Organizational
Behavior
Kyle White
Email: [email protected]
Cell: 918-766-5512
Office: 918-335-6289
Website for PPT: www.kdub1.com
Copyright © 2017 Pearson Education, Inc.
Scripture Verse
Galatians 6:4 (NLT)
4 Pay careful attention to your own
work, for then you will get the
satisfaction of a job well done, and you
won’t need to compare yourself to
anyone else.
Copyright © 2017 Pearson Education, Inc.
STUDENT EVALUATION
The performance of adult learners in this course is assessed
through the following components:
1.
Individual Research Paper and Presentation Week 2&5
 Week Two Informal Presentation. Week Five Formal.
2.
3.
Learning Team Case Presentations Week 3&4
Class Participation and Attendance
See Syllabus for Homework Discussion
Copyright © 2017 Pearson Education, Inc.
Week 3 – Team Cases
TEAM CASES
Your group will complete a case presentations next wee.
These group assignments are designed not only to provide
a practical application of material, but also to facilitate team
thinking and interaction, as well as hone your presentation
skills.
You are charged with reading the case, analyzing it in the
context of the chapter’s material, preparing a multimedia
presentation, and professionally presenting your findings to
the class. The grade will be based on content and
communication skills and will apply to all members of the
Learning team equally. Therefore, all members of the
learning team must take part in the presentation.
Copyright © 2017 Pearson Education, Inc.
Week 3 – Team Cases
TEAM CASES
Chapter 9: Is Social Loafing Unethical? pg303
Chapter 10: The Sum of the Team is Less Than its
Members Pg334
Chapter 11: BYOD pg374
Chapter 12: Smoking Success pg412
Copyright © 2017 Pearson Education, Inc.
4
Emotions
and
Moods
Copyright © 2017 Pearson Education, Inc.
LO 1
Differentiate Between
Emotions and Moods
Six essentially universal emotions
1. Anger
How many of you are
2. Fear
emotional?
3. Sadness
Does this impact your
4. Happiness
job?
5. Disgust
What about Moral
6. Surprise
Emotions?
Copyright © 2017 Pearson Education, Inc.
4-8
LO 1
Differentiate Between
Emotions and Moods
Moral Emotions
 Moral emotions: emotions that have moral
implications because of our instant
judgement of the situation that evokes them.
 Our responses to moral emotions differ from
our responses to other emotions.
 Moral emotions are learned, usually in
childhood.
 Because morality is a construct that differs
between cultures, so do moral emotions.
Copyright © 2017 Pearson Education, Inc.
4-9
LO 1
Differentiate Between
Emotions and Moods
Do emotions make us ethical?
 Research on moral emotions questions the
previous belief that emotional decision
making is based on higher-level cognitive
processes.
 Our beliefs are shaped by our groups,
resulting in an unconscious feeling that our
shared emotions are “right.”
Copyright © 2017 Pearson Education, Inc.
4-10
LO 5
Describe Emotional Intelligence
Emotional Intelligence:
A person’s ability to:
 Perceive emotions in the self and others.
 Understand the meaning of these
emotions.
 Regulate one’s emotions accordingly in
a cascading model.
Copyright © 2017 Pearson Education, Inc.
4-11
LO 6
Identify Strategies
for Emotion Regulation
Emotion regulation involves identifying and
modifying the emotions you feel.
Emotion Regulation Influences and Outcomes
 Diversity in work groups may help us to
regulate our emotions more consciously and
effectively.
Copyright © 2017 Pearson Education, Inc.
4-12
LO 6
Identify Strategies
for Emotion Regulation
Emotion Regulation Techniques
Surface acting
Deep acting
Emotional suppression
Cognitive reappraisal
Social sharing
 The best option though is to recruit positiveminded individuals and train leaders to
manage their moods, attitudes, and
performance.
Copyright © 2017 Pearson Education, Inc.
4-13
LO 7
Apply Concepts About Emotions
and Moods to Specific OB Issues
Selection
 EI should be a hiring factor, especially for
social jobs.
Decision Making
 Positive emotions can lead to better
decisions.
Creativity
 Positive mood increases flexibility, openness,
and creativity.
Copyright © 2017 Pearson Education, Inc.
4-14
LO 7
Apply Concepts About Emotions and
Moods to Specific OB Issues
Motivation
 Positive mood affects expectations of success.
Feedback amplifies this effect.
Leadership
 Emotions are important to acceptance of
messages from organizational leaders.
Negotiation
 Emotions can affect negotiations.
Copyright © 2017 Pearson Education, Inc.
4-15
LO 7
Apply Concepts About Emotions and
Moods to Specific OB Issues
Customer Service
 Emotions influence customer service.
Influences repeat business and customer
satisfaction.
 Emotional contagion: “catching” emotions.
Job Attitudes
 A good day at work tends to be followed by
a good mood at home and vice versa.
This usually dissipates overnight.
Copyright © 2017 Pearson Education, Inc.
4-16
LO 7
Apply Concepts About Emotions
and Moods to Specific OB Issues
Deviant Workplace Behaviors
 Negative emotions lead to workplace
deviant behaviors.
Actions that violate norms and threaten
the organization.
Safety and Injury at Work
 Don’t do dangerous work when in a bad
mood.
Copyright © 2017 Pearson Education, Inc.
4-17
Implications for Managers
Recognize that emotions are a natural part of
the workplace and good management does not
mean creating an emotion-free environment.
To foster effective decision making, creativity,
and motivation in employees, look to model
positive emotions and moods as much as is
authentically possible.
Provide positive feedback to increase the
positivity of employees. Of course, it also helps
to hire people who are predisposed to positive
moods.
Copyright © 2017 Pearson Education, Inc.
4-18
Implications for Managers
In the service sector, encourage positive
displays of emotion, which make customers feel
more positive and thus, improve customer
service interactions and negotiations.
Understand the role of emotions and moods to
significantly improve your ability to explain and
predict your coworkers’ and other’s behavior.
Copyright © 2017 Pearson Education, Inc.
4-19
Case Study Chapter 04
Point/Counterpoint: Yelling
Individual Paper Discussions
Copyright © 2017 Pearson Education, Inc.
1-20
5
Personality
and
Values
Copyright © 2017 Pearson Education, Inc.
LO 1
Describe Personality, the Way It Is
Measured, and the Factors that Shape It
Measuring Personality
 Managers need to know how to measure
personality.
Personality tests are useful in hiring decisions
and help managers forecast who is best for a
job.
 The most common means of measuring
personality is through self-report surveys.
Copyright © 2017 Pearson Education, Inc.
5-22
LO 1
Describe Personality, the Way It Is
Measured, and the Factors that Shape It
Early research tried to identify and label
enduring personality characteristics.
 Shy, aggressive, submissive, lazy, ambitious,
loyal, and timid.
These are personality traits.
Difference between Natural response
vs. Controlled Response.
Can we act outside our personality?
Copyright © 2017 Pearson Education, Inc.
5-23
LO 2
Strengths and Weakness of
the MBTI and Big Five Model
The most widely used personality framework is the
Myers-Briggs Type Indicator (MBTI).
Individuals are classified as:
 Extroverted or Introverted (E or I)
 Sensing or Intuitive (S or N)
 Thinking or Feeling (T or F)
 Perceiving or Judging (P or J)
INTJs are visionaries.
ESTJs are organizers.
ENTPs are conceptualizers.
SEE SAMPLE REPORTS – HOW WOULD
YOU USE?
How important is confidence? Core Self
Evaluation (CSE)
Copyright © 2017 Pearson Education, Inc.
5-24
LO 2
Strengths and Weakness of
the MBTI and Big Five Model
Copyright © 2017 Pearson Education, Inc.
5-25
LO 2
Strengths and Weakness of
the MBTI and Big Five Model
The Dark Triad Machiavellianism: the degree to
which an individual is pragmatic, maintains
emotional distance, and believes that ends can
justify means.
Narcissism: the tendency to be arrogant, have a
grandiose sense of self-importance, require
excessive admiration, and have a sense of
entitlement.
Psychopathy: the tendency for a lack of concern for
others and a lack of guilt or remorse when their
actions cause harm.
Copyright © 2017 Pearson Education, Inc.
5-26
LO 2
Strengths and Weakness of
the MBTI and Big Five Model
An emerging framework to study dark side
traits:
 First, antisocial people are indifferent and
callous toward others.
 Second, borderline people have low selfesteem and high uncertainty.
Copyright © 2017 Pearson Education, Inc.
5-27
LO 2
Strengths and Weakness of
the MBTI and Big Five Model
 Third, schizotypal individuals are eccentric and
disorganized.
 Fourth, obsessive compulsive people are
perfectionists and can be stubborn, yet they
attend to details, carry a strong work ethic, and
may be motivated by achievement.
 Fifth, avoidant individuals feel inadequate and
hate criticism.
Copyright © 2017 Pearson Education, Inc.
5-28
LO 4
The Situation, Personality,
and Behavior
Situation strength theory: indicates that
the way personality translates into behavior
depends on the strength of the situation.
 The degree to which norms, cues, or
standards dictate appropriate behavior.
Clarity
Consistency
Constraints
Consequences
Copyright © 2017 Pearson Education, Inc.
5-29
LO 4
The Situation, Personality,
and Behavior
Copyright © 2017 Pearson Education, Inc.
5-30
LO 5
Contrast Terminal and
Instrumental Values
Values: basic convictions about what is right,
good, or desirable.
 Value system: ranks values in terms of
intensity.
The Importance and Organization of Values
 Values:
Lay the foundation for understanding of
attitudes and motivation.
Influence attitudes and behaviors.
Copyright © 2017 Pearson Education, Inc.
5-31
LO 6
Person-Job Fit vs.
Person-Organization Fit
Person-Organization Fit
 People high on extraversion fit well with
aggressive and team-oriented cultures.
 People high on agreeableness match up
better with a supportive organizational
climate than one focused on aggressiveness.
 People high on openness to experience fit
better in organizations that emphasize
innovation rather than standardization.
Copyright © 2017 Pearson Education, Inc.
5-32
Case Study Chapter 05
Point/Counterpoint
Millennials are more narcissistic than their parents.
Copyright © 2017 Pearson Education, Inc.
1-33
6
Perception and
Individual
Decision Making
Copyright © 2017 Pearson Education, Inc.
LO 1
Explain the Factors That
Influence Perception
Perception is a process by which individuals
organize and interpret their sensory
impressions in order to give meaning to their
environment.
It is important to the study of OB because
people’s behaviors are based on their
perception of what reality is, not on reality itself.
Copyright © 2017 Pearson Education, Inc.
6-35
LO 1
Explain the Factors That
Influence Perception
Copyright © 2017 Pearson Education, Inc.
6-36
LO 2
Explain Attribution Theory
Attribution theory suggests that when we
observe an individual’s behavior, we attempt to
determine whether it was internally or externally
caused.
Determination depends on three factors:
 Distinctiveness
 Consensus
 Consistency
How does this impact the way we interact with
other departments?
Copyright © 2017 Pearson Education, Inc.
6-37
LO 2
Explain Attribution Theory
Clarification of the differences between
internal and external causation
 Internally caused – those that are
believed to be under the personal control of
the individual.
 Externally caused – resulting from outside
causes.
Situation vs. Person attribution.
Copyright © 2017 Pearson Education, Inc.
6-38
LO 2
Explain Attribution Theory
Fundamental attribution error
 We have a tendency to underestimate the
influence of external factors and
overestimate the influence of internal or
personal factors.
Self-serving bias
 Individuals attribute their own successes to
internal factors.
Copyright © 2017 Pearson Education, Inc.
6-39
LO 2
Explain Attribution Theory
Common Shortcuts in Judging Others
 Selective perception
Any characteristic that makes a person,
object, or event stand out will increase the
probability that it will be perceived.
Since we can’t observe everything going on
around us, we engage in selective
perception.
She left because she didn’t want to talk to
me…
Copyright © 2017 Pearson Education, Inc.
6-40
LO 2
Explain Attribution Theory
Halo effect
 The halo effect occurs when we draw a
general impression on the basis of a single
characteristic.
Contrast effects
 We do not evaluate a person in isolation.
 Our reaction to one person is influenced by
other persons we have recently
encountered.
Copyright © 2017 Pearson Education, Inc.
6-41
LO 2
Explain Attribution Theory
Stereotyping
 Judging someone on the basis of our
perception of the group to which he or she
belongs.
We have to monitor ourselves to make
sure we’re not unfairly applying a
stereotype in our evaluations and
decisions.
Copyright © 2017 Pearson Education, Inc.
6-42
LO 2
Explain Attribution Theory
Applications of Shortcuts in Organizations
 Employment Interview
Evidence indicates that interviewers make
perceptual judgments that are often
inaccurate.
Interviewers generally draw early impressions
that become very quickly entrenched.
Studies indicate that most interviewers’
decisions change very little after the first four
or five minutes of the interview.
Copyright © 2017 Pearson Education, Inc.
6-43
LO 2
Explain Attribution Theory
Performance Expectations
 Evidence demonstrates that people will
attempt to validate their perceptions of
reality, even when those perceptions are
faulty.
Self-fulfilling prophecy, or the
Pygmalion effect, characterizes the fact
that people’s expectations determine their
behavior.
Expectations become reality.
Copyright © 2017 Pearson Education, Inc.
6-44
LO 2
Explain Attribution Theory
Performance Evaluation
 An employee’s performance appraisal is
very much dependent upon the perceptual
process.
Many jobs are evaluated in subjective
terms.
Subjective measures are problematic
because of selective perception, contrast
effects, halo effects, and so on.
Copyright © 2017 Pearson Education, Inc.
6-45
LO 3
Explain the Link Between
Perception and Decision Making
Individuals make decisions – choosing from
two or more alternatives.
Decision making occurs as a reaction to a
problem.
 There is a discrepancy between some
current state of affairs and some desired
state, requiring consideration of alternative
courses of action.
One person’s problem is another’s
satisfactory state of affairs.
Copyright © 2017 Pearson Education, Inc.
6-46
LO 4
Rational Model of Decision Making vs.
Bounded Rationality and Intuition
Common Biases and Errors in Decision Making
 Overconfidence Bias: individuals whose
intellectual and interpersonal abilities are
weakest are most likely to overestimate their
performance and ability.
 Anchoring Bias: fixating on initial
information as a starting point and failing to
adequately adjust for subsequent
information.
Copyright © 2017 Pearson Education, Inc.
6-47
LO 4
Rational Model of Decision Making vs.
Bounded Rationality and Intuition
Confirmation Bias: type of selective
perception.
 Seek out information that reaffirms past
choices, and discount information that
contradicts past judgments.
Availability Bias: tendency for people to base
judgments on information that is readily
available.
Copyright © 2017 Pearson Education, Inc.
6-48
LO 4
Rational Model of Decision Making vs.
Bounded Rationality and Intuition
Escalation of Commitment: staying with a
decision even when there is clear evidence that
it’s wrong.
Likely to occur when individuals view
themselves as responsible for the outcome.
Randomness Error: our tendency to believe we
can predict the outcome of random events.
Decision making becomes impaired when
we try to create meaning out of random
events.
Copyright © 2017 Pearson Education, Inc.
6-49
LO 4
Rational Model of Decision Making vs.
Bounded Rationality and Intuition
Risk Aversion: the tendency to prefer a sure
thing instead of a risky outcome.
Ambitious people with power that can be
taken away appear to be especially risk
averse.
People will more likely engage in risk-seeking
behavior for negative outcomes, and riskaverse behavior for positive outcomes, when
under stress.
Hindsight Bias: the tendency to believe falsely
that one has accurately predicted the outcome of
an event, after that outcome is actually known.
Copyright © 2017 Pearson Education, Inc.
6-50
LO 6
Contrast the Three
Ethical Decision Criteria
 Utilitarianism: decisions are made solely on
the basis of their outcomes or consequences.
 Focus on rights: calls on individuals to make
decisions consistent with fundamental liberties
and privileges as set forth in documents such
as the Bill of Rights.
 Protects whistle-blowers.
Impose and enforce rules fairly and impartially
to ensure justice or an equitable distribution of
benefits and costs.
Copyright © 2017 Pearson Education, Inc.
6-51
LO 6
Contrast the Three
Ethical Decision Criteria
Behavioral ethics: an area of study that
analyzes how people actually behave when
confronted with ethical dilemmas.
 Individuals do not always follow ethical
standards promulgated by their
organizations, and we sometimes violate
our own standards.
 There are ways to increase ethical decision
making in organizations.
 Consider cultural differences.
Copyright © 2017 Pearson Education, Inc.
6-52
LO 6
Contrast the Three
Ethical Decision Criteria
Lying
One of the top unethical activities we may
indulge in daily.
It undermines all efforts toward sound
decision making.
Managers—and organizations—simply
cannot make good decisions when facts are
misrepresented and people give false motives
for their behaviors.
Lying is a big ethical problem as well.
Copyright © 2017 Pearson Education, Inc.
6-53
LO 7
Describe the Three-Stage
Model of Creativity
Creativity is the ability to produce novel and
useful ideas.
 These are ideas that are different from what
has been done before, but that are also
appropriate to the problem.
Copyright © 2017 Pearson Education, Inc.
6-54
Case Study Chapter 06
 Which Ethical Approach should you take?
 Utilitarianism – decisions are made solely on the basis of
their outcomes.
 Focus on rights – calls individuals to make decisions
consistent with fundamental liberties and privileges as set
forth in documents such as the Bill of Rights. This
criterion protects whistleblowers when they reveal an
organization’s unethical practices to the press or
government agencies, using their right to free speech.
 Impose and enforce rules fairly and impartially to ensure
justice protects the interests of the underrepresented and
less powerful, but it can encourage a sense of entitlement
that reduces risk taking, innovation, and productivity.
Copyright © 2017 Pearson Education, Inc.
1-55
7
Motivation
Concepts
Copyright © 2017 Pearson Education, Inc.
LO 1
Describe the Three
Key Elements of Motivation
Motivation is the processes that account for an
individual’s intensity, direction, and persistence
of effort toward attaining a goal.
The level of motivation varies both between
individuals and within individuals at different
times.
Copyright © 2017 Pearson Education, Inc.
7-57
LO 1
Describe the Three
Key Elements of Motivation
The three key elements of motivation are:
1. Intensity: concerned with how hard a
person tries.
2. Direction: the orientation that benefits the
organization.
3. Persistence: a measure of how long a
person can maintain his/her effort.
Copyright © 2017 Pearson Education, Inc.
7-58
LO 2
Compare the Early
Theories of Motivation
Copyright © 2017 Pearson Education, Inc.
7-59
LO 2
Compare the Early
Theories of Motivation
Maslow’s need theory has received wide
recognition, particularly among practicing
managers.
 It is intuitively logical and easy to understand
and some research has validated it.
 However, most research does, especially
when the theory is applied to diverse
cultures.
Copyright © 2017 Pearson Education, Inc.
7-60
LO 1
Compare the Early
Theories of Motivation
Copyright © 2017 Pearson Education, Inc.
7-61
LO 2
Compare the Early
Theories of Motivation
Copyright © 2017 Pearson Education, Inc.
7-62
LO 2
Compare the Early
Theories of Motivation
Criticisms of Herzberg’s theory:
 Limited because it relies on self-reports.
 Reliability of methodology is questioned.
 No overall measure of satisfaction was
utilized.
Copyright © 2017 Pearson Education, Inc.
7-63
LO 2
Compare the Early
Theories of Motivation
 McClelland’s Theory of Needs
 The theory focuses on three needs:
 Need for achievement (nAch): drive to
excel, to achieve in relation to a set of
standards, to strive to succeed.
 Need for power (nPow): need to make
others behave in a way that they would
not have behaved otherwise.
 Need for affiliation (nAfl): desire for
friendly and close interpersonal
relationships.
Copyright © 2017 Pearson Education, Inc.
7-64
LO 2
Compare the Early
Theories of Motivation
McClelland’s theory has had the best support.
 It has less practical effect than the others.
 Because McClelland argued that the three
needs are subconscious—we may rank high
on them but not know it—measuring them is
not easy.
 It is more common to find situations in which
managers aware of these motivational
drivers label employees based on
observations made over time.
Copyright © 2017 Pearson Education, Inc.
7-65
LO 3
Self-Determination Theory
vs. Goal-Setting Theory
Self-Determination Theory
 People prefer to feel they have control over
their actions.
People paid for work feel less like they
want to do it and more like they have to it.
 Proposes that in addition to being driven by
a need for autonomy, people seek ways to
achieve competence and positive
connections to others.
Copyright © 2017 Pearson Education, Inc.
7-66
LO 3
Self-Determination Theory
vs. Goal-Setting Theory
When extrinsic rewards are used as payoffs for
performance, employees feel they are doing a
good job.
 Eliminating extrinsic rewards can also shift an
individual’s perception of why he or she works
on a task from an external to an internal
explanation.
Self-determination theory acknowledges that
extrinsic rewards can improve even intrinsic
motivation under specific circumstances.
Copyright © 2017 Pearson Education, Inc.
7-67
LO 3
Self-Determination Theory
vs. Goal-Setting Theory
What does all of this mean?
 For individuals:
Choose your job for reasons other than
extrinsic rewards.
 For organizations:
Provide intrinsic as well as extrinsic
incentives.
Copyright © 2017 Pearson Education, Inc.
7-68
LO 3
Self-Determination Theory
vs. Goal-Setting Theory
Goal-Setting Theory
 Goals tell an employee what needs to be
done and how much effort is needed.
Evidence suggests:
 Specific goals increase performance.
 Difficult goals, when accepted, result in
higher performance than do easy goals.
 Feedback leads to higher performance than
does non-feedback.
Copyright © 2017 Pearson Education, Inc.
7-69
LO 4
Self-Efficacy, Reinforcement,
Equity, and Expectancy Theory
When employees perceive an inequity, they
can be predicted to make one of six choices:
 Change their inputs.
 Change their outcomes.
 Distort perceptions of self.
 Distort perceptions of others.
 Choose a different referent.
 Leave the field.
Copyright © 2017 Pearson Education, Inc.
7-70
LO 4
Self-Efficacy, Reinforcement,
Equity, and Expectancy Theory
Expectancy theory: a tendency to act in a
certain way depends on an expectation that the
act will be followed by a given outcome and on
the attractiveness of that outcome to the
individual.
Three relationships:
 Effort-performance relationship
 Performance-reward relationship
 Rewards-personal goals relationship
Copyright © 2017 Pearson Education, Inc.
7-71
LO 4
Self-Efficacy, Reinforcement,
Equity, and Expectancy Theory
Copyright © 2017 Pearson Education, Inc.
7-72
LO 4
Self-Efficacy, Reinforcement,
Equity, and Expectancy Theory
Expectancy theory helps explain why a lot of
workers aren’t motivated and do only the
minimum.
Three questions employees need to answer in the
affirmative if their motivation is to be maximized:
 If I give maximum effort, will it be recognized in
my performance appraisal?
 If I get a good performance appraisal, will it
lead to organizational rewards?
 If I’m rewarded, are the rewards attractive to
me?
.
Copyright © 2017 Pearson Education, Inc
7-73
LO 5
Implications of Job
Engagement for Management
Job engagement: the investment of an
employee’s physical, cognitive, and emotional
energies into job performance.
 Gallup organization: more engaged employees
in successful organizations than in average
organizations.
 Academic studies: job engagement is
positively associated with performance and
citizenship behaviors.
Copyright © 2017 Pearson Education, Inc.
7-74
LO 5
Implications of Job
Engagement for Management
What makes people more engaged in their job?
 The degree to which an employee believes it
is meaningful to engage in work.
 A match between the individual’s values and
the organization’s.
 Leadership behaviors that inspire workers to
a greater sense of mission.
Copyright © 2017 Pearson Education, Inc.
7-75
Case Study Chapter 07
Point/Counterpoint
Goals Get you to Where You Want to Be
Copyright © 2017 Pearson Education, Inc.
1-76
8
Motivation:
From Concepts
To Applications
Copyright © 2017 Pearson Education, Inc.
LO 2
Compare the Main Ways
Jobs Can Be Redesigned
Repetitive jobs provide little variety, autonomy, or
motivation.
Job Rotation
 Referred to as cross-training.
 Periodic shifting from one task to another.
 Strengths: reduces boredom, increases
motivation, and helps employees better
understand their work contributions.
 Weaknesses: creates disruptions, requires extra
time for supervisors addressing questions and
training time, and reduced efficiencies.
Copyright © 2017 Pearson Education, Inc.
8-78
LO 3
How Specific Alternative Work
Arrangements Motivate Employees
Copyright © 2017 Pearson Education, Inc.
8-79
LO 3
How Specific Alternative Work
Arrangements Motivate Employees
Job Sharing
 Two or more people split a 40-hour-a-week
job.
Declining in use.
Can be difficult to find compatible pairs of
employees who can successfully coordinate
the intricacies of one job.
Increases flexibility and can increase
motivation and satisfaction when a 40-houra-week job is just not practical.
Copyright © 2017 Pearson Education, Inc.
8-80
LO 3
How Specific Alternative Work
Arrangements Motivate Employees
Telecommuting
 Employees who do their work at home at
least two days a week on a computer that
is linked to their office.
Virtual office
Some well-known organizations actively
discourage telecommuting, but for most
organizations it remains popular.
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LO 3
How Specific Alternative Work
Arrangements Motivate Employees
Telecommuting Disadvantages
 Employer
Less direct supervision of employees.
Difficult to coordinate teamwork.
Difficult to evaluate non-quantitative
performance.
 Employee
May not be noticed for his or her efforts.
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LO 5
Variable-Pay Programs
and Employee Motivation
What to Pay:
 Complex process that entails balancing
internal equity and external equity.
 Some organizations prefer to pay leaders by
paying above market.
 Paying more may net better-qualified and
more highly motivated employees who may
stay with the firm longer.
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LO 5
Variable-Pay Programs
and Employee Motivation
Piece-Rate Pay
 A pure piece-rate plan provides no base
salary and pays the employee only for
what he or she produces.
 Limitation: not a feasible approach for
many jobs.
 The main concern for both individual and
team piece-rate workers is financial risk.
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LO 5
Variable-Pay Programs
and Employee Motivation
Merit-Based Pay
 Allows employers to differentiate pay based
on performance.
 Creates perceptions of relationships between
performance and rewards.
 Limitations:
Based on annual performance appraisals.
Merit pool fluctuates.
Union resistance.
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LO 5
Variable-Pay Programs
and Employee Motivation
Bonuses
 An annual bonus is a significant component
of total compensation for many jobs.
 Increasingly include lower-ranking
employees.
Many companies now routinely reward
production employees with bonuses when
profits improve.
 Downside: employees’ pay is more
vulnerable to cuts.
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LO 5
Variable-Pay Programs
and Employee Motivation
Profit-Sharing Plans
 Organization-wide programs that distribute
compensation based on some established
formula centered around a company’s
profitability.
 Appear to have positive effects on employee
attitudes at the organizational level.
Employees have a feeling of psychological
ownership.
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LO 5
Variable-Pay Programs
and Employee Motivation
Employee Stock Ownership Plan (ESOP)
 A company-established benefit plan in which
employees acquire stock, often at belowmarket prices, as part of their benefits.
 Increases employee satisfaction and
innovation.
Employees need to psychologically
experience ownership.
 Can reduce unethical behavior.
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LO 5
Variable-Pay Programs
and Employee Motivation
Evaluation of Variable Pay
 Do variable-pay programs increase
motivation and productivity?
Generally, yes, but that doesn’t mean
everyone is equally motivated by them.
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LO 6
Show How Flexible Benefits
Turn Benefits Into Motivators
Developing a Benefits Package
 Flexible benefits individualize rewards.
Allow each employee to choose the
compensation package that best satisfies
his or her current needs and situation.
Today, almost all major corporations in
the United States offer flexible benefits.
However, it may be surprising that their
usage is not yet global.
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LO 7
Identify the Motivational
Benefits of Intrinsic Rewards
Employee Recognition Programs
 Organizations are increasingly recognizing
that important work rewards can be both
intrinsic and extrinsic.
 Rewards are intrinsic in the form of
employee recognition programs and
extrinsic in the form of compensation
systems.
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Implications for Managers
 Recognize individual differences.
 Spend the time necessary to understand
what’s important to each employee.
 Design jobs to align with individual needs
and maximize their motivation potential.
 Use goals and feedback.
 You should give employees firm, specific
goals, and they should get feedback on how
well they are faring in pursuit of those goals.
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Case Study Chapter 08
POINT/COUNTERPOINT
“Face-Time” Matters
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