Motivation and

Performance

Chapter

9
1

Learning Objectives
After studying the chapter, you should be able to:

Explain what motivation is and why managers

need to be concerned about it.
Describe from the perspectives of expectancy
theory and equity theory what managers should do
to have a highly motivated workforce.
Explain how goals and needs motivate people and
what kinds of goals are especially likely to result in
high performance.
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Learning Objectives

Identify the motivation lessons that

managers can learn from operant
conditioning theory and social learning
theory.
Explain why and how managers can use
pay as a major motivation tool.

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The Nature of Motivation

Motivation

The psychological forces acting on an individual

that determine:
z

z
z

Directionpossible behaviors the individual could engage

in
Efforthow hard the individual will work
Persistencewhether the individual will keep trying or
give up

Explains why people behave the way they do in

organizations
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The Nature of Motivation (contd)

z Intrinsically

Motivated Behavior

Behavior that is performed for its own sake.

z
z

The source of the motivation that comes from actually

engaging in the behavior.
The sense of accomplishment and achievement derived
from doing the work itself

z Extrinsically

Motivated Behavior

Behavior that is performed to acquire material or

social rewards or to avoid punishment.
z

The source of the motivation is the consequences of the

behavior and not the behavior itself.
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Outcomes and Inputs

z Outcome

Anything a person gets from a job or an

organization
z Pay,

job security, autonomy, accomplishment

z Input

Anything a person contributes to his or her

job or organization
z Time,

effort, skills, knowledge, work behaviors

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The Motivation Equation

Figure 13.1
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Expectancy Theory
Motivation will be high when workers
believe:

High levels of effort will lead to high

performance.
High performance
will lead to the
attainment of
desired outcomes.
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Expectancy Theory
Major Factors of Motivation

Expectancythe belief that effort (input)

will result in a certain level of performance
Instrumentalitythe belief that
performance results in the attainment of
outcomes
Valencehow desirable each of the
available outcomes from the job is to a
person
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Expectancy, Instrumentality, and

Valence

Figure 13.2
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Expectancy Theory in Practice

Expectancy: Effort will result in a level of

performance.
z

Instrumentality: Performance leads to outcomes.

z

Employees will work work hard if they believe they can

attain high performanceorganizations must provide the
resources that support performance.
Workers are only motivated if they think performance
leads to an outcomemanagers must link performance to
outcomes.

Valence: How desirable an outcome is to a person.

z

Workers have preferences for outcomesmanagers must

determine which outcomes are valued.
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Expectancy and Motivation

Motivation is highest when expectancy,
instrumentality, and valence levels are high.

If one of the values is low, motivation will be low.

z
z

Workers do not believe they can perform well.

Workers do not believe that performance and rewards are
closely linked.
Workers do not value the rewards offered for
performance.

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Expectancy Theory

Figure 13.3
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Need Theories
z Need

A requirement for survival and well-being.

z Need

Theories

Theories of motivation that focus on what needs

people are trying to satisfy at work and what
outcomes will satisfy those needs.
Basic premise is that people are motivated to
obtain outcomes at work to satisfy their needs.
z

Managers must determine what needs a worker wants

satisfied and ensure that a person receives the outcomes
when performing well.
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Maslows Hierarchy of Needs

Needs
Highest-level
needs

Lowest-level
needs

Table 13.1
McGraw-Hill/Irwin

Description

Examples

Self
Selfactualization
actualization

Realize
s
Realizeone
ones
full
fullpotential
potential

Use
Useabilities
abilities
to
the
to thefullest
fullest

Esteem
Esteem

Feel
Feelgood
good
about
oneself
about oneself

Promotions
Promotions
and
andrecognition
recognition

Belongingness
Belongingness

Social
Social
interaction,
interaction,love
love

Interpersonal
Interpersonal
relations,
relations,parties
parties

Safety
Safety

Security,
Security,stability
stability

Job
Jobsecurity,
security,
health
insurance
health insurance

Physiological
Physiological

Food,
Food,water,
water,
shelter
shelter

Basic
Basicpay
paylevel
level
to
buy
items
to buy items

Lower-level needs must be satisfied before

higher-level needs are addressed.

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Alderfers ERG Theory

Needs
Highest-level
needs

Lowest-level
needs

Description

Examples

Growth
Growth

Self
-development,
Self-development,
creative
creativework
work

Continually
Continually
improve
improveskills
skills

Relatedness
Relatedness

Interpersonal
Interpersonal
relations,
relations,feelings
feelings

Good
Goodrelations,
relations,
accurate
accuratefeedback
feedback

Existence
Existence

Food,
Food,water,
water,
clothing,
and
clothing, andshelter
shelter

Adequate
Adequatepay
pay
for
necessities
for necessities

After lower level needs satisfied, person seeks higher needs. When
When
unable to satisfy higher needs, lower needs motivation is raised.
raised.

Table 13.2
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Herzbergs Motivation-Hygiene
Theory
Focuses on outcomes that lead to higher
motivation and job satisfaction, and those
outcomes that can prevent dissatisfaction.

Motivator needs relate to the nature of the work

itselfautonomy, responsibility, interesting work.
Hygiene needs are related to the physical and
psychological context of the workcomfortable
work environment, pay, job security.
z

Unsatisfied hygiene needs create dissatisfaction;

satisfaction of hygiene needs does not lead to motivation
or job satisfaction.
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McClellands Needs for Achievement,

Affiliation, and Power
Need for
Achievement

A strong need to
perform challenging
tasks well and meet
personal standards
for excellence

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McClellands Needs for Achievement,

Affiliation, and Power
z Need

A concern for good interpersonal relations,

being liked, and getting along

z Need

for Affiliation

for Power

A desire to control or influence others

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Equity Theory
Focuses on peoples perceptions of the
fairness (or lack of fairness) of their work
outcomes in proportion to their work inputs.

A relative outcome to input ratio comparison to

oneself or to another person (referent) perceived
as similar to oneself.
Equity exists when a person perceives that their
outcome/input ratio to be equal to the referents
ratio.
z

If the referent receives more outcomes, they should also

give more inputs to achieve equity.
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Equity Theory
Condition

Equity
Equity

Underpayment
Underpayment
Equity
Equity

Overpayment
Overpayment
Equity
Equity

Table 13.3
McGraw-Hill/Irwin

Person

Referent

Example

Outcomes
Outcomes == Outcomes
Outcomes
Inputs
Inputs
Inputs
Inputs

Worker
Workercontributes
contributes
more
moreinputs
inputsbut
butalso
also
gets
more
outputs
gets more outputs
than
thanreferent
referent

Outcomes
Outcomes << Outcomes
Outcomes
Inputs
Inputs
Inputs
Inputs

Worker
Workercontributes
contributes
more
moreinputs
inputsbut
butalso
also
gets
the
same
outputs
gets the same outputs
as
asreferent
referent

Outcomes
Outcomes >> Outcomes
Outcomes
Inputs
Inputs
Inputs
Inputs

Worker
Workercontributes
contributes
same
sameinputs
inputsbut
butalso
also
gets
more
outputs
gets more outputs
than
thanreferent
referent

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Equity Theory
Inequity exists when workers outcome/input
ratio is not equal to referent.

Underpayment inequity: ratio is less than the

referent.
z

Workers feel they are not getting the outcomes they

should for their inputs.

Overpayment inequity: ratio is higher than the

referent.
z

Workers feel they are getting more outcomes than they

should for their inputs.
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Equity Theory
Restoring Equity: Inequity creates tension in
workers causing them to attempt to restore
equity.

In underpayment, workers may reduce input levels

to correct (rebalance) the ratio or seek a raise.
In overpayment, workers may change the referent
person and readjust their ratio perception.
If inequity persists, workers will often choose to
leave the organization.
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Goal Setting Theory

z Focuses

on identifying the types of

goals that are effective in producing
high levels of motivation and explaining
why goals have these effects.
z Considers how managers can ensure
that workers focus their inputs in the
direction of high performance and the
achievement of organizational goals.
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Goal Setting Theory

z Goal

What a person is trying to accomplish.

z Characteristics

Specific and not vague in providing direction

Difficult but not impossible to attain
Accepted and committed to by workers
Feedback on goal attainment is important.

z Goals

of Motivating Goals

point out what is important to the firm.

Workers should be encouraged to develop action

plans to attain goals.
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Learning Theories
Theories that focus on increasing
motivation and performance by linking
outcomes to performance and the
attainment of goals.

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Learning Theories
Learning

A relatively permanent change in persons

knowledge or behavior that results from
practice or experience.

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Operant Conditioning Theory

Operant Conditioning

People learn to perform behaviors that lead

to desired consequences and learn not to
perform behaviors that lead to undesired
consequences.
Linking specific behaviors to the attainment
of specific outcomes can motivate high
performance and prevent behaviors that
detract from organizational effectiveness.
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Operant Conditioning Tools

z Positive

Reinforcement

Getting desired outcomes for performing

needed work behaviors
z Positive

z Negative

reinforcers: Pay, praises, or promotions

Reinforcement

Eliminating undesired outcomes once the

desired behavior occurs
z Negative

reinforcers: criticisms, pay cuts,

suspension
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Operant Conditioning Tools

z Extinction

Curtailing the performance of a dysfunctional

behavior by eliminating whatever is reinforcing it.
z

Behavior is not rewarded and over time, the worker stops

performing it.

z Punishment

Administering an undesired/negative consequence

to immediately stop a dysfunctional behavior.
z

Manager administers an undesired consequence to

worker (verbal reprimand, demotion, pay cut).
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Organizational Behavior
Modification

The systematic application of operant

conditioning techniques to
organizationally functional behaviors and
discourage dysfunctional behaviors.
Improves productivity, attendance,
punctuality and other behaviors that are
specific, objective and countable.

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Organizational Behavior
Modification

Has been criticized for ethical implications

of application and effects on workers.
Appears to be effective in promoting
organizational efficiency.

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Steps in
Organizational
Behavior
Modification

Figure 13.4

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Social Learning Theory

A theory that takes into account how
learning and motivation are influenced
by peoples
thoughts and
beliefs and their
observations of
other peoples
behavior.
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Social Learning Theory

Conditions for Social Learning

The learner observes the model performing the

behavior.
The learner accurately perceives the models
behavior.
The learner remembers the behavior.
The learner has the skills and abilities needed to
perform the behavior.
The learner sees or knows that the model is
positively reinforced for the behavior.
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Social Learning Theory

Vicarious Learning (Observational
Learning)

Learning that occurs when a learner is

motivated to perform a behavior by
watching another person perform and be
rewarded.
z People

are motivated to imitate models who are

highly competent, expert, receive attractive
reinforcers, and are friendly or approachable.
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Social Learning Theory

z Self-Reinforcement

Any desired or attractive outcome or award that a

person can give himself or herself for good
performance.
z

The self-management of behavior

z Self-efficacy

A persons belief about his or her ability to perform

a behavior successfully.
z

Influences motivation both when managers provide

reinforcement and when workers themselves provide it.
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Pay and Motivation

Pay as a Motivator

Expectancy: Instrumentality, the association

between performance and outcomes, must be high
for motivation to be high.
Need Theory: pay is used to satisfy many needs.
Equity Theory: pay is given in relation to inputs.
Goal Setting Theory: pay is linked to attainment of
goals.
Learning Theory: outcomes (pay), is distributed
upon performance of functional behaviors.
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Merit Pay and Performance

Merit Pay Plan

A compensation plan that bases pay on based on

individual, group and/or organization performance.
Individual plan: when individual performance
(sales) can accurately measured.
Group plan: when group that works closely
together is measured and rewarded as a group.
Organization plan: when group or individual
outcomes not easily measured.
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Salary Increase or Bonus?

z Motivational

Value of a Bonus Is Higher

When:

Salary levels are unrelated to current performance.

Changes in other compensation items (cost of
living, seniority) are not having a large effect in
increasing compensation.
Salaries rarely change and performance does.

z Benefits

of Using Bonuses

Do not become permanent part of compensation

Are more directly tied to current performance
Provide more flexibility in distributing rewards 13-40

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Salary Increase or Bonus?

Employee Stock Option

A financial instrument that entitles the

bearer to buy shares of an organizations
stock at a certain price during a certain
period of time or under certain conditions.
Uses
z To

attract high-level managers

z To motivate employee performance through
ownership in the firm
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Examples of Merit Pay Plans

z Piece-rate

Pay

Employees pay is based on the number of units

that the employee produces.

z Commission

Pay

Employees pay is based on a percentage of sales

that the employee makes.

z Organization-based

Merit Plans

Scanlon planfocuses on reduced expenses or

cutting costs
Profit sharingemployees receive a share of an
organizations profits
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Movie Example: that thing you do!

What motivates the
members of the
band, The
Oneders?

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