Motivation- From

Theory to
Application
 Intrinsic vs Extrinsic Rewards
• Organizations are increasingly recognizing that both intrinsic and extrinsic rewards are important.
Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of
compensation systems. Intrinsic rewards range from a spontaneous and private thank-you to widely
publicized formal programs in which specific types of behavior are encouraged and the procedures for
attaining recognition are clearly identified.
• Pay, an extrinsic reward, is not the primary factor driving job satisfaction, however, it does motivate
people, and companies often underestimate its importance in keeping top talent. No matter how
much recognition a top performer gets, he will be tempted to leave if the pay scale is much lower than
the market and another offer arrives.
• Variable pay structures, such as bonuses are often the best production motivators. When pay is tied to
performance, the employee's earnings also recognize contribution rather than being a form of
entitlement. Over time, low performers' pay stagnates, while high performers enjoy pay increases
commensurate with their contributions.
• An obvious advantage of intrinsic rewards like recognition programs is that they are inexpensive, since
praise is free. However, they are highly susceptible to political manipulation by management. When
applied to jobs for which performance factors are relatively objective, such as sales, recognition
programs are likely to be perceived by employees as fair. However, in most jobs, the criteria for good
performance aren't self-evident, which allows managers to manipulate the system and recognize their
favorites. Abuse can undermine the value of recognition programs and demoralize employees.
• Research suggests financial incentives may be more motivating in the short term, but in the long run
intrinsic incentives will retain good employees if the extrinsic incentives are competitive

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Motivating by Job Design: The Job Characteristics
Model
• Job characteristics model: jobs are described in terms of five core
dimensions:
• Skill variety
• Task identity
• Task significance
• Autonomy
• Feedback

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The Job Characteristics Model

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Designing Motivational Jobs
• JCM-designed jobs give internal rewards
• Individual’s growth needs are moderating factors
• Motivating jobs must:
• Be autonomous
• Provide feedback
• Be meaningful

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 Practice Question
• Which of the following is not one of the core job dimensions in the job characteristics model (JCM)?
• A) task significance
• B) feedback
• C) autonomy
• D) reward
• E) skill variety

• John is a design manager for a production company. He independently assigns teams, chooses projects, researches trends,
and is able to work from home two to three days a week. He provides a status report to the design director once a month.
Based on this description and as per the job characteristics model, it's safe to say that John's job is high in ________.
• A) task identity
• B) feedback
• C) autonomy
• D) task significance
• E) skill variety

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Practice Question
• Anya is a graphic designer in a firm specializing in making logos for their clients. Last week, she
got client specifications on how to make a new logo. She was able to create a prototype, and
having got it initially reviewed by her immediate supervisor, she made changes until the client
was satisfied with her final product. Based on this description, it's safe to say that Anya's job is
high in ________ and ________.
• A) task significance; feedback
• B) autonomy; skill variety
• C) feedback; skill variety
• D) task identity; feedback
• E) skill variety; autonomy

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Redesigning Jobs: Job Rotation
• Job Rotation
• The periodic shifting of an employee from one task to another
• Also called cross-training
• Increases job satisfaction and organizational commitment

Which of the following statements is true regarding job rotation?

• A) It decreases the flexibility with which an organization can adapt to a change.
• B) It decreases employee motivation.
• C) It decreases productivity.
• D) It decreases supervisory workload.
• E) It decreases the flexibility in scheduling work.

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Job Rotation
• If employees suffer from over routinization of their work, one alternative is job rotation, or the
periodic shifting of an employee from one task to another with similar skill requirements at the
same organizational level. It is also called cross-training.
• The strengths of job rotation are that it reduces boredom, increases motivation, and helps
employees better understand how their work contributes to the organization. An indirect benefit is
that employees with a wider range of skills give management more flexibility in scheduling work,
adapting to changes, and filling vacancies. However, job rotation is not without drawbacks.
Training costs increase, and productivity is reduced by moving a worker into a new position just
when efficiency at the prior job is creating organizational economies. Job rotation also creates
disruptions when members of the work group have to adjust to the new employee. And
supervisors may also have to spend more time answering questions and monitoring the work of
recently rotated employees.

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Job Enrichment
• Job enrichment increases the degree to which the worker controls the ________.
• A) planning, execution, and evaluation of the work
• B) planning, execution, and evaluation of company plans
• C) horizontal integration of his or her tasks
• D) evaluation of his or her peers
• E) feedback that a worker receives from his or her supervisor and peers

• Job enrichment expands jobs by increasing the degree to which the worker controls the planning,
execution, and evaluation of the work.

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Redesigning Jobs: Relational Job Design
• Relational Job Design
• Designing work so employees are motivated to promote the well-being of the
organization’s beneficiaries
• Relate stories from customers who have benefited from the company’s products or services
• Connect employees directly with beneficiaries
Singapore Airlines is rated one of the best airlines in the world and often requires ticket agents to
serve as baggage handlers. What is the logic behind this action?
• A) Ticket agents often have attitude problems and need to be "punished."
• B) Ticket agents often have stressful jobs and need a break.
• C) Ticket agents often deal with luggage and so cross-training makes them more efficient.
• D) Baggage handlers in Singapore often go on strike and replacements are needed.
• E) There is no logical reason for this action.

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Using Alternative Work Arrangements to Motivate
• Flextime
• Some discretion over when worker starts and leaves
• Job Sharing
• Two or more individuals split a traditional job
• Telecommuting
• Work remotely at least two days per week

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Practice Question: Job Sharing
• Which of the following is the major drawback of job sharing from management's perspective?
• A) increase in supervisory workload
• B) increased costs for providing supporting infrastructure (such as desk and computer) to two
employees instead of one
• C) difficulty in finding compatible partners
• D) difficulty in designing the reward structure
• E) difficulty in coordinating schedules

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Employee Involvement
• Employee involvement: A participative process that uses the input of
employees to increase their commitment to the organization’s success
• Two types:
1. Participative management
2. Representative participation

• ________ is a participative process that uses employees' input to increase their commitment to
the organization's success.
• A) Job enrichment
• B) Employee involvement
• C) Organizational reengineering
• D) Corporate restructuring
• E) Job sharing

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Participative Management
• Participative management: Subordinates share a significant degree of
decision-making power with superiors
• To be effective:
• Followers must have confidence and trust in leaders
• Leaders should avoid coercion and stress organizational consequences of decisions
• Only a modest influence on productivity, motivation, and job satisfaction

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Representative Participation
• Representative participation: Workers are represented by a small group of
employees who participate in decisions affecting personnel
• Works councils
• Board membership
• Redistribute power within an organization
• Does not appear to be very motivational

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Using Pay to Motivate Employees
• Major strategic rewards decisions:
• What to pay employees
• How to pay individual employees

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What to Pay
• Establishing a pay structure
• Balance between:
• Internal equity – the worth of the job to the organization
• External equity – the external competitiveness of an organization’s pay relative to pay elsewhere in its
industry
• A strategic decision with trade-offs

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How to Pay
• Variable-Pay Programs
• Base a portion of the pay on a given measure of performance
• Piece-rate pay plan
• Merit-based pay
• Bonuses
• Profit-sharing plans
• Employee-stock ownership plan (ESOP)

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Variable-Pay Programs
1. Piece-Rate Pay: workers are paid a fixed sum for each unit of production
completed
2. Merit-Based Pay: pay is based on individual performance appraisal ratings
3. Bonuses: rewards employees for recent performance
4. Employee Stock Ownership Plans (ESOPs) – plans in which employees
acquire stock, often at below-market prices

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Using Benefits to Motivate
• Benefits are both an employee provision and an employee motivator
• Individual employees value the components of benefits packages differently
• A flexible benefits program turns the benefits package into a motivational
tool

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Using Intrinsic Rewards to Motivate
• Employee recognition programs
• Can be as simple as a spontaneous comment
• Can be formalized in a program
• Recognition is the most powerful workplace motivator – and the least expensive – but
fairness is important

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Practice Question
• Lavon has been feeling dissatisfied with his position of late. Particularly, he feels that he is
underutilized. According to motivation theories, what should Lavon's supervisor do?
• A) fire him
• B) promote him
• C) include him in revising his job description
• D) mentor him to use his time better
• E) appoint him to numerous committees

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Practice Question
• Explain how participative management can enhance skill variety, task identity, and autonomy as
described in the Job Characteristics Model (JCM).
• Answer: Skill variety, the degree to which a job requires a variety of different activities so the
worker can use a number of different skills and talent, can be enhanced by participative
management because the employees can begin to view their tasks from a different perspective,
that of management, and the need for high productivity and efficiency. By learning to think
differently, the employees are learning different mental and relational skills.
• Task identity, the degree to which a job requires completion of a whole and identifiable piece of
work, can be enhanced by participative management by allowing employees to make decisions on
the spot without management approval. For example, the woman at the Wegman's bakery that
convinced management to let her include a traditional family recipe in the product line will feel a
much stronger sense of task identity.
• Autonomy, in the sense of determining work procedures and carrying them out, is enhanced by
participative management because the employee is able to participate in the decision-making
process. Having a voice in the process increases the sense of autonomy and control.

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Practice Question
Which of the following statements is true regarding an employee stock ownership plan (ESOP)?
• A) Under this plan, employees acquire stock, often at below-market prices.
• B) Research on ESOPs indicates that it does not affect employee satisfaction.
• C) ESOPs for top management tend to increase unethical behavior.
• D) Research on ESOPs indicates that ESOPs drastically improve employee performance.
• E) ESOPs are also called competency-based pay plans

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Intrinsic & Extrinsic Rewards
• Which of the following is an example of an intrinsic reward?
• A) bonus
• B) profit-sharing plan
• C) employee stock option
• D) employee recognition
• E) gainsharing
• Answer: D
• Explanation: D) Work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the
form of employee recognition programs and extrinsic in the form of compensation systems.

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Practice Question
• Anu works as a nurse at the local hospital. She was very pleased recently when she was awarded
"Employee of the Month," received her picture on the wall, and a gift Voucher from the hospital
commissary. Which type of reward has Anu received?
• A) both intrinsic and extrinsic
• B) just intrinsic
• C) just extrinsic
• D) neither intrinsic nor extrinsic
• E) variable intrinsic and extrinsic

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Implications for Managers
• Recognize individual differences
• Use goals and feedback
• Allow employees to participate in decisions that affect them
• Link rewards to performance
• Check the reward system for equity

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