UGBA105: Organizational Behavior

1. Walter A. Haas School of Business University of California, Berkeley UGBA105: Organizational Behavior Professor Jim Lincoln Week 9: Motivation and Job Design

2. Agenda • Today • Theories of motivation • Job design for motivation • Tuesday • Lecture windup; questions • Discuss Adler paper on NUMMI • Discuss motivation issues in People Express • Lincoln Electric video

3. An experiment Rank-order (#1-#8) the following as to their importance to you as motivators in your job: Benefits Worthwhile Praise Pay Learning Security Feels good Skills

4. An experiment Now rank-order (#1-#8) the following as to their importance for others’ motivations (imagine you were being paid for the accuracy of your predictions): Learning Security Feels good Skills Benefits Worthwhile Praise Pay

5. The importance of intrinsic & extrinsic rewards Actual rank-order (#1-#8) of these factors based on a study by Heath (2000): Self-Rating Others’ Rating • Learning • Skills • Feel Good • Pay • Worthwhile • Praise • Benefits • Security 1 Pay 2 Skills 3 Security 4 Benefits 5 Feel Good 6 Learning 7 Worthwhile 8 Praise What are the implications of these differences?

6. How important is money? Choose Between: Job A: A moderately interest- ing and enjoyable job with high pay Job B: An extremely interes- ting and enjoyable job with only average pay

7. Theories of extrinsic motivation(What are the managerial implications?) • Homo economicus (Taylor, Theory X, principal/agent) M=f(R) • People are rational but selfish, opportunistic, & risk- and effort-averse. They need strong incentives & close monitoring • Expectancy/path-goal (Vroom) M = E(Ri) = S(pi)Ri • People are rational and goal-directed. They map paths to the attainment of rewards. Extrinsic rewards motivate only when the perceived probability of attainment is high • Learning theory (Skinner) • People are not rational or goal-directed. Random behavior that is rewarded is reinforced. Behavior that is punished is extinguished • Equity theory: M = f(Rs/Es - Ro/Eo) • People benchmark the value of their extrinsic rewards on those of others. Perceived inequity may be motivating or demotivating

8. Theory X 1. People are motivated only by economic gain 2. People resist effort; tend to “soldier” on the job 3. People need clear, simple tasks and strong direction 4. People are selfish, individualistic, “look out for number one” Theory Y 1. People are motivated by many nonfinancial rewards 2. People find meaning and value in work 3. People need challenge, variety, feedback, closure in work 4. People are highly social and sensitive to group norms Theory X and Theory YDouglas MacGregor: The Human Side of Enterprise, 1960

9. Frederick Taylor on workers’ tendency to “soldier” “There is no question that the tendency of the average man (in all walks of life) is to work at a slow,easy gait, and that it is only after external pressure that he takes a more rapid pace.” "There are, of course, men of unusual energy, vitality,and ambition who naturally choose the fastest gait, whose up their own standards, and who work hard, even though it may be against their best interests. But these (are) few …. "This common tendency to 'take it easy' is greatly increased by bringing a number of men together on similar work and at a uniform standard rate of pay by the day. "Under this plan the better men gradually but surely slow down their gait to that of the poorest and least efficient. F. W. Taylor, “Shop Management.” Paper presented to The American Society of Mechanical Engineers,in June, 1903.

10. The pain of inequity Sitting on his back porch, with a view of a lake, his black Mercedes parked in the driveway, John Mariotti ponders the unfairness of life. "I see people I know couldn't carry my briefcase walking away with failure packages bigger than my net worth," says Mr. Mariotti, 57 years old, a former executive and now a Knoxville, Tenn., consultant who made more than $150,000 last year. Most people don't begrudge Bill Gates his billions. What seems to be more unnerving to high-wage earners is the belief that many of the new super-rich have stumbled into their wealth by being at the right place at the right time -- or, even more infuriatingly, have succeeded after failing at careers in law, medicine or big corporations. WSJ 8/3/1998

11. Theories of intrinsic motivation(What are the managerial implications?) • Theory Y (McGregor, Marx) • People find meaning & fulfillment through work (intrinsic rewards) • Motivation/hygiene (Herzberg) • Extrinsic rewards reduce dissatisfaction; intrinsic rewards motivate • Hierarchy of needs (Maslow) • People have needs that both intrinsic and extrinsic rewards fulfill. Intrinsic rewards motivate only after a sufficient level of extrinsic reward is attained • Cognitive dissonance (Festinger) • People as rationalizers: need consistency in cognitions & behavior • Too much extrinsic reward makes work less intrinsically rewarding • Too little extrinsic reward makes work more intrinsically rewarding

12. Herzberg: motivation - hygiene

13. MASLOW’S NEEDS HIERARCHY APPLIED TO JOB DESIGN Challenging work Recognition, respect Friends at work Job security Pay/benefits

14. What exactly is motivating about $$$money$$$?

15. Dilbert on the motivational power of cognitive dissonance

16. What makes a job intrinsically rewarding? • Leadership • inspiring vision and charisma • Culture and community • identification, commitment, respect • Job tasks

17. What attributes of job tasks are intrinsically rewarding?

18. SCIENTIFIC MANAGEMENT :“Systems so perfect that no one will need to be good” Frederick W. Taylor: The Principles of Scientific Management, 1911. Frank B. Gilbreth: Motion Study, a Method for Increasing the Efficiency of the Workman. 1911. Frank B. Gilbreth and Ernestine Gilbreth Carey: Cheaper by the Dozen. 1948.

19. Classical job design (Taylorism):Efficiency & reliability through standardization and control • Narrow scope • Simple, repetitive tasks • Rigid rules & specs • Close, top-down supervision • Low autonomy • Low skill • Fixed pay (by job or time) or individual incentive pay • Long job ladders Efficiency at the expense of motivation!

20. Classical job design and motivation

21. Job redesign for motivation • Classical (Taylorist) job design • Job rotation • cross-train; pay for job skills • Job enlargement (horizontal loading). Pull in: • support tasks • upstream and downstream production tasks • Job enrichment (vertical loading). Pull down: • Authority, accountability, responsibility • Switch to teams • Off-line problem-solving • On-line self-managing • Industrial democracy • European supervisory boards; works councils; Saturn; People Express Low- Scope and Empowerment-High

22. What does the NUMMI case say about job redesign and motivation?

23. When empowerment fails to motivate SOUTH BEND, Ind. -- Beverly Reynolds thought she wanted to be an empowered factory worker. But after nine months at Eaton Corp.’s small forge plant here, where empowerment is a near-religion, she had enough and left for another job. Though she liked the idea of being her own boss, she hated the headaches -- fixing broken machines and having to learn a wide variety of jobs. She says her coworkers "weren't standing watching me, but from afar, they were watching me." She found that stressful, even though they were kind and willing to help her. “It wasn't for me at all," she says. Nor is it for many others -- though you would never know that, to listen to the advocates of empowerment. It is sweeping through American factories, usually through creation of self-directed work teams and other organizational changes designed to push responsibilities down to the factory floor. The idea has obvious appeal: What better way to tap into workers' brains as well as their brawn than to encourage them to think on the job, to bring to it a greater sense of professionalism and self-motivation and to feel committed to the company's success? WSJ 9/8/97

24. Do organizations really want “satisfied” employees? Or is it better to have “hungry” employees who have high expectations for achievement and fulfillment through work? • How do expectations affect job satisfaction?

25. Motivation and stress

26. Job satisfaction & the bottom line Sears Roebuck found in an 800-store study that employees' attitudes about their workload, treatment by bosses and eight other such matters have a measurable effect on customer satisfaction and revenue. A happy employee will stick with the company, give better service to the customer and recommend company products to others. If employee attitudes on 10 essential counts improve by 5%, Sears found, customer satisfaction jumps 1.3%, driving a .5% rise in revenue. Sears rigorously measures employee attitudes and customer satisfaction and bases executives' long-term bonuses in part on the results, says John Sloan, senior vice president, human resources. “Companies Find It Pays To Be Nice to Employees”, WSJ 7.22.98

27. Conference Board survey of 5000 workers in 2004 shows declining job satisfaction in US • Half of U.S. workers are happy with their jobs • Down from 59 percent in 1995 • Declines found for all types of workers but magnitude varied by age and income • Biggest drops: earning $25,000 to $35,000 and between 35 to 44. • Workers 65 and older were most satisfied • “The long-term drop in job satisfaction has been driven by rapid changes in technology, employers' push for productivity and shifting expectations among workers,” said Lynn Franco, director of the group's Consumer Research Center. • Highest satisfaction with work commutes and coworker relationships . • High dissatisfaction with their companies' bonus plans, promotion policies, health plans and pension benefits. • And only about one in three said they are satisfied with their pay.

28. Still, U. S. employees are among the most satisfied in the world (and the Japanese are among the least) J. R. Lincoln& A. L. Kalleberg: Culture, Control, and Commitment: A Study of Work Organization and Work Attitudes in the U. S. and Japan. Cambridge, 1990.

29. Takeaways • Managers ignore at their peril our tendency to seek intrinsic rationales for work activities. • Human motivation has complex causes that may work in contradictory ways • Managers need to think about those channels in designing job and reward systems • Be clear about your own motivational assumptions before you begin designing job and reward systems. • The theories of motivation managers carry in their heads can become self-fulfilling prophecies • Efficiency and motivation are not contradictory goals in job design