Survey of Management

Set of moral principles/values that defines right or wrong for a person or group.
Ethical Behavior
Behavior that conforms to a society’s accepted principles of right & wrong.
Workplace Deviance
Unethical behavior that violates organizational norms about right and wrong.
Employee Shrinkage
Theft of company merchandise by employees; form of property deviance.
According to Lawrence Kohlberg, what are ethical decisions based on?
A person’s level of moral development.
What are the three phases of moral development according to Kohlberg?
(1.) Pre-conventional Level (2.) Conventional Level
(3.) Post – conventional Level
Describe Pre-conventional Level of moral development and its stages
People make decisions based on selfish reasons.

Stage 1: Punishment and obedience stage – your primary concern would be not to get in trouble.
Stage 2: The instrumental exchange stage – you make decisions that advance your wants and needs.

Describe Conventional Leve of moral development and its stages
People make decisions that conform to societal expectations.

Stage 3: The “good boy- nice girl” stage, you normally do what the other “good boys” and “nice girls” are doing. (peer pressure, modeling behaviors)
Stage 4: Law and order stage – you do whatever the law permits you to do. (Includes religious laws)

Describe the Post-conventional Level of moral development and its stages
People at the post-conventional level of moral maturity always use internalized, ethical principles to solve ethical dilemmas. (unconditional; self-sacrificing)

Stage 5: The social contract stage – you would consider the effects of your decision on others. (This ethical behavior helps most people).
Stage 6: The universal principle stage – you make ethical decisions based on your principles of right and wrong.

The ethical answers that managers choose, depend on…
(1.) The ethical intensity of the decision (2.) The moral development of the manager (3.) The ethical principles used to solve the problem
Ethical Intensity
The degree of concern people have about an ethical issue.
Ethical intensity of a decisions depends on
(1.) Magnitude of consequences (2.)Social Consensus (3.) Probability of effect (4.) Temporal Immediacy
(5.) Proximity of effect (6.) Concentration of effect
Magnitude of consequences
The total harm or benefit derived from an ethical decision.
Social Consensus
Agreement on whether behavior is bad or good.

Managers are much more likely to view decisions as ethical when the magnitude of consequences (total harm) is high and there is a social consensus (agreement) that a behavior or action is bad.

Probability of effect
The change that something will happen and then harm others.
Temporal immediacy
The time between an act and the consequences the act produces.
Concentration of effect
The total harm or benefit that an act produces on the average person.
Ethical Dilemma
No matter what you decide, someone or some group will be unhappy. There are no clear answers on “doing the right thing.” Ethics is a conflicting issue, but each company should have its own code of ethics.
Social Responsibility
A business’ obligation to pursue policies, make decisions, and take actions that benefit society. (e.g., PETA, P&G)
Hosmer’s Principles of Ethical Decision Making (use to make business decisions)
(1.) Long-term self interest (2.) Personal virtue (3.) Religious injunctions (4.) Government requirements (5.) Utilitarian benefits (6.) Individual rights
(7.) Distributive justice
What do Hosmer’s Principles have in common?
They encourage managers and employees to take others’ interests into account when making ethical decisions.
BUT, they can lead to very different ethical actions.
Principle of long-term self interest
Never take any action not in your organization’s long term self-interest.This saves the company $ over time; customers might not like how their products are being made & they will lose customers.

NIKE Article:
Ethical – this is cheaper & positively affects their bottom line; the company is in business to increase shareholder wealth.
Unethical – there may be customer backlash & boycotts, which have a negative effect on the bottom line.

Principle of personal virtue
You should never do anything that is not honest, open, and truthful, and that you would not be glad to see reported in the news media.
E.g., your company wouldn’t like to see pictures of their work conditions in the factories. This principle includes improving people’s lives, giving workers new job opportunities.

NIKE Article:
Ethical – could claim to be improving people’s lives overseas (by creating jobs, stimulating the economy)
Unethical – may not want images/stories skewed in media

Principle of Religious Injunctions
Never take any action that is not kind and that does not build a sense of community. The major issues here are compassion and kindness.E.g., treating workers as you’d like to be treated.

NIKE Article:
Ethical – give them enough so they aren’t starving to death
Unethical – not abiding by the “Golden Rule.”

Principles of Government Requirements
Never take any action that violates the law, for the law represents the minimal moral standard. The law provides the basic ethical guidelines for people. E.g., violating the work week laws. (Unethical)
Principle of Utilitarian Benefit
Never take any action that does not result in greater good for society. The needs of many outweigh the needs of few. This is a cost benefit for all those affected by the decision. E.g., paying workers trickles down into the economy.

NIKE Article:
Consumer of NIKE products – try to keep the price low for them by sending them abroad
If it was suppression on wage, it would be unethical to hurt society in that way – they’re paying slightly above equity, shareholder wealth.
Ethical – is keeping Indonesian economy good its consumers? increased costs = increased SH wealth
Unethical – workers are paid starvation wage.

Principle of Individual Rights
Never take any action that infringes on others’ agreed-upon rights. Here, one considers those affected by this decision and tries to find a solution that does not sacrifice the rights of any of the affected persons.
Principle of Distributive Justice
Never take any action that harms the least among us; this is designed to protect the poor, uneducated, and unemployed. One of the “real world” aspects of ethical decisions is that no matter what you decide, or how you decide it, someone or some group of will be unhappy with the decision. Even though all of these ethical principles encourage managers to balance others’ needs against their own, they can also lead to very different ethical actions. So, even when managers strive to be ethical, often times, there aren’t any clear answers when it comes to “doing the right thing”.

E.g., by paying slightly above equity, they’re helping the least among us. If they paid a little more, it would attract the most qualified buyers w/higher pay.

Unethical – company suppression – they can’t defend themselves & cannot unionize.

Establish a Code of Ethics
Communicate a code of ethics to both inside and outside the company. Develop ethical standards and procedures specific to business. 90% of large corporations have an ethics code in place. But 2 things must happen if those codes are to successfully encourage ethical decision making and behavior:

(1.) Companies must communicate the codes to others, both within and outside of the company.

(2.) In addition to general guidelines and ethics codes like “do unto others as you would have others do unto you”, management must also develop practical ethical standards and procedures specific to the company’s line of business. It makes it easier for employees to decide what action they should take when they want to do the “right thing”.

Ethics Training
Develops employee awareness of ethics, achieves credibility with employees, and teaches a practical model of ethical decision making.
The first objective (employee awareness), is meant to help employees recognize what issues are ethical issues, and then avoid the rationalization of unethical behavior; “no one will ever find out, this isn’t “really” illegal or immoral.”

The second objective is to achieve credibility with employees. Employees can be highly suspicious of management’s reasons for offering ethics training.

The 3rd objective, is to teach employees a practical model of ethical decision making, which should help them think about the consequences their choices will have on others and consider how they’ll choose between different solutions.

Ethical Climate
Where core beliefs are widely shared and strongly held.
– workplaces who have strong ethical climates are more likely to report violations because they expect that management wants them to and won’t retaliate against them for doing so.
– workplaces who have strong ethical climates observed about 24% of employees engaging in unethical behavior, compared to the 56% of a weak ethical environment.
Steps involved in an Ethical Climate
1st step: In establishing an ethical climate is for managers, especially top managers, to act ethically themselves.

2nd step: Is for top management to be active in and committed to the company ethics program.

3rd step: Whistleblowing; Put in place a reporting system that encourages managers and employees to report potential ethics violations. The factor that discourages employees most from participating in whistleblowing is a lack of company action on reported violations.
4th step: For management to fairly, and consistently punish those who violate the company’s code of ethics.

Basic Model of Ethical Decision Making
(1.) Identify the Problem: What makes an ethical problem? Think in terms of rights, obligations, fairness, relationships, and integrity.
(2.) Identify the Constituents: Who has been hurt? Who could be hurt? Who could be helped? Are they willing players or victims? Is the situation negotiable?
(3.) Diagnose the Situation: How did it happen in the first place? What could have prevented it? Is it going to get worse or better? Can the damage be undone?
(4.) Analyze your options: Limit yourself to the 2 or 3 most manageable, and consider their outcomes, and costs.
(5.) Make your choice: What is your intention behind making your decision? How does it compare with the probable results? Can you discuss the problem with the affected parties before you act? Is it presentable to family, and upper management?
(6.) Act: Do what you have to do. Don’t hesitate to admit errors, be as bold in confronting a problem as you were in causing it.
Nike Case Study
Is it ethical for Nike to send its workers abroad?
They paid 2 Australian dollars a day, “starvation wage.” Workers only had 8 cents per day left for food. Nike promotes independence & empowerment but uses oppression & exploitation of workers. Workers forced to work beyond 60 hr. limit per week, were abused by managers.

1. Long-term self interest:
– better for them in the long run because its cheaper
– backlash in US for sending work abroad – in the long run, they’ll lose shareholder wealth
2. Personal virtue:
– are you happy w/the images/news stories produced?
– improving the lives of people there, giving others jobs that may not otherwise had opportunity
3. Religious Injunctions:
– would those of your religion treat them this way?
4. Gov’t Requirements:
– did they break the law or not?
5. Utilitarian Benefit:
– economy of the Indonesian worker
– trying to keep cost down of Nike product for consumers
– colleges & WRC
– suppression on wage = unethical
6. Distributive Justice:
– they’re paying slightly above equity = ethical
– suppressing, not giving them a voice = unethical

What do work teams initially cause?
High turnover – teams aren’t for everyone, and some workers will balk at the responsibility, effort, and learning required in team settings.
2 Disadvantages of Work Teams
(1.) Social Loafing
(2.) Self limiting behavior
Social Loafing
Occurs when workers withhold their efforts and fail to perform their share of the work. They count on being able to blend into the background, so that their lack of effort isn’t easily spotted. They try to make sure that no one detects that they are withholding their efforts. Their pay off is that they can get away with it.
Self-limiting Behavior
Occurs whenever team members choose to limit their environment in the team’s work. Ex: daydreaming, doodling, thinking about others tasks other than work, withholding opinions or not participating reduces team performance. The payoff or motivation for self limiters is different than that of social loafers; they reduce their involvement in team activities because they don’t see any payoff to participating.
What kind of legal risk can teams cause?
Teams can violate the National Labor Relations Board
1. It determines whether the worked teams in a company can be categorized as a labor organization; since many work teams control or have large say on these issues, teams in many companies can be categorized as such.
2. If teams can be categorized as labor organizations, then the NLRA tries to determine if the company controlled or dominated the teams by having management participate on the teams, by financially supporting or determining team membership.
Factors that Encourage Self-Limiting Behavior in Teams: “When Teammates Raise a White Flag”
Major causes cited for giving up and the frequency (%) of citation:
– Presence of someone with expertise – 73%
– The presentation of a compelling argument – 62%
– Lacking confidence in one’s ability to contribute – 61%
– An unimportant or meaningless decision – 52%
– Pressure from others to conform to the team’s decision – 46%
– A dysfunctional decision making climate – 39%
Work Team Characteristics
– Team Size
– Team Norms
– Team Conflict
– Team Cohesiveness
– Team Development
Team Norms
Informally agreed on standards that regulate team behavior. They are valuable because they let team members know what is expected of them.They regulate the everyday behaviors of teams. And have a strong influence on work behavior.
– Studies indicate that norms are one of the most powerful influences on work behavior; they are so often associated with positive outcomes such as stronger organizational commitment, more trust in management, and stronger job and organizational satisfaction.
Effective work teams: Develop norms about the quality, timeliness, safety, and honest expression of ideas and opinions.
Cohesiveness (Hawthorn studies)
The extent to which team members are attracted to a team and motivated to remain in it. Cohesive groups have a better chance of retaining their members, resulting in lower turnover. It promotes cooperative behavior, generosity, and a willingness on the part of the team members to assist each other. The higher the cohesiveness, the higher the motivation to contribute in order to gain the approval of other members. They quickly achieve high levels of performance.
How to Promote Team Cohesiveness
1. Ensure all team members are present at team meetings. (cohesiveness suffers when members are absent.)
2. Create additional opportunities for teammates to work together by rearranging work schedules and creating common workplaces; when task interdependence is high and team members have many chances to work together, cohesiveness tends to increase.
3. Engage in non-work activities as a team.
Relationship between team size and performance
Very small or very large teams may not perform as well as moderately sized teams. For most, the right size is between 6-9 members. This is conducive to high team cohesion. This size group is small enough to get to know one another, and for each member to be given an opportunity to contribute. They are also large enough to have diverse skills, knowledge and perspectives. Also, instilling mutual accountability and responsibility is easier in this size group.
Minority Domination
As teams grow, there is a greater chance that just a few team members dominate team discussions.
2 Kinds of Team Conflict
C- Type Conflict (Cognitive)
A- Type Conflict (Affective)
What is the primary cause of team conflict?
Disagreement over team goals and priorities.
Other common causes include disagreements over task related issues, interpersonal incompatibilities, and simple fatigue.
What is the key to dealing with conflict?
Not avoiding conflict, but making sure that teams experience the right kind of conflict.
C-Type Conflict
Focuses on problem and issue related differences of opinion.
Cognitive conflict:
associated with improvements in team performance
– attempts to reach an agreement on a difficult issue can quickly deteriorate from cognitive to affective conflict if the discussion turns personal and tempers and emotions flare. Cognitive conflict should still be approached with caution.
A-Type Conflict
Refers to the emotional reactions that can occur when disagreements become personal rather than professional.
Affective conflict:
associated with decreases in team performance
How Teams Can Have a Good Fight
1. Work with more, rather than less, information
2. Develop multiple alternatives to enrich debate
3. Establish common goals
4. Inject humor into the workplace
5. Maintain a balance of power
6. Resolve issues without forcing a consensus
Stages of Team Development
1. Forming
2. Storming
3. Norming
Initial stage of team development (only happens once). This is where people get acquainted and make 1st impressions, and try to get an idea of what it will be like to be a part of the team.
Member Behavior:
– Comments directed towards leader
– Direction sought
– Members fail to listen
– Issues are discussed superficially
Leader Behaviors:
– Provide Structure
– Encourage participation by all
– Learn from member’s area of expertise
– Share all relevant information
– Encourage questions
Conflicts and disagreements often characterize this second stage of team development. Different personalities and work styles may clash. Team members become more assertive at this stage and more willing to state opinions.
Member Behavior:
– Attempts to gain influence
– Subgroups form
– Leader is tested
– Members judge each other and leader
– Task avoidance
Leader Behavior:
– Engage in joint problem solving
– Establish a norm supporting different viewpoints
– Share decision making
– Provide members with resources
Team members begin to settle into their roles as team members. Positive team norms will have developed by this stage, and teammates should know what to expect from each other. Little (petty) differences should have been solved by now, and friendships will have developed, and group cohesion should be strong.
Member Behavior:
– Cohesive behavior
– Laughs together; some jokes at leaders expense
– Group may feel superior to other groups
– Members do not challenge one another as much as leader would like
Leader Behavior:
– Talk openly about your own issues and concerns
– Have group members manage agenda items (in priority)
– Assign challenging problems for “member” decisions
– Delegate as much as members are capable.
Last stage of team development. Performance improves because the team has finally matured into an effective, fully functioning team. At this point, members should be fully committed to the team and think of themselves as “members of a team” and not just “employees”
If teams aren’t managed well, what can happen to performance?
It may begin to decline, as members progress through the stages of de-norming, de-storming, and de-forming
Team Compensation & Recognition
What percent of companies pay the same?
– 40% of managers in companies would directly link merit pay increases to team performance
– 60% pay the same amount

Studies show that in 60% of teams, all members get equal compensation.

Job Performance Formula
IPM MODEL: Industrial psychology model – what will increase performance?
Job Performance = Motivation X Ability X Situational Constraints

Job performance will suffer if any of these components is weak.

Job Performance-how well someone performs the requirements of the job.

Motivation-Effort, the degree to which someone works hard to do the job well.

Ability-The degree to which workers possess the knowledge, skills, and talent needed to do a job well.

Situational Constraints-Factors beyond the control of individual employees; tools, policies, and resources that have an effect on job performance.

Employee Motivation
A job redesign approach that seeks to increase employee motivation.
– Emphasize internal motivation
Internal Motivation
Motivation that comes from the job itself rather than from outside rewards such as a raise or praise from the boss. If workers feel that performing the job well is itself rewarding, then the job has internal motivation.
What psychological states must occur for work to be interlay motivating?
1. Workers must experience the work as meaningful, and important.
2. Experience responsibility for work outcomes – they must feel personally responsible for the work being well done.
3. Must have knowledge of results – know how well they are performing their jobs.
Job Specialization
– A job that is a small part of a larger task or process
– Jobs are simple, easy to learn steps, low variety, and high repetition.
– Can lead to low satisfaction (boring), high absenteeism, and employe turnover – which is costly for the organization.
Why do companies continue to create and use specialized jobs?
They are very economical. Once a job has been specialized, it takes little time to learn and master. When experienced workers quit or are absent, the company loses little productivity when replacing them with another employee.
Overcome the Disadvantage of Job Specialization
1. Job Rotation
2. Job Enlargement
3. Job Enrichment
Job Rotation
In an attempt to overcome the disadvantages of job specialization, periodically moving workers from one specialized job to another to give them more variety and the opportunity to utilize new skills.
Job Enlargement
Increasing the number of different tasks a worker performs within one particular job, so instead of them only performing one task, they would have several.
Job Enrichment
In order to overcome the deficiencies in specialized work, increasing the number of tasks and giving the workers the authority to control and make meaningful decisions about their work.
Needs Theories
-Physical or psychological requirements
-Must be met to ensure survival and well being
Unmet needs motivate people. A person’s unmet needs creates an uncomfortable internal state of tensions that must be resolved. Once a need is met, it no longer motivates, and when this occurs, people become satisfied.
3 Approaches to Needs
1. Maslow’s Hierarchy of Needs
2. Alderfer’s ERG Theory
3. McClelland’s Learned Needs Theory
Maslow’s Hierarchy of Needs
Maslow suggests that people are motivated by these factors:
1. Physiological: Food and Water
2. Safety: Physical and Economic
– protection from harassment/harm, job security
3. Belongingness: Friendship, Love, and Social interaction
4. Esteem: Achievement and Recognition
5. Self-Actualization: Realizing your full potential
Aldefer’s ERG Theory
Collapses Maslow’s 5 needs into 3
1. Existence: Safety and Physiological needs
2. Relatedness: Belongingness
3. Growth: Esteem and self-actualization
McClelland’s Learned Needs Theory
Suggests that people are motivated by the need for:
1. Affiliation
2. Achievement
3. Need for Power
How are needs arranged according to Maslow?
Needs are arranged in a hierarchy from low (physiological) to high (self-actualization). People are motivated by their lowest unsatisfied need. As needs are met, they work their way up the hierarchy from physiological to self actualization.
How are needs arranged according to Alderfer?
People can be motivated by more than one need at a time. He suggests that people are just as likely to move down the needs hierarchy as up, particularly when unable to achieve satisfaction at the next higher need level.
How are needs arranged according to McClelland?
Argues that the degree to which particular needs motivate varies from person to person, with some being motivated primarily by achievement, and others by power or affiliation. Needs are learned, not innate. Lower order needs are concerned with safety and with physiological and existence requirements. But higher order needs are concerned with relationships (belongingness, relatedness, and affiliation); challenges and accomplishments (esteem, self-actualization, growth, and achievement); and influence (power).
Studies show that higher order needs will not motivate people as long as lower order needs remain unsatisfied.
Extrinsic Rewards
Tangible and visible to others, and are given to employees contingent on the performance of specific tasks or behaviors. External agents (managers), determine and control the distribution, frequency, and amount of extrinsic rewards. They can be: pay, company stock, benefits, promotions.

Most important rewards:
– good benefits
-health insurance
-job security
– more vacation time

Why give extrinsic rewards?
To get people to do things they wouldn’t otherwise do. Companies use rewards to motivate people to perform 3 basic behaviors:
1. Joining the organization
2. Regularly attending their jobs
3. Performing their jobs well
4. Staying w/the organization
Intrinsic Rewards
Natural rewards associated with performing a task or activity for its own sake. A sense of interest and enjoyment from the activities or tasks they perform (other than those given by managers). Examples of intrinsic rewards: sense of accomplishment or achievement, feeling of responsibility, chance to learn something new, ability to interact with others, or the fun that comes from performing an interesting, challenging and engaging task.

Most important rewards:
– interesting work – #1 motivating factor, according to employees
– opportunity to learn new skills
– being able to work independently

How to Motivate with the Basics
1. Ask people what their needs are: If managers don’t know what workers’ needs are, they won’t be able to provide them the opportunities and rewards that can satisfy those needs.

2. Satisfy lower needs first: Since higher order needs will not motivate people as long as lower order needs are unmet, companies should satisfy lower order needs first. Provide equipment, training, and knowledge to create a safe workplace free of physical risks, paying employees well enough to provide financial security, offering benefits package that will protect them and their families, medical coverage and health/disability insurance.

3. Expect people’s needs to change: As other needs are satisfied, or situations change, managers should expect that employee’s needs will change too. What motivated people before may not continue to once they have a job.

4. As needs change and lower order needs are satisfied, satisfy higher order needs by looking for ways to allow employees to experience intrinsic rewards:With the exception of influence (power), intrinsic rewards correspond very closely to higher order needs that are concerned with relationships and challenges and accomplishments.

Components of Equity Theory
Inputs, outputs, referents


Contributions employees make to the organization. Includes; education, training, intelligence, experience, effort, number of hours worked, and ability.
Rewards employees receive in exchange for their contributions to the organization. Includes; pay, fringe benefits, status symbols, job titles, assignments, and leadership style of their superiors.
{receptions of equity depend on how you are being treated compared to others, and referents are others with whom people compare themselves to determine if they have been treated fairly. Usually people compare themselves to referents who hold the same or similar jobs or are similar in some way (gender, race, sex, tenure).
Outcome/Input (O/I) ratio
Employees compare inputs, their contributions to the organization, to outcomes, the rewards they received from the organization in exchange for those inputs.
After an internal comparison in which they compare their outcomes to their inputs, employees then make an external comparison in which they compare their O/I ratio with the O/I ratio of a referent. When people perceive that their O/I ratio is equal to the referent’s O/I ratio, they conclude that they are being treated fairly. But when they see that their O/I ratio is different from their referents O/I ratio, they conclude that they have been treated inequitably or unfairly.
2 Kinds of Inequity
1. Underreward
2. Overreward
Occurs when a referent’s O/I ratio is better than your O/I ratio – the referent you compare yourself to is getting more outcomes relative to his or her inputs than you are. When people feel that they have been underrewarded, they tend to experience anger/frustration.
Occurs when a referent’s O/I ratio is worse than your O/I ratio – you are getting more outcomes relative to your inputs than your referent. When people feel that they have been overrewarded, they experience guilt.
5 ways people react to inequity
A slight inequity may not be enough to take action, but if it continues tension can build up until a point of intolerance is met.
1. Reducing inputs-people who feel they have been underrewarded will decrease or withhold inputs to restore equity.
2. Increasing outcomes-Asking for a raise or pointing out the inequity to the boss and hoping she/he compensates for it.
3. Rationalizing inputs or outcomes-Instead of decreasing inputs or increasing outcomes, employees restore equity by making mental or emotional “adjustments” in their O/I ratios or the O/I ratios of their referents.
4. Changing the referent-People instead compare themselves to others who hold more similar jobs.
5. Leaving-After trying the above 4, if still unsatisfied, employees may quit or transfer or increase absenteeism.
Motivating with Equity Theory
1. Look for and correct major inequities. Employees have subjective perceptions of what is fair, so what is fair to one might not be for another, so managers have to take care of the major inequities that can energize employees to take actions that could be disruptive, costly, or harmful (decreasing inputs or leaving).
2. Reduce employees inputs. This is just as viable a solution as increasing outputs.
3. Make sure decision making process is fair. Equity theory focuses on
A) distributive justice: degree to which outcomes and rewards are fairly distributed. AND
B) Procedural Justice: Fairness of the process used to make reward allocation decisions – is just as important.
Even when employees are unhappy with their outcomes (i.e.,low pay), they’re much less likely to be unhappy with company management if they believe that the procedures used to allocate outcomes were fair.

distributive justice: if you earn a 90 or higher on a test, you expect an A
procedural justice: if you walk into class and get an A because you’re wearing a yellow t-shirt, things wouldn’t be fair

Components of Expectancy Theory
1. Valence
2. Expectancy
3. Instrumentality
Expectancy theory holds that for people to be highly motivated, all 3 variables must be high.
The attractiveness or desirability of various rewards or outcomes. Expectancy theory says that when people are deciding how much effort to put forth, they will consider the valence of all possible rewards and outcomes that they can receive from their jobs. The greater the sum of those valences, each of which could be positive,negative, the more effort people will choose to put forth on the job.
Perceived relationship between effort and performance. When expectancies are strong, employees believe that their hard work and efforts will result in good performance, so they work harder. When expectancies are weak, employees figure that no matter what they do or how hard they work, they won’t be able to perform their jobs successfully, so they don’t work as hard.
Perceived relationship between performance and rewards. When instrumentality is strong, employees believe that improved performance will lead to better and more rewards, and they will choose to work harder. When instrumentality is weak, employees don’t believe that better performance will result in more or better rewards, so they will choose to not work as hard.
Expectancy Theory equation
Motivation = Valence X Instrumentality X Expectancy
Motivating with Expectancy Theory
1. Systematically gather information to find out what employees want from their jobs. In addition to individual managers directly asking employees what they want from their jobs, companies still need to survey their employees regularly to determine their wants, needs, and dissatisfaction. Since people consider the valence of all the possible rewards and outcomes that they can receive from their jobs regular identification of wants, needs, and dissatisfaction gives companies the chance to turn negatively valent rewards and outcomes into positively valent rewards and outcomes, thus raising overall motivation and effort.

2. Take clear steps to link rewards to individual performance in a way that is clear and understandable to employees. Most employees are dissatisfied with the link between pay and performance. Other than making sure there is a link between pay and performance, another way for managers to establish a clearer link is to publicize the way in which pay decisions are made.

3. Empower employees to make decisions if you really want them to believe that their hard work and efforts will lead to good performance. If valent rewards are linked to good performance people should be energized to take action. This only works if they believe that their efforts will lead to good performance. One way managers destroy the expectancy that hard work and effort will lead to good performance is by restricting what employees can do or by ignoring employees’ ideas.

Reinforcement Theory
Behavior is a function of its consequences, that behaviors followed by positive consequences (reinforced), will occur more frequently, and that behaviors followed by negative consequences, or not followed by positive ones, will occur less.
It is the process of changing behavior by changing the consequences that follow behavior.
2 parts of Reinforcement
1. Reinforcement Contingencies
2. Schedules of Reinforcement
Reinforcement Contingencies
Cause and effect relationships between the performance of specific behaviors and specific consequences.
Schedules of Reinforcement
The set of rules regarding reinforcement contingencies, such as which behaviors will be reinforced, which consequences will follow those behaviors, and the schedule by which those consequences will be delivered.
Positive Reinforcement
Strengthens behavior (increases its frequency) by following behaviors with desirable consequences.
Negative Reinforcement
Also called- avoidance learning, because workers perform a behavior to avoid a negative consequence. Strengthens behavior by withholding unpleasant consequence when employees perform a specific behavior.
Weakens behavior (decreases its frequency) by following behaviors with undesirable consequences. Punishment can weaken behavior, managers have to be careful to a void the backlash that sometimes occurs when employees are punished at work.
Reinforcement strategy in which a positive consequence is no longer allowed to follow a previously reinforced behavior. By removing the positive consequence, extinction weeks the behavior, making it less likely to occur.
Schedule of Reinforcement
Set of rules regarding reinforcement contingencies, such as which behaviors will be reinforced, which consequences will follow those behaviors, and the schedule by which those consequences will be delivered.
2 Types of Schedules for Delivering Reinforcement
1. Continuous
2. Intermittent
Continuous Reinforcement Schedules
A consequence follows every instance of a behavior. Ex: Working on a piece-rate pay system earn money (consequence) for every part they manufacture (behavior). The more they produce, them more they earn.
Intermittent Reinforcement Schedules
Consequences are delivered after a specified or average time has elapsed or after a specified or average number of behaviors have occurred. There are 4 different kinds of intermittent reinforcement schedules, 2 based on time; interval reinforcement schedules, and 2 based on behaviors; ratio schedules
4 Different Kinds of Intermittent Reinforcement Schedules
1. Fixed Interval Reinforcement Schedules
2. Variable Interval Reinforcement Schedules
3. Fixed Ratio Reinforcement Schedules
4. Variable Ratio Reinforcement Schedules
Fixed Interval Reinforcement Schedule
Consequences follow a behavior only after a fixed time has elapsed. Ex: Most people receive their paychecks on a fixed interval schedule.
Variable Interval Reinforcement Schedule
Consequences follow a behavior after different times, some shorter and some longer; they vary around a specified average time. On a 90 day variable reinforcement schedule you might receive a bonus after 80 days, but the average interval between performing your job well (behavior) and receiving your bonus (consequence) would be 90 days.
Fixed Ratio Reinforcement Schedule
Consequences are delivered following a specific number of behaviors. Ex: A car salesperson might received a $1,000 bonus after every 10 sales. Therefore, a salesperson with only 9 sales would not receive the bonus until he/she finally sold the 10th.
Variable Ratio Reinforcement Schedule
Consequences are delivered following a different number of behaviors, sometimes more sometimes less, that vary around a specified average number of behaviors. With a 10-car variable ratio reinforcement schedule, a salesperson might receive the bonus after car 7 or after 12, 11, or 9, but the average of cars sold before receiving the bonus would be 10 cars.
Motivating with Reinforcement Theory
Identify: Identifying critical, observable, performance related behaviors.
Measure: Measuring the baseline frequencies of these behaviors.
Analyze: Analyzing the causes and consequences of these behaviors.
Intervene: Changing the organization by using positive and negative reinforcement to increase the frequency of these critical behaviors.
Evaluate: Evaluating the extent to which the intervention actually changed the workers’ behavior.

Don’t reinforce the wrong behaviors. While reinforcement theory sounds simple, it’s actually very difficult to put into practice. One of the most common mistakes is accidentally reinforcing the wrong behaviors.

Correctly administer punishment at the appropriate time. Most managers believe that punishment can change workers’ behavior and help them improve their performance. Fairly punishing workers lets other workers know what is or isn’t acceptable. One of the dangers of using punishment is that it can produce a backlash against managers and companies. If it is administered properly, punishment can weaken the frequency of undesirable behaviors without creating a backlash.

Choose the simplest and most effective schedule of reinforcement. Managers need to balance effectiveness against simplicity. The more complex the schedule of reinforcement, the more likely it is to be misunderstood and resisted by managers and employees.

Motivation Article: the 28 year old worker’s performance
The 28 year old worker’s performance has significant decreased in the past 3 years. How would a manager motivate him?

Ask if he is first able to do the job

– Start w/IPM – industrial psychology model to increase performance. (job performance = ability x motivation x situational constraints)
– He has ability because he was doing well up until 3 years ago, now look for any situational constraints (external influences that are in his way), then decide if he has motivation.

Use the basics with Needs Theories:
– although the job may have initially satisfied his needs, they may have changed. Figure out what these are, then satisfy his lower-order needs first (psychological, safety). How are things going at home, does he have job security?

Next, satisfy the higher-order needs (belongingness, esteem, self-actualization) by having the employee experience intrinsic rewards. He may have to recreate his job, add something to his position, maybe some authority would help.

Motivation Article: Lyle
Lyle has entry-level position manning the phones at an investment firm. Since he enjoyed working with people, he volunteered for committee assignments in addition to his phone responsibilities. He was told that while his volunteer work was appreciated, he hadn’t proved himself in the phone bank. His friends that had entered the job at the same time as him were receiving promotions, but he wasn’t. He was so frustrated by this experience that he quit his job and went back to school.
– USE IPM (motivation x ability x situational constraints); EXPECTANCY theory (effort, performance, reward); EQUITY theory (input, output, references)

IPM Theory
– Ability – he does have ability the ability to answer the phones; does he need more training?
– Motivation – maybe he’s too motivated
– Situational constraints – (2) his boss failed to describe his performance tasks and he failed to ask his boss

Equity Theory
– Referents- coworkers
– Inputs – self-committee work (more work) and answering the phones (less work put in)
– Outcome – he got nothing, his referents were promoted
– 1 of 3 things can happen (fair, underreward, overreward) – He was underrewarded, so now he can expect 1 of 5 things to happen – He decided to quit, this was his reaction to inequity

Expectancy Theory
– Valence – Lyle’s committee work (high valence) and phones (no valence)
– Expectancy – none, his effort did not lead to job performance targets
– Instrumentality – since he didn’t hit the job performance target, there is none

Wylie Coyote
Maslow’s Hierarchy of Needs, Equity, and Expectancy

Self actualization; Be all you can be and get the roadrunner. It’s motivating his effort-physiological needs to eat. If there were other coyotes-esteem for the one who got the roadrunner-belongingness. Talking about getting the roadrunner-equity theory, how it is motivating him; other coyotes getting close to getting him. Idealistically his future self (referent)-inputs and outputs. A lot of input with little to no output; underrewarded, leading to quitting (1 of 5 outcomes of inequity). Expectancy theory: valence to reward because reward was desirable. No expectancy-effort is not leading to job performance targets, so no expectancy, reward is eating it. No instrumentality because his increased input did not result in a higher reward.

Green Characteristics
Get them to talk about their opinions, ideas & dreams & try to support them;
explore alternative solutions instead of arguing;
support their goals and objectives;
ask questions that allow them to discover new things instead of telling them;
give them recognition of their ideas, not to them personally;
if you disagree w/them, argue the facts, not personal feelings. Give recognition to their ideas, not to them personally. To influence their decisions you should provide alternative actions with probabilities of their success backed by facts. Be precise, efficient, time disciplined and well organized.
Gold Characteristics
Organizational Approach
– Contributions demonstrated through actions, not words (being punctual)
– Reach agreements by ironing out the specific details concerning what/when/how they agree, then summarize this in writing, follow-up afterwards
– Use positive testimonials from important people or companies which they can identify
– Be precise, efficient, timely, and well-organized
– Give time to verify your words & actions
– Provide solid, tangible, factual evidence
– Don’t rush the decision-making process, or recommending organizational changes (avoid gimmicks to get a fast decision)
Orange Characteristics
Keep it entertaining and fast moving. Allow them opportunities to do things and or take action. Give them opportunities to move things forward. Allow them to perform new and varied activities. Try to limit controls and supervision. Keep environment somewhat unstructured and flexible. Try to encourage and support decisiveness without falling into the trap of “haste makes waste”.
Blue Characteristics
Get blues to talk about opinions, ideas, and dreams and try to support them. DO NOT hurry the discussion; try to develop mutually stimulating ideas together . Try to support their feelings; project that you are interested in them as a person. Take time to efficiently get them to spell out personal objectives. In disagreements they do not debate facts and logic. DO discuss personal opinion and feelings. Use active listening and be open in your discussion. They like guarantees that actions will involve a minimum risk. Offer personal assurance of support, however do not overstate guarantees or they will lose trust.
Green Teamwork
Focus on future, communication and the big picture. Assign critical and challenging tasks. Give space.
Gold Teamwork
Give freedom and authority as possible permission to have fun, and be focused.
Orange Teamwork
Focus on here and now; present.
Blue Teamwork
Relaxed; people centered environment. Encourage interactive relationships. Foster democratic relationships and permit freedom of expression.

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