MOTIVATION-FROM CONCEPTS

TO APPLICATION
 After studying this chapter, you should be able to:
 8.1 Describe how the job characteristics model (JCM) motivates
by changing the work environment
 8.2 Compare the main ways jobs can be redesigned.
 8.3 Explain how specific alternative work arrangements can
motivate employees.
 8.4 Describe how employee involvement measures can motivate
employees.
 8.5 Demonstrate how the different types of variable-pay programs
can increase employee motivation.
 8.6 Show how flexible benefits turn benefits into motivators.
 8.7 Identify the motivational benefits of intrinsic rewards
• JOB DESIGN: The way the elements in a job are
organized.
• MOTIVATING BY JOB DESIGN :
• THE JOB CHARACTERISTICS MODEL(JCM)
proposes that any job can be described in terms of 5 core
job dimensions:
• 1. Skill variety
• 2. Task identity
• 3. Task significance
• 4. Autonomy
• 5. Feedback
 1. Skill variety: The degree to which a job requires a variety of
different activities. Eg: The work of a garage owner-operator who
does electrical repairs, rebuild engines, The job of a body shop worker
who sprays paint 8 hours a day scores low on skill variety
 2. Task identity: The degree to which a job requires completion of a
whole and identifiable piece of work. Eg: A cabinet maker who
designs a piece of furniture, selects the wood, builds the object, and
finishes it to perfection –high task identity. Only making the legs of
the table-low task identity
 3. Task significance: The degree to which a job has a
substantial impact on the lives or work of other people.
Eg: A nurse in an I.C.U. score high on task significance.
 4. Autonomy: The degree to which a job provides
substantial freedom and discretion to the individual in
scheduling the work and in determining the procedures to
be used in carrying it out.
 5. Feedback: The degree to which a job carrying out the
work activities required by a job results in the individual
obtaining direct and clear information about the
effectiveness of his or her performance.
 From a motivational standpoint, the JCM proposes that individuals
obtain internal rewards when they learn (Knowledge of results) that
they personally (experienced responsibility) have performed well
on a task that they care about (experienced meaningfulness)
 The more these 3 states are present,
 The greater will be employees motivation, performance and
satisfaction
 And the lower their absenteeism and likelihood of leaving.
 Motivating potential Score(MPS) A predictive index that reflects
the motivating potential in a job
 (skill variety + task identity +Task significance) x Autonomy x feedback
 To be high on motivating potential, jobs must be high
on at least one of the 3 factors that lead to
experienced meaningfulness and high on both
autonomy and feedback
 JCM is strongly supported by evidence.
 How can jobs be redesigned?
 1. job rotation: The periodic shifting of an employee from one task
to another, with similar skill requirements at the same organizational
level (also called cross training).
 If employees suffer from overroutinisation
 Eg: At Singapore airlines, a ticket may take on the duties of a
baggage handler. Singapore airline is rated one of the best airlines in
the world to work in.
 Increases flexibility and avoids lay offs.
 Advantages
 1. reduces boredom.
 2. increases motivation.
 3. helps employees better understand how their work contributes to the
organization
 4. more flexibility in scheduling work, filling vacancies,
 Disadvantages
 1. Training costs increase
 3. productivity is reduced by moving a worker into a new position.
 3. Disruptions when members of the work group have to adjust to the
new employee.
 4. Supervisors may have to spend more time answering questions and
monitoring the work of recently rotated employee.
• 2. Job enrichment : Adding high-level responsibilities to a job
to increase intrinsic motivation.
 Relational job design: Constructing jobs so employees see
the positive difference positive difference they can make in the
lives of others directly through their work
 Eg. Researchers recently found that when university fund
raisers briefly interacted with the under graduates who would
receive the scholarships they raised, they persisted 42%
longer, and raised nearly twice as much money, as those who
did not interact with the potential recipients.
 ALTERNATIVE WORK ARRANGEMENTS:
 1.Flextime
 2.Job sharing
 3.Telecommuting
• 1:Flextime: 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.
 Benefits:
 1. Reduced absenteeism.
 2. Increased productivity.
 3. Reduced overtime expenses.
 4. Reduced hostility towards management.
 5.Reduced traffic congestion around work sites.
 6. Elimination of tardiness.
 7. Increased autonomy and responsibility for employees.
 8. Increased employee job satisfaction.
 Most of the evidence is in favour of Flextime.
 The major drawback is it is not applicable for every job.
 Works well for clerical tasks.
 2. Job sharing : The practice of having two or more
people split 40 hour a week job.
 Eg: 1: One person – 8 a.m. to noon. The other person 1
p.m. to 5 p.m.
2. The two could work full but alternate days.
 Pros : 1. The organization can draw on the talents of
more than 1 individual in a given job.
 2. Skilled workers who might not be available on a full
time basis may be hired.
 Cons : Finding compatible pairs of employees who can
successfully coordinate the intricacies of one job.
 3.Telecommuting : Working from home at least 2 days a week on a
computer that is linked to the employer’s office.
 Advantages :
 Larger labor pool
 Higher productivity
 Improved morale
 Reduced office-space costs
 Disadvantages
 Less direct supervision of employees
 Difficult to evaluate non-quantitative performance
 EMPLOYEE INVOLVEMENT:: A
participative process that uses the input of
employees and is intended to increase
employee commitment to an organization's
success.
 Example:
 1. Participative management.
 2. Representative participation.
 Participative management: A process in which subordinates share a
significant degree of decision-making power with their immediate
superiors.
 For it to work,
 1. The issues in which employees are engaged must be relevant to
their interests so that they will be motivated.
 2. Employees must have the competence and knowledge to make a
useful contribution.
 3. Trust and confidence must exist among all parties.
 Dozens of studies have shown mixed results.
 2. Representative participation : A system in which workers
participate in organizational decision making through a small group
of representative employees.
 Almost every country in western Europe requires companies to
practice representative participation.
 “The most widely legislated form of employee involvement around
the world.”
 USING REWARDS TO MOTIVATE EMPLOYEES:
 1.What to pay: Establishing a pay structure
 2. How to pay: Rewarding individual employees through
variable pay programs
 2.a. Piece-rate pay
 2.b. Merit-based pay
 2.c. Bonuses
 2.d. Skill-based pay
 2.e. Profit-sharing plans
 2.f. Gain sharing
 2.g. Employee stock ownership plans
 3. Flexible benefits : Developing a benefits package
 4. Intrinsic Rewards: Employee Recognition Programs
 1. What to pay : Establishing a pay structure
 The process of initially setting pay levels entails
balancing internal equity and external equity.
 Internal equity - The worth of the job to the
organization (established through job evaluation)
 External equity- the external competitiveness of an
organizations pay relative to pay elsewhere in the
industry (usually established through pay surveys)
 2. How to pay : Rewarding individual employees through
variable pay programs
 A pay plan that bases a portion of an employee’s pay on
some individual and/or organizational measure of
performance.
 2.1 Piece rate pay
 2.2 Merit based pay
 2.3 Bonuses
 2.4 Skill based pay
 2.5 Profit sharing plans
 2.6 Gain sharing
 2.7 Employee stock ownership plan
 2.1. Piece-rate pay : A pay plan in which workers are
paid a fixed sum for each unit of production completed.
 Production workers.
 No base salary.
 Not feasible for all jobs.
 Eg.: You can’t pay a hospital administrator a salary
based on the number of patients admitted in the ward
 2.2. Merit-based pay : A pay plan based on performance
appraisal ratings.
 Pros:
 1. Performers can be given bigger raises, motivated and retained
 If designed correctly, merit based plans let individuals perceive a
strong relationship between their performance and the rewards
they receive.
 Cons:
 1. They are typically based on an annual performance appraisal,
and thus are only as valid as the performance ratings.
 2. The pay-raise pool fluctuates on economic or other conditions
that have very little to do with individual performance.
 3. Unions typically resist merit-based pay plan
 2.3. Bonuses : A pay plan that rewards employees for
recent performance rather than historical performance.
 Pros :
 1. The incentive effects of performance bonuses should
be higher than those of merit pay because, rather than
paying for performance years ago(that was rolled into
base pay), bonuses reward recent performance.
 Cons :
 1. Pay is more vulnerable to cuts when bonuses are a
large percentage of total pay or when employees come
to take bonuses for granted
 2.4. Skill-based pay : A pay plan that sets pay levels on the basis of
how many skills employees have or how many jobs they can do.
 Pros :
 1. The increase the flexibility of the workforce.
 2. Facilitates communication across the organization as people gain
a better understanding of each others’ jobs.
 Cons :
 1. People can “top out” – i.e. they can learn all the skills the
program offers and can then get frustrated with nothing new to
learn.
 2. The skills may not be monetizable but the company may be
shelling out extra to the employees who have acquired the new
skills.
 3. Level of productivity is not addressed. They deal only with
whether someone can perform the skill
 2.5. Profit-sharing plans : An organization wide program that
distributes compensation based on some established formula
designed around a company’s profitability.
 Can be direct cash outlays or for top managers – ESOPs.
 Greater psychological ownership
 2.6. Gain sharing : A formula based group incentive
plan.
 Popular among large manufacturing companies.
 How is Gain sharing different from profit sharing?
 It ties rewards to productivity gains rather than profits.
 Employees in a gain sharing plan can receive incentive
rewards even when the organization isn’t profitable.
 Because the benefits accrue to groups of workers, high
performing workers pressure weaker performers to
work harder, improving performance for the group as a
whole
 2.7. Employee stock ownership plans (ESOP) : A
company established benefits plan in which employees
acquire stock, often at below market prices, as part of
their benefits.
 Research on ESOPs indicates they increase employee
satisfaction.
 But their impact on performance is less clear.
 3. Flexible benefits : A benefits plan that allows each
employee to put together a benefits package
individually tailored to his or her own needs and
situation
 A standardized benefits package would be unlikely to
meet the needs of both them.
 3 popular types are:
 1. Modular plans.
 2. Core-plus plans.
 3. Flexible spending accounts.
 1. Modular plans : are predesigned packages or
modules of benefits, each of which meets the needs of a
specific groups of employees.
 A module designed for single employees with no
dependents might include only essential benefits.
 A module designed for single parents might have
additional life insurance, disability insurance and
expanded health coverage
 2. Core-plus plans: consist of a CORE of essential
benefits and a menu like selection of others from which
employees can select.
 Typically, each employee is given benefit credits,
which allow the “purchase” of additional benefits that
uniquely meet his or her need
 3. Flexible spending plans: allow employees to set
aside pretax money up to the amount offered in the plan
to pay for particular benefits, such as healthcare
premiums
 Take home pay is increased as taxes are not levied on
the money spent on these heads
 4. Intrinsic Rewards : Employee Recognition Programs
 Arnab Go swami makes only Rs.6,000 a month working at
a fast food joint in Noida.
 The job is not very interesting or challenging.
 Yet John talks enthusiastically about the job, his boss, and
the company that employs him.
 “What I like about the job is the fact that Mr. Anthony
Gonzales (his supervisor) appreciates the effort I make. He
compliments me regularly in front of the other people on
my shift, and I have been chosen Employee of the Month
twice in the past 6 months. Did you see my picture on that
plaque on the wall?”
 Organizations are increasingly recognizing what John
knows, important work rewards can be both intrinsic and
extrinsic.
 Intrinsic : Employee recognition programs.
 Extrinsic : Compensation systems.
 Can range from a spontaneous Thank You to widely
publicized formal programs in which specific types of
behavior are encouraged and the procedures for attaining
recognition are clearly identified.
 Some research suggests financial incentives may be more
motivating in the short term but in the long run it is
nonfinancial incentives
 Advantage:
 Inexpensive since praise is free.
 Can be applied to jobs for which performance factors
are relatively objective, such as sales.
 Disadvantage:
 Susceptible to abuse.
 In most jobs, the criteria for good performance aren’t
self-evident, which allows managers to manipulate the
system and recognize their favorite