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The job of a manager in the workplace is to get things done through employees. To do this the
manager should be able to motivate employees. But that's easier said than done! Motivation
practice and theory are difficult subjects, touching on several disciplines.
In spite of enormous research, basic as well as applied, the subject of motivation is not clearly
understood and more often than not poorly practiced. To understand motivation one must
understand human nature itself. And there lies the problem!
Human nature can be very simple, yet very complex too. An understanding and appreciation
of this is a prerequisite to effective employee motivation in the workplace and therefore
effective management and leadership.
Our articles on motivation theory and practice concentrate on various theories regarding
human nature in general and motivation in particular. Included are articles on the practical
aspects of motivation in the workplace and the research that has been undertaken in this field,
notably by Douglas McGregor (theory y), Frederick Herzberg (two factor motivation
hygiene theory,) Abraham Maslow (theory z, hierarchy of needs), Elton Mayo
(Hawthorne Experiments) Chris Argyris Rensis Likert and David McClelland
(achievement motivation.)
Quite apart from the benefit and moral value of an altruistic approach to treating colleagues as
human beings and respecting human dignity in all its forms, research and observations show
that well motivated employees are more productive and creative. The inverse also holds true.
The schematic below indicates the potential contribution the practical application of the
principles this paper has on reducing work content in the organization.
Motivation is the key to performance improvement
There is an old saying you can take a horse to the water but you cannot force it to drink; it will
drink only if it's thirsty - so with people. They will do what they want to do or otherwise
motivated to do. Whether it is to excel on the workshop floor or in the 'ivory tower' they must
be motivated or driven to it, either by themselves or through external stimulus.
Are they born with the self-motivation or drive? Yes and no. If no, they can be motivated, for
motivation is a skill which can and must be learnt. This is essential for any business to survive
and succeed.
Ability in turn depends on education, experience and training and its improvement is a slow
and long process. On the other hand motivation can be improved quickly. There are many
options and an uninitiated manager may not even know where to start. As a guideline, there
are broadly seven strategies for motivation.
These are the basic strategies, though the mix in the final 'recipe' will vary from workplace
situation to situation. Essentially, there is a gap between an individuals actual state and some
desired state and the manager tries to reduce this gap.
Motivation is, in effect, a means to reduce and manipulate this gap. It is inducing others in a
specific way towards goals specifically stated by the motivator. Naturally, these goals as also
the motivation system must conform to the corporate policy of the organization. The
motivational system must be tailored to the situation and to the organization.
In one of the most elaborate studies on employee motivation, involving 31,000 men and
13,000 women, the Minneapolis Gas Company sought to determine what their potential
employees desire most from a job. This study was carried out during a 20 year period from
1945 to 1965 and was quite revealing. The ratings for the various factors differed only slightly
between men and women, but both groups considered security as the highest rated factor. The
next three factors were;
• advancement
• type of work
• company - proud to work for
Surprisingly, factors such as pay, benefits and working conditions were given a low rating by
both groups. So after all, and contrary to common belief, money is not the prime motivator.
(Though this should not be regarded as a signal to reward employees poorly or unfairly.)
This is seldom, if ever, the case. Both the information available and the time at the managers
disposal are limited, but he or she must make a decision. And the decision is, therefore, not
the optimum one but a 'satisficing' one - in effect, a satisfactory compromise under the real
conditions prevailing in the management 'arena'.
This can best be ascribed to Sigmund Freud who was no lover of people, and was far from
being optimistic. Theory X assumes that people are lazy; they hate work to the extent that
they avoid it; they have no ambition, take no initiative and avoid taking any responsibility; all
they want is security, and to get them to do any work, they must be rewarded, coerced,
intimidated and punished. This is the so-called 'stick and carrot' philosophy of management. If
this theory were valid, managers will have to constantly police their staff, whom they cannot
trust and who will refuse to cooperate. In such an oppressive and frustrating atmosphere, both
for the manager and the managed, there is no possibility of any achievement or any
creative work. But fortunately, as we know, this is not the case.
This is in sharp contrast to theory 'X'. McGregor believed that people want to learn and that
work is their natural activity to the extent that they develop self-discipline and self-
development. They see their reward not so much in cash payments as in the freedom to do
difficult and challenging work by themselves. The managers job is to 'dovetail' the human wish
for self-development into the organizations need for maximum productive efficiency. The basic
objectives of both are therefore met and with imagination and sincerity, the enormous
potential can be tapped.
Does it sound too good to be true? It could be construed, by some, that Theory 'Y'
management is soft and slack. This is not true and the proof is in the 'pudding', for it has
already proved its worth in the USA and elsewhere. For best results, the persons must be
carefully selected to form a homogeneous group. A good leader of such a group may
conveniently 'absent' from group meetings so they can discuss the matters freely and help
select and 'groom' a new leader. The leader does no longer hanker after power, lets people
develop freely, and may even (it is hoped) enjoy watching the development and actualization
of people, as if, by themselves. Everyone, and most of all the organization, gains as a result.
Maslow's central theme revolves around the meaning and significance of human work and
seems to epitomize Voltaire's observation in Candide, 'work banishes the three great evils
-boredom, vice and poverty'. The great sage Yajnavalkya explains in the Brihadaranyaka
Upanishad that by good works a man becomes holy, by evil works evil. A mans personality is
the sum total of his works and that only his works survive a man at death. This is perhaps the
essence of Maslow's hierarchy of needs theory, as it is more commonly know.
Maslow's major works include the standard textbook (in collaboration with Mittlemann),
Principles of Abnormal Psychology (1941), a seminal paper, 'A Theory of Human Motivation'
(1943) and the book, Eupsychian Management (pronounced yew-sigh-keyan) published in
1965. Maslow's theory of human motivation is, in fact, the basis of McGregor's theory 'Y'
briefly described above. The basic human needs, according to Maslow, are:
Mans behavior is seen as dominated by his unsatisfied needs and he is a 'perpetually wanting
animal', for when one need is satisfied he aspires for the next higher one. This is, therefore,
seen as an ongoing activity, in which the man is totally absorbed in order to attain perfection
through self-development.
Maslow has had his share of critics, but he has been able to achieve a refreshing synthesis of
divergent and influential philosophies of:
This is based on analysis of the interviews of 200 engineers and accountants in the Pittsburgh
area in the USA. According to this theory, people work first and foremost in their own self-
enlightened interest, for they are truly happy and mentally healthy through work
accomplishment. Peoples needs are of two types:
• Supervision
• Interpersonal relations
• Working conditions
• Salary
• Recognition
• Work
• Responsibility
• Advancement
Unsatisfactory hygiene factors can act as de-motivators, but if satisfactory, their motivational
effect is limited. The psychology of motivation is quite complex and Herzberg has exploded
several myths about motivators such as:
As typical examples, saying 'please' to shop-floor workers does not motivate them to work
hard, and telling them about the performance of the company may even antagonize them
more. Herzberg regards these also as hygiene factors, which, if satisfactory, satisfy animal
needs but not human needs.
Chris Argyris
According to Argyris, organization needs to be redesigned for a fuller utilization of the most
precious resource, the workers, in particular their psychological energy. The pyramidal
structure will be relegated to the background, and decisions will be taken by small groups
rather than by a single boss. Satisfaction in work will be more valued than material rewards.
Work should be restructured in order to enable individuals to develop to the fullest extent. At
the same time work will become more meaningful and challenging through self-motivation.
Rensis Likert
• exploitative-authoritative;
• benevolent-authoritative;
• consultative;
• participative.
The participative system was found to be the most effective in that it satisfies the whole range
of human needs. Major decisions are taken by groups themselves and this results in achieving
high targets and excellent productivity. There is complete trust within the group and the sense
of participation leads to a high degree of motivation.
Fred Luthans
Luthans advocates the so-called 'contingency approach' on the basis that certain practices
work better than others for certain people and certain jobs. As an example, rigid, clearly
defined jobs, authoritative leadership and tight controls lead in some cases to high
productivity and satisfaction among workers. In some other cases just the opposite seems to
work. It is necessary, therefore, to adapt the leadership style to the particular group of
workers and the specific job in hand.
Victor Vroom
We have discussed above only a selection of the motivation theories and thoughts of the
various proponents of the human behavior school of management. Not included here are,
among others, the thoughts of:
What does it all add up to? Back to 'square one'? Yes, indeed, the overall picture is certainly
confusing. This is not surprising, for the human nature and human mind defy a clear-cut
model, mathematical or otherwise.
In some of the theories and thoughts presented, however, one can see some 'glimpses' of the
person and how, perhaps, he or she could be motivated. This is rewarding in itself. But, as
noted earlier, practice has been ahead of theory in this field, so let us now move to the
practical side of management of human behavior and motivation in the workplace.
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Management literature is replete with actual case histories of what does and what does not
motivate people. Presented here is a tentative initial broad selection of the various practices
that have been tried in order to draw lessons for the future.
The traditional Victorian style of strict discipline and punishment has not only failed to deliver
the goods, but it has also left a mood of discontent amongst the working class. Punishment
appears to have produced negative rather than positive results and has increased the hostility
between 'them' (the management) and 'us' (the workers). In contrast to this, the 'carrot'
approach, involving approval, praise and recognition of effort has markedly improved the work
atmosphere, produced the 'goods' and given the workers enormous satisfaction.
The manager's main task is to motivate his or her team, both individually and collectively so
that they can deliver the 'goods' and also derive satisfaction from it.
This may appear somewhat contradictory, but it seems to work. The main tools in the
manager's kitbag for motivating the team are:
These are arranged in order of importance and it is interesting to note that cash is way down
the ladder of motivators. Let's look at a couple of examples taken from real life situations.
The Swedish shipbuilding company, Kockums, turned a 15 million dollar loss into a 100 million
dollar profit in the course of ten years due entirely to a changed perception of the workforce
brought about by better motivation. At Western Electric there was a dramatic improvement in
output after the supervisors and managers started taking greater interest in their employees.
Persuasion is far more powerful than coercion, just as the pen is mightier than the sword.
Managers have a much better chance of success if they use persuasion rather than coercion.
The former builds morale, initiative and motivation, whilst the latter quite effectively kills such
qualities. The three basic components in persuasion are:
• suggest;
• play on the person's sentiments; and
• appeal to logic.
Once convinced, the person is so motivated as to deliver the 'goods'. The manager will have
achieved the goal quietly, gently and with the minimum of effort. It is, in effect, an effortless
achievement.
There has been a considerable amount of research into persuasion / motivation in the field of
advertising and marketing. The research is entirely of the applied type, which can and has
been used to great practical advantage. Some of the findings in this field were first published
in the fifties in a book with the title, The Hidden Persuaders, which became a bestseller.
Can these findings be used in actual work conditions? AT&T (The American Telephone and
Telegraph Co.,) recognizing the importance of hidden needs, at one time succeeded in
promoting long distance calls by use of the simple phrase: 'Reach out, reach out and touch
someone'. Managers will need to adapt this persuasion / motivation technique to their own
situation.
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This is the title of a study carried out by the US Department of Labor among 1500 workers,
who were asked to rate the job factors, from a list of 23, which they considered important
starting from the most important factor. Their findings (Sanzotta (1977)) are:
It is interesting that out of the 23 job factors listed for the survey, yet with the exception of
two items (white-collar workers' choice (b) and blue-collar workers' choice (c)) groups
selected the same top ten factors, although with different rankings. It is significant that good
pay was considered as the most important factor by the blue-collar workers, but it ranked as
the least important for white-collar workers.
It is well known that individual behavior is intensely personal and unique, yet companies seek
to use the same policies to motivate everyone. This is mainly for convenience and ease
compared to catering for individual oddities (Lindstone (1978)). 'Tailoring' the policy to the
needs of each individual is difficult but is far more effective and can pay handsome dividends.
Fairness, decisiveness, giving praise and constructive criticism can be more effective than
money in the matter of motivation. Leadership is considered synonymous (Tack (1979)) with
motivation, and the best form of leadership is designated as SAL, situation adaptable
leadership. In this style of leadership, one is never surprised or shocked, leadership must
begin with the chief executive and it is more a matter of adaptation than of imparting
knowledge. Ultimately, it is the leadership quality which leads to the success of a company
through building and motivating its people.
A contemporary bestseller (Blanchard & Johnson (1983)) aimed at managers who seek to
make star performers of their subordinates. To start with, the manager sets a goal, e.g. one
page read in one minute, and it is seen to be achieved by 'one minute' of praising or
reprimand as the case may be. But to be effective, these must be given (a) promptly, (b) in
specific terms, and the behavior, rather than the person, should be praised or reprimanded.
The concept is basic and it makes sense, although the book seeks to 'dramatize' it. 'One
minute' praising is seen to be the motivating force. Everyone is considered a winner, though
some people are disguised as losers, and the manager is extolled not to be fooled by such
appearances.
Another bestseller, In Search of Excellence (Peters & Waterman (1982)). Several criteria,
including analysis of annual reports and in-depth interviews, were used to pick 14 'model
excellent companies' out of an initial sample of 62 companies. As expected, most of the action
in high-performing companies revolved around its people, their success being ascribed to:
Personnel function and in particular leadership were considered the most critical components.
If the leaders in an organization can create and sustain an environment in which all employees
are motivated, the overall performance is bound to be good. The three essentials for creating
such an environment are:
• fairness;
• job security; and
• involvement.
Of all the resources available, the human resource is clearly the most significant, but also the
most difficult to manage. Excellence can only be achieved through excellent performance of
every person, rather than by the high-pitched performance of a few individuals. And
motivation is, undoubtedly, the crux.
Conclusion
There is no simple answer to the question of how to motivate people. Can money motivate?
Yes, but money alone is not enough, though it does help. We have discussed some of the
pertinent theories bearing on human motivation and this is balanced by some of the practical
factors which can lead to excellence. Human resource remains the focal point and leadership
the critical component, and motivation has to be 'tailored' to each individual. The next section
deals with an important mode of motivation, namely financial aspects of rewarding employees.
Employee rewards
Introduction
The previous section dealt with motivation theory and practice. There is no doubt that
motivation is the crux for good performance, but there is no clear cut answer to the question
of how to motivate. The previous pages gave a glimpse of the answer through various theories
and practices.
Money is a factor in motivating people and this section concentrates on this. Employee reward
systems are discussed in general and later in specifics in terms of payment by results. Various
schemes for financial motivation are also described.
Money is important!
This is, perhaps, saying the obvious. But it still needs to be said, for a perusal of the previous
section may give the impression to the contrary, at least judging from Maslow's concept.
Refreshing as it is, if the theory was completely valid then, at least in affluent countries,
economic incentives should have lost all their force. This, we know is not correct.
According to Peter Drucker (1974) 'there is not one shred of evidence for the alleged turning
away from material rewards... Antimaterialism is a myth, no matter how much it is extolled.'
In fact, they are taken so much for granted that their denial may act as a de-motivator.
'Economic incentives are becoming rights rather than rewards.'
There is no doubt that we live in a money-motivated world. Any amount of human relations
cannot compensate for a lack of monetary reward. If the reward is right, good human
relations will give that extra zest to a team, motivating them to give of their best efforts.
Insufficient monetary reward cannot be compensated by good human relations.
Even dedicated footballers do not think of playing for England, they merely pay 'lip service' to
it.; the financial rewards of playing for their clubs far exceed those recieved from playing from
their country .Cricketers and rugby players no longer play for their own country but opt for the
'highest bidder'. Professional tennis players have refused to play at Wimbledon, the 'Mecca' of
lawn tennis, because the rewards were not attractive.
It is no different in the industrial world. Strikes for better salary and rewards do still occur. All
this despite the claim of psychologists that security is the prime need of a person, as indicated
in the previous section. Has the sense of values changed with time? But we are not concerned
here with the philosophical angle, but with hard facts of life in a commercial world.
Employee rewards
Motivating executives
We discuss this subject separately, since there is an indication from various surveys (see
previous section) that the blue-collar and white-collar workers do not attach the same
importance to financial incentives. This is probably more due to differing value system of the
two, rather than the importance each attaches to the money per se.
Properly used, money can be a motivating factor, but little money may have no effect (Crystal
(1970)). To achieve motivation of executives, therefore:
The concept is simple, but its implementation is not easy. However, the job is well worth
trying. To be effective, the reward should be 'tailored' to each individual, but only as part of
the total compensation concept. It is essential (Moore (1968)) to develop an overall program
within which each compensation package must be individualized.
There is also need for constant search of new ideas in this respect. The essentials of an
effective company-wide executive compensation scheme are: sound salary-base structure,
several fundamental compensation devices and considerable flexibility in its application.
• salary,
• short-term incentives,
• long-term incentives,
• employee benefits and
• perquisites.
Any plan for executives should take into account the following factors:
Motivating for high performance can cost a lot of money. Not everyone can be motivated by
money alone, however much. Incentive pay plans should be designed (Ivancevich (1983)) not
only to reward good performance but also to minimize the negative side-effects, such as
conflict and grievance. At times it is difficult to develop a valid, equitable and acceptable
means of performance. Many pay plans fail because of either not being suited to the particular
situation or because of poor implementation. It is essential to consider the following aspects
before designing a pay plan to motivate performance:
We have pointed out earlier that for effective and sustained motivation, the reward must be
prompt and immediate. The example of Foxboro has been quoted. In its early days, the
company's very survival depended on technical innovation. Late one evening (Peters &
Waterman (1982)) a scientist walked into the president's office with a working prototype. The
president was dumbfounded by the elegance of the solution and sought to reward him
immediately and on the spot. Rummaging through the drawers of his desk, all he could find
was a banana and this had to suffice. This was the forerunner of the 'gold banana' concept, a
very apt and fitting reward. Likewise, Thomas Watson Snr. had made a practice of writing out
a check on the spot for any unusual achievement that he observed.
However, we must introduce a note of caution. There is a connection (White (1973)) between
executive pay and company size, in terms of turnover or number of employees, but no
connection between executive pay and improvement in profitability - the bigger the company,
the higher the pay, but efficiency is not necessarily higher. The higher salary is probably
because of a larger number of levels in big companies. Of course, with the large number of
variables involved, it is difficult to correlate any two isolated factors, such as executive pay
and overall company efficiency.
There should be a direct correlation, but perhaps the yardsticks available for this purpose are
inadequate to establish it. Let us, however, reiterate that individual executives have different
senses of values, of which money is one, and an important one at that. No reward other than
money is so flexible, so measurable or so controllable. But in using financial motivation, the
companies must be clear on what they wish to achieve, then define what managers are
expected to contribute towards the objectives and finally ensure that financial reward is linked
to managerial performance.
Reward can act as the 'catalyst' for improved performance and better productivity. But reward,
as such, is not enough and in any case it is not a substitute for good management. Rather, it is
a part of management. Certain basic criteria are essential for rewards to be effective. These
include:
If the reward plan is seen to be unfair and unrealistic, for example promotion on the basis of
seniority or favoritism, it may have a definitely negative effect as a motivator. For rewards to
be effective, they have to be generous and significant as noted above, hence they must be
structured to attain a proper balance of motivating people to purpose and at optimum effort.
Productivity is usually but erroneously associated only with the workshop floor. But total
productivity which ultimately determines the profitability of the entire organization is the sum
total of the productivity at various levels right up to the CEO. For if the workers are not given
the right materials at the right place and at the right time, their productivity will suffer due to
no fault of theirs. The manager, therefore, plays a vital role in the productivity of the workers
and team.
One can even go as far to say that productivity is the only reason for the existence of the
manager. Individually the manager may be considered nonproductive, in that he or she does
not contribute directly to the production, but is responsible for integrating the work of his or
her team into a total productivity effort, Thus, a manager can increase productivity indirectly
by aiding to produce more, and here too, financial motivation plays a major role.
Reward systems
• profit sharing;
• job evaluation; and
• merit rating.
Profit sharing
Profit sharing could be on a macro basis or on a micro basis. The former relates to the entire
company as a whole and the latter to a particular section or group dealing with a particular
activity and/or product. On a macro level, it would be difficult to identify and reward
outstanding performance. This is possible on a micro level by treating the particular activity as
a cost and profit center by itself. This is easier said than done, since overheads and other
common services have to be charged and this cannot be done completely objectively. The cost
allocation in such cases is somewhat arbitrary and the profit will therefore not be a true
reflection of the performance of that particular group or activity.
Job evaluation
In case of job evaluation, the various component factors have to be isolated and evaluated for
purposes of inter-job comparison. Each factor is assigned a rating on the basis of a scale
agreed beforehand by the union and the management joint committee. The total rating for
each job then forms the basis of wage structure. However, there must be a base level,
representing, in effect, the 'minimum wage', depending on the nature of work and the
geographical area. In some cases and in some countries these are stipulated by law. A typical,
though somewhat broad, list of job factors is as follows:
• working environment;
• physical characteristics;
• mental characteristics;
• extent of responsibility;
• training and experience.
• responsibility;
• expertise;
• human relations.
Merit rating
Merit rating has been used as an indicator of performance. Each employee is rated, typically as
excellent, good, average or poor, in respect of the following abilities:
• communication;
• human relations, including leadership and motivation;
• intelligence;
• judgment;
• knowledge.
The rating, unfortunately, tends to be carried out purely mechanically and it carries a heavy
bias of the rater who may be too lenient, may not be objective and may also have favorites or
otherwise in the group being rated.
This relates to a major scientific investigation in a real life situation. The Glacier Metal
Company (UK) was the largest manufacturer of plain bearings in Europe employing some 4500
persons in six factories. This was a unique experiment, commercially successful and probably
without a parallel.
The project began in 1948 with the assistance of the Tavistock Institute of Human
Relations and it sought to provide novel answers to baffling problems in industrial
organizations. Simply stated, once people get a job, they begin to lose interest in the work,
hate their firm and soon organize themselves in order to pressurize the firm for higher wages.
The Glacier project used the task approach concept, under which the task is carefully analyzed
and roles clearly defined in order to provide scope for peoples effective participation in the
fulfilment of companies objective. Work is seen to have two components:
• prescribed; and
• discretionary.
The latter is more difficult of the two. A supervisor, for example, has the discretion in matters
of priorities, allotment of work and development of his or her department. These elements
determine the extent of responsibility and are the basis of the theory of equitable payment
developed by the renowned psychoanalyst, Elliott Jaques.
According to this, wages should be related to the responsibility involved and this in turn
depends on the discretionary elements. Jaques developed a technique for measuring the time-
span for discretion for different types of work and formulated a scale of equitable earnings for
a laborer, machine operator, supervisor and engineer. The Glacier model is far more
comprehensive, but for our present purpose the quantification of wage differential serves as a
motivator for better performance.
Payment by results
One of the earliest and best examples of this is the Rucker and Scanlon plans introduced in the
USA in the depression of the 1930s. Joseph Scanlon was a union officer in the Penn Steel Mill
which, as a result of the depression, was on the brink of extinction.
The aim of the plan was to reduce waste and increase efficiency with consequent increase of
productivity and profits. The savings and surplus resulting from implementation of the
suggestions of the group are shared. For equitable distribution, a committee has to administer
the plan and the company has to disclose (McBeath (1974)) a considerable amount of financial
data and be also prepared to share profits.
As a result the plan has not always been successful. In a survey (Gruneberg & Oborne (1982))
of 44 cases, 30 were reported to be successful. Thus success has been achieved in some
companies and in some situations. But the concept is sound. The plan gives the participants a
real sense of participation and self-esteem, and the group cohesion and motivation are
increased in anticipation of the reward. Other methods of payment by results include:
• time saved;
• piecework;
• daily work measurement;
• productivity index;
• added value.
In each case, the savings or increased production are quantified in monetary terms and sought
to be shared amongst the concerned people. Earlier schemes were based on individual effort
which could be appropriately rewarded. However, modern technology and production methods
are quite often based on a team approach, hence new schemes for payment by results have to
be tried and implemented, if found effective. In this case individuals do not get rewarded as a
result of their own effort and it is the group performance which counts. This requires a change
of attitude of the workers, as also of the management.
Like the Scanlon plan, the management needs to be prepared to discuss openly with the
workers / unions the real change / improvement in the relevant indices and this requires
disclosure of otherwise confidential financial and production data. In the long run, such an
open attitude will benefit both.
There is no such scheme! Each situation must be studied in depth and a suitable scheme
'tailored' for the specific situation. Also important is the history and culture of the organisation
concerned. Anything radically different and without active participation of all concerned is
bound to fail. It is advisable also not to introduce drastic changes suddenly. The system must
be properly formulated and after full and frank discussion with the concerned people tried out
on a 'mini' scale and refined in the light of the experience gained.
The micro versus macro aspect has been briefly touched on earlier in this chapter. Both have
their pros and cons and an ideal system may well be a combination of the two. It is good to
reward individual performance since it could act as an instant motivator. On the other hand
certain benefits result only from a group action and therefore must be shared among the
entire group or even across the entire company.
Implementation of any scheme is the most important phase and it should not be rushed
through. Sufficient time should be allowed for discussion and suggestions from the concerned
group. At this stage all problems that may arise during implementation stage cannot be
foreseen, but some of the obvious ones certainly can be anticipated.
Once implemented, both sides should be willing to modify the scheme in the light of the
experience gained. There should be no hesitation to refine the scheme until found completely
satisfactory. It will require full cooperation and complete honesty.
Conclusions
Money is certainly a motivator and a major one at that. Success of companies such as of
Microsoft, IBM and other such tech companies is certainly, at least to some extent, a result of
such motivation. There are, of course, other factors particularly job satisfaction as shown in
the previous section.
Rewarding employees financially does improve levels of employee motivation and thus
improves productivity, which ultimately shows up in the 'bottom line', and part of the
increased profits must be circulated back to the workforce responsible for it.
Some of the schemes for reward systems and payment by results have are briefly discussed.
The novel Glacier project and the Scanlon plan are briefly described. There is no such thing as
the 'best scheme'. It must be formulated and 'tailored' to each specific case.
This sub-article on the informal workgroups is available for use as a classroom / training
handout.
Jeff Lane was at his wits end. As a newly appointed production manager, he had tried virtually
everything to get his work group to come up to production standard. The equipment was
operating properly, and the group had the training and experience to meet expectations, yet it
was not performing well. What was wrong? And what could he do to correct the situation?
Managers and supervisors frequently face such a dilemma-standards that should be met but
aren't for what seems like no apparent reason. What Jeff Lane and other managers/
supervisors sometimes fail to realize is that within every organization there are often informal
group pressures that influence and regulate individual behavior.
Often, these groups serve a counter organizational function, attempting to counteract the
coercive tendencies in an organization. If management prescribes production norms that the
group considers unfair, for instance, the group's recourse is to adopt less demanding norms
and to use its ingenuity to discover ways in which it can sabotage management's imposed
standards.
Informal groups have a powerful influence on the effectiveness of an organization, and can
even subvert its formal goals. But the informal group's role is not limited to resistance. The
impact of the informal group upon the larger formal group depends on the norms that the
informal group sets. So the informal group can make the formal organization more effective,
too.
A norm is an implied agreement among the group's membership regarding how members in
the group should behave. From the perspective of the formal group, norms generally fall into
three categories-positive, negative, and neutral. In other words, norms either support,
obstruct, or have no effect on the aims of the larger organization.
For example, it the informal group in Jeff's shop set a norm supporting high output, that norm
would have been more potent than any attempt by Jeff to coerce compliance with the
standard. The reason is simple, yet profound. The norm is of the group members own making,
and is not one imposed upon them. There is a big motivational difference between being told
what to do and being anxious to do it.
If Jeff had been aware of group dynamics, he might have realized that informal groups can be
either his best friend or his worst enemy. He should have been sensitive to the informal groups
within his area and he should have cultivated their goodwill and cooperation and made use of
the informal group leadership.
That is, he should have wooed the leadership of the informal group and enlisted the support of
its membership to achieve the formal organization's aims. The final effect of his actions might
have been positive or negative, depending upon the agreement or lack of it between the
informal group and himself.
Harnessing the power of informal groups is no easy task. The requirements include:
Individuals are employed by an organization to perform specific functions. Although the whole
person joins an organization, attention is usually focused on the partial person, the part of the
individual doing the job. Because people have needs that extend beyond the work itself,
informal groups develop to fill certain emotional, social, and psychological needs.
The degree to which a group satisfies its members needs determines the limits within which
individual members of the group will allow their behavior to be controlled by the group.
Sense of belonging
Several major functions are served by informal groups. For example, the group serves as a
means of satisfying the affiliation needs of its members for friendship and support. People
need to belong, to be liked, to feel a part of something. Because the informal group can
withhold this attractive reward, it has a tool of its own to coerce compliance with its norms.
Groups also provide a means of developing, enhancing, and confirming a person's sense of
identity and self-esteem. Although many organizations attempt to recognize these higher
needs, the nature of some jobs-their technology and environment-precludes this from
happening. The long assembly line or endless rows of desks reinforce a feeling of
depersonalization.
Stress reduction
Another function of groups is to serve as an agent for establishing and testing social reality.
For instance, several individuals may share the feeling that their supervisor is a slave driver or
that their working conditions are inadequate. By developing a consensus about these feelings,
group members are able to reduce the anxiety associated with their jobs.
Finally, the informal group serves as a defense mechanism against forces that group members
could not resist on their own. Joining forces in a small group makes the members feel
stronger, less anxious, and less insecure in the face of a perceived threat.
As long as needs exist that are not served by the formal organization, informal groups will
form to fill the gap. Since the group fills many important needs for its members, it influences
member behavior.
Informal groups possess certain characteristics that, if understood, can be used to advantage.
While many of these characteristics are similar to those of formal organizations, others are
unique. One attribute of informal groups is rotational leadership.
The informal leader emerges as the individual possessing qualities that the other members
perceive as critical to the satisfaction of their specific needs at the moment; as the needs
change so does the leader. Only rarely does a single individual possess all of the leadership
characteristics needed to fill the various needs of the group.
Unlike the formally appointed leader who has a defined position from which to influence
others, the informal leader does not possess formal power. If the informal leader fails to meet
the group's expectations, he or she is deposed and replaced by another. The informal group's
judgment of its leaders tends to be quicker and more cold-blooded than that of most formal
groups.
Supervisory strategies
The supervisor can use several strategies to affect the leadership and harness the power of
informal groups. One quick and sure method of changing a group is to cause the leader to
change one or more of his or her characteristics. Another is to replace the leader with another
person.
One common ploy is to systematically rotate out of the group its leaders and its key members.
Considering the rotational nature of leadership, a leader may emerge who has aims similar to
the formal goals of the organization. There are problems with this approach, however. Besides
the practical difficulties of this, this strategy is blunted by the fact that group norms often
persist long after the leader has left the group.
A less Machiavellian approach is for the supervisor to be alert to leaders sympathetic to the
supervisor's objectives and to use them toward the betterment of the formal group's
effectiveness. Still another method is to attempt to 'co-opt' informal leaders by absorbing
them into the leadership or the decision-making structure of the formal group. Co-opting the
informal leader often serves as a means of averting threats to the stability of the formal
organization.
Remember, though, a leader may lose favor with the group because of this association with
management, and group members will most likely select another leader.
Another characteristic of the informal group is its communications network. The informal group
has communications processes that are smoother and less cumbersome than those of the
formal organization.
Thus its procedures are easily changed to meet the communication needs of the group. In the
informal group, a person who possesses information vital to the group's functioning or well-
being is frequently afforded leadership status by its members. Also, the centrally located
person in the group is in the best position to facilitate the smooth flow of information among
group members.
Knowing about informal group communication the supervisor can provide a strategically placed
individual with information needed by the group. This not only enhances the stature of this
individual perhaps elevating him or her to a leadership position but also provides an efficient
means of distributing information. Providing relevant information to the group will also help
foster harmony between the supervisor and the informal group.
By winning the cooperation of informal group leaders the supervisor will most likely experience
fewer grievances and better relationships.
A third characteristic of informal groups is group cohesiveness-the force that holds a group
together. Group cohesiveness varies widely based on numerous factors-including the size of
the group dependence of members upon the group achievement of goals status of the group
and management demands and pressures. For example group cohesiveness increases strongly
whenever the membership perceives a threat from the outside. This threat produces the high
anxiety that strong group cohesiveness can help reduce.
If the supervisor presses the group to conform to a new organizational norm that Is viewed as
a threat to the security needs of group members The group will become more unified in order
to withstand the perceived threat. Thus management can limit its own effectiveness by helping
to increase the group's cohesiveness. With the passing of the threat the group tends to lose its
cohesiveness.
Perhaps paradoxically the most dangerous time for group cohesion is when things are going
well. Supervisors can use the factors that affect group cohesiveness to increase their own
effectiveness.
For instance a supervisor can involve the informal group members in the decision-making
process. Input from group members will not only reduce their feeling of alienation but also
improve communication between the supervisor and subordinates thereby reducing potential
conflict.
Where group participation in decision making is not practical the supervisor should carefully
explain the reasons to play down what might be seen as a threat to the group. In some cases
the supervisor may want to increase the groups cohesiveness deliberately devising situations
that put one group into competition with another. If this gambit is carefully controlled the
solidarity that results may bring a higher level of performance.
The danger of this strategy is that the supervisor may be unable to control the reaction of the
group. The ploy could backfire bringing competition and dissension within the group.
The final characteristic of informal groups is the establishment of the groups norms (values).
As we discussed earlier, norms keep a group functioning as a system instead of a collection of
individuals.
Norms are of great importance to the informal group in controlling behavior and measuring
the performance of members. Because norm (values) violations threaten a group's existence,
departures from the norm usually carry severe sanctions. The members must either conform
or sever their group affiliation.
The latter action is unlikely, especially if the individual values group membership to satisfy
certain needs.
Two points are important to note about the norms of informal groups.
• First, where both formal and informal norms exist, the informal norms transcend the
formal. At moments when norms conflict with organizational objectives, organizational
effectiveness suffers.
• Second, members of an informal group may be unaware that the norms of the group
influence their behavior. Norms are particularly potent because without knowing it
members would not even think of acting otherwise-norms are that ingrained into their
behavior pattern.
How can a supervisor bring about a positive change in a group / team's norms?
Once a group / team has developed its norms, they are strictly enforced until changed. But
norms change frequently because the group / team must be responsive to changes in its
environment for self-protection. When a perceived change occurs in the environment that
affects the group / team, it tightens, eases, or changes it norms.
There are three stages to fostering group / team / team norms that are congenial to the
organization.
First Stage
The first stage involves determining what the group/ team/ norms are, and then getting
group/ team members to recognize their existence and influence.
This can often be accomplished by observing the behavior patterns of the group / team,
interviewing group / team members, or asking the group/ team to identify its own norms. As
noted earlier, people frequently respect and follow norms unconsciously.
A suggested way is to use our Team Building - Informal Group Organizational Norms
Employee Survey (available for purchase by clicking here.) This instrument has ten
predetermined dimensions, these are (together with definitions,) as follows.
Helping define norms is useful because it assists the group / team in clarifying its thinking and
frees members from behavior patterns that they may not really wish to follow in the first
place.
When group / team members actually become aware of negative norms, they commonly reject
them and seek alternative modes of behavior. And the supervisor can't begin to change
negative norms to positive ones until group / team members first become aware of their
existence.
Second Stage
Having identified the team's norms, the next stage is to measure the norms and establish a
norm profile. Using the Team Building - Informal Group Organizational Norms Employee
Survey instrument, each team member is posed a set of questions, related to the 10
dimensions. As shown in the 'Group Norms Profile' graphic, the responses can be averaged
and plotted in order to obtain a norm profile for the group under review.
The difference between where the group / team is versus where the desired norms of the
group should be, denotes the normative "gap." These gaps provide the starting point for
determining where changes should occur.
Third Stage
The final stage is to bring about normative change. A systematic change process consists of
six steps:
This process emphasizes the creation of positive norms through cooperative effort that
benefits both the supervisor and the group/ team. Positive group/ team norms -increase the
effectiveness of the supervisor while providing an environment in which group/ team members
can satisfy their own needs.
The process also improves team communications and trust, reducing the anxiety sometimes
created by perceived threats from management.
If the informal group / team's norms are negative, they can negate the interests of an
organization many times the group / team's size. The process of change is a tool by which a
supervisor can deal with the informal group/ team stresses that exist within the organization
and that tend to de-motivate employees.
By fostering positive group norms, a supervisor can harness the power of informal groups and
release the energies of such groups to work together as a team to achieve desired goals.
Introduction
In 1911 two researchers with the unlikely names of Stumpt and Pfungst began an
investigation of an even more unlikely horse named Clever Hans. The unlikely thing about
Hans was that he could add, subtract, multiply, divide, spell and solve problems involving
musical harmony. Any number of animals had been taught to perform such tricks before, but
they all had to be cued by their trainers.
The really clever thing about Clever Hans was that he could run through his repertoire even
when his owner a German mathematician named Von Osten, was not present. The horse
would answer questions for anyone. Von Osten swore he was mystified by the whole thing.
In 'Teachers and the Learning Process' (Prentice-Hall, 1971), Robert Strom describes what
Stumpt and Pfungst learned. "Among the first discoveries made was that if the horse could not
see the questioner, Hans was not clever at all. Similarly, if the questioner did not himself know
the answer to the question, Hans could not answer it either... A forward inclination of the head
of the questioner would start Hans tapping, Pfungst observed... as the experimenter
straightened up, Hans would stop tapping he found that even the raising of his eyebrows was
sufficient. Even the dilation of the questioner's nostrils was a cue for Hans to stop tapping."
In other words, unwittingly, people were giving the horse the correct answers by
communicating their expectations to him via physical signals. Hans was able to pick up on
those signals even subtle ones.
A management concept
As it is known and taught today in management and education circles, the notion of the self-
fulfilling prophecy was conceptualized by Robert Merton a professor of sociology at Columbia
University. In a 1957 work called 'Social Theory and Social Structure', Merton said the
phenomenon occurs when "a false definition of the situation evokes a new behavior which
makes the original false conception come true."
In other words, once an expectation is set, even if it isn't accurate, we tend to act in ways that
are consistent with that expectation. Surprisingly often, the result is that the expectation, as if
by magic, comes true.
An ancient myth
Magic certainly was involved in the ancient myth from which the idea of the self-fulfilling
prophecy takes its other common name. As Ovid told the story in the tenth book of
Metamorphoses, the sculptor Pygmalion, a prince of Cyprus, sought to create an ivory statue
of the ideal woman.
The result which he named Galatea, was so beautiful that Pygmalion fell desperately in love
with his own creation. He prayed to the goddess Venus to bring Galatea to life. Venus granted
his prayer and the couple lived happily ever after.
A modern update
That's where the name originated but a better illustration of the "Pygmalion Effect" is George
Bernard Shaw's play Pygmalion, in which Professor Henry Higgins insists that he can take a
Cockney flower girl and, with some vigorous training, pass her off as a duchess. He succeeds.
But a key point lies in a comment by the trainee, Eliza Doolittle, to Higgins' friend Pickering:
"You see, really and truly, apart from the things anyone can pick up (the dressing and the
proper way of speaking and so on), the difference between a lady and a flower girl is not how
she behaves, but how she's treated. I shall always be a flower girl to Professor Higgins,
because he always treats me as a flower girl, and always will, but I know I can be a lady to
you because you always treat me as a lady, and always will."
Key Principles
The concept of the self-fulfilling prophecy can be summarized in these key principles:
Does it work?
The rats believed to be bright improved daily in running the maze they ran faster and more
accurately. The "dull" rats refused to budge from the starting point 29% of the time, while the
"bright" rats refused only 11% of the time.
This experiment illustrates the first of a number of corollaries to our four basic principles.
Corollary 1
Rosenthal concluded that some students unknowingly communicated high expectations to the
supposedly bright rats.
The other students communicated low expectations to the supposedly dull ones. But this study
went a step further.
According to Rosenthal, "Those who believed they were working with intelligent animals liked
them better and found them more pleasant.
Such students said they felt more relaxed with the animals, they treated them more gently
and were more enthusiastic about the experiment than the students who thought they had
dull rats to work with."
Corollary 2
• Better performance resulting from high expectations leads us to like someone more
• Lower performance resulting from low expectations leads us to like someone less
In another classic experiment, Rosenthal and Lenore Jacobson worked with elementary school
children from 18 classrooms. They randomly chose 20% of the children from each room and
told the teachers they were "intellectual bloomers."
They explained that these children could be expected to show remarkable gains during the
year. The experimental children showed average IQ gains of two points in verbal ability, seven
points in reasoning and four points in over all IQ. The "intellectual bloomers" really did bloom!
In 'Pygmalion in the Classroom' (Holt, Rinehart and Winston, 1968), Rosenthal replies: "To
summarize our speculations, we may say that by what she said, by how and when she said it,
by her actual facial expressions, postures and perhaps by her touch, the teacher may have
communicated to the children of the experimental group that she expected improved
intellectual performance.
Such communication together with possible changes in teaching techniques may have helped
the child learn by changing his self concept, his expectations of his own behavior, and his
motivation, as well as his cognitive style and skills."
There was no difference in the amount of time the teachers spent with the students. Evidently
there was a difference in the quality of the interactions. The teachers also found the
"bloomers" to be more appealing, more affectionate and better adjusted. Some students
gained in IQ even though they had not been designated as "bloomers," but they were not
regarded to be as appealing, affectionate or well-adjusted.
Apparently, the bloomers had done what was expected of them and the teachers were
comfortable with them. The other students who did well surprised the teachers; they did the
unexpected and the teachers were not as comfortable with them. It may be that they were
thought of as overstepping their bounds or labeled as troublemakers.
Corollary 3
• We tend to be comfortable with people who meet our expectations, whether they're
high or low;
• We tend not to be comfortable with people who don't meet our expectations, whether
they are high or low.
As for our expectations of what will happen or how someone will behave, we form them in a
thousand ways, many preconceived. We all are prejudiced in the literal sense of the word; we
'prejudge' either positively or negatively.
We like to think we know what's going to happen before it happens, and we don't like to be
proven wrong. We want to feel that we can control things.
The impulse has given rise to religion, which says we can influence the gods with prayer,
magic, which says we can manipulate events with secret powers; and science, which says we
can understand the logic behind events and use it to predict similar events.
Corollary 4
The simple truth is that almost all of us behave pretty much according to the way we're
treated.
If you keep telling a teenager, for example, that he's worthless, has no sense of right or wrong
and isn't going to amount to anything, he'll probably respond accordingly.
If you keep telling him (sincerely) that he's important to you that you have every confidence in
his judgment as to what?s right or wrong and that you're sure he's going to be successful in
whatever he decides to do, he'll also tend to respond accordingly.
You transmit those expectations to him and he'll begin to reflect the image you've created for
him.
Corollary 5
Exactly how do we communicate the expectations responsible for the Pygmalion Effect? The
process works in very similar ways with people as it did with Clever Hans.
Corollary 6
• Good managers produce employees who perform well and feel good about themselves;
• Bad managers produce employees who perform poorly and feel badly about themselves
Much more importantly, though, reviews influence future performance. They offer a good
example of how self-fulfilling prophecies work, for good or ill.
Take the case of a bright, young, aggressive employee. Let's assume she is abrasive,
disruptive and disrespectful at times. However, she can also be creative, hard-working and full
of enthusiasm. Given proper channeling, she can produce excellent results.
Some managers, required to assign her to a performance category, would call her "excellent"
They're impressed by her strengths. Others, focusing on her weaknesses, would call her
"poor." Still others, weighing the pluses and minuses, would call her "average." Even with the
scant information you have, you can see that any of these ratings could be justified.
But what these managers are doing probably unknowingly, is helping to determine the young
woman's future performance. If she's rated "excellent," what will happen? She will tend to be
even more abrasive, disruptive and disrespectful. She will also probably be more creative,
enthusiastic and hard-working. She will do more of what she believes her manager wants.
What if she's rated "poor" She will likely be less abrasive, but she will also be less creative and
enthusiastic. Suppose she's rated "average" Depending on what her manager says about the
rating and why she got it, she may adjust her behavior slightly.
The variable here is the manager's rating. It is based on the manager's values, prejudices and
feelings. Most employees will take the cues and alter their future behavior accordingly.
Corollary 7
• Performance ratings don't just summarize the past, they help determine future
performance
A manager cannot avoid communicating low expectations because the messages are often
non-verbal and unintentional. As with observers communicating to Clever Hans and teachers
communicating to students, managers nod their heads, prolong or shorten eye contact,
express themselves in a certain tone of voice, etc.
Some managers refuse to admit they communicate negative expectations: "I never said
anything negative to him. I hardly spoke to him at all." (As if that doesn't send a powerful
message.)
The key is not what managers say, but the way they behave.
Corollary 8
• The best managers have confidence in themselves and in their ability to hire, develop
and motivate people; largely because of the self-confidence, they communicate high
expectations to others.
• Climate
Managers create a warmer social and emotional mood for high-expectation employees.
They smile, more nod their heads approvingly and look into subordinates eyes more
often. They are generally more supportive, friendly, accepting and encouraging
• Input
More assignments and projects are given to high-expectation employees. In addition,
these assignments are more challenging and afford higher visibility.
• Output
Managers give high-expectation employees more opportunities to speak at meetings, to
offer their opinions or to disagree with the manager?s opinions. They pay closer
attention to their responses, and give them more assistance or encouragement in
generating solutions to problems.
• Feedback
Managers give more positive reinforcement to high expectation employees. They praise
them more for good work and criticize them less for making mistakes. Consequently,
confidence grows.
• Like the teacher with the student and the trainer with the trainee, the manager has a
profound impact on the success or failure of the subordinate.
To quote Livingston once more, "If he is unskilled, he leaves scars on the careers of the young
men (and women), cuts deeply into their self-esteem and distorts their image of themselves
as human beings. But if he is skilful and has high expectations of his subordinates, their self-
confidence will grow, their capabilities will develop and their productivity will be high More
often than he realizes, the manager is Pygmalion."
• Seating low expectation students far from the teacher and/or seating them in a group
• Paying less attention to lows in academic situations (smiling less often, maintaining
less eye contact, etc.)
• Calling on lows less often to answer questions or to make public demonstrations
• Waiting less time for lows to answer questions
• Not staying with lows in failure situations (e g. providing fewer clues, asking fewer
follow-up questions)
• Criticizing lows more frequently than highs for incorrect responses
• Praising lows less frequently than highs after successful responses
• Praising lows more frequently than highs for marginal or inadequate responses
• Providing lows with less accurate and less detailed feedback than highs
• Failing to provide lows with feedback about their responses as often as highs
• Demanding less work and effort from lows than from highs
• Interrupting lows more frequently than highs
• Seating low-expectation employees in low-prestige office areas far from the manager
• Paying less attention to lows in business situations (smiling less often and maintaining
less eye contact). Giving them less information about what?s going on in the
department
• Calling on lows less often to work on special projects, state their opinions, or give
presentations
• Waiting less time for lows to state their opinions
• Not staying with lows in failure situations (i.e. providing less help or giving less advice
when subordinates really need it)
• Criticizing lows more frequently than highs for making mistakes
• Praising lows less frequently than highs after successful efforts
• Praising lows more frequently than highs for marginal or inadequate effort
• Providing lows with less accurate and less detailed feedback on job performance than
highs
• Failing to provide lows with feedback about their job performance as often as highs
• Demanding less work and effort from lows than from highs
• Interrupting lows more frequently than highs