends of one scale, but that the factors that led to either satisfaction or dissatisfaction were entirely different. The idea that satisfaction and dissatisfaction are separate and distinct dimensions led to the motivation-hygiene theory. Those factors that increase motivation, but whose absence does not necessarily result in dissatisfaction are called motivation factors. They include such things as achievement, responsibility, recognition, and growth. Job factors that reduce dissatisfaction when present to an acceptable degree, but that do not necessarily result in high levels of motivation are called hygiene factors. These factors include working conditions, job security, supervisors, and company policies. When hygiene factors are absent, they act as dissatisfiers.
In 1960 Douglas McGregor published a book in which he set forth the concepts of Theory X and Theory Y, assumptions that underlie management’s attitudes regarding worker behavior. Theory X is a concept of employee motivation generally consistent with Taylor’s scientific management. It assumes that employees dislike work and will function only in a highly controlled work environment. This translates to management’s belief that (1) people dislike work and try to avoid it, (2) managers must coerce, control, and threaten employees to achieve organizational goals, and (3) people must be led because they have little ambition and will not seek responsibility. In contrast, Theory Y is a concept of employee motivation generally consistent with the human relations movement. It assumes that employees accept responsibility and work toward organizational goals if by so doing they also achieve personal goals. So, according to Theory Y, (1) people feel work is an important part of their lives, (2) people will work toward goals to which they are committed, (3) people become committed to goals when those goals will bring personal rewards, (4) people seek out and accept responsibility, (5) employees have the potential to help accomplish organizational goals, and (6) organizations do not make full use of their human resources. Though quite different in nature, Theory X and Theory Y increased managers’ awareness of the importance of social factors in the workplace.
In the 1970s, William Ouchi studied business practices at American and Japanese firms. He concluded that different management systems dominate in these two countries. Japan was dominated by what Ouchi called type J firms. These were characterized by lifetime employment, group decision making with collective responsibility for the outcomes, slow evaluation and promotion, and a holistic concern for employees as people. He felt that American business was dominated by type A firms, which emphasized short-term employment, individual decision making and responsibility for outcomes, rapid evaluation and promotion, and a segmented concern for employees only as employees. He also found that a few successful American firms blended some of these characteristics. From this research, he proposed Theory Z, the belief that some middle ground between type A and type J practices is best for American business.
Other research led mangers to consider various aspects of reinforcement theory, a theory of motivation based on the premise that behavior that is rewarded is likely to be repeated, whereas behavior that is punished is less likely to recur. A positive reinforcement is one that strengthens desired behavior, such as praise. A negative reinforcement strengthens desired behavior by eliminating an undesirable task or situation. Punishment is an undesired consequence of undesirable behavior, such as a reprimand or getting fired. Extinction is when a behavior is eliminated due to management’s lack of response to it. (LO 2 ends)

3. Describe three contemporary views of motivation: equity theory, expectancy theory, and goal-setting theory

More recent theories of motivation attempt to explain why or how motivation develops, rather than simply discovering what motivates people. These three views are equity theory, expectancy theory, and goal-setting theory. Equity theory is based on the premise that people are motivated to obtain and preserve equitable treatment for themselves. In other words, the distribution of rewards is in direct proportion to the contribution of each employee to the organization. This begins by a worker developing an input-to-outcome ratio. This compares the time, effort, skills, and so on that a worker contributes in exchange for pay, recognition, and so forth. Then a similar ratio is constructed for someone else, a comparison other. If the two ratios are roughly the same, we feel we are being treated equitably and we are motivated to leave things alone. But if they are not roughly equivalent, we are motivated to change, either by working harder or working less, until the equity seems in balance.
Victor Vroom developed a model of motivation based on the assumption that motivation depends on how much we want something and on how likely we think we are to get it. He called this model expectancy theory. Expectancy theory is complex, but it does provide several useful guidelines for managers, including (1) employees work for different reasons, (2) that these reasons can change over time, and (3) it is necessary to show employees how to attain what they want.
In addition to equity theory and expectancy theory, the third contemporary theory of motivation is goal-setting theory, which suggests that employees are motivated to achieve goals that they and their managers establish together. The goal should be very specific, moderately difficult, and one that the employee is committed to achieve. Using goal-setting theory, a manager can design rewards that fit employees’ needs. (LO 3 ends)

4. Explain several techniques for increasing employee motivation

These days it takes more than a good salary to motivate employees. More and more companies are using a variety of techniques to motivate. These include management by objectives, job enrichment, behavior modification, flextime, part-time work and job sharing, telecommuting, employee empowerment, self-managed work teams, and employee ownership. Let’s look briefly at each.
Management by objectives, or MBO, is a motivation technique in which managers and employees collaborate in setting goals. Most MBO programs consists of 5 steps: (1) securing the acceptance of top management, (2) establishing preliminary goals that reflect the firm’s mission and strategy, (3) meetings between the manager and employee to promote buy-in on the work required to achieve the goals, (4) periodic meetings to check on progress, and finally (5) the evaluation, based on the degree of goal attainment. By allowing individuals to participate in goal setting and performance evaluation, MBO increases motivation.
Job enrichment provides employees with more variety and responsibility in their jobs. Employees also gain new skills and acquire a broader view of the organization. Along with job enrichment, some firms use job enlargement, which expands a worker’s assignments to include additional but similar tasks. Unfortunately, job enlargement does not remove the tedium associated with many jobs, whereas job enrichment does, by adding responsibility and allowing the employee to have more control. Another type of job enrichment is job redesign, in which work is restructured to cultivate the worker-job match. This may involve combining jobs, forming work groups, or establishing closer customer relationships.
Behavior modification is a systematic program of reinforcement to encourage desirable behavior. Behavior modification includes both positive rewards to encourage desirable actions as well as punishments to discourage undesirable ones, though research has shown that the positive reinforcements are far more effective. Experts suggest that management should reward quality, loyalty, and productivity.
Another motivation technique is flextime, a system in which employees set their own work hours within employer-determined limits. This system accommodates the varied schedules of employees and allows a sense of independence and autonomy. It usually means that the firm establishes a core time of the day when everyone must be at work, and flexible time when employees may choose whether to be at work.
Part-time work is permanent employment in which individuals work less than a standard workweek. A part-time job is set up so that its responsibilities can be completed in the number of hours the employee works. A related arrangement whereby two people share one full-time position is called job sharing. Sometimes this means that one person works mornings and the other afternoons, or sometimes each works alternate days.
Telecommuting is working from home either all of the time or for a portion of the workweek. Working at home means workers can set their own hours and communicate by using computers, modems, fax machines, voice mail, cell phones, and overnight mail.
Many firms today are using employee empowerment as a motivational technique. Empowerment is making employees more involved in their jobs by increasing their participation in decision making. Empowered employees have a voice in what they do and in how and when they do it. To work effectively, managers should set expectations, communicate standards, institute periodic evaluations, and guarantee follow-up.
Some organizations are discovering that a highly affective technique for motivating employees is employee ownership, a situation in which employees own the company they work for by virtue of being stockholders. When the company enjoys success, employees benefit directly. Employees stock ownership plans, or ESOPS, provide considerable employee incentive. (LO 4 ends)

5. Understand the types, development, and uses of teams

A final technique is the introduction of teams, a group of workers functioning together as a unit to complete a common goal or purpose. Various types of teams function in specific ways to achieve different purposes. A problem-solving team is a team of knowledgeable employees brought together to tackle a specific problem. Once the problem is solved, the team is disbanded. A virtuoso team is a team of exceptionally highly skilled and talented individuals brought together to produce significant change. Instead of being task oriented, virtuoso teams focus on producing ideas and encouraging change that could impact the company as well as the industry. A more permanent type of team is the self-managed work team, which consists of groups of employees with the authority and skills to manage themselves. Employees have more task variety and more control, and as they mature as teams, they take on more managerial functions. Cross-functional teams consist of individuals with varying specialties, expertise, and skills that are brought together to achieve a common task. Although cross-functional teams are not necessarily self-managed, most self-managed teams are cross-functional. Finally, thanks to sophisticated communications technology, we have virtual teams, consisting of members who are geographically dispersed but who communicate electronically.
It takes time to develop high performing teams. As a team matures, it passes through five stages: forming, where team members are introduced to one another and begin to develop a social dynamic; storming, characterized by not only volatility and lack of unity, but also by development of goals and objectives; norming, a stage of stability and recognition of roles; performing, the stage at which the team achieves its full potential; and finally adjourning, when the team is disbanded.
Within the team, each member has a role to play. In addition to the team leader role, various members may play the task-specialist role, the socio-emotional role, a dual role, or even a nonparticipant role. The most cohesive teams consist of 5 to 12 members who are goal-oriented. (LO 5 ends)