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Chapter 10: Managing Employee Motivation and Performance: Reading
Chapter Introduction
Learning Outcomes
After studying this chapter, you should be able to:
1. Characterize the nature of motivation, including its importance
and basic historical perspectives.
2. Identify and describe the major content perspectives on
motivation.
3. Identify and describe the major process perspectives on
motivation.
4. Describe reinforcement perspectives on motivation.
5. Identify and describe popular motivational strategies.
6. Describe the role of organizational reward systems in
motivation.
Management in Action
Motivating the Whole
Person
“If I put our mission in simple terms, it would be, No. 1, to change the way the world
eats and, No. 2, to create a workplace based on love and respect.”
—Whole Foods co-CEO Walter Robb
Whole Foods is often recognized as a great place to work. Employees
such as this one are motivated by Whole Foods’ competitive pay and
benefits, although some criticism has been directed at the firm’s healthcare plan.
Jim West/Alamy
Whole Foods Market (WFM) started out in
1980 as 1 store with 19 employees in Austin,
Texas. Today, with 350 stores and 54,000
employees in North America and Great Britain,
it’s the leading natural and organic foods
supermarket (and ninth-largest food and drug
chain in the United States). Along the way, it’s
also gained a considerable reputation as a
socially responsible company and a good place
to work. WFM’s motto is “Whole Foods, Whole
People, Whole Planet,” and its guiding “core
value,” according to co-CEO Walter Robb, is
“customers first, then team members, balanced
with what’s good for other stakeholders…. If I
put our mission in simple terms,” Robb
continues, “it would be, No. 1, to change the
way the world eats and, No. 2, to create a
workplace based on love and respect.”
WFM made Fortune magazine’s very first list of
the “100 Best Companies to Work For” in 1998
and is one of 13 organizations to have made it
every year since. Citations have acknowledged
the company’s growth (which means more
jobs), salary-cap limits (the top earner gets no
more than 19 times the average full-time
salary), and generous health plan. The
structure of the company’s current health-care
program, which revolves around high
deductibles and so-called health savings
accounts (HSAs), was first proposed in 2003.
Under such a plan, an employee (a “team
member,” in WFM parlance) pays a deductible
before his or her expenses are covered.
Meanwhile, the employer funds a special
account (an HSA) for each employee, who can
spend the money to cover health-related
expenditures. The previous WFM plan had
covered 100 percent of all expenses, and when
some employees complained about the
proposed change, the company decided to put
it to a vote. Nearly 90 percent of the workforce
went to the polls, with 77 percent voting for
the new plan. In 2006, employees voted to
retain the plan, which now carries a deductible
of around $1,300; HSAs may go as high as
$1,800 (and accrue for future use). The
company pays 100 percent of the premiums for
eligible employees (about 89 percent of the
workforce).
High-deductible plans save money for the
employer (the higher the deductible, the lower
the premium), and more important—at least
according to founder and co-CEO John
Mackey—they also make employees more
responsible consumers. When the first $1,300
of their medical expenses comes out of their
own pockets (or their own HSAs), he argues,
people “start asking how much things cost. Or
they get a bill and say, ‘Wow, that’s expensive.’
They begin to ask questions. They may not
want to go to the emergency room if they wake
up with a hangnail in the middle of the night.
They may schedule an appointment now.”
Mackey believes that “the individual is the best
judge of what’s right for the individual,” and
he’s so convinced of the value of plans like the
one offered by his company that in August
2009 he wrote an op-ed in the Wall Street
Journal in which he recommended “The Whole
Foods Alternative to ObamaCare.” Health care,
he wrote, “is a service that we all need, but just
like food and shelter, it is best provided
through voluntary and mutually beneficial
market exchanges.” Going a step further,
Mackey argued against an “intrinsic right to
health care,” and on this point he stirred up a
reaction among his customers that ran the
gamut from surprise to boycotting. “I’m
boycotting [Whole Foods],” said one customer
who’d been shopping WFM several times a
week, “because all Americans need health care.
While Mackey is worried about health-care and
stimulus spending, he doesn’t seem too
worried about expensive wars and tax breaks
for the wealthy and big businesses such as his
own that contribute to the [national] deficit.”
Consumer advocates and HR specialists also
attacked Mackey’s proposals and policies.
“High-deductible plans for low-wage workers,”
says Judy Dugan, research director of
Consumer Watchdog, “are the next best thing
to being uninsured: The up-front costs are so
high that workers have to weigh getting health
care against paying the rent (to the detriment
of their health).” A former WFM executive
points out, for example, that the firm’s plan
entails “astronomical deductibles and co-pays.”
As for the HSA, it has to cover all co-pays and
all expenses not covered by the plan (such as
mental health care). “There’s way more going
on here than ‘health insurance,’” concludes the
anonymous former exec. “… [The] system has
massive hidden charges that routinely threaten
and undermine the financial stability and,
ultimately, [the] well-being of the employees.”
Responding to the backlash against
Mackey’s WSJ piece, the WFM Customer
Communications Team hastened to point out
that “our team members vote on our plan … to
make sure they continue to have a voice in our
benefits.” Mackey’s intent, said the press
release, “was to express his personal
opinions—not those of Whole Foods Market
team members or our company as a whole.”
The release also offered an apology for having
“offended some of our customers,” but for
many onetime WFM loyalists, the apology was
too little too late. “I will no longer be shopping
at Whole Foods,” announced one New Jersey
shopper, explaining that “a CEO should take
care that if he speaks about politics, his beliefs
reflect at least the majority of his clients.” In
fact, WFM had become, in the words of one
reporter, “the granola set’s chain of choice,”
and much of its customer base consists of
people whose opinions on such issues as
health-care reform are quite different from
Mackey’s. His WSJ article, declared a
contributor to the company’s online forum,
was “an absolute slap in the face to the millions
of progressive-minded consumers that have
made [Whole Foods] what it is today.”
The potential repercussions weren’t lost on the
WFM board. In late August, following the
appearance of the WSJ op-ed piece,
shareholder activists called for Mackey’s
removal. The CEO, they charged, had
“attempted to capitalize on the brand
reputation of Whole Foods to champion his
personal political views but has instead deeply
offended a key segment of Whole Foods
consumer base.” The company’s stock had also
slipped 30 percent over the previous five-year
period. The board eventually compromised by
convincing Mackey to step down as chairman
of the board.
Obviously, managers can’t always motivate
people to perform in ways that are in the best
interests of the organization. But managers are
responsible for encouraging high performance
from their employees, so it’s always
worthwhile trying to figure out what makes
employees more (or less) productive. Whether
it’s pay, benefits, or job security, the issue
almost invariably comes down to motivation,
which is the subject of this chapter. We first
examine the nature of employee motivation
and then explore the major perspectives on
motivation. Newly emerging approaches are
then discussed. We conclude with a description
of rewards and their role in motivation.
The Nature of Motivation
Motivation is the set of forces that cause people to behave in
certain ways. On any given day, an employee may choose to
work as hard as possible at a job, work just hard enough to
avoid a reprimand, or do as little as possible. The goal for the
manager is to maximize the likelihood of the first behavior and
minimize the likelihood of the last. This goal becomes all the
more important when we understand how important
motivation is in the workplace.
Individual performance is generally determined by three things:
motivation (the desire to do the job), ability (the capability to do
the job), and the work environment (the resources needed to do
the job). If an employee lacks ability, the manager can
provide training or replace the worker. If there is a resource
problem, the manager can correct it. But, if motivation is the
problem, the task for the manager is more challenging.
Individual behavior is a complex phenomenon, and the
manager may be hard pressed to figure out the precise nature of
the problem and how to solve it. Thus, motivation is important
because of its significance as a determinant of performance and
because of its intangible character.
The motivation framework in Figure 10.1 is a good starting
point for understanding how motivated behavior occurs. The
motivation process begins with a need deficiency.
Figure 10.1The Motivation Framework
The motivation process progresses through a series of discrete steps.
Content, process, and reinforcement perspectives on motivation address
different parts of this process.
© Cengage Learning
For example, when a worker feels that she is underpaid, she
experiences a need for more income. In response, the worker
searches for ways to satisfy the need, such as working harder to
try to earn a raise or seeking a new job. Next, she chooses an
option to pursue. After carrying out the chosen option—
working harder and putting in more hours for a reasonable
period of time, for example—she then evaluates her success. If
her hard work resulted in a pay raise, she probably feels good
about things and will continue to work hard. But, if no raise has
been provided, she is likely to try another option.
Content Perspectives on
Motivation
Content perspectives on motivation deal with the first part of
the motivation process—needs and need deficiencies. More
specifically, content perspectives address the question “What
factors in the workplace motivate people?” Labor leaders often
argue that workers can be motivated by more pay, shorter
working hours, and improved working conditions. Meanwhile,
some experts suggest that motivation can be more effectively
enhanced by providing employees with more autonomy and
greater responsibility. Both of these views represent content
views of motivation. The former asserts that motivation is a
function of pay, working hours, and working conditions; the
latter suggests that autonomy and responsibility are the causes
of motivation. Two widely known content perspectives on
motivation are the needs hierarchy and the two-factor theory.
10-2aThe
Needs Hierarchy Approach
The needs hierarchy approach has been advanced by many
theorists. Needs hierarchies assume that people have different
needs that can be arranged in a hierarchy of importance. The
best known is Maslow’s hierarchy of needs.
Abraham Maslow, a human relationist, argued that people are
motivated to satisfy five need levels. Maslow’s hierarchy of
needs is shown in Figure 10.2. At the bottom of the hierarchy
are the physiological needs—things such as food, sex, and air,
which represent basic issues of survival and biological function.
In organizations, survival needs are generally satisfied by
adequate wages and the work environment itself, which
provides restrooms, adequate lighting, comfortable
temperatures, and ventilation.
Figure 10.2Maslow’s Hierarchy of Needs
Maslow’s hierarchy suggests that human needs can be classified into five
categories and that these categories can be arranged in a hierarchy of
importance. A manager should understand that an employee may not be
satisfied with only a salary and benefits; he or she may also need
challenging job opportunities to experience self-growth and satisfaction.
Source: Adapted from Abraham H. Maslow, “A Theory of Human Motivation,” Psychology
Review, 1943, Vol. 50, pp. 370–396.
Next are the security needs for a secure physical and emotional
environment. Examples include the desire for housing and
clothing and the need to be free from worry about money and
job security. These needs can be satisfied in the workplace by
assured job continuity (no layoffs), an effective grievance
system (to protect against arbitrary supervisory actions), and
an adequate insurance and retirement benefit package (for
security against illness and provision of income in later life).
Even today, however, depressed industries and economic
decline can put people out of work and restore the primacy of
security needs.
Belongingness needs relate to social processes. They include the
need for love and companionship and the need to be accepted
by one’s peers. These needs are satisfied for most people by
family and community relationships outside work and by
friendships on the job. A manager can help satisfy these needs
by allowing social interaction and by making employees feel like
part of a team or work group.
Esteem needs actually comprise two different sets of needs: the
need for a positive self-image and self-respect and the need for
recognition and respect from others. A manager can help
address these needs by providing a variety of extrinsic symbols
of accomplishment, such as job titles, nice offices, and similar
rewards as appropriate. At a more intrinsic level, the manager
can provide challenging job assignments and opportunities for
the employee to feel a sense of accomplishment.
At the top of the hierarchy are the self-actualization needs. These
involve realizing one’s potential for continued growth and
individual development. The self-actualization needs are
perhaps the most difficult for a manager to address. In fact, it
can be argued that these needs must be met entirely from
within the individual. But a manager can help by promoting a
culture wherein self-actualization is possible. For instance, a
manager could give employees a chance to participate in
making decisions about their work and the opportunity to learn
new things.
Maslow suggests that the five need categories constitute a
hierarchy. An individual is motivated first and foremost to
satisfy physiological needs. As long as they remain unsatisfied,
the individual is motivated to fulfill only them. When
satisfaction of physiological needs is achieved, they cease to act
as primary motivational factors, and the individual moves “up”
the hierarchy and becomes concerned with security needs. This
process continues until the individual reaches the selfactualization level. Maslow’s concept of the needs hierarchy has
a certain intuitive logic and has been accepted by many
managers. But research has revealed certain shortcomings and
defects in the theory. Some research has found that five levels of
need are not always present and that the order of the levels is
not always the same, as postulated by Maslow. In addition,
people from different cultures are likely to have different need
categories and hierarchies.
10-2bThe
Two-Factor Theory
Another popular content perspective is the two-factor theory
of motivation. Frederick Herzberg developed his theory by
interviewing a group of accountants and engineers. He asked
them to recall occasions when they had been satisfied and
motivated and occasions when they had been dissatisfied and
unmotivated. Surprisingly, he found that different sets of factors
were associated with satisfaction and with dissatisfaction—that
is, a person might identify “low pay” as causing dissatisfaction
but would not necessarily mention “high pay” as a cause of
satisfaction. Instead, different factors—such as recognition or
accomplishment—were cited as causing satisfaction and
motivation.
This finding led Herzberg to conclude that the traditional view
of job satisfaction was incomplete. That view assumed that
satisfaction and dissatisfaction are at opposite ends of a single
continuum. People might be satisfied, dissatisfied, or
somewhere in between. But Herzberg’s interviews had
identified two different dimensions altogether: one ranging
from satisfaction to no satisfaction and the other ranging from
dissatisfaction to no dissatisfaction. This perspective, along with
several examples of factors that affect each continuum, is shown
in Figure 10.3. Note that the factors influencing the satisfaction
continuum—called motivation factors—are related specifically
to the work content. The factors presumed to cause
dissatisfaction—called hygiene factors—are related to the work
environment.
Figure 10.3The Two-Factor Theory of Motivation
The two-factor theory suggests that job satisfaction has two dimensions.
A manager who tries to motivate an employee using only hygiene
factors, such as pay and good working conditions, will likely not succeed.
To motivate employees and produce a high level of satisfaction,
managers must also offer factors such as responsibility and the
opportunity for advancement (motivation factors).
© Cengage Learning
Based on these findings, Herzberg argued that there are two
stages in the process of motivating employees. First, managers
must ensure that the hygiene factors are not deficient. Pay and
security must be appropriate, working conditions must be safe,
technical supervision must be acceptable, and so on. By
providing hygiene factors at an appropriate level, managers do
not stimulate motivation but merely ensure that employees are
“not dissatisfied.” Employees whom managers attempt to
“satisfy” through hygiene factors alone will usually do just
enough to get by. Thus, managers should proceed to stage 2—
giving employees the opportunity to experience motivation
factors such as achievement and recognition. The result is
predicted to be a high level of satisfaction and motivation.
Herzberg also went a step further than most other theorists and
described exactly how to use the two-factor theory in the
workplace. Specifically, he recommended job enrichment, as
discussed in Chapter 6. He argued that jobs should be
redesigned to provide higher levels of the motivation factors.
Although widely accepted by many managers, Herzberg’s twofactor theory is not without its critics. One criticism is that the
findings in Herzberg’s initial interviews are subject to different
explanations. Another charge is that his sample was not
representative of the general population and that subsequent
research often failed to uphold the theory . At the present
time, Herzberg’s theory is not held in high esteem by
researchers in the field. The theory has had a major impact on
managers, however, and has played a key role in increasing
their awareness of motivation and its importance in the
workplace.
10-2cIndividual
Human Needs
In addition to these theories, research has focused on specific
individual human needs that are important in organizations.
The three most important individual needs, sometimes referred
to as manifest needs, are achievement, affiliation, and power.
The need for achievement, the best known of the three, is the
desire to accomplish a goal or task more effectively than in the
past. People with a high need for achievement have a desire to
assume personal responsibility, a tendency to set moderately
difficult goals, a desire for specific and immediate feedback, and
a preoccupation with their task. Davi …
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