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Causes and Effect of Job Satisfaction on a Company

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Q.1) ABC company has heard rumors that some of their workers are dissatisfied with their jobs. You have been asked to explain to management the following: 1) what are the major causes of job satisfaction? 2) Why should management be concerned about the job satisfaction of employees? 3) How would you recommend that ABC Company verify or assess that employees are actually dissatisfied; how can job satisfaction be measured? 4) Once ABC Company has determined that the employees are definitely dissatisfied with aspects of their particular jobs, what are ways they could possibly decrease job dissatisfaction?


Defining Job Satisfaction: Job satisfaction is a pleasurable feeling that results from the perception that one's job fulfills or allows for the fulfillment of one's important job values. It refers to an individual's general attitude toward his or her job. A person with a high level of job satisfaction holds positive attitudes toward the job, while a person who is dissatisfied with his or her job holds negative attitudes toward the job.

What are factors that cause employee satisfaction?

Review of the evidence and research* has identified several factors conducive to high levels of employee job satisfaction; some of these factors are controllable by managers and some are not.

Factors controllable by management

1. Nature of Work

- Task Complexity: jobs that are mentally challenging have been consistently found as a main cause of job satisfaction. Simple, repetitive, less challenging jobs are found to a source of frustration and dissatisfaction in employee.

- Task Meaningfulness: employees' belief that the work done by them is meaningful and has significance causes job satisfaction in them. Furthermore, giving autonomy to employees make them feel that they can display their competence and make a positive impact to the organization, is another factor in job satisfaction.

- Physical Strain: reasonable amount of physical strain and exertion is another determinant in job satisfaction. This factor is sometimes overlooked in the present age of technology. Fact is that advancement in technology has made physical strain even more undesirable work characteristic.

2. Relationship with Supervisor and Colleagues

People expect more out of work than merely money or tangible achievements. For most employees, work also fills the need for social interaction. The behavior of an employee's manager is found a major cause of satisfaction. Studies generally find that employee satisfaction increases when the immediate supervisor understands the employees, is friendly, praises for good performance, listens to employees' opinions, and shows a personal interest in them.

3. Compensation and benefits factors

Employees want pay systems that they perceive as just, unambiguous, and in line with their expectations. When pay is seen as fair based on job demands, individual skill level, and community pay standards, satisfaction is likely to result.

4. Promotion Policies and Career Development Factor

Opportunities for promotion, training programs, and capacity of career development are other factors that cause job satisfaction. Employees seek fair promotion policies and practices. Promotions provide opportunities for personal growth, more responsibilities, and increased social status. Individuals who perceive that promotion decisions are made in a fair and just manner, therefore, are likely to experience satisfaction from their jobs.

5. Working conditions and environment factors

Employees want work environments that support personal comfort and good job performance. Studies demonstrate that employees prefer physical surroundings that are not dangerous or uncomfortable. Most employees also prefer working relatively close to home, in clean and relatively modern facilities, and with adequate tools and equipment. Physical features of workplace like temperature, lighting arrangements, cleanliness, working outdoors, health hazards, sick-building syndrome, social density, privacy in work, all may result in satisfaction or dissatisfaction to employees.

6. Organization development factors

Brand of organization in business field and comparison with leading competitor and potential development of organization is a cause of job satisfaction in employees.

Missions and Vision of organization is another source of job satisfaction if it complies with employee's personal views and goals.

Factors not controllable by management:

1. Personality

Contemporary research* indicates that employee job satisfaction can be genetically determined. Whether people are happy or not can be found by their gene structure. You either have happy genes or you don't. Scientific research in the field of psychology has been done to find the relationship of job satisfaction with five traits of personality i.e., Neuroticism, Extraversion, Openness to Experience, Agreeableness, and Conscientiousness. These factors with the exception of Openness to Experience have considerable correlation with job satisfaction, as given in Table 1.

Impact of personality in work can be controlled if the managers make sure their selection process screens out the negative, maladjusted, troublemaking fault-finders who derive little satisfaction in anything job-related. This is probably best achieved through personality testing, in-depth interviewing, and careful checking of applicants' previous work records.

Table 1 Available meta-analytic correlations between Big Five personality traits and criteria

Big Five Trait

















Job satisfaction*











Job performance†






















Workplace deviance§











Motivation (goal-setting)**











Motivation (expectancy)**











Motivation (self-efficacy)**











Team effectiveness††











Notes: Correlations are based on the most recently published meta-analysis for the corresponding criterion. Dashes indicate unreported information. ρ = estimated true score correlations; SDρ = standard deviation of true score correlations. *Reported in Judge, Heller, and Mount (2002). †Reported in Salgado (2003). ‡Reported in Judge, Bono, Ilies, and Gerhardt (2002). §Reported in Berry, Ones, and Sackett (2007). **Reported in Judge and Ilies (2002). ††Reported in Bell 2007

2. Emotions Regulations

Scientific study* has explored the association between emotion regulation, defined as the conscious manipulation of one's public displays of emotion, and job satisfaction. Suppression of unpleasant emotions decreases job satisfaction and amplification of pleasant emotions increases job satisfaction by improving the quality of interpersonal encounters at work.

3. Life Satisfaction

One common research* finding is that job satisfaction is correlated with life satisfaction. People who are satisfied with life tend to be satisfied with their job and people who are satisfied with their job tend to be satisfied with life. However, some research has found that job satisfaction is not significantly related to life satisfaction when other variables such as non-work satisfaction and core self evaluations are taken into account.

Why is employee satisfaction important for the organization and the management?

Job Satisfaction can be an important indicator of how employees feel about their jobs and a predictor of work behaviors such as organizational citizenship, absenteeism, and turnover. Further, job satisfaction can partially mediate the relationship of personality variables and deviant work behaviors.

Satisfied employees can add value to organization such as:

- Enhance employee retention

- Increase productivity

- Reduce turnover

- Enhance customer satisfaction and loyalty

- More energetic employees

- Improve teamwork

- Higher quality products and/or services due to more competent, energized employees

Job satisfaction and dissatisfaction has direct impact on organization, which can be seen by analyzing the following:

Job Satisfaction and Productivity*

The evidence suggests that the link between an individual's job satisfaction and his or her productivity is positive. It turns out the productivity can be affected as much by external conditions as it is by job satisfaction. The link between job satisfaction and productivity is much stronger when we look not at individuals, but at the organization as a whole. When satisfaction and productivity data are gathered for the organization as a whole, rather than at the individual level, we find that organizations with more-satisfied employees tend to be more effective than organizations with less-satisfied employees.

Job Satisfaction and Organizational Citizenship Behavior

Organizational citizenship behavior (OCB) is discretionary behavior that is not part of an employee's formal job requirements and is not usually rewarded, but that nevertheless promotes the effective functioning of the organization. Organizational citizenship is important, as it can help the organization function more efficiently and more effectively. It seems logical to assume that job satisfaction should be a major determinant of an employee's OCB.

Job Satisfaction and Customer Satisfaction

Employees in service jobs often interact with customers. Since the management of service organizations should be concerned with pleasing those customers, it is reasonable to ask: Is employee satisfaction related to positive customer outcomes? For front-line employees who have regular contact with customers, the answer is yes. Satisfied employees are more likely to be friendly, upbeat, and responsive—which customers appreciate.

Job Satisfaction and Absenteeism:

One can find a consistent negative relationship between satisfaction and absenteeism, but the correlation is moderate-usually less than 0.40. While it certainly makes sense that dissatisfied employees are more likely to miss work, other factors have an impact on the relationship and reduce the correlation coefficient. e.g. Organizations that provide liberal sick leave benefits are encouraging all their employees, including those who are highly satisfied, to take days off. So, outside factors can act to reduce the correlation.

Job Satisfaction and Turnover:

Satisfaction is negatively related to turnover*, but the correlation is stronger than what we found for absenteeism. Labour turnover is quite strongly correlated with satisfaction when there is high unemployment. Yet, again, other factors such as labour market conditions, expectations about alternative job opportunities, and length of tenure with the organization are important constraints on the actual decision to leave one's current job.

Workplace Violence and Sabotage:

Dissatisfaction in employees may cause violence and sabotage in workplace. Most violence that involves insiders is triggered by extreme levels of dissatisfaction and stress on part of attacker. Dissatisfied workers may either consciously or subconsciously produce faulty products.

How can job satisfaction be measured?

Job satisfaction is usually measured with interviews or questionnaires administered to the job incumbents in question. Most research is done with questionnaires. This is because interviews are expensive and time consuming to conduct. By contrast, one can survey a large number of people with a paper-and-pencil questionnaires with very little effort or expense. Furthermore, it is easy to quantify and standardize questionnaire responses.

Perhaps the easiest way to assess job satisfaction is to use one of the existing scales which have been carefully developed, and in many studies, their reliability and validity have been established. There are many methods for measuring job satisfaction, few of these are briefly mentioned below:

1. Job Descriptive Index (JDI), created by Smith, Kendall, & Hulin (1969), is a specific questionnaire of job satisfaction that has been widely used. It measures one's satisfaction in five facets: pay, promotions and promotion opportunities, coworkers, supervision, and the work itself. The scale is simple, participants answer either yes, no, or can't decide (indicated by ‘?') in response to whether given statements accurately describe one's job.

2. Job In General Scale (JIG) Job In General Scale (JIG, Ironson et al., 1989) was designed to assess overall job satisfaction rather than facets. Its format is same as the JDI, and it contains 18 items. Each item is an adjective or short phrase about the job in general rather than a facet. The total score is a combination of all items.

Advantage of using JIG is that it is quick and easy to use, and disadvantage is that it only gives global measure of job satisfaction and does not provide information about specific facets causing job satisfaction/dissatisfaction.

3. Minnesota Satisfaction Questionnaire (MSQ) The Minnesota Satisfaction Questionnaire (MSQ) is designed to measure an employee's satisfaction with their particular job. Method includes 100 items measuring 20 facets of job satisfaction. Three revisions of MSQ are available: two long forms (1977 version and 1967 version) and a short form. Long form contains 100 items measuring 20 facets, and short form includes 20 items that best represent each of the 20 scales.

Advantages of this method are it is reliable, valid measure of job satisfaction, easy to use, easy to understand, applicable to any organization, applicable for managers, supervisors, and employees. Disadvantage of this method is that it is very long, and uses 20 different facets and it may not be meaningful to have info on each of them.

4. Satisfied / dissatisfied method In this method, you just send a question form that include:

What is good thing in our company?

What is not good one in our company?

This method is suitable for “emergency events” and you need result in a short time.

To assess and measure job satisfaction in employees of ABC Company I would recommend Job Descriptive method (JDI).

Job Descriptive Index assesses five most important facets of job satisfaction:

* The work itself—responsibility, interest, and growth.

* Quality of supervision—technical help and social support.

* Relationships with co-workers—social harmony and respect.

* Promotion opportunities—chances for further advancement.

* Pay—adequacy of pay and perceived equity vis-à-vis others.

The entire scale contains 72 items with either 9 or 18 items per subscale. Each item is an evaluative adjective or short phrase that is descriptive of the job. Responses are “Yes” “Uncertain” or “No”.

Job Descriptive Index (JDI; Smith, Kendall, & Hulin, 1969) has probably been the most popular facet scale among organizational researchers. It also may have been the most carefully developed and validated, as is well described in Smith et al.'s book. It is easy to use with all types of respondents and is most commonly used measure of job satisfaction. Scales that measure the overall level of job satisfaction and do not measure the specific facet may not help in identifying the main cause of job satisfaction/dissatisfaction.

Job dissatisfaction can be decreased by considering the following factors:

1. Work itself: Job dissatisfaction can be decreased by

- Job rotation

- Job enlargement: knowledge enlargement, task enlargement

- Job enrichment, add complexity to the task to make it challenging

2. Define Role and Expectations:

When an organization makes the decision to fill a new position, it has an idea of what will be expected of the new employee. However, unless these expectations are clearly communicated and role is defined, the result can be disappointing for both the employee and employer. Such situations cause conflict and inefficiencies in the workplace. Therefore, it is very important that the employer establish a mechanism for making sure the needs of the organization are clearly communicated and understood. Role analysis technique can be used to identify and define one's role.

3. Organization development

- Shared mission or vision: In many organizations, employee doesn't know what is mission, vision, objects. Building a corporate culture that requires employees to be an integral part of the organization can be an effective way of getting the most from the talents or competencies brought to the organization by each employee.

- Feedback programs: Give employees opportunity to complain to the organization about his work situation. Feedback will help organization to know opinions of their employees.

4. Compensation and benefits:

Policies of compensation and benefits are most important part of organization. But you should build your policies at “suitability” not “the best”.

5. Appraisal program:

You should build the proper evaluation and fair and encourage employees perform work.

6. Relationship with supervisors:

Relationship with management is the key factor often happen dissatisfaction of employees. The company should have policies to:

- Management must be fairly treat the staff

- Ready to help them

- Full training for staff

- Ready to listen and respond to employee

7. Promotions and career development

- Develop programs to promote all titles in the organization

- Develop training programs for employees

- Build programs for career development of each title

8. Working condition and environment

- Build occupational health and safety program.

9. Improvement programs of employee satisfaction

- HR department must have the monitoring methods for improvement programs of employee satisfaction. Many organizations just do appraisal of employee satisfaction but not pay attention to role of monitoring.

- Build solutions to improve satisfaction

- Training all level of management about the importance of satisfaction and methods to increase satisfaction.

10. Employees by themselves

- Hiring the right employees

- Clearly defined and communicated employee expectations.


References marked with an asterisk indicate studies included in the answer.

*Timothy A. Judge, Daniel Heller and Michael K. Mount. Five-Factor Model of Personality and Job Satisfaction: A Meta-Analysis. Journal of Applied Psychology 2002, Vol. 87, No. 3, 530-541

*Ste´Phane Co ˆ Te and Laura M. Morgan. A longitudinal analysis of the association between emotion regulation, job satisfaction, and intentions to quit. Journal of Organizational Behavior. 23, 947-962 (2002)

*Timothy A. Judge, Daniel Heller and Michael K. Mount. Five-Factor Model of Personality and Job Satisfaction: A Meta-Analysis. Journal of Applied Psychology 2002, Vol. 87, No. 3, 530-541

*John A. Wagner III & John R. Hollenback. Organizational Behavior, Securing Competitive Advantage, 5E. by South-Westrn, 2009

* Robbins, Stephen P., and Timothy A. Judge. Organization Behavior. 12th ed. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2007. 156-158.

*Steven G. Westlund and John C. Hannon. Retaining Talent: Assessing Job Satisfaction Facets Most Significantly Related To Software Developer

Turnover Intentions. Journal of Information Technology Management Volume XIX, Number 4, 2008

Q3) Compare and contrast the rational decision making model with the bounded rationality model of decision-making. In what ways does the theory of bounded rationality differ from the rational model and what are the characteristics of each? Which do you feel is a better representation of decision-making and why?


The rational decision-making model is sometimes referred to as the rational economic model as it includes a primary assumption of economic rationality, that is, the notion that people attempt to maximize their economic outcomes, where alternative with the highest expected worth is selected as preferred alternative.

Rational decision making processes consist of a sequence of steps designed to rationally develop a desired solution. Typically these steps involve:

1. Verify, Define, and Detail the problem: The first step is to recognize a problem or to see opportunities that may be worthwhile. A rational decision making model is best employed where relatively complex decisions have to be made.

2. Identify the Criteria: What is relevant and what is not relevant to the decision? What do you need to know before you can make a decision or what will help you make the right one?

3. Analyzing the situation: What alternative courses of action may be available to you? What different interpretations of the data may be possible?

4. Developing options: Generate several possible options. Be creative and positive.

5. Evaluating alternatives: What criteria should you use to evaluate? Evaluate for feasibility, acceptability and desirability. Which alternative will best achieve your objectives?

6. Selecting a preferred alternative: Explore the provisional preferred alternative for future possible adverse consequences. What problems might it create? What are the risks of making this decision?

Assumptions made by rational decision-making model

There are six assumptions of the rational decision-making model:

- Problem clarity: The decision maker is assumed to have complete information regarding the decision situation.

- Known options: Identify all the relevant criteria and can list all the viable alternatives. The decision maker is aware of all the possible consequences of each alternative.

- Clear preference: The criteria and alternatives can be ranked and given weight to reflect their importance.

- Constant preferences: The specific decision criteria are constant and that weights assigned to them are stable over time.

- No time or cost constraints: The rational decision maker can obtain full information about criteria and alternatives because it is assumed that there are no time or cost constraints.

- Maximum payoff: The rational decision maker will choose the alternative that yields the highest perceived value.

Rational decision making model presupposes that there is one best outcome. The search for perfection is frequently a factor in actually delaying making a decision. Such a model also presupposes that it is possible to consider every option and also to know the future consequences of each. While many would like to think they know what will happen, the universe often has other plans! It is also limited by the cognitive abilities of the person making the decision; how good is their memory? How good is their imagination? The criteria themselves, of course, will be subjective and may be difficult to compare. These models require a great deal of time and a great deal of information. And, of course, a rational decision making model attempts to negate the role of emotions in decision making.

Bounded Rationality Decision Making Model

Bounded Rationality theory accepts the notion of bounded rationality and suggests that people act only in terms of what they perceive about a given situation. Because these perceptions are frequently imperfect, most organizational decision making does not take place in a world of complete certainty. Rather, the behavioral decision maker is viewed as acting most often under uncertain conditions and with limited information. Organizational decision makers face problems that are often ambiguous, and they have only partial knowledge of the available action alternatives and their consequences. As Herbert Simon states: “Most human decision making, whether individual or organizational, is concerned with the discovery and selection of satisfactory alternatives; only in exceptional cases is it concerned with the discovery and selection of optimal decisions.”

Alternative model to rational decision making model based on the theory of bounded rationality called the administrative model is actually a critique of the rational model. Simon says the rational model is prescriptive or normative, the way it is supposed to be, rather than the way it is. Simon presented the administrative model as a realistic antidote, the way it really is. Administrative model he says is the way decisions are actually made.

Simon coined a term of Satisficing - means settling for the first alternative that seems to meet some minimum level of acceptability. Search for a needle in the haystack. Optimize is to look for the sharpest. Satisfied is to search until you find the needle that is just sharp enough to do the job.

He says there are limits on decision making:

Bounded rationality: imperfect information about goals and courses of action and relation of means to ends;

Bounded discretion: constraints on optimizing, prior commitments, moral and ethical standards, laws, and social standards;

Bounded rationality recognizes that it is impossible to comprehend and analyze all of the potentially relevant information in making choices. The only possible way of coping with the complexity of the world is to develop techniques, habits and standard operating procedures (SOP) to facilitate decision making. Widely shared SOP's are institutions.

Habit--Routine responses and behaviors based on reinforcement e.g. brushing your teeth in the morning.

Technique--Ways to deal with generalized situations e.g., read reviews before selecting a hotel.

SOP--group and organizational rules for decisions e.g., our firm reorders when inventories reach one month of recent sales.

Which model better represents decision-making?

Rational decision making model provides a guideline of what managers ideally should be doing, but it does not represent what managers actually do. When decision makers are faced with a simple problem and few alternative courses of action, and when the cost of searching out and evaluating alternatives is low, the rational model provides a fairly accurate description of the decision process. However, such situations are the exception. Most decisions in the real world do not follow the rational model. For instance, people are usually content to find an acceptable or reasonable solution to their problem rather than an optimizing one. Most decisions in the real world do not follow the rational model. People are usually content to find an acceptable or reasonable solution to their problem rather than an optimizing one. Thus decision makers may rely on bounded rationality, satisficing, intuition, and judgment shortcuts in making decisions.

In an ideal situation, manager faces a clearly defined problem, knows all possible action alternatives and their consequences, and then chooses the alternative that offers the best, or “optimum,” solution to the problem. This optimizing style is an ideal way to make decisions. This rational approach is normative and prescriptive, and is often used as a model for how managers should make decisions. However, Behavioral scientists are cautious about applying rational decision theory to many decision situations. They recognize that the human mind is a wonderful creation, capable of infinite achievements. But they also recognize that human beings have cognitive limitations that restrict their information-processing capabilities. Information deficiencies and overload compromise the ability of decision makers to achieve complete certainty and otherwise operate according to the rational model. Human decision makers also operate with bounded rationality. Bounded rationality is suggests that, while individuals are reasoned and logical, humans have their limits. Individuals interpret and make sense of things within the context of their personal situation. This makes it difficult to realize the ideal of rational decision making. As a result, the rational model does not give a full and accurate description of how most decisions are made in organizations.


References marked with an asterisk “ * ” indicate studies included in the answers.

*John A. Wagner III & John R. Hollenback. Organizational Behavior, Securing Competitive Advantage, 5E. by South-Westrn, 2009

* Robbins, Stephen P., and Timothy A. Judge. Organization Behavior. 12E. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2007. 156-158.

* John R. Schermerhorn, Jr., James G. Hunt, Richard Osborn. Organization Behavior. 7E. John Wiley & Sons, Inc, 2002

Q.4) Discuss goal-setting theory and its major conclusions. How do major conclusions of goal setting inform managers, or how can managers apply what research on goal setting has found in managing employees?


Goal Setting Theory

The prime axiom of goal setting theory is that specific, difficult goals lead to higher performance than when people strive to simply “do their best”, (Locke, 1966; Locke & Latham, 1990). Goals play an important part in high performance work environments. Goal setting is the process of developing, negotiating, and formalizing the targets or objectives that a person is responsible for accomplishing.

The model uses elements of expectancy theory to help clarify the implications of goal setting for performance while taking into account certain moderating conditions, such as ability and task complexity.

Locke's research showed that there was a relationship between how difficult and specific a goal was and people's performance of a task. He found that specific and difficult goals led to better task performance than vague or easy goals.

Telling someone to "Try hard" or "Do your best" is less effective than "Try to get more than 80% correct". Likewise, having a goal that's too easy is not a motivating force. Hard goals are more motivating than easy goals, because it's much more of an accomplishment to achieve something that you have to work for.

Locke and his colleagues spend considerable time on research* and studied the effects of goal setting, which can be concluded as:

- Specific goals increase performance, under certain conditions

- Difficult goals, when accepted, result in higher performance than do easy goals

- Feedback leads to higher performance

- Goals are equally effective whether assigned, set in participation, or self-set.

- Goal commitment and financial incentives affect whether goals are achieved

Five Principles of Goal Setting

To motivate, goals must take into consideration the degree to which each of the following exists:

1. Clarity.

2. Challenge.

3. Commitment.

4. Feedback.

5. Task complexity.

Each of these principles can be elaborated further as follows:

1. Clarity

Clear goals are measurable, unambiguous, and behavioral. When a goal is clear and specific, with a definite time set for completion, there is less misunderstanding about what behaviors will be rewarded. You know what's expected, and you can use the specific result as a source of motivation. When a goal is vague - or when it's expressed as a general instruction, like "Take initiative" - it has limited motivational value. When you use the SMART technique to set goals, you ensure the clarity of the goal by making it Specific, Measurable and Time-bound.

2. Challenge

One of the most important characteristics of goals is the level of challenge. People are often motivated by achievement, and they'll judge a goal based on the significance of the anticipated accomplishment. When you know that what you do will be well received, there's a natural motivation to do a good job. While setting goals, make each goal a challenge. It's important to strike an appropriate balance between a challenging goal and a realistic goal.

3. Commitment

Goals must be understood and agreed upon if they are to be effective. Employees are more likely to "buy into" a goal if they feel they were part of creating that goal. The notion of participative management rests on this idea of involving employees in setting goals and making decisions.

One version of SMART, for use when you are working with someone else to set their goals, has A and R stand for Agreed and Realistic instead of Attainable and Relevant. Agreed goals lead to commitment.

As you use goal setting in your workplace, make an appropriate effort to include people in their own goal setting. Encourage employees to develop their own goals, and keep them informed about what's happening elsewhere in the organization. This way, they can be sure that their goals are consistent with the overall vision and purpose that the company seeks.

4. Feedback

In addition to selecting the right type of goal, an effective goal program must also include feedback. Feedback provides opportunities to clarify expectations, adjust goal difficulty, and gain recognition. It's important to provide benchmark opportunities or targets, so individuals can determine for themselves how they're doing. SMART goals are Measurable, and this ensures that clear feedback is possible.

5. Task Complexity

The last factor in goal setting theory introduces two more requirements for success. For goals or assignments that are highly complex, take special care to ensure that the work doesn't become too overwhelming. People who work in complicated and demanding roles probably have a high level of motivation already. However, they can often push themselves too hard if measures aren't built into the goal expectations to account for the complexity of the task. It's therefore important to do the following:

- Give the person sufficient time to meet the goal or improve performance.

- Provide enough time for the person to practice or learn what is expected and required for success.

This reinforces the "Attainable" part of SMART.

In addition to the factors mentioned above, another important factor to consider in goal setting is adequate self-efficacy. Self-efficacy refers to an individual's belief that he or she is capable of performing a task. People with higher self-efficacy have more confidence in their ability to succeed in a task. We find that a person with low efficacy is very likely to lessen his efforts in difficult situations, while those with higher self-efficacy will work harder to accomplish the task. People with lower and higher self efficacy also respond differently to negative feedback. Figure below summarizes the goal-setting theory and high performance cycle.

Application of Goal-Setting Theory

Goal Setting and Management by Objective: When we speak of goal setting and its potential to influence individual performance at work, the concept of management by objectives (MBO), comes to mind. The core part of MBO is a process of joint goal setting between a supervisor and employee. It is a process of alignment of performance goals with that of departmental or organizational goals. In addition to these goal-setting steps, a successful MBO system calls for careful implementation. Not only must workers have the freedom to carry out the required tasks, managers should be prepared to actively support their efforts to achieve the agreed-upon goals. In general, and as an application of goal-setting theory, MBO has much to offer.

Productivity and Cost Improvement:

Numerous studies have shown that setting a specific difficult goal leads to significant increases in employee productivity (Locke & Latham, 1984).

Performance Appraisal

Engineers and scientists who set goals for their scores on a behavioral index of their performance had higher subsequent performance than those who were urged to do their best (Latham et al., 1978). Unionized telecommunications employees had high performance and high satisfaction with the performance appraisal process when specific high goals were set. Moreover, self-efficacy correlated positively with subsequent performance (Brown & Latham, 2000a).


In selection process, applicants can be given scenarios and asked to their goals or intentions for what he or she would do when confronted by these situations. Meta-analyses have shown that the situational interview has high criterion-related validity. Research has shown that the mean criterion-related validity of the situational interview is higher than that of all other selection interviews.

Self-Regulation at Work

A key variable in self-regulation is goal setting. Goal-setting research* led to the development of the high-performance cycle. The high-performance cycle explains how high goals lead to high performance, which in turn leads to rewards, such as recognition and promotion. Rewards result in high satisfaction as well as high self-efficacy regarding perceived ability to meet future challenges through the setting of even higher goals.

Goal setting also has been applied successfully to non-work domains, such as sports (Lerner & Locke, 1995) and health management (Gauggel, 1999). It is applicable to any self-regulated activity.


References marked with an asterisk indicate studies included in the answer.

*Edwin A. Locke and Gary P. Latham. Building a Practically Useful Theory of Goal Setting and Task Motivation, American Psychologist, Vol. 57, No. 9, 705-717

*Peter A. Heslin, Jay B. Carson, and Don VandeWalle, Practical Applications of Goal-Setting Theory to Performance Management, 89-108

*Locke, E. A., & Latham, G. P. (1990). A theory of goal setting and task performance. Englewood Cliffs, NJ: Prentice Hall.

*John A. Wagner III & John R. Hollenback. Organizational Behavior, Securing Competitive Advantage, 5E. by South-Westrn, 2009

* Robbins, Stephen P., and Timothy A. Judge. Organization Behavior. 12E. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2007. 156-158.

* John R. Schermerhorn, Jr., James G. Hunt, Richard Osborn. Organization Behavior. 7E. John Wiley & Sons, Inc, 2002

Q6). Describe the major principles of scientific management theory. What value did scientific management bring to managing organizations? What do you feel are the most helpful aspects or contributions made by scientific management to management practice. What aspects (ideas, principles or applications) of scientific management do you feel are not helpful to managing workers and organizations?


Principles of scientific management theory

Scientific management (also called Taylorism) is a theory of management that analyzes and synthesizes workflows, with the objective of improving labor productivity.

In 1911, Frederick Winslow Taylor published his work, “The Principles of Scientific Management”, in which he described how the application of the scientific method to the management of workers greatly could improve productivity. Scientific management methods called for optimizing the way that tasks were performed and simplifying the jobs enough so that workers could be trained to perform their specialized sequence of motions in the one "best" way.

The principles advocated by Taylor can be summarized as follows:

* Assign all responsibility to managers rather than workers. Manager should be responsible for organization, planning and design of work, and then workers should carry out that work as organized, planned and designed by managers.

· Use scientific methods to determine one best way of doing the work. Managers should design each worker's job using scientific methods, to find most efficient way of performing each job.

· Select the person most suited to each job to perform that job. Workers should be selected according to their abilities to follow standard methods set for carrying out the job.

· Train the worker to do the work efficiently. Selected workers should be trained so that they can use the set standard methods in most efficient way.

· Monitor worker performance to ensure that work procedures are followed and that results are achieved (Morgan 1997). Managers should make sure that workers under their supervision always perform their jobs in the one best way.

· Provide further support by eliminating interruptions. Managers can help their workers continue to produce at a high level by shielding them from distractions that interfere with job performance.

Through his principles of scientific management, Taylor introduced a framework for organizations by giving concept of:

- responsibility

- separation of planning from operations

- incentive schemes for workers

- management by exception

- task specialization

Other contributors to scientific management theory are Frank and Lillian Gilbreth (husband and wife, best known for their invention of motion study), Henry Grantt, and Harrington Emerson.

Scientific management theory was adopted by many large organizations throughout the world.

It added value to organizations by *:

- Increase in productivity.

- Increase in efficiency (quality and quantity).

- Making easy to keep track records of total production, individual production and other information in calculated manner.

- Improvement in relationship between employees, employers or other management authorities by creating a friendly environment.

- Decrease in working hours which led to decrease in stress and improves efficiency.

- Providing opportunity to earn more for every individual in form of incentives, refferal bonuses, other bonuses. It linked rewards to performance, which is also the basis of Expectancy Theory.

- Decrease in rate of depletion of resources or reduces the wastage of resources.

- Profit margin at every turn over of a company also increases.

Its impact on organizations was great due to the concept of work design, work-measurement, production control and other functions, that completely changed the nature of industry. Taylor's theory introduced basis of many new organization functions. Before scientific management, such departments as work study, personnel, maintenance and quality control did not exist.

He introduced the concept of scientific study of work (time and motion). He gave a concept of job descriptions, job specification, standards of selection of workers. He emphasized on need for training of employees to achieve maximum productivity on high quality standards. He gave a concept of performance management and rewarding workers according to their performance. It gave opportunities to workers to earn as per their skills and capabilities. He divided labor into managers vs. workers, and differentiated in planning and operations.

*The benefits of scientific management lie within its ability to coordinate a mutual relationship between employers and workers. At the time of its inception, Taylor found that the firms who introduced scientific management as he prescribed it became the world's most meticulously organized corporations (Nelson, 1980). Scientific management also provides a company with the means to achieve economies of scale. This phenomenon occurs because the theory stresses efficiency and the need to eliminate waste. Managers are given the duty to identify ways in which costs can be accounted for precisely, which leads to a division of labor and a specialization amongst staff, thus allowing each employee to become highly effective at carrying out their limited task. Consequently, firms will have in place efficient production methods and techniques. Another benefit of scientific management for a company adopting it is that it will obtain full control of its workforce. Management can dictate the desired minimum output to be produced and, with a piece rate payment system in place, can be guaranteed workers will produce the required amount.

Scientific Management, however, is an incomplete system. As jobs are broken down into their constituent elements, and workers tasks are made easier, humans become little more than machines in the chain.* Their cognitive input is not required and their motions do little to develop themselves.

In today's society the average intelligence of employees has sharply risen; people have been made aware of their value as human beings and any process by which this status is challenged is considered self-depreciating. People are no longer content to receive only fiscal reward for their tasks. Under Taylor's Scientific Management system workers were viewed as working solely for economic reward. In current organizations, on the other hand, it has been recognized that productivity and success is not just obtained by controlling all factors in the work place, but by contributing to the social well-being and development of the individual employee.

The negative aspects of scientific management are apparent when evaluating the treatment of employees and with the problems that arise from the piece rate payment system.* At the beginning of the twentieth century, Taylor's methods for managing the workers were not completely adhered to. Thousands of plants introduced elements of scientific management, but few firms created formal planning departments or issued instruction cards to machine workers in fear of alienating the workforce (Nelson, 1980). The principals of scientific management are unquestionably authoritarian in that they assume decision-making is best kept at the top of the organization because there exists a lack of trust in the competence of the employees. Taylor believed productivity and efficiency would both rise if there were a division between workers and experts, and contended that almost every act of the workman should be preceded by one or more preparatory acts of the management. He also reasoned that each person must be taught daily by those who are over them (1998). This style of management can be the catalyst for causing anti-motivation and dissatisfaction amongst employees. If workers feel as though they are being treated without due respect, many may become disenchanted with the company and refuse to work to their maximum potential. Similarly, the piece rate payment system may cause the employer to encounter the problem of encouraging staff to concentrate on quantity at the expense of quality.

Higher levels of access to technology and information as well as increased competition present another difficulty to theory of Scientific Management being applied to organizations in the 21st Century.* Modern organizations process huge amounts of input, and employees no longer work in isolated units cut off from the organization at large, but are quite literally connected to it. Alongside this rapid technological growth organizations are finding it increasingly important to react quickly to developments that may affect their welfare. Managers recognize they are unable to control all aspects of employee's functions, as the sheer layers of information factored into everyday decisions are so high that it is imperative employees use their own initiative. High competition between organizations also means that companies must react fast to maintain market positions. All of these forces modern companies to maintain high levels of flexibility.

In the era during which Scientific Management was developed each worker had a specific task that he or she had to perform with little or no real explanation of why, or what part it plays in the organization as a whole. In this day and age it is virtually impossible to find an employee in the developed world who is not aware of what his or her organization stands for, what their business strategy is, how they are faring, and what their job means to the company as a whole. Organizations actively encourage employees to know about their company and to work across departments.

Another weakness in Scientific Management theory is that it can lead to workers becoming too highly specialized therefore hindering their adaptability to new situations, in the 21st Century employers not only want workers to be efficient they want them to exhibit flexibility too.

The above paragraphs can be summarized as:

Applications of scientific management have been limited in the current era due to some of the following reasons:

- Individuals are different from each other: the most efficient way of working for one person may be inefficient for another;

- Taylor separates planning of work from actually performing work. But later research has shown that if employees are given chance to participate in decision making, it improves motivation and goal commitment.

- In the era of technology Tasks have become complex, and organizations value creativity rather than just following the standard methods.

- The economic interests of workers and management are rarely identical, so that both the measurement processes and the retraining required by Taylor's methods are frequently resented and sometimes sabotaged by the workforce.

- Different theory of needs suggest that it is not only money that motivates personnel, other factor such as socialization, self esteem and self actualization are also important.

- Employees are encouraged to work in teams by giving more autonomy on their work. Jeffrey Pfeffer in his book, “Building profits by putting people first” suggests that top performing companies are using autonomous decentralized teams to make maximum profits.

It is perhaps then better to accept that as a complete theory Scientific Management is not visible in modern organizations, however, elements of it like labour-division etc., are so relevant that they have become deeply ingrained in all modern organizations.


References marked with an asterisk indicate studies included in the answer.

* Frederick Winslow Taylor (1911). "The Principles of Scientific Management". Harper & Brothers. Free book hosted online by Eldritch Press.

* Dale, Ernest. (1973), Management, Theory & Practice. McGraw-Hill Publication

* Sean Priestley. Scientific Management in 21st Century. http://www.eioba.com/

*John A. Wagner III & John R. Hollenback. Organizational Behavior, Securing Competitive Advantage, 5E. by South-Westrn, 2009

Q7. John Butler is CEO of Widget Inc. He is concerned that his employees aren't not motivated even after implementing a pay for performance pay system. He has been advised to examine the motivation aspects of the employees' jobs. He has brought you in to help him. Please explain or describe: 1) The Job Characteristics Approach. As part of this, explain its purpose, its five core job dimensions and resulting critical psychological states. 2) After assessing jobs, what are some of the ways that the five core job dimensions can be increased in jobs? 3) What are the expected outcomes of redesigning jobs using this approach?


The Job Characteristics model (JCM) proposed by Richard Hackman and Greg Oldham in 1976 is a very influential model which attempts to address how a core set of job characteristics impact a number of psychological states, leading to specific related outcomes in the work environment.

The five core job characteristics include:

Skill variety (SV): using an appropriate variety of your skills: too many might be overwhelming, too few, boring;

Task identity (TI): the degree to which performing a job results in a completion of an identifiable piece of work and a visible outcome that be recognized as result of personal performance;

Task significance: being able to identify the task as contributing to something wider, to society or a group over and beyond the self; the degree to which a job has significant effect on others life;

Autonomy: being able to perform the task with freedom, independence, and having discretion in scheduling the work and deciding which procedure to use to carry out tasks.

Feedback: the degree to which job activities provide knowledge, and clear and direct information about effectiveness of one's performance.

These five core job characteristics influence the extent to which employees experience three critical psychological states which are given below:

Meaningfulness of work: the extent to which a worker sees his job as having an outcome that is valuable, and useful to the worker, the organization and external environment.

Responsibility for outcomes: it concerns the degree to which a worker feels personally responsible and accountable for results his work.

Knowledge of results: it reflects the degree to which a worker maintains an awareness and knowledge of effectiveness of his work.

Moderating Factors

JCM proposes that several variables that moderate the relationship between job dimensions and psychological states, and between psychological states and work. These variables are growth need strength (GNS), knowledge and skills, and satisfaction with extrinsic aspects of work. The variables ultimately affect the direction of response which workers display towards particular jobs, either accepting or negatively. Workers who exhibit high growth need strength, adequate knowledge & skills, and satisfaction with extrinsic aspects are expected to respond best to jobs that possess high Motivating Potential Scores (MPS). In contrast, workers that do not possess these variables are not likely to respond to jobs with high MPS.

To measure workers' perceptions of the five core characteristics, the three critical psychological states, and certain moderating factors, Hackman and Oldham developed a questionnaire, known as Job Diagnostic Survey (JDS).

The deficiencies identified by a JDS analysis of a particular job can be corrected in several ways.

- Job enlargement: To enhance skill variety and task identity, oversimplified jobs can be combined to form enlarged modules of work.

- Natural units of work: Natural unit of works can be created by clustering similar tasks into logical or inherently meaningful groups. It will make the completion of an entire task feasible, and improve task identity.

- Establishing and managing client relationships: Connect people to the outcomes of their work and the customers that receive them so as to provide feedback for learning. It will increase task variety, autonomy, and feedback.

- Vertical Loading: To increase autonomy, managerial duties can be designed into a particular job through vertical loading.

- Feedback channels: To increase feedback, feedback channels can be opened by adding to a job such things as quality-control responsibilities and computerized feedback mechanism.

As per the Hackman-Oldham Model, if a worker experiences all three psychological states simultaneously, four kinds of work and personal outcomes are likely to result -high internal work motivation, high-quality work performance, high satisfaction with work, and lower absenteeism and turnover.

Relationship between five core job characteristics, resulting psychological states, and resulting outcomes can be summarized as follows:

- According to Hackman & Oldham, skill variety, task significance and task identity are used in the work to stimulate meaningfulness, which produces outcomes of both or either high intrinsic motivation and high job performance. Therefore, if employees feel they are fully utilizing a variety of their skills, their job affects many people to a great extent and they are allowed to complete the task from beginning to end, it is likely they will perceive the job as meaningful, leading to high job performance and/or high intrinsic motivation.

- The presence of autonomy in the workforce leads to the psychological state of felt responsibility for outcomes, resulting in high job satisfaction. Thus, if employees are able to determine the method or approach in which the work is accomplished they feel responsible for the end product and are therefore more satisfied with what they have accomplished, less likely to quit (turnover) and also more likely to attend work (low absenteeism). Autonomy is contrasted by being told what to do and the manner in which to do it.

- Feedback produces a psychological state in which employees develop knowledge of their results, producing outcomes similar to autonomy (high job satisfaction, low turnover/absenteeism). In other words, knowing how you are performing and being aware that superiors know how you are performing leads to more job satisfaction and motivation.


*Fried, Y. & Ferris, G. R.. The validity of the job characteristics model: A review and meta-analysis. Personnel Psychology, 40, 287 - 322.

*John A. Wagner III & John R. Hollenback. Organizational Behavior, Securing Competitive Advantage, 5E. by South-Westrn, 2009

* Robbins, Stephen P., Timothy A. Judge. Organization Behavior. 12E. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2007. 156-158.

*John Slocum Jr., Job Redesign: Improving the Quality of Work Life. Journal of Experiential Learning and Simulation 3.17-36 (1981)

Q4) List and define the three variables used in the Expectancy Theory. Explain what each of these variables contributes to the theory and describe a scenario/case (either personal or one you are aware of) where the Expectancy Theory could be applied to explain an employee's level of motivation. Be sure to tie specific elements of the scenario/case to the key variables in the theory.


The expectancy theory of motivation suggested by Victor Vroom hypothesizes that in order for a person to be motivated, effort, performance and motivation must be linked. He proposes three variables to account for this, which he calls Valence, Expectancy and Instrumentality.

Expectancy theory diagram, based on work by Victor Vroom


Expectancy is the belief that one's effort will result is attainment of desired performance goals. This belief, or perception, is generally based on an individual's past experience, self confidence (often termed self efficacy), and the perceived difficulty of the performance standard or goal.
Variables affecting the individual's Expectancy perception are:

- Self Efficacy: Self efficacy is a person's belief about his or her ability to perform a particular behavior successfully. Does the individual believe that he or she has the require skills and competencies required to perform well and the required goals?

- Goal Difficulty: Goals that are set too high or performance expectations that are made too difficult, lead to low expectancy perceptions. When individuals perceive that the goals are beyond their ability to achieve, motivation is low because of low expectancy.

- Control: One's perceived control over performance is an important determinant of expectancy. In order for expectancy to be high, individuals must believe some degree of control over the expected outcome. When individuals perceive that the outcome is beyond their ability to influence, expectancy, and thus motivation, is low. For example, many profit-sharing plans do not motivate individuals to increase their effort because these employees do not think that they have direct control over the profits of their large companies.


Instrumentality is the belief that if one does meet performance expectations, he will receive a greater reward. This reward may come in the form of a pay increase, promotion, recognition or sense of accomplishment. It is important to note that when it is perceived that valued rewards follow all levels of performance, then instrumentality is low.
Variables affecting the individual's Valance for outcomes:

- Trust. When individuals trust their leaders, they're more likely to believe their promises that good performance will be rewarded.

- Control. When workers do not trust the leaders of their organizations, they often attempt to control the reward system through a contract or some other type of control mechanism. When individuals believe they have some kind of control over how, when, and why rewards are distributed, Instrumentality tends to increase.

- Policies. The degree to which pay and reward systems are formalized in written policies has an impact on the individuals' Instrumentality perceptions. Formalized policies linking rewards to performance tend to increase Instrumentality.


The valance refers the value the individual personally places on the rewards. This is a function of his or her needs, goals, values and sources of motivation.
Potential Valued Outcomes may include:

- Pay increases and bonuses

- Promotions

- Time off

- New and interesting assignments

- Recognition

- Intrinsic satisfaction from validating one's skills and abilities

- Intrinsic satisfaction from knowing that your efforts had a positive influence in helping someone.

Variables affecting the individual's Valance for outcomes are:

- Values

- Needs

- Goals

- Preferences

- Sources of Motivation

Case Study

About two years ago I planned to study further. I searched for universities offering a program in HR and found that many British and Australian universities based in UAE are offering Masters Degree in HR. And there are many other universities around the globe offering online programs. Somehow I doubted the standard of education offered by online universities so preferred to stick to regular programs. I collected prospectus from different universities. Tuition fee for graduate programs in most of the Australian and British universities in UAE ranges from US$ 15,000 to US$ 22,000. Class timings were also flexible, like some offer classes on the weekends and some in the weekday evenings. Most of the universities I found do not require even tests like GMAT or TOEFEL etc., as part of admission criteria.

After carefully reviewing these university programs offered in UAE and getting information through my social networks I could say that there were one or two programs which were comparatively better, but these did not have high valence for me. I did not find enough motivation to apply for these programs despite their very flexible criteria. Please note that Michigan State University (MSU) was not offering any graduate lev

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