Organizational Behavior V2.

0
By Talya Bauer and Berrin Erdogan
Published by:
Flat World Knowledge, Inc.
 
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13-2
Chapter 6
Designing a Motivating
Work Environment
Learning Objectives

1. Describe the history of job design approaches

2. Understand how to increase the motivating potential
of a job
3. Understand why goals should be SMART
4. Set SMART goals
5. Give performance feedback effectively
6. Describe individual, team, and organization based
incentives that can be used to motivate the workforce

1-4
 Motivation at Nucor

• Producing steel is hot

and demanding work.
Employees who are
motivated are much
more productive as
evidenced by Nucor’s
success.
© 2010 Jupiterimages Corporation

1-5
Case Study: Nucor

Source: shutterstock.com
Case Discussion Questions

1. What are some potential problems with closely tying employee pay to company
performance?
2. Nucor has one of the lowest turnover rates in the industry. How much of the
organization’s employee retention is related to the otherwise low pay of the steel
working industry?
3. What would Nucor’s strategy look like in a nonmanufacturing environment
(e.g., a bank)?
4. Would Nucor’s employee profit-sharing system work at a much larger
company? At what point does a company become too large for profit sharing to
make a difference in employee motivation?
5. Imagine that the steel industry is taking a major economic hit and Nucor’s
profits are way down. Employees are beginning to feel the pinch of substantially
reduced pay. What can Nucor do to keep its employees happy?
Scientific Management and Job Specialization

Scientific Job
Management Specialization

• Based on ideas • Break down jobs

from Frederic into their
Taylor’s 1911 simplest
book, “Principles components
of Scientific • Assign tasks so
Management” each employee
• Among the most performs a
influential books select number
of the 20th of tasks in a
century repetitive
manner
Scientific Management and Job Specialization

© 2010 Jupiterimages Corporation

This Ford panel assembly line in Berlin,

German, is an example of specialization. Each
person on the line has a different job.
Alternatives to Job Specialization

Job
Job Rotation Job Enrichment
Enlargement

Expanding the
Moving Allowing
tasks
employees workers more
performed by
from job to job control over
employees to
at regular how they
add more
intervals perform tasks
variety
Job Crafting

• A recent approach to job enrichment is job

crafting.
• Job crafting refers to the changes employees
make to their own job description – expanding
certain elements that are a better fit to their
own personality, or reducing the scope of the
job to achieve better work-life balance, all in
the service of better meeting the employee’s
career and life goals.
 Job Characteristics Model

Core Job Psychological Outcomes

Characteristic States
s
• Meaningfulness • Motivation
• Skill variety
• Responsibility • Performance
• Task identity
• Knowledge of • Satisfaction
• Task
results • Absenteeism
significance
• Autonomy
• Turnover
• Feedback
Calculate Motivation Potential Score (MPS)

( Skill Variety +
Task Identity +
(
Task Significance
x Autonomy x Feedback
3

MPS
OB Toolbox: Increase the Feedback You Receive:
Seek It!
If you are not receiving enough feedback on the
job, it is better to seek it instead of trying to guess
how you are doing.

Be genuine in your desire to learn.

Develop a good relationship with your manager.

Consider finding trustworthy peers who can share

information with you regarding your performance.

Be gracious when you receive feedback.

 Empowerment

Structural Empowerment
Decision Leadership Organizational Access to Organizational
authority styles structure information climate

Felt Empowerment
Meaningful Feeling Having Ability to
work confident discretion and influence
about autonomy at how the
performing work company
the job operates
 Discussion

• Is job rotation suitable to just lower level employees,

or is it possible to use it at higher levels in the
organization?
• What is the difference between job enlargement and
job enrichment? Which of these approaches is more
useful in dealing with the boredom and monotony of
job specialization?
• Consider a job you held in the past. Analyze the job
using the framework of the job characteristics model.
• Does a job with a high motivation potential motivate
all employees? Under which conditions is the model
less successful in motivating employees?
• How would you increase the empowerment levels of
employees?
1-16
• OB Toolbox: Tips for Empowering Employees

• Change the company structure so that employees

have more power on their jobs

• Provide employees with access to information

about things that affect their work

• Make sure that employees know how to perform

their jobs

• Do not take away employee power

• Instill a climate of empowerment where managers

do not routinely step in and take over
Goal-Setting Theory

Goal-setting theory is one of

the most influential and
practical theories of
motivation. It has been rated
as the most important (of 73
theories), supported in over
1,000 studies, and is used by
thousands of organizations. © 2010 Jupiterimages Corporation
SMART Goals

S Specific

M Measurable

A Aggressive

R Realistic

T Time-Bound
Why do SMART Goals Motivate?

Make You
Think Energize
Outside
the Box
SMAR
T
Goals

Provide Give
Challenge Direction
When Are Goals More Effective?

Goal
Feedback Ability Commitment
Downsides to Goal Setting

Learning
decreases
Adaptability
declines
Narrow
thinking may
develop
Ethical
problems
increase
Management by Objectives

Use corporate
strategy to set
company wide
goals

Periodically review Determine team-

performance and and department-
revise goals level goals

Collaboratively set
individual-level
Develop an action
goals that align
plan
with corporate
strategy
 Discussion
• Give an example of a SMART goal.
• If a manager tells you to “sell as much as you
can,” is this goal likely to be effective? Why or
why not?
• How would you ensure that employees are
committed to the goals set for them?
• A company is interested in increasing customer
loyalty. Using the MBO approach, what would be
the department- and individual-level goals
supporting this organization wide goal?
• Discuss an experience you have had with goals.
Explain how goal setting affected motivation and
performance.
 Performance Appraisal

• Many companies have a formal, companywide

process of providing feedback to employees.
Performance Appraisal Questions

What is
How the
often? purpose
?
What
makes
Who is
an
the
effectiv
rater?
e
system?
Absolute vs. Relative Ranking Appraisals

• Rating based on a standard

that is applied equally to
Absolute everyone
• Scores are based solely on
individual performance

• Rating is based on rank

within all ratings
• Final score is dependent
Relative on individual performance
measured against another
individual’s performance
OB Toolbox: Conducting an Effective Performance
Appraisal Meeting

Before the meeting

• Ask the person to complete a self-appraisal
• Complete the performance appraisal form
• Avoid recency bias
• Handle the logistics
During the meeting
• Be sure to recognize effective performance
• Do not start the meeting with a criticism
• Give employees lots of opportunities to talk
• Show empathy and support
• Set goals and create an action plan
Bias in Performance Appraisals

Unfair
Appraisal
Stereotypes

Leniency

Liking
 Discussion

• What are the disadvantaged of using only supervisors as

the rater? What are the disadvantages of using peers,
subordinates, and customers as raters?
• Do you believe that self-appraisals are valid? Why would it
be helpful to add self-appraisals to the appraisal process?
Can you think of any downsides to using them?
• Why do some managers intentionally give an employee a
higher rating than deserved? What are the disadvantages of
biased ratings? How could this tendency be prevented?
• Some recommend that performance appraisals be
abolished altogether. What do you think about this
approach? What are the downsides of eliminating
appraisals altogether?
• If your objective is to minimize the effects of rater biases,
what type of appraisal system would you design?
Performance Incentives

Piece Rate Individual

Merit Pay
System Bonuses

Sales Team
Commissions Awards Bonuses

Profit Stock
Gainsharing
Sharing Options
Performance Incentives

Properly designed
sales commissions
are widely used to
motivate sales
employees

The blend of straight salary and

commissions should be carefully
balanced to achieve optimum
sales volume, profitability, and
© 2010 Jupiterimages Corporation
customer satisfaction
 Discussion

• Have you ever been rewarded under any of the

incentive systems described in this chapter? What was
your experience with them?
• What are the advantages and disadvantages of
bonuses compared to merit pay? Which one would you
use if you were a manager at a company?
• What are the advantages of using awards as opposed
to cash as an incentive?
• How effective are stock options in motivation
employees? Why do companies offer them?
• Which of the incentive systems in this section do the
best job of tying pay to individual performance? Which
ones do the worst jobs?
Case Study: Netflix

Source: Denys Prykhodov / shutterstock.com

Case Discussion Questions

1. How does Netflix motivate employees? Which of the approaches discussed in

this chapter (job design, incentives, and performance appraisals) are being
utilized to motivate Netflix employees?
2. What do you think about the absence of policies such as vacations, travel, or
expense reimbursement? What are the downsides of not having such policies?
What is Netflix gaining as a result of not having them?
3. Why does Netflix avoid using financial incentives other than stocks? Would
instituting bonuses and other incentives increase motivation? Why or why not?
4. What do you think about companies eliminating performance appraisals? What
makes the absence of performance appraisals work?
Motivating Employees and Ethics

When goal accomplishment

is rewarded, and when
rewards are desirable,
employees will have two
basic options:

Work hard to Cheat to reach

reach goals goals
 Motivating Employees around the Globe

Motivation

Goals
perceived as American
difficult employees
Chinese
employees
 Discussion

• Do you have any experience with goal setting

leading to unethical behaviors?
• Many observers and employees are concerned
about the spread between CEO pay and average
employee pay. Is it ethical for CEOs to be paid so
much more than other employees? Under which
conditions would it be unethical?
• How would you determine whether a certain
incentive scheme or a type of performance
appraisal could be transferred to a different
culture?