Fourth Edition

PART 3 . . . . . . . . . . . . . . . . . . . . . . . .
Understanding People in
Organizations

Copyright ©2003 Prentice Hall, Inc.

Chapter 8

Motivating, Satisfying,
and Leading Employees

Copyright ©2003 Prentice Hall, Inc. 8-2

 “A leader is best when people barely know
he exists, when his work is done… they will
say: We did it ourselves.”
~ Lao-Tzu, c. 600 B.C.

“Leadership is the art of getting someone

else to do something you want done
because he wants to do it.”
~ Dwight D. Eisenhower, 1890 - 1969

Copyright ©2003 Prentice Hall, Inc. 8-3

 Key Topics

Psychological contracts in the workplace

Job satisfaction and employee morale
Theories of employee motivation
Job satisfaction and employee motivation
Managerial styles of leadership

Copyright ©2003 Prentice Hall, Inc. 8-4

 Psychological Contract
A Set of Employment Expectations

Contributions:
What does each employee expect to
contribute to the organization?

Inducements:
What will the organization provide to each
employee in return?

Copyright ©2003 Prentice Hall, Inc. 8-5

 Satisfied Employees Are More
Productive and More Committed

Job Satisfaction:
Degree of enjoyment employees

MORALE

TURNOVER
derive from doing their jobs

High Morale:
An overall positive employee
attitude toward the workplace

TURNOVER

MORALE
Low Turnover:
A low percentage of employees
leave each year

Copyright ©2003 Prentice Hall, Inc. 8-6

 Raising Morale Is a High Priority When
Unemployment Is Low

0% 10% 20% 30% 40% 50% 60%

Alternative Work Arrangements

Long-term Care Insurance

Group Financial Planning

Group Auto Insurance

NA
Group Home Owners Insurance

1994 1997 2000

Copyright ©2003 Prentice Hall, Inc. 8-7
 Fortune Magazine’s
100 Best Companies to Work For
“It's not easy being good these days
at least if you're an employer.”
Edward Jones #1
Cisco Systems #15
Microsoft #28
Patagonia #41
Starbucks #58
Wal-Mart #94
Source: Fortune Magazine, February 4th , 2002
Copyright ©2003 Prentice Hall, Inc. 8-8
 Highly Motivated Employees Are
Critical to Business Success

Motivation:
The set of forces that cause people to behave in
certain ways

 Classical
 Behavior: The Hawthorne Studies
 Contemporary
Copyright ©2003 Prentice Hall, Inc. 8-9
 The Human Resources Model
Theory X and Theory Y

Theory X Theory Y
 People are lazy.  People are energetic.

 People lack ambition and  People are ambitious and

dislike responsibility.
 People are self-centered.
 People resist change.
 People are gullible and
not very bright.
seek responsibility.
 People can be selfless.
 People want to contribute
to business growth and
change.
 People are intelligent.

Copyright ©2003 Prentice Hall, Inc. 8 - 10

 Maslow’s Hierarchy of Needs

General Organizational
Examples Self-
Self- Examples
Actualization
Actualization
Self-Fulfillment Needs
Needs Challenging Job

Status Esteem Needs

Esteem Needs Job Title

Friendship Social Needs

Social Needs Friends at Work

Stability Security Needs

Security Needs Pension Plan

Shelter Physiological Needs

Physiological Needs Salary
Copyright ©2003 Prentice Hall, Inc. 8 - 11
 Two Factor Theory

Hygiene Factors Motivation Factors

• Supervisors • Achievement
• Working Conditions • Recognition
• Interpersonal Relations • The Work Itself
• Pay & Security • Responsibility
• Company Policies & • Advancement & Growth
Administration

Dissatisfaction Satisfaction

Copyright ©2003 Prentice Hall, Inc. 8 - 12

 Expectancy Theory

Individual Organizati
Individu Personal
Performa onal
al Effort Goals
nce Rewards

Effort- Performan Rewards-

Performan ce- Personal
ce Issue Reward Goals
Issue Issue

Copyright ©2003 Prentice Hall, Inc. 8 - 13

 Equity Theory

Employees evaluate their treatment relative to the treatment

of others
Inputs: Employee contributions to their jobs
Outputs: What employees receive in return
The perceived ratio of contribution to return determines
perceived equity

Copyright ©2003 Prentice Hall, Inc. 8 - 14

 Strategies for Enhancing Job
Satisfaction and Morale

 Reinforcement/behavior
modification
 Management by objectives
 Participative management
and empowerment
 Job enrichment and job
redesign
 Modified work schedules

Copyright ©2003 Prentice Hall, Inc. 8 - 15

 Reinforcement /
Behavior Modification Theory

Punishment
Punishment
When negative consequences are attached
directly to undesirable behavior

Positive
Positive Reinforcement
Reinforcement
When rewards are tied directly to
performance

Copyright ©2003 Prentice Hall, Inc. 8 - 16

 Management by Objectives
Collaborative Goal-setting

Collaborati Communica
ve Goal ting Periodic Evaluatio
Setting & Organizatio Review n
Planning nal Goals &
Plans
Meeting
Setting
Verifiable
Goals
& Clear Plans
Counseling
Identifying
Resources

Copyright ©2003 Prentice Hall, Inc. 8 - 17

 Participative Management
and Empowerment

Increasing job satisfaction by

encouraging participation

Team management represents

a growing trend

Copyright ©2003 Prentice Hall, Inc. 8 - 18

 Job Enrichment and Job Redesign

Job Enrichment: Adding one or more motivating

factors to job activities

Job Redesign: Designing a better fit between

workers and their jobs
Combining tasks
Forming natural work groups
Establishing client relationships

Copyright ©2003 Prentice Hall, Inc. 8 - 19

 Modified Work Schedules

Work share programs

Flextime programs and

alternative workplace
strategies

Telecommuting and
virtual offices

Copyright ©2003 Prentice Hall, Inc. 8 - 20

 Sample Flextime Scheduling
6:00 7:00 8:00 9:00 10:00 11:00 12:00 1:00 2:00 3:00 4:00 5:00 6:00
A.M. A.M. A.M. A.M. A.M. A.M. NOON P.M. P.M. P.M. P.M. P.M. P.M.

Flexible Core Flexible Core Flexible

Time Time Time Time Time

Joe

Sue

Pat

Copyright ©2003 Prentice Hall, Inc. 8 - 21

 Evaluating Modified Schedules and
Alternative Workplaces

Advantages Disadvantages
More satisfied, Challenging to
committed coordinate and
employees manage
Less congestion Poor fit for some
workers

Copyright ©2003 Prentice Hall, Inc. 8 - 22

 Managerial Leadership

The process of
motivating others
to work to meet
specific objectives

Copyright ©2003 Prentice Hall, Inc. 8 - 23

 Five Fundamental Leadership
Practices

 Challenge the process

 Inspire a shared vision
 Enable others to act
 Model the way
 Encourage the heart

Source: www.theleadershipchallenge.com

Copyright ©2003 Prentice Hall, Inc. 8 - 24

 Leadership at General Electric
“Four E’s of GE Leadership”

A high energy level

The ability to energize others around common

goals

The edge to make tough decisions

The ability to consistently execute and deliver

on promises

Source: Jack Welch Tells It Straight from the Gut, Anderson Assets, Winter 2002
Copyright ©2003 Prentice Hall, Inc. 8 - 25
 Managerial Styles

Autocratic Style
Democratic Style
Free-rein Style

Contingency
Contingency Approach
Approach
The
The appropriate
appropriate style
style in
in any
any situation
situation is is contingent
contingent
on
on the
the unique
unique elements
elements ofof that
that situation
situation
Copyright ©2003 Prentice Hall, Inc. 8 - 26
 Motivation and Leadership in the
Twenty-first Century

Motivation
Security and pay are no
longer enough

Leadership
 “Coach” mentality
 Diversity
 Flexibility

Copyright ©2003 Prentice Hall, Inc. 8 - 27

 Chapter Review

Describe psychological contracts

Discuss the importance of job satisfaction
and employee morale
Summarize the most important theories of
employee motivation
Describe strategies to improve job
satisfaction and employee motivation
Discuss different managerial styles
Copyright ©2003 Prentice Hall, Inc. 8 - 28