I.The Meaning of Money in the Workplace
A.Money and Employee Needs
1.Money is an important factor in satisfying individual needs.
2.Money is a symbol of status, which relates to the innate drive to acquire.
3.Financial gain symbolizes personal accomplishments and relates to growth needs.
4.People value money as a source of feedback and a representation of goal achievement.
5.Compensation is one of the top three factors attracting individuals to work for an organization.
B.Money Attitudes and Values
1.Money tends to create strong emotions and attitudes, most of which are negative, such as anxiety, depression, anger, and helplessness.
2.Money is associated with greed, avarice and occasionally, generosity.
3.People with a strong money ethic believe that money is not evil; that it is a symbol of achievement, respect, and power; and it should be budgeted carefully.
4.Cultural values seem to influence attitudes toward money and a money ethic.
a.People with Confucian work values are more likely to carefully budget their money but are also more likely to spend it.
b.People in countries with a long-term orientation give money a high priority in their lives.
c.Scandinavians, Australians, ad New Zealanders have a strong egalitarian value that discourages people from openly talking about money or displaying their personal wealth.
C.Money and Social Identity
1.People tend to define themselves in terms of their ownership and management of money.
2.Couples tend to adopt polarized roles regarding their management and expenditure of money.
3.Men are more likely than women to emphasize money in their self-concept.
4.Men are shown to be more confident managing their money and are more likely to use money as a tool to influence and impress other.
A.Membership-and Seniority-Based Rewards
1.Represent the largest part of most paychecks.
2.Also called “pay for pulse.”
3.Employees receive either the same wages and benefits, or these financial rewards increase with years of service.
4.Attract job applicants with security needs, reduce stress, and sometimes improve loyalty.
5.They do not directly motivate job performance.
6.They discourage poor performers from seeking out work better suited to their abilities.
7.Some of these rewards undermine job performance by creating continuance commitment.
B.Job Status-Based Rewards
1.Job evaluation is commonly used to rate the worth or status of each job, with higher pay rates going to jobs that require more skill and effort, have more responsibility, and have more difficult working conditions.
2.Organizations that don’t rely on job evaluation indirectly reward job status based on surveys estimating what other companies pay for specific jobs.
3.Job status-based pay motivates employees to compete for promotions and tries to make pay levels fair across different jobs (called internal equity).
4.One concern is that rewarding people for the worth of their jobs is inconsistent with the model of market-responsive organizations that have few layers of hierarchy and encourage initiative in everyone.
5.Status-based rewards motivate employees to compete with each other, rather than focusing their energy on customer service and other market needs.
6.They tend to reward functional specialization rather than the organization’s central goals of anticipating and responding to market needs.
7.Job evaluation systems motivate employees to increase their pay rate by exaggerating job duties and hoarding resources.
1.Organizations are shifting from rewarding job status to rewarding employees for their skills, knowledge, and other competencies that lead to superior performance.
2.Skill-based pay is a variation of competency-based rewards. The employees pay rate depends on the number of skill modules that he or she has mastered, not on the specific job performed on a particular day.
3.They improve workforce flexibility because they motivated employees to acquire a variety of skills that they can apply to different jobs as demands require.
4.Product or service quality tends to improve because employees with multiple skills are more likely to understand the work process and know how to improve it.
5.They are consistent with employability because they reward employees who continuously learn skills that will keep them employed.
6.A potential problem is that measuring competencies can be subjective, particularly where they are personality traits or values.
7.They are usually more objective and accurate but also expensive.
D. Performance-Based Rewards
a.Employees receive individual bonuses or awards for accomplishing a specific task or performance goal.
b.Salespeople typically earn commissions where pay increases with sales volume.
c.Piece-rate systems reward employees based on the number of units produced.
a.Organizations are shifting their focus from individuals to teams and employees are finding a larger part of their paycheck based on team performance.
b.Gainsharing plans award bonuses based on cost savings and improve team dynamics, knowledge sharing and pay satisfaction. Most of the cost reduction and labor efficiency is within the team’s control.
c.Open-book management is a variation of gainsharing whereby employees are shown operating costs, taught how to read those financial statements, and encouraged to find ways to reduce costs.
3. Organizational Rewards
a.Profit-sharing plans pay bonuses to employees based on the previous year’s level of corporate profits.
b.Employee stock ownership plans (ESOPs) encourage employees to buy shares in the company, usually at a discounted price. Employees are subsequently rewarded through dividends and market appreciation of those shares. One concern is where ESOPs make company pension plans too heavily weighted with company stock. If the company goes bankrupt, employees lose both their jobs and a large portion of their retirement nest egg.
c.Stock options give employees the right to purchase company stock at a future date at a predetermined price. They don’t require employees to own stock but allow them to benefit from its increase above a threshold level.
d.The balanced scorecard is a performance measurement system that rewards people (typically executives) for improving performance on a composite of financial, customer, and internal processes, as well as employee factors. The better the measurement improvements, the larger the bonus awarded.
e.ESOPs, stock options, and balanced scorecards tend to create an “ownership culture” in which employees feel aligned with the organization’s success.
f.The main problem with ESOPs, stock options, and profit sharing is that employees often perceive a weak connection between individual effort and corporate profits or the value of company shares. They also fail to motivate employees when profits are negligible or in “bear” markets when stock prices decline.
E.Improving Reward Effectiveness
1.Link Rewards to Performance
a.Inconsistencies and bias can be minimized by introducing gainsharing, ESOPs, and other plans that use objective performance measures.
b.Use 360-degree feedback to minimize biases from any single source because companies should rely on multiple sources of information.
c.Companies need to apply rewards soon after the performance occurs, and in a large enough dose that employees will experience positive emotion when they receive the reward.
2.Ensure that Rewards are Relevant
a.Companies need to align rewards with performance within the employee’s control. The more employees see a “line of sight” between their daily actions and the reward, the more they are motivated to improve performance.
b.Reward systems also need to correct for situational factors.
3.Use Team Rewards for Interdependent Jobs
a.Organizations should use team rewards rather than individual rewards when employees work in highly interdependent jobs because individual performance is difficult to measure in these situations.
b.Team rewards also tend to make employees more cooperative and less competitive.
c.They support employee preferences for team-based work arrangements.
4.Ensure that Rewards are Valued
a.Ask employees what they value because rewards work best when they are valued.
5.Watch Out for Unintended Consequences
a.Carefully think through the consequences of rewards and, where possible, test incentives in a pilot project before applying them across the organization to minimize the number of unexpected and undesirable effects these performance-based reward systems may have on employee behaviors.
III.Job Design Practices
A.Job Design and Work Efficiency
1.Job Design refers to the process of assigning tasks to a job, including the interdependency of those tasks with other jobs. A job is a set of tasks performed by one person.
2.Job Design is constantly changing due to technological change and trends in psychological contracts.
3.Job Design produces a produces an interesting technology or workforce flexibility, job design often produces and interesting conflict between the employee’s motivation and ability to complete the work.
4.Job specialization occurs when the work required to build a product or service is subdivided into separate jobs assigned to different people.
5.Job specialization potentially increases work efficiency because employees have fewer tasks to juggle and therefore spend less time changing activities.
6.They also require fewer physical and mental skills to accomplish the assigned work, so less time and resources are needed for training.
7.Employees practice their tasks more frequently with shorter work cycles, so jobs are mastered quickly.
8.Work efficiency increases because employees with specific aptitudes or skills can be matched more precisely to the jobs for which they are best suited.
a.The systematic partitioning of work into its smallest elements and the standardization of tasks to achieve maximum efficiency.
b.The supervisor’s tasks should be divided as well.
c.Improved efficiency in many work settings.
d.Improved training, goal setting, work incentives, and job specialization have all contributed to the success of scientific management.
10.Problems with Job Specialization
a.Discontentment pay is to compensate for the job dissatisfaction of narrowly defined work.
b.It ignores the effects of job content on employees.
c.Costs more in terms of higher turnover, absenteeism, sabotage, and mental health problems.
d.Work quality is often lower with highly specialized jobs because employees see only a small part of the process.
e.It ignores the motivational potential of jobs.
B.Job Design and Work Motivation
1.The motivator-hygiene theory proposes that employees experience job satisfaction when they fulfill growth and esteem needs (called motivators), and they experience dissatisfaction when they have poor working conditions, job security, and other factors related lower needs (called hygienes).
2.The job characteristics model identifies five core job dimensions that produce three psychological states.
3.Core job characteristics
a.Skill variety refers to the use of different skills and talents to complete a variety of work activities.
b.Task identity is the degree to which a job requires completion of a whole or identifiable piece of work.
c.Task significance is the degree to which the job has a substantial impact on the organization and/or larger society.
d.Autonomy is the degree to which a job gives financial freedom, independence, and discretion to schedule their work and determine the procedures used in completing it.
e.Job feedback is the degree to which employees can tell how well they are doing based on direct sensory information from the job itself. It has an important effect on reducing role ambiguity and improving job satisfaction.
4.Critical Psychological States
a.Experienced meaningfulness is the belief that one’s work is worthwhile or important.
b.Experienced responsibility is the state that employees must be assigned control of their work environment to feel responsible for their successes and failures.
c.Knowledge of results is the state where employees want information about the consequences of their work effort.
a.Employees must have the required skills and knowledge to master the more challenging work or job design will increase stress and reduce job performance.
b.Employees must be reasonably satisfied with their work environment before job design affects work motivation.
c.Employees must have strong growth needs, since improving the core job characteristics will have little motivational effect on people who are primarily focused on existence or relatedness needs.
C.Increasing Work Motivation Through Job Design
a.The practice of moving employees from one job to another.
b.Mainly introduced by organizations to develop a flexible workforce.
c.Rotation helps employees become multiskilled, so they can fluidly shift work duties based on needs and demands.
d.Introduced to reduce the incidence of repetitive strain injuries.
a.Increasing the number of tasks employees perform within their job.
b.Increases job’s skill variety.
c.Significantly improves work efficiency and flexibility.
d.Employees are motivated when they have a variety of tasks and have the freedom and knowledge to structure their work to achieve the highest satisfaction and performance.
a.Giving employees more responsibility for scheduling, coordinating, and planning their own work.
b.Clustering tasks into natural groups stitches highly interdependent tasks into one job.
c.Establishing client relationships also increases task significance because employees see a line-of-sight connection between their work and consequences for customers.
1.Empowerment is a psychological concept in which people experience more self-determination, meaning, competence, and impact regarding their role in the organization.
2.Four dimensions of empowerment:
a.Self-determination-empowered employees experience self-determination, which consists of freedom, independence, and discretion over their work activities.
b.Meaning-employees who feel empowered care about their work and believe that what they do is important.
c.Competence-empowered people have feelings of self-efficacy, meaning that they are confident about their ability to perform the work well and have a capacity to grow with new challenges.
d.Impact-empowered employees view themselves as active participants in the organization where their decision and actions have and influence on the company’s success.
3.Employees must be able to perform the work as well as handle the additional decision-making requirements.
4.To generate beliefs about self-determination, employees must work in jobs with a high degree of autonomy with minimal bureaucratic control.
5.To maintain a sense of meaningfulness, jobs must have high levels of task identity and task significance.
6.Jobs must provide sufficient feedback to maintain a sense of self-confidence.
7.Employees experience more empowerment in organizations where information and other resources are easily accessible.
8.Empowerment flourishes in organizations that appreciate the value of the employee learning and that accept reasonable mistakes as a natural part of the learning process.
9.Empowerment requires corporate leaders who trust employees and are willing to take the risks that empowerment creates.
10.Empowerment allows employees to apply their knowledge directly and with more responsiveness to problems and opportunities.
11.Empowerment increases personal initiative because employees identify with and assume more psychological ownership of their work.
A.Personal Goal Setting
1.Self-leadership is the process of influencing oneself to establish the self-direction and self-motivation needed to perform a task.
2.The first step in self-leadership
3. Employees are more focused when they set their own goals.
B. Constructive Thought Patterns
1. Positive self-talk refers to talking to ourselves about our own thoughts
or actions for the purpose of increasing our self-efficacy and navigating
through decisions in a future event.
a.Creates a “can do” belief and thereby increases motivation
by raising our expectancy.
b.Self-leadership is mostly interested in evaluative self-talk, in which you evaluate your capabilities and accomplishments. Most evaluative self-talk is negative; we criticize much more than encourage or congratulate ourselves.
c.Negative self-talk undermines our self-efficacy, which then undermines our potential for performing a particular task.
a. Mentally practicing a task and visualizing its successful
b. By mentally walking through the activities required to
accomplish the task, we begin to see problems that may occur and can then imagine what responses would be best for each contingency.
c.The other half involves imagining the experience of
completing the task and the positive results that follow.
d.This visualization increases goal commitment and motivates us to complete the task effectively.
C. Designing Natural Rewards
1. One way to build natural rewards into the job is to alter the way a task is
1. The process of keeping track of one’s progress toward a goal.
2. Includes the notion of consciously checking that naturally occurring
feedback at regular intervals.
3.Includes designing artificial feedback where natural feedback does not occur.
1.Includes the social learning theory concept of self-reinforcement.
2.Occurs whenever an employee has control over a reinforcer but doesn’t “take” the reinforcer until completing a self-set goal.
3.Also occurs decide to do a more enjoyable task after completing a task that you dislike.
F.Self-Leadership in Practice
1.People with a high degree of conscientiousness and internal locus of control are more likely to apply self-leadership practices.
2.Self-Leadership can be learned.
3.Training programs have helped employees to improve their self-leadership skills.
4.Organizations can encourage self-leadership by providing sufficient autonomy and establishing rewards that reinforce self-leadership behaviors.