Up To Dated Topics In Organizational Behavior Business Essay

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Motivation is one of the most frequent researched and up-to-dated topics in Organizational Behavior. One reason for its popularity is revealed in a recent Gallup poll which found that a majority of US employees, 55% have no enthusiasm for their work. Moreover, another study suggested that, by workers' own reports, they waste roughly 2 hours per day, not counting lunch and scheduled breaks(the biggest time wasters were internet surfing and talking with coworkers).Clearly motivation seems to be an issue even though it possesses a positive face as well. The good news is that all this research provides us with considerable insights into how to improve motivation.

Motivation is the result/output of the interaction between an individual and a situation.

Commitment of motivation is differ from situation.

E.g.: A same student who finds it difficult to read a text book for more than 20 minutes may spend his time gorgeously for reading a Harry Potter book in a day. For this student, the difference in motivation is driven by the situation.

When analyzing the concept of motivation, it is worthwhile to keep in mind that the level of motivation varies both between individuals and within individuals at different times.

Defining Motivation

Motivation is defined as the processes that account for an individual's intensity, direction and persistence of effort toward attaining a goal.

The three key elements in the definition are intensity, direction and persistence.

Intensity is concerned with how hard a person tries or in other words into which extend a person is potential in to try something. This is the widely focused element when talking about motivation.

However, high intensity is impossible to lead to favorable job performance outcomes unless the effort is channeled in a direction that benefits the organization. Therefore, quality of effect too is an important factor as well as its intensity. Effort that is directed toward and consistent with the organizations goals is the typical kind of effort framework that should be seeking.

Motivation definition's final dimension is persistence. This is a measure of how long a person can maintain effort. Motivated individuals stay with a task long enough to achieve their goal.

General motivation is concerned with effort toward any goal, in that case goal is flattened/generalized; organizational motivation is particularly narrowed to organizational goals in order to reflect the singular interest in work-related behavior.

Early Theories of Motivation

In 1950s was a prosperous period in the development of motivation concepts. Four specific theories were formulated during these periods which although heavily attacked, problematic, argued and now questionable in terms of validity, are probably still the best known explanations for employee motivation. Although these theories are quite popular and widely used, unfortunately, those have either not held up well under close examination or fallen out of favor. They represent a solid foundation from which contemporary theories have grown up and practicing managers still regularly use and exercise these theories and their terminology in explaining employee motivation. Those theories are:

Hierarchy of Needs Theory

Theory X and Theory Y

Two Factor Theory

McClelland's Theory of needs

Contemporary Theories of Motivation

"Contemporary Theories" are defined so not because they were all developed and emerged recently but because they represent the current state of thinking in explaining employee motivation. There are number of contemporary theories, and they all have one thing in common. Each has a reasonable degree of valid supporting documentation. Those theories are:

Cognitive Evaluation Theory

Goal-setting Theory

Self-Efficacy Theory

Reinforcement Theory

Equity Theory

Expectancy Theory

Most current motivation theories presented were developed, introduced, researched and born in United States by and about U.S.A adults

E.g.: Maslow's Needs Hierarchy, Achievement Need Theory, Equity Theory clearly have an direct U.S.A bias

The theories address different outcome variables. Some, for instance, are directed at explaining turnover, while others emphasize productivity. The theories also differ from predictive strength.

Cognitive Evaluation Theory

Cognitive Evaluation Theory proposes that the introduction of extrinsic rewards such as pay, for work effort that was previously intrinsically rewarding due to pleasure, commitment and satisfaction associated with the content of the work itself tends to decrease overall motivation.

Cognitive Evaluation Theory has been extensively researched and a large number of studies are available. The major implications of this theory relate to the way in which people are paid in organizations.

Historically, motivation theorists generally assumed that intrinsic rewards such as interesting work were independent of extrinsic rewards such as high pay. But Cognitive Evaluation Theory proposes the opposite. It emphasizes that when extrinsic rewards are used by organization as pay offs for superior performance, the intrinsic rewards, which are derived from individuals doing what they like, are reduced. When extrinsic rewards are given to someone for performing an interesting task, it causes intrinsic interest in the task itself to decline. Such an outcome occur due to an individual may experiences a loss of control over his/her own behavior so that the previous intrinsic motivation fade away. The elimination of extrinsic rewards can produce a shift from an external to an internal explanation in an individual's perception of causation of why she works on a task.

If the Cognitive Evaluation Theory is valid, it should have major implications for managerial practices. It has been a cliché among compensation specialists for years the fact that they suggested is if pay or other extrinsic rewards are to be effective motivates, they should be made dependent on an individual's performance. But Cognitive Evaluation Theorists would argue that this will only tend to lessen the internal satisfaction that the individual receives from doing an interesting job. In fact, if cognitive evolution theory is correct, it would make sense to make an individual's pay non contingent on performance in order to avoid decreasing intrinsic motivation.

Following is a simple illustrative format on 4 aspects of reward strategy.


Pay Benefits

1. Basic pay 1. Pensions

2. Annual bonus 2. Perks


Learning & Development Work Environment

1. Training 1. Organizational Culture

2. On-the-job learning 2. Leadership

3. Performance management 3. Communications

Organizations work out a mix strategy combining intrinsic and extrinsic rewards for individuals and teams. The 4 quadrants show how organizations tend to go between the tangible and intangible challenges in regard to rewards.

Extrinsic rewards that are verbal (receiving praise from a supervisor or coworker) or tangible (money) can actually have different effects on individuals' intrinsic motivation. That is, verbal rewards increase intrinsic motivation where as tangible rewards weaken it. When people are told they will receive a tangible reward, they come to count on it and focus more on the reward than on the task. Verbal rewards however, seem to keep people focused on the task and encourage them to perform into a maximum level for some extent.

Employees will apply a high level of effort if they distinguish/observe that there is a strong relationship between effort and performance, performance and rewards and rewards and satisfaction of personal goals. Each of these relationships, in turn, is influenced by certain personal factors. For effort to lead to good performance, the individual must have the necessary or mandatory ability to perform, and the performance appraisal system that measures the individual's performance must be observed as being fair and objective. The performance-reward relationship will be strong if the individual perceives that it is performance (rather than seniority, personal favorable or other criteria) that is rewarded. If cognitive evaluation theory were fully valid in the actual workplace environment, it would predict here that based on rewards on performance should decrease the individual's intrinsic motivation. Motivation would be high to the degree that rewards an individual received for high performance satisfied the dominant needs consistent with individual goals.

A recent outcome of the cognitive evaluation theory is self-concordance which focuses on the degree to which peoples' reasons for pursuing goals are consistent with their interests and core values.

E.g.1: If individuals follow goals because of an intrinsic interest, they are more likely to reach their goals and are happy even if they do not accomplish them because the process of striving toward them is fun.

E.g.2: People who follow goals for extrinsic reasons (money, status or other benefits) are less likely to reach their goals and also less happy even when they achieve them because they find that goals are less meaningful to them.

E.g.3: One Organizational Behavior research suggests that people who practice work goals for intrinsic reasons are more satisfied with their jobs, happy and committed, feel like they fit into their organizations better and may perform better.

Employees have to choose their job carefully while make sure they are choosing to do something special for reasons other than extrinsic rewards. For organizations, managers need to provide intrinsic rewards in addition to extrinsic incentives. Managers need to make the working environment interesting, provide recognition and support employee growth and development.

Employees who feel that what they do is within their control and results of free choice are likely to be more motivated by their work and committed.

Goal-Setting Theory

Goals direct behavior. Goal setting theory is an inspiring output in terms of the effect that goal specificity, challenge and feedback have on performance.

In the late 1960s, Edwin Locke proposed that intensions to work towards a goal is a major source of work motivation. That is, goals tell an employee what needs to be done and how much effort will need to be expended. The evidence strongly supports the value of goals. Specific goals increase performance; that difficult goals; and that accepted, result in higher performance than do easy tasks; and that feedback leads to higher performance than does non-feedback.

Specific goals produce a higher level of output than does the generalized goal of "do your best". The specificity of the goal itself seems to act as an internal motivation.

If factors such as acceptance of the goals are held constant, it can also state that the more difficult the goal, the higher the level of performance. It is logical to assume that easier goals are more likely to be accepted. But once a hard task is accepted, the employee can be expected to apply a high level of effort to try to achieve it.

People motivate by different goals since

Different goals direct the attention to the task at hand and away from irrelevant distractions. Challenging goals get employee attention and thus tend to help them keep focusing.

Difficult goals energize employees because they have to work harder to achieve them.

When goals are difficult, people keep on trying to achieve them

Difficult goals lead employees to discover strategies that help them perform the job/task effectively.

People do better when they get feedback on how well they are progressing toward their goals because feedback helps to identify inconsistency between what they have done and what they want to do; that is, feedback acts to guide behavior. But all feedback is not equally effective. Self-generated feedback for which employees are able to monitor their own progress has been proved to be a more powerful motivator than externally generated feedback.

Three other factors have been found to influence the goals performance relationship: goal commitment, task characteristics and national culture.

Goal setting theory assumes that an individual is committed to the goal; that is, an individual is determined not to lower or give up the goal. Behaviorally, this means that an individual

Believes he or she can achieve the goal

Wants to achieve it

Goal commitment is most likely to occur when goals are made public, when the individual has an internal space of control, and when the goals are self-set rather than assigned.

Research indicates that goal setting theory does not work equally well on all tasks. The evidence suggests that goals seem to have a more significant effect on performance when tasks are simple rather than complex, well learned rather than novel, and independent rather than interdependent. On interdependent, tasks, group goals are preferable.

Finally, goal setting theory is culture based. It is well adapted to countries such as United States and Canada because its key components align reasonably well with North American cultures. It assumes that employees will seek challenging goals (that is, low in uncertainty avoidance), and that performance is considered important by both (that is, high in achievement). So we can't expect goal setting to necessarily lead to higher employee performance in countries such as Portugal or Chile where the opposite conditions exist.

Intensions as expressed in terms of difficult and specific goals are a potent motivating force. The motivating power of goal setting theory has been demonstrated on more than 100 tasks involving more than 40,000 participants in many different kinds of industries from lumber to insurance, to automobiles. Basically, setting specific, challenging goals for employees is the best thing managers can do to improve performance.

There is a little argument that clear and difficult goals lead to higher levels of employee productivity. This evidence leads to conclude that goal setting theory provides one of the most powerful explanations of this dependent variable. The theory however does not address absenteeism, turnover or satisfaction.

Implementing Goal-Setting strategies:

Managers make this theory into operational by explicitly setting aggressive performance targets.

A more systematic way to utilize goal setting is with a management by objectives programs. Management by Objectives (MBO) emphasizes participative set goals that are tangible, verifiable and measurable. The organization's overall objectives are translated into specific objectives for each succeeding level-divisional, departmental, individual in the organization. But because lower-unit managers jointly participate in setting their own goals.MBO works from the "bottom up" as well as from the "top down". The result is a hierarchy that links objectives at one level to those at the next level. And for the individual employee, MBO provides specific personal performance objectives.

Four ingredients are common to MBO programs: goal specificity, participation in decision making (including participation in the setting goals or objectives), an explicit time period, and performance feedback. Many of the elements in the MBO programs match propositions of goal setting theory.

E.g.: Having an explicit time period to accomplish objectives matches' goal setting theory's emphasis on goal specificity. Similarly, we noted earlier that feedback about goal progress is a critical element of goal setting theory. The only area of possible disagreement between MBO and goal setting theory relates to the issue of participation: MBO strongly advocates it, where as goal setting theory demonstrates, that manager assigning goals is usually just as effective.

From motivation concepts to Applications

We can link motivation theories to practices such as employee involvement and skill-based pay.

Using rewards to motive employees

Pay is merely not a primary factor driving job satisfaction. However, it motivates people, and companies often underestimate the importance of pay in keeping top talent. Pay is important, but need to consider what to pay employees and how to pay them. To do that, management must initiate some strategic decisions. Reasonable questions occur like "will the organization lead, match, or lag the market in pay?", "How will individual contributions be recognized?". There are 4 major strategic rewards decisions that need to be made:

What to pay employees(which is decided by establishing a pay structure)

How to pay individual employees(which is decided through variable pay plans and skill based pay plans)

What benefits to offer, especially whether to offer employees choice in benefits(flexible benefits)

How to construct employee recognition programs

What to pay?

Establish Pay structure: There are many ways to pay employees. The best pay system pays the job what it is worth while also paying competitively relative to the labor market. Some organizations prefer to be pay leaders by paying above the market, while some may delay because they can't afford to pay market rates, or they are willing to bear the costs of paying below market (namely, higher turnover as people are lured to better-paying jobs). Pay more and you may get better-qualified, more highly motivated employees who will stay with the organization longer. It is a strategic decision an organization must make, with clear trade-offs.

How to pay?

Rewarding individual employees through variable pay programs: a number of organizations are moving away from paying people based solely on credentials or length of service and toward using variable-pay programs. Instead of paying a person only for time on the job or seniority, a variable pay program bases a portion of an employee's pay on some individual and or organizational measure of performance. Earnings therefore fluctuate up and down with the measure of performance. It is precisely the fluctuation in variable pay that has made these programs attractive to management.

Price-rate plans merit based pay, bonuses, profit-sharing, gain-sharing, and employee stock ownership plans are all forms of variable pay programs.

Variable-pay program: A pay plan that bases a portion of an employee's pay on some individual and/or organizational measure of performance

Price-rate pay plan: A pay plan in which workers are paid a fixed sum for each unit of production completed.

Merit-based pay plan: A pay plan based on performance appraisal ratings.

Bonus: A pay plan that rewards employees for recent performance rather than historical performance.

Skill-based pay: A pay plan that sets pay levels on the basis of how many skills employees have or how many jobs they can do.

Profit-sharing plan: An organization wide program that distributes compensation based on some established formula designed around a company's profitability.

Gain-sharing: A formula-based group incentive plan.

Variable pay programs increase motivation and productivity. Gain-sharing has been found to improve productivity in a majority of cases and often has a positive impact on employee attitudes. Piece-rate pay-for-performance plans stimulated higher levels of productivity; this positive affect was not observed for risk-averse employees

Intrinsic Rewards: Employee Recognition programs

Important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensation systems.

Employee recognition programs range from a spontaneous and private "thank you" up to widely publicized formal programs in which specific types of behavior are encouraged and the procedures for achieving recognition are clearly identified. Financial incentives may be more motivating in the short term, in the long run, nonfinancial incentives are more motivating. An obvious advantage of recognition programs is that they are inexpensive (praise). Two of the most popular methods of recognizing employees are giving gift certificates and cash rewards. The most common reasons for giving an award are length of service and exceptional performance.

Some companies allow executives to make their own mix of salary packages.

Link rewards to perform

Rewards should be reliant on performance. Importantly, employees must distinguish a clear relation between performance and rewards. Regardless of how closely rewards are actually correlated to performance criteria, if individuals observe this relationship to be low, the results will be low performance, a decrease in job satisfaction, and an increase in turnover and absenteeism.

Use Goals and feedback

Employees should have firm, specific goals, and they should get feedback on how well they are fairing in interest of those goals.