CHAPTER 17 MOTIVATION

Chapter 17 Motivation

It’s Your Career

What Motivates You?

What’s important to you or excites you in a job?
Some say “money.” Others might say “challenging
work” or “fun coworkers.” If you have a solid
grounding in and understanding of what motivates
you, it can help you make smart career and job
choices.

The following is a list of 12 factors that might
enter into your decision in selecting a job. Read
over the list.Then rank order the items in terms
of importance, with 1 being highest in impor-
tance and 12 being lowest in importance.

Source: Artplay711/iStock/Getty ________High pay
________Good working conditions
A key to success in ________Friendly and supportive colleagues
management and in your ________Flexible working hours
career is knowing what ________Opportunities for growth and new challenges
motivates YOU. ________Considerate boss
________Inclusion in decisions that affect you
________Fair and equitable treatment
________Job security
________Promotion potential
________Excellent benefits (vacation time, retirement contributions, etc.)
________Freedom and independence

Now, compare your list with others in your class. How similar were your
preferences? It’s rare for lists to be exactly the same.This tells us that peo-
ple differ in terms of what they value. Second, use these results to better
understand what you’re looking for in a job.

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Learning Objectives

17.1 Define motivation.
17.2 Compare and contrast early theories of motivation.
17.3 Compare and contrast contemporary theories of motivation.

● Develop your skill at motivating employees.
17.4 Discuss current issues in motivation.

● Know how to identify what motivates you.

Successful managers need to understand that what motivates them personally may
have little or no effect on others. Just because you’re motivated by being part of a
cohesive work team, don’t assume everyone is. Or just because you’re motivated by
your job doesn’t mean that everyone is. Effective managers who get employees to put
forth maximum effort know how and why those employees are motivated and tailor
motivational practices to satisfy their needs and wants.

WHAT is motivation?

LO17.1 Jetstar Asia, a low-fare carrier based in Singapore, encourages its cabin
crew to share compliments with the entire workforce via internal social
media. When passengers say good things about crew members, everyone in the organiza-
tion hears the news and is proud of their peers and their employer. Similarly, when employ-
ees take part in corporate social responsibility activities, they share their experiences with
colleagues. Jetstar Asia also operates Bravo, a social media system where employees can
compliment colleagues for actions that embody the airline’s values. The airline holds quar-
terly and yearly award ceremonies for Bravo winners. One recent winner was honored for
expediting the return of a passenger’s wallet inadvertently left behind in a hotel miles away.
An airline with personality, Jetstar Asia encourages cabin crew to celebrate special days
like Singapore’s National Day with fun events during flights. The airline has a mentoring
program for younger employees and a “Career Progression” plan for older employees that
want to transition to specialized or non-flight positions as their circumstances change. No
wonder Jetstar Asia’s employees of all ages and at all levels are engaged and motivated.1
Have you ever even thought about how to motivate someone? It’s an important
topic in management, and researchers have long been interested in it.2 All managers
need to be able to motivate their employees, which first requires understanding what
motivation is. Let’s begin by pointing out what motivation is not. Why? Because many
people incorrectly view motivation as a personal trait; that is, they think some people
are motivated and others aren’t. Our knowledge of motivation tells us that we can’t
589

590 Part 5 Leading

motivation label people that way because individuals differ in motivational drive and their overall
The process by which a person’s efforts motivation varies from situation to situation. For instance, you’re probably more moti-
are energized, directed, and sustained vated in some classes than in others.
toward attaining a goal
Motivation refers to the process by which a person’s efforts are energized, directed,
and sustained toward attaining a goal.3 This definition has three key elements: energy,
direction, and persistence.4

The energy element is a measure of intensity, drive, and vigor. A motivated person
puts forth effort and works hard. However, the quality of the effort must be consid-
ered as well as its intensity. High levels of effort don’t necessarily lead to favorable job
performance unless the effort is channeled in a direction that benefits the organization.
Effort directed toward and consistent with organizational goals is the kind of effort we
want from employees. Finally, motivation includes a persistence dimension. We want
employees to persist in putting forth effort to achieve those goals.

Motivating high levels of employee performance is an important organizational
concern, and managers keep looking for answers. For instance, a Gallup Poll found a
large majority of U.S. employees—some 68 percent—are disengaged.5 As the research-
ers stated, “These employees have essentially ‘checked out.’ They’re sleepwalking

through their workday, putting time, but not energy or pas-
sion, into their work.”6 The number globally is even more
disturbing—some 87 percent are not excited about their
work.7 It’s no wonder then that both managers and academ-
ics want to understand and explain employee motivation.

EARLY theories of motivation

LO17.2 We begin by looking at four early motiva-
tion theories: Maslow’s hierarchy of needs,
McGregor’s Theories X and Y, Herzberg’s two-factor theory,
and McClelland’s three-needs theory. Although more valid
explanations of motivation have been developed, these early
theories are important because they represent the foundation
from which contemporary motivation theories were devel-
Motivators for employees of Procter & oped and because many practicing managers still use them.
Gamble’s factory in Urlati, Romania, include
satisfying their lower-order needs of a salary, a Maslow’s Hierarchy of Needs Theory
safe job, benefits, and job security. According
to Maslow’s hierarchy of needs theory, after Having a car to get to work is a necessity for many workers. When two crucial employ-
these needs are met, managers can motivate ees of Vurv Technology in Jacksonville, Florida, had trouble getting to work, owner
them by forming work groups and giving them Derek Mercer decided to buy two inexpensive used cars for the employees. One of the
opportunities for socializing to satisfy their employees who got one of the cars said it wasn’t the nicest or prettiest car, but it gave
needs of friendship and belongingness. him such a sense of relief to know that he had a reliable way to get to work. So when
Source: Aga Luczakowska/Bloomberg/Getty the company needed him to work hard, he was willing to do so.8 Derek Mercer under-
Images stands employee needs and their impact on motivation. The first motivation theory
we’re going to look at addresses employee needs.
hierarchy of needs theory
Maslow’s theory that human needs— The best-known theory of motivation is probably Abraham Maslow’s hierarchy
physiological, safety, social, esteem, of needs theory.9 Maslow was a psychologist who proposed that within every person
and self-actualization—form a sort of is a hierarchy of five needs:
hierarchy
1. Physiological needs: A person’s needs for food, drink, shelter, sex, and other
physiological needs physical requirements.
A person’s needs for food, drink, shelter,
sexual satisfaction, and other physical 2. Safety needs: A person’s needs for security and protection from physical and
needs emotional harm as well as assurance that physical needs will continue to be met.

safety needs 3. Social needs: A person’s needs for affection, belongingness, acceptance, and
A person’s needs for security and friendship.
protection from physical and emotional
harm 4. Esteem needs: A person’s needs for internal esteem factors such as self-
respect, autonomy, and achievement and external esteem factors such as status,
recognition, and attention.

Self- Chapter 17 Motivation 591
Actualization
Exhibit 17-1
Esteem
Social Maslow’s Hierarchy of Needs
Safety
Physiological Source: A. H. Maslow, R. D. Frager, and
J. Fadiman, Motivation and Personality,
3rd Edition, © 1987. Reprinted and
electronically reproduced by permission
of Pearson Education, Inc., Upper Saddle
River, NJ.

5. Self-actualization needs: A person’s needs for growth, achieving one’s social needs
potential, and self-fulfillment; the drive to become what one is capable of A person’s needs for affection,
becoming. belongingness, acceptance, and
Maslow argued that each level in the needs hierarchy must be substantially satis- friendship
esteem needs
fied before the next need becomes dominant. An individual moves up the needs hierar- A person’s needs for internal factors
chy from one level to the next. (See Exhibit 17-1.) In addition, Maslow separated the such as self-respect, autonomy, and
five needs into higher and lower levels. Physiological and safety needs were considered achievement, and external factors such
lower-order needs; social, esteem, and self-actualization needs were considered higher- as status, recognition, and attention
order needs. Lower-order needs are predominantly satisfied externally while higher- self-actualization needs
order needs are satisfied internally. A person’s need to become what he or
she is capable of becoming
How does Maslow’s theory explain motivation? Managers using Maslow’s hierarchy
to motivate employees do things to satisfy employees’ needs. But the theory also says that Theory X
once a need is substantially satisfied, an individual is no longer motivated to satisfy that The assumption that employees dislike
need. Therefore, to motivate someone, you need to understand at what need level that per- work, are lazy, avoid responsibility, and
son is on in the hierarchy and focus on satisfying needs at or above that level. must be coerced to perform
Theory Y
Maslow’s needs theory was widely recognized during the 1960s and 1970s, espe- The assumption that employees are
cially among practicing managers, probably because it was intuitively logical and easy creative, enjoy work, seek responsibility,
to understand. But Maslow provided no empirical support for his theory, and several and can exercise self-direction
studies that sought to validate it could not.10

McGregor’s Theory X and Theory Y

Andy Grove, cofounder of Intel Corporation and now a senior advisor to the com-
pany, was known for being open with his employees. However, he was also known for
his tendency to yell. Intel’s current CEO, Paul Otellini, said, “When Andy was yelling
at you, it wasn’t because he didn’t care about you. He was yelling at you because he
wanted you to do better.”11 Although managers like Andy Grove want their employees
to do better, that approach might not have been the best way to motivate employees,
as McGregor’s Theory X and Theory Y suggest.

Douglas McGregor is best known for proposing two assumptions about human
nature: Theory X and Theory Y.12 Very simply, Theory X is a negative view of people
that assumes workers have little ambition, dislike work, want to avoid responsibility,
and need to be closely controlled to work effectively. Theory Y is a positive view that
assumes employees enjoy work, seek out and accept responsibility, and exercise self-
direction. McGregor believed that Theory Y assumptions should guide management
practice and proposed that participation in decision making, responsible and chal-
lenging jobs, and good group relations would maximize employee motivation. For
example, Walmart gives workers a significant role in decision making. Store associates
can provide input into what is sold locally. The company relies on associates’ judgment
because they interact with customers. Walmart’s U.S. CEO stated: “There is noth-
ing I like better than hearing about your [associates’] jobs, your ideas, your hopes
and dreams, and frustrations, and listening to how we can make your lives easier.”13
Clearly, this is an example of Walmart putting the philosophy of Theory Y manage-
ment into practice.

592 Part 5 Leading Motivators Hygiene Factors
• Achievement • Supervision
Exhibit 17-2 • Recognition • Company Policy
• Work Itself • Relationship with
Herzberg’s Two-Factor Theory • Responsibility
• Advancement Supervisor
Source: Based on F. Herzberg, B. Mausner, • Growth • Working Conditions
and B. B. Snyderman, The Motivation to • Salary
Work (NewYork: John Wiley, 1959). Extremely Satisfied • Relationship with Peers
• Personal Life
Neutral • Relationship with

Subordinates
• Status
• Security

Extremely Dissatisfied

FYI Unfortunately, no evidence confirms that either set of assumptions is valid or that
being a Theory Y manager is the only way to motivate employees. For instance, Jen-
• What motivates employees? A Hsun Huang, founder of Nvidia Corporation, an innovative and successful microchip
survey showed the following in manufacturer, has been known to use both reassuring hugs and tough love in motivat-
order of importance:15 ing employees. He also has little tolerance for screw-ups. In one meeting, he suppos-
edly screamed at a project team for its tendency to repeat mistakes. “Do you suck?” he
96 percent Salary asked the stunned employees. “Because if you suck, just get up and say you suck.”14
95 percent Job security His message, delivered in classic Theory X style, was that if you need help, ask for it.
92 percent My supervisor/ It’s a harsh approach, but in this case, it worked as employees knew they had to own
91 percent manager up to their mistakes and find ways to address them.
91 percent Training
89 percent Performance Herzberg’s Two-Factor Theory
87 percent feedback
85 percent Leadership Frederick Herzberg’s two-factor theory (also called motivation–hygiene theory)
81 percent Vacation/paid proposes that intrinsic factors are related to job satisfaction, while extrinsic factors are
75 percent time off associated with job dissatisfaction.16 Herzberg wanted to know when people felt excep-
Career tionally good (satisfied) or bad (dissatisfied) about their jobs. (These findings are shown in
advancement Exhibit 17-2.) He concluded that the replies people gave when they felt good about their
Involved in jobs were significantly different from the replies they gave when they felt bad. Certain
decisions characteristics were consistently related to job satisfaction (factors on the left side of the
Corporate exhibit), and others to job dissatisfaction (factors on the right side). When people felt good
culture about their work, they tended to cite intrinsic factors arising from the job itself such as
achievement, recognition, and responsibility. On the other hand, when they were dissatis-
two-factor theory (motivation– fied, they tended to cite extrinsic factors arising from the job context such as company pol-
hygiene theory) icy and administration, supervision, interpersonal relationships, and working conditions.
The motivation theory that intrinsic
factors are related to job satisfaction and In addition, Herzberg believed the data suggested that the opposite of satisfac-
motivation, whereas extrinsic factors are tion was not dissatisfaction, as traditionally had been believed. Removing dissatisfy-
associated with job dissatisfaction ing characteristics from a job would not necessarily make that job more satisfying (or
motivating). As shown in Exhibit 17-3, Herzberg proposed that a dual continuum
hygiene factors existed: The opposite of “satisfaction” is “no satisfaction,” and the opposite of “dis-
Factors that eliminate job dissatisfaction, satisfaction” is “no dissatisfaction.”
but don’t motivate
Again, Herzberg believed the factors that led to job satisfaction were separate and
motivators distinct from those that led to job dissatisfaction. Therefore, managers who sought to
Factors that increase job satisfaction and eliminate factors that created job dissatisfaction could keep people from being dissatis-
motivation fied but not necessarily motivate them. The extrinsic factors that create job dissatisfac-
tion were called hygiene factors. When these factors are adequate, people won’t be dis-
satisfied, but they won’t be satisfied (or motivated) either. To motivate people, Herzberg
suggested emphasizing motivators, the intrinsic factors having to do with the job itself.

Herzberg’s theory enjoyed wide popularity from the mid-1960s to the early 1980s,
despite criticisms of his procedures and methodology. Although some critics said his
theory was too simplistic, it has influenced how we currently design jobs, especially
when it comes to job enrichment, which we’ll discuss at a later point in this chapter.

TRADITIONAL VIEW Chapter 17 Motivation 593

Satisfied Dissatisfied Exhibit 17-3

Contrasting Views of Satisfaction–
Dissatisfaction

Motivators HERZBERG’S VIEW Hygiene Factors

Satisfaction No Satisfaction No Dissatisfaction Dissatisfaction

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titled: Rudi’s Bakery: Motivation and to respond to questions.

Three-Needs Theory three-needs theory
The motivation theory that says
David McClelland and his associates proposed the three-needs theory, which says three acquired (not innate) needs—
three acquired (not innate) needs are major motives in work.17 These three are the achievement, power, and affiliation—are
need for achievement (nAch), the drive to succeed and excel in relation to a set of major motives in work
standards; the need for power (nPow), the need to make others behave in a way they
would not have behaved otherwise; and the need for affiliation (nAff), the desire need for achievement (nAch)
for friendly and close interpersonal relationships. Of these three needs, the need for The drive to succeed and excel in
achievement has been researched the most. relation to a set of standards

People with a high need for achievement are striving for personal achievement need for power (nPow)
rather than for the trappings and rewards of success. They have a desire to do some- The need to make others behave in a
thing better or more efficiently than it’s been done before.18 They prefer jobs in which way that they would not have behaved
they can take personal responsibility for finding solutions to problems, in which they otherwise
can receive rapid and unambiguous feedback on their performance in order to tell
whether they’re improving, and in which they can set moderately challenging goals. need for affiliation (nAff)
High achievers avoid what they perceive to be very easy or very difficult tasks. Also, The desire for friendly and close
a high need to achieve doesn’t necessarily lead to being a good manager, especially interpersonal relationships
in large organizations. That’s because high achievers focus on their own accomplish-
ments, while good managers emphasize helping others accomplish their goals.19
McClelland showed that employees can be trained to stimulate their achievement
need by being in situations where they have personal responsibility, feedback, and
moderate risks.20 Indeed, good managers make a difference. One survey indicated
that 67 percent of employees whose managers helped them to grow and develop were
highly engaged.21

The other two needs in this theory haven’t been researched as extensively as the
need for achievement. However, we do know that the best managers tend to be high in
the need for power and low in the need for affiliation.22

All three of these needs can be measured by using a projective test (known as the
Thematic Apperception Test or TAT), in which respondents react to a set of pictures.
Each picture is briefly shown to a person who writes a story based on the picture. (See
Exhibit 17-4 for some examples.) Trained interpreters then determine the individual’s
levels of nAch, nPow, and nAff from the stories written.

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Writing Assignment MGMT 14: Theories of Motivation.

594 Part 5 Leading

Exhibit 17-4

TAT Pictures 

Photo Source: Bill Aron/PhotoEdit

CONTEMPORARY theories of motivation

LO17.3 The theories we look at in this section represent current explanations
of employee motivation. Although these theories may not be as well
known as those we just discussed, they are supported by research.23 These contem-
porary motivation approaches include goal-setting theory, reinforcement theory, job
design theory, equity theory, expectancy theory, and high-involvement work practices.

goal-setting theory Goal-Setting Theory
The proposition that specific goals
increase performance and that difficult At Wyeth’s research division, scientists were given challenging new product quotas in
goals, when accepted, result in higher an attempt to bring more efficiency to the innovation process, and their bonuses were
performance than do easy goals contingent on meeting those goals.24 Before a big assignment or major class project
presentation, has a teacher ever encouraged you to “Just do your best”? What does
that vague statement mean? Would your performance on a class project have been
higher had that teacher said you needed to score a 93 percent to keep your A in the
class? Research on goal-setting theory addresses these issues, and the findings, as you’ll
see, are impressive in terms of the effect that goal specificity, challenge, and feedback
have on performance.25

Research provides substantial support for goal-setting theory, which says that
specific goals increase performance and that difficult goals, when accepted, result in
higher performance than do easy goals. What does goal-setting theory tell us?

First, working toward a goal is a major source of job motivation. Studies on goal
setting have demonstrated that specific and challenging goals are superior motivating
forces.26 Such goals produce a higher output than the generalized goal of “do your
best.” The specificity of the goal itself acts as an internal stimulus. For instance, when
a sales rep commits to making eight sales calls daily, this intention gives him a specific
goal to try to attain.

It’s not a contradiction that goal-setting theory says that motivation is maximized
by difficult goals, whereas achievement motivation (from three-needs theory) is stimu-
lated by moderately challenging goals.27 First, goal-setting theory deals with people
in general, whereas the conclusions on achievement motivation are based on people

Chapter 17 Motivation 595

who have a high nAch. Given that no more

LEADER making athan 10 to 20 percent of North Americans
DIFFERENCEare high achievers (a proportion that’s likely
lower in underdeveloped countries), difficult
goals are still recommended for the major-
ity of employees. Second, the conclusions of What if the group of people you needed to lead
goal-setting theory apply to those who accept
and are committed to the goals. Difficult goals Source: WENN Ltd/Alamy and motivate didn’t actually work for your com-
will lead to higher performance only if they pany? That’s been the challenge faced by Susan
are accepted. Wojcicki, CEO of Google-owned YouTube since
2014.28
Next, will employees try harder if they
have the opportunity to participate in the No stranger to the tech world before taking the
lead at YouTube, Wojcicki was actually the 16th

setting of goals? Not always. In some cases, employee hired at Google (in fact, the first few months of Google

participants who actively set goals elicit supe- operations were out of her garage). Her role at YouTube is unique
rior performance; in other cases, individuals
performed best when their manager assigned as she needs to motivate both employees and those that provide the

goals. However, participation is probably content on YouTube, known as “creators.” Wojcicki calls the creators
preferable to assigning goals when employees
might resist accepting difficult challenges.29 the “lifeblood of YouTube,” understanding that they are the talent of
the company. Many creators depend on making their living through
Finally, we know people will do better YouTube, generating income from the ads that run before their videos.
if they get feedback on how well they’re pro-
gressing toward their goals because feedback Before Wojcicki, the creators had a turbulent relationship with
helps identify discrepancies between what management, describing them as arrogant and closed off from the
creators. Wojcicki made the creators her priority, spending time dur-

they have done and what they want to do. But ing her first month on the job meeting with them to just listen and take

all feedback isn’t equally effective. Self-gener- notes. She made an effort to engage the creators by working to under-
ated feedback—where an employee monitors
his or her own progress—has been shown to stand their needs and goals. In response, she has implemented strate-
be a more powerful motivator than feedback
coming from someone else.30 gies that help motivate the creators to post their content on YouTube.
For example, the company now offers YouTube Spaces which are
Three other contingencies besides feed- free production and educational spaces located in six major cities.
back influence the goal-performance relation- Creators stay with YouTube because Wojnicki listens and has helped
ship: goal commitment, adequate self-efficacy, create opportunities for them to pursue their passions. What can you
and national culture. learn from this leader making a difference?

First, goal-setting theory assumes an
individual is committed to the goal. Commitment is most likely when goals are made
public, when the individual has an internal locus of control, and when the goals are
self-set rather than assigned.31
Next, self-efficacy refers to an individual’s belief that he or she is capable of self-efficacy
performing a task.32 The higher your self-efficacy, the more confidence you have in An individual’s belief that he or she is
your ability to succeed in a task. So, in difficult situations, we find that people with capable of performing a task

low self-efficacy are likely to reduce their effort or give up altogether, whereas those
with high self-efficacy will try harder to master the challenge.33 In addition, individuals
with high self-efficacy seem to respond to negative feedback with increased effort and
motivation, whereas those with low self-efficacy are likely to reduce their effort when
given negative feedback.34
Finally, the value of goal-setting theory depends on national culture. It’s well
adapted to North American countries because its main ideas align reasonably well
with those cultures. It assumes that subordinates will be reasonably independent (not
a high score on power distance), that people will seek challenging goals (low in uncer-
tainty avoidance), and that performance is considered important by both managers
and subordinates (high in assertiveness). Don’t expect goal setting to lead to higher
employee performance in countries where the cultural characteristics aren’t like this.
Exhibit 17-5 summarizes the relationships among goals, motivation, and perfor-
mance. Our overall conclusion is that the intention to work toward hard and spe-
cific goals is a powerful motivating force. Under the proper conditions, it can lead to
higher performance. However, no evidence indicates that such goals are associated
with increased job satisfaction.35

596 Part 5 Leading • Goals Are Public
• Individual Has Internal
Exhibit 17-5
Locus of Control
Goal-Setting Theory • Self-Set Goals

Self-Efficacy

Goals Committed Motivation Self-Generated Higher Performance
• Specific to Achieving (intention to work Feedback on Plus
• Difficult
Accepted toward goal) Progress Goal Achievement

Participation National
in Setting Culture

reinforcement theory Reinforcement Theory
The theory that behavior is a function of
its consequences Reinforcement theory says that behavior is a function of its consequences. Those
reinforcers consequences that immediately follow a behavior and increase the probability that the
Consequences immediately following a behavior will be repeated are called reinforcers.
behavior, which increase the probability
that the behavior will be repeated Reinforcement theory ignores factors such as goals, expectations, and needs.
Instead, it focuses solely on what happens to a person when he or she does something.
FYI For instance, Walmart improved its bonus program for hourly employees. Employees
who provide outstanding customer service get a cash bonus. And all Walmart hourly
• 52 percent of employees full- and part-time store employees are eligible for annual “My$hare” bonuses, which
say their manager is not are allocated on store performance and distributed quarterly so that workers are
interested in their professional rewarded more frequently.36 The company’s intent: keep the workforce motivated to
development.39 meet goals by rewarding them when they do, thus reinforcing the behaviors.

In Chapter 15 we showed how managers use reinforcers to shape behavior, but
the concept is also widely believed to explain motivation. According to B. F. Skinner,
people will most likely engage in desired behaviors if they are rewarded for doing so.
These rewards are most effective if they immediately follow a desired behavior; and
behavior that isn’t rewarded, or is punished, is less likely to be repeated.37

Using reinforcement theory, managers can influence employees’ behavior by using
positive reinforcers for actions that help the organization achieve its goals. And man-
agers should ignore, not punish, undesirable behavior. Although punishment elimi-
nates undesired behavior faster than nonreinforcement, its effect is often temporary
and may have unpleasant side effects, including dysfunctional behavior such as work-
place conflicts, absenteeism, and turnover. Although reinforcement is an important
influence on work behavior, it isn’t the only explanation for differences in employee
motivation.38

Designing Motivating Jobs

Jobs designed with a shorter work day in mind are particularly motivating for
employees of some Swedish businesses. Employees of the tech firm Brath aren’t
expected to work more than six hours a day because, says CEO Maria Brath, “we
are very creative—we couldn’t keep it up for eight hours.” Filimundus, a Swedish
app design firm, also has a six-hour work day because “it is a strong motivational
factor to be able to go home two hours earlier,” notes the CEO. “You still want to
do a good job and be productive during six hours, so I think you focus more and are
more efficient.”40

Because managers want to motivate individuals on the job, we need to look at ways
to design motivating jobs. If you look closely at what an organization is and how it
works, you’ll find that it’s composed of thousands of tasks. These tasks are, in turn,

Chapter 17 Motivation 597

aggregated into jobs. We use the term job design to refer to the way tasks are combined job design
to form complete jobs. The jobs people perform in an organization should not evolve The way tasks are combined to form
by chance. Managers should design jobs deliberately and thoughtfully to reflect the complete jobs
demands of the changing environment; the organization’s technology; and employees’
skills, abilities, and preferences.41 When jobs are designed like that, employees are moti-
vated to work hard. Let’s look at some ways that managers can design motivating jobs.42

JOB ENLARGEMENT As we saw in the Management History Module, job design job scope
historically has been to make jobs smaller and more specialized. It’s difficult to motivate The number of different tasks required
employees when jobs are like this. An early effort at overcoming the drawbacks of job in a job and the frequency with which
specialization involved horizontally expanding a job through increasing job scope—the those tasks are repeated
number of different tasks required in a job and the frequency with which these tasks are
repeated. For instance, a dental hygienist’s job could be enlarged so that in addition to job enlargement
cleaning teeth, he or she is pulling patients’ files, refiling them when finished, and sanitiz- The horizontal expansion of a job by
ing and storing instruments. This type of job design option is called job enlargement. increasing job scope

Most job enlargement efforts that focus solely on increasing the number of tasks
don’t seem to work. As one employee who experienced such a job redesign said,
“Before, I had one lousy job. Now, thanks to job enlargement, I have three lousy jobs!”
However, research has shown that knowledge enlargement activities (expanding the
scope of knowledge used in a job) lead to more job satisfaction, enhanced customer
service, and fewer errors.43

JOB ENRICHMENT Another approach to job design is the vertical expansion of a job enrichment
job by adding planning and evaluating responsibilities—job enrichment. Job enrich- The vertical expansion of a job by adding
ment increases job depth, which is the degree of control employees have over their planning and evaluating responsibilities
work. In other words, employees are empowered to assume some of the tasks typically
done by their managers. Thus, an enriched job allows workers to do an entire activity job depth
with increased freedom, independence, and responsibility. In addition, workers get The degree of control employees have
feedback so they can assess and correct their own performance. For instance, if our over their work
dental hygienist had an enriched job, he or she could, in addition to cleaning teeth,
schedule appointments (planning) and follow up with clients (evaluating). Although
job enrichment may improve the quality of work, employee
motivation, and satisfaction, research evidence has been in-
conclusive as to its usefulness.44

JOB CHARACTERISTICS MODEL Even though many Meaningful work that helps people recover
organizations implemented job enlargement and job enrich- from physical problems caused by illness,
ment programs and experienced mixed results, neither ap- injury, or aging gives physiotherapist Diane
proach provided an effective framework for managers to Leng great motivation and job satisfaction.
design motivating jobs. But the job characteristics model Shown here working with a young patient,
(JCM) does.45 It identifies five core job dimensions, their inter- Leng has a job that scores high in skill and task
relationships, and their impact on employee productivity, mo- variety plus task significance. She applies her
tivation, and satisfaction. These five core job dimensions are: knowledge and skills in identifying patients’
needs, organizing and conducting therapy
1. Skill variety, the degree to which a job requires a sessions, writing reports, consulting with
variety of activities so that an employee can use a doctors and nurses, and educating patients
number of different skills and talents. about exercise and movement.
Source: Jonathan Hordle / AP Images
2. Task identity, the degree to which a job requires completion of a whole and
identifiable piece of work.

3. Task significance, the degree to which a job has a substantial impact on the
lives or work of other people.

4. Autonomy, the degree to which a job provides substantial freedom,
independence, and discretion to the individual in scheduling the work and
determining the procedures to be used in carrying it out.

5. Feedback, the degree to which doing work activities required by a job results in
an individual obtaining direct and clear information about the effectiveness of
his or her performance.

598 Part 5 Leading Core Job Critical Personal and
Dimensions Psychological States Work Outcomes
Exhibit 17-6 Skill Variety Experienced High Internal
Task Identity meaningfulness Work Motivation
Job Characteristics Model Task Significance of the work High-Quality
Work Performance
Source: “Job Characteristics Model,” from Autonomy Experienced responsibility
Work Redesign, by J. R. Hackman & G. R. for outcomes of the work High Satisfaction
Oldham. Copyright © 1980 by Addison- Feedback Knowledge of the actual with the Work
Wesley (a division of Pearson). Reprinted results of the work activities Low Absenteeism
with permission. and Turnover

Strength of Employee Growth Need

job characteristics model (JCM) The JCM is shown in Exhibit 17-6. Notice how the first three dimensions—skill variety,
A framework for analyzing and designing task identity, and task significance—combine to create meaningful work. In other words,
jobs that identifies five primary core job if these three characteristics exist in a job, we can predict that the person will view his or
dimensions, their interrelationships, and her job as being important, valuable, and worthwhile. Notice, too, that jobs that possess
their impact on outcomes autonomy give the jobholder a feeling of personal responsibility for the results and that if
a job provides feedback, the employee will know how effectively he or she is performing.
skill variety
The degree to which a job requires a The JCM suggests that employees are likely to be motivated when they learn
variety of activities so that an employee (knowledge of results through feedback) that they personally (experienced responsibility
can use a number of different skills and through autonomy of work) performed well on tasks that they care about (experienced
talents meaningfulness through skill variety, task identity, or task significance).46 The more a
job is designed around these three elements, the greater the employee’s motivation, per-
task identity formance, and satisfaction and the lower his or her absenteeism and likelihood of resign-
The degree to which a job requires ing. As the model shows, the links between the job dimensions and the outcomes are
completion of a whole and identifiable moderated by the strength of the individual’s growth need (the person’s desire for self-
piece of work esteem and self-actualization). Individuals with a high-growth need are more likely than
low-growth need individuals to experience the critical psychological states and respond
task significance positively when their jobs include the core dimensions. This distinction may explain the
The degree to which a job has a mixed results with job enrichment: Individuals with low-growth need aren’t likely to
substantial impact on the lives or work of achieve high performance or satisfaction by having their jobs enriched.
other people
The JCM provides specific guidance to managers for job design. These suggestions
autonomy specify the types of changes most likely to lead to improvement in the five core job dimen-
The degree to which a job provides sions. You’ll notice that two suggestions incorporate job enlargement and job enrichment,
substantial freedom, independence, and although the other suggestions involve more than vertical and horizontal expansion of jobs.
discretion to the individual in scheduling
work and determining the procedures to 1. Combine tasks. Put fragmented tasks back together to form a new, larger work
be used in carrying it out module (job enlargement) to increase skill variety and task identity.

feedback 2. Create natural work units. Design tasks that form an identifiable and meaningful
The degree to which carrying out work whole to increase employee “ownership” of the work. Encourage employees to
activities required by a job results in the view their work as meaningful and important rather than as irrelevant and boring.
individual’s obtaining direct and clear
information about his or her performance 3. Establish client (external or internal) relationships. Whenever possible, establish
effectiveness direct relationships between workers and their clients to increase skill variety,
autonomy, and feedback.

4. Expand jobs vertically. Vertical expansion gives employees responsibilities and
controls that were formerly reserved for managers, which can increase employee
autonomy.

5. Open feedback channels. Direct feedback lets employees know how well they’re
performing their jobs and whether their performance is improving or not.
The research into the JCM has provided a rich knowledge base for understand-

ing how job design influences employee motivation; however, the research does not
directly specify motivating jobs. What are some of the jobs people consider to be more
or less meaningful?

Chapter 17 Motivation 599

A survey of workers employed in more than 450 jobs provides some insights.
Approximately 374,000 workers were asked the question: “Does your job make the
world a better place?”47 More than 95 percent of clergy members, surgeons, and educa-
tion administrators (such as principals) feel that they make the world a better place. In
contrast, fewer than 25 percent of gaming supervisors and parking lot attendants feel
that they make the world a better place.

Research into the JCM continues. For instance, one recent study looked at using
job redesign efforts to change job characteristics and improve employee well-being.48
Another study examined psychological ownership—that is, a personal feeling of
“mine-ness” or “our-ness”—and its role in the JCM.49

REDESIGNING JOB DESIGN APPROACHES50 Although the JCM has proven to relational perspective of work design
be useful, it may not be totally appropriate for today’s jobs that are more service and An approach to job design that focuses
knowledge oriented. The nature of these jobs has also changed the tasks that employ- on how people’s tasks and jobs are
ees do in those jobs. Two emerging viewpoints on job design are causing a rethinking increasingly based on social relationships
of the JCM and other standard approaches. Let’s take a look at each perspective.
proactive perspective of work design
The first perspective, the relational perspective of work design, focuses on An approach to job design in which
how people’s tasks and jobs are increasingly based on social relationships. In jobs employees take the initiative to change
today, employees have more interactions and interdependence with coworkers and how their work is performed
others both inside and outside the organization. In doing their job, employees rely
more and more on those around them for information, advice, and assistance. So what high-involvement work practices
does this mean for designing motivating jobs? It means that managers need to look Work practices designed to elicit greater
at important components of those employee relationships such as access to and level input or involvement from workers
of social support in an organization, types of interactions outside an organization,
amount of task interdependence, and interpersonal feedback.

Let’s look at an example of the relational perspective of work design. Have you
ever called a software company’s help line? Isn’t your expectation that the product
expert will provide straightforward answers and step-by-step instructions for address-
ing the problem? Of course, we all do! Microsoft understands customers’ expectations.
Managers help improve the customer service experience by connecting software devel-
opers with customers. In this example, the manager’s goal is to have developers write
software that meets technical specifications and is user friendly.

The second perspective, the proactive perspective of work design, says that
employees are taking the initiative to change how their work is performed. They’re
much more involved in decisions and actions that affect their work. Important job
design factors according to this perspective include autonomy (which is part of the
JCM), amount of ambiguity and accountability, job complexity, level of stressors, and
social or relationship context. Each of these has been shown to influence employee
proactive behavior. For instance, researchers observed cleaners at a hospital took the
initiative to craft their own jobs. According to one of the researchers, “the cleaners had
tons of rooms they had to clean in a very short period of time so they had very little dis-
cretion over the number of tasks they had to get done. . . . [T]o make it more meaning-
ful for themselves, they would do all types of little things to help the patients and their
patients’ families.”51 One stream of research that’s relevant to proactive work design
is high-involvement work practices, which are designed to elicit greater input or
involvement from workers.52 The level of employee proactivity is believed to increase as
employees become more involved in decisions that affect their work. Another term for
this approach, which we discussed earlier in Chapter 10, is employee empowerment.
(You’ll find more information on employee empowerment in Chapter 16.)

Equity Theory

Do you ever wonder what kind of grade the person sitting next to you in class makes on
a test or on a major class assignment? Most of us do! Being human, we tend to compare
ourselves with others. If someone offered you $60,000 a year on your first job after gradu-
ating from college, you’d probably jump at the offer and report to work enthusiastic, ready
to tackle whatever needed to be done, and certainly be satisfied with your pay. How would
you react, though, if you found out a month into the job that a coworker—another recent

600 Part 5 Leading Perceived Ratio Comparison Employee’s Assessment

Exhibit 17-7 Inequity (underrewarded)
Equity
Equity Theory Inequity (overrewarded)

Outcomes A Outcomes B

Inputs A Inputs B

Outcomes A Outcomes B
Inputs A Inputs B

Outcomes A Outcomes B
Inputs A Inputs B

equity theory graduate, your age, with comparable grades from a comparable school, and with compa-
The theory that an employee compares rable work experience—was getting $65,000 a year? You’d probably be upset! Even though
his or her job’s input-outcomes ratio with in absolute terms, $60,000 is a lot of money for a new graduate to make (and you know
that of relevant others and then corrects it!), that suddenly isn’t the issue. Now you see the issue as what you believe is fair—what
any inequity is equitable. The term equity is related to the concept of fairness and equitable treatment
compared with others who behave in similar ways. Evidence indicates that employees com-
referents pare themselves to others and that inequities influence how much effort employees exert.53
The persons, systems, or selves against
which individuals compare themselves to Equity theory, developed by J. Stacey Adams, proposes that employees compare
assess equity what they get from a job (outcomes) in relation to what they put into it (inputs), and then
distributive justice they compare their inputs-outcomes ratio with the inputs-outcomes ratios of relevant
Perceived fairness of the amount and others (Exhibit 17-7). If an employee perceives her ratio to be equitable in comparison
allocation of rewards among individuals to those of relevant others, there’s no problem. However, if the ratio is inequitable, she
procedural justice views herself as underrewarded or overrewarded. When inequities occur, employees
Perceived fairness of the process used attempt to do something about it.54 The result might be lower or higher productivity,
to determine the distribution of rewards improved or reduced quality of output, increased absenteeism, or voluntary resigna-
tion. In some cases, employees reveal pay inequities to the public rather than lowering
FYI their inputs. For instance, actor Robin Wright who stars in the Netflix series House
of Cards did just this. After realizing that her pay was significantly less than her male
• A woman will earn $430,480 costar’s for an equally influential role, Wright demanded higher pay: “You better pay
less than her male counterpart me or I’m going to go public.”55 Her efforts paid off (no pun intended!).
over the course of a 40-year
career.58 The referent—the other persons, systems, or selves individuals compare themselves
against in order to assess equity—is an important variable in equity theory.56 Each of the
three referent categories is important. The “persons” category includes other individuals
with similar jobs in the same organization but also includes friends, neighbors, or pro-
fessional associates. Based on what they hear at work or read about in newspapers or
trade journals, employees compare their pay with that of others. The “system” category
includes organizational pay policies, procedures, and allocation. The “self” category refers
to inputs-outcomes ratios that are unique to the individual. It reflects past personal experi-
ences and contacts and is influenced by criteria such as past jobs or family commitments.

Originally, equity theory focused on distributive justice, the perceived fairness
of the amount and allocation of rewards among individuals. More recent research
has focused on looking at issues of procedural justice, the perceived fairness of
the process used to determine the distribution of rewards. This research shows that
distributive justice has a greater influence on employee satisfaction than procedural
justice, while procedural justice tends to affect an employee’s organizational commit-
ment, trust in his or her boss, and intention to quit.57 What are the implications for
managers? They should consider openly sharing information on how allocation deci-
sions are made, follow consistent and unbiased procedures, and engage in similar prac-
tices to increase the perception of procedural justice. By increasing the perception of
procedural justice, employees are likely to view their bosses and the organization as
positive even if they’re dissatisfied with pay, promotions, and other personal outcomes.

Chapter 17 Motivation 601

WORKPLACE CONFIDENTIAL Feelings of Unfair Pay

For many employees, nothing is likely to act as a demotivator hard do you want to push? In some organizations, the culture
as much as learning that someone in their organization is get- discourages people from comparing salaries or challenging
ting paid more than they are for the same or similar job. De- the pay structure. And be prepared to find that your concern
pending on your equity sensitivity, someday you might find falls on deaf ears. Many managers fear that increasing one
yourself angry and frustrated because you believe you’re not individual’s pay because he or she complained will open up a
being fairly compensated. flood of requests for pay reevaluations.

Let’s start with the fact that we’re not all equally equity If you decide to pursue the issue, you’ll need a strate-
sensitive. Equity sensitivity (ES) is a term that developed out gy. Start by deciding to whom you are going to make your
of equity theory. ES acknowledges that not all individuals are case. Don’t assume your boss has solo discretion to adjust
equivalently sensitive to equity. ES, therefore, is a personal- your pay. Pay structures, especially in large organizations,
ity trait based on an individual’s preferred input-to-outcome are carefully designed and monitored. While your boss may
ratios. For our purposes, we will focus on individuals who have some say in recommending pay increases, the final de-
believe that they are being underrewarded relative to others. cision usually lies with the human resources department. So
If you’re not equity sensitive and you think you’re underpaid, you should consider whether you want to present your case
you might just want to let it go. As we’ll point out, there are to your immediate boss, the human resources manager, or
risks when you try to correct what you perceive as unfair pay. both.
Sometimes the best strategy is to do nothing. Be sure that
you really want to pursue the issue before you act. Timing counts! That is, there are times that are better
for making your case. The natural time is with your perfor-
If you do feel that you’re being paid unfairly, you need to mance evaluation. A strong evaluation strengthens your hand
start by asking yourself: What’s my evidence? A few organiza- in asking for an adjustment, especially if it is backed up with
tions make employee salaries public. But that’s not the norm. evidence suggesting that you’re underpaid. And what kind
Especially for white-collar jobs, organizations typically don’t of evidence makes your case and helps your boss to get ap-
want employees to know what others are making. In fact, in provals from his or her superiors? If you have objective data
some organizations, it’s a stated policy that employees are that indicates that others in your organization or community
not to share salary information with each other. Why do orga- are getting paid more than you are for the same or similar
nizations do this? The obvious answer is that they don’t want job, present the facts. Additionally, elaborate on your contri-
employees making comparisons and expecting management butions. Specifically reference your past accomplishments
to justify every perceived unfairness. and what you expect to contribute in the future. Ideally, you’ll
have concrete evidence to make your case, such as how
The above suggests that you need to do research be- much you brought the organization in sales or how much
fore you want to proclaim that you’re underpaid. While his- you saved through increased productivity. If your job doesn’t
torically it was difficult to get accurate data for comparing lend itself to such facts, support your case with positive com-
salaries, the Internet has changed that. Salary websites such ments on your accomplishments from customers, suppliers,
as Glassdoor and PayScale.com provide comparative data for or work colleagues.
many jobs and in different markets.
We conclude with some things you should not do.
Two questions to consider: What’s your basis for con- (1) Don’t go over your boss’s head—for instance, talking with
cluding you’re underpaid, and is there a logical explanation your human resources manager—without first getting your
why you might be paid less than someone else in the same boss’s approval. No manager wants to feel that you are under-
or similar job? Keep in mind that there are a lot of reasons mining his or her authority. (2) Don’t discuss your compensa-
to justify salary differences—education, skills, length of time tion with coworkers. Pay is a sensitive subject. It’s best not to
with the organization, relevant experience, different perfor- share salary information. Use other sources, besides cowork-
mance ratings, location, and cost of living. There’s a reason, ers, to get comparative data. (3) Don’t make comparisons to
for instance, that two insurance adjusters working for Liberty a specific person in your department or organization. This is
Mutual might be paid differently if one works out of New York not likely to win you support from your boss or colleagues.
City and the other out of Birmingham, Alabama. In the United (4) Don’t go negative. Complaining or making threats rarely
States, gender is not a justification for paying a woman less results in positive outcomes. And saying that you haven’t had
than a man for doing the same job. The Equal Pay Act specifi- a raise in years or that you’re doing twice as much work as
cally prohibits wage disparities based on sex. Also, remem- everyone else is also likely to prove unproductive.
ber that most organizations have salary ranges for specific
jobs and people have different skills in negotiating. Some dif- Sources: Based on E. W. Miles, J. D. Hatfield, and R. C. Husman, “The
ferences in pay may be attributable to initial starting salaries Equity Sensitive Construct: Potential Implications for Worker Performance,”
that were negotiated at different times and under different Journal of Management, December 1989, pp. 581–588; R. Rueff, “Tips
conditions. on How to Approach Suspected Pay Inequity,” Glassdoor blog, March 11,
2009; A. Doyle, “What Can You Do When Your Co-Workers Are Paid More
If you’re convinced your pay is unfair and have the evi- Money?,” Career Tool Belt, June 15, 2015; and “How to Ask for a Raise,”
dence to support your claim, ask yourself how much risk Forbes.com, November 5, 2015.
you’re willing to take. Is it worth pursuing this, and if so, how

602 Part 5 Leading Individual A Individual B Organizational C Individual
Effort Performance Rewards Goals
Exhibit 17-8

Expectancy Model

A = Effort–performance linkage
B = Performance–reward linkage
C = Attractiveness of reward

Just Born candy company—makers of Peeps Expectancy Theory
and Mike and Ike brands—uses expectancy
theory in motivating employees to achieve The most comprehensive explanation of how employees
annual sales goals. Sales team members are motivated is Victor Vroom’s expectancy theory.59
shown here expected their efforts would result Although the theory has its critics,60 most research evidence
in winning an all-expenses-paid trip to Hawaii. supports it.61
But they failed to meet their goal and instead
earned jackets and bomber hats and a trip to Expectancy theory states that an individual tends to act
Fargo, North Dakota. in a certain way based on the expectation that the act will
Source: AP Photo/Ann Arbor Miller be followed by a given outcome and on the attractiveness of
that outcome to the individual. It includes three variables or
relationships (see Exhibit 17-8):

1. Expectancy or effort-performance linkage is the
probability perceived by the individual that exerting
a given amount of effort will lead to a certain level of
performance.

2. Instrumentality or performance-reward linkage is the
degree to which the individual believes that performing at a particular level is
instrumental in attaining the desired outcome.
3. Valence or attractiveness of reward is the importance an individual places on the
potential outcome or reward that can be achieved on the job. Valence considers
both the goals and needs of the individual.

This explanation of motivation might sound complicated, but it really isn’t.
It can be summed up in the questions: How hard do I have to work to achieve a
certain level of performance, and can I actually achieve that level? What reward
will performing at that level of performance get me? How attractive is the reward
to me, and does it help me achieve my own personal goals? Whether you are moti-
vated to put forth effort (that is, to work hard) at any given time depends on your
goals and your perception of whether a certain level of performance is necessary
to attain those goals. Let’s look at an example. Your second author had a stu-
dent many years ago who went to work for IBM as a sales rep. Her favorite work
“reward” was having an IBM corporate jet fly into Springfield, Missouri, to pick
up her best customers and her and take them for a weekend of golfing at some
fun location. But to get that particular “reward,” she had to achieve at a certain
level of performance, which involved exceeding her sales goals by a specified per-
centage. How hard she was willing to work (that is, how motivated she was to put
forth effort) was dependent on the level of performance that had to be met and the
likelihood that if she achieved at that level of performance she would receive that
reward. Because she valued that reward, she always worked hard to exceed her sales
goals. And the performance-reward linkage was clear because her hard work and
performance achievements were always rewarded by the company with the reward
she valued (access to the corporate jet).

Chapter 17 Motivation 603

The key to expectancy theory is understanding an individual’s goal and the link- expectancy theory
age between effort and performance, between performance and rewards, and finally, The theory that an individual tends
between rewards and individual goal satisfaction. It emphasizes payoffs, or rewards. to act in a certain way based on the
As a result, we have to believe that the rewards an organization is offering align with expectation that the act will be followed
what the individual wants. Expectancy theory recognizes that no universal principle by a given outcome and on the
explains what motivates individuals and thus stresses that managers understand why attractiveness of that outcome to the
employees view certain outcomes as attractive or unattractive. After all, we want to individual
reward individuals with those things they value positively. Also, expectancy theory
emphasizes expected behaviors. Do employees know what is expected of them and
how they’ll be evaluated? Finally, the theory is concerned with perceptions. Reality
is irrelevant. An individual’s own perceptions of performance, reward, and goal out-
comes—not the outcomes themselves—will determine his or her motivation (level of
effort).

Integrating Contemporary Theories of Motivation

Many of the ideas underlying the contemporary motivation theories are complemen-
tary, and you’ll understand better how to motivate people if you see how the theories
fit together.62 Exhibit 17-9 presents a model that integrates much of what we know
about motivation. Its basic foundation is the expectancy model. Let’s work through
the model, starting on the left.

The individual effort box has an arrow leading into it. This arrow flows from the
individual’s goals. Consistent with goal-setting theory, this goals-effort link is meant

Exhibit 17-9

High Integrating Contemporary Theories
nAch of Motivation

Performance Equity
Evaluation Comparison
Criteria OA OB
IA : IB

Ability Job Job
Design Design

Individual Individual Organizational Individual
Effort Performance Rewards Goals

Objective Dominant
Performance Needs

Evaluation
System

Reinforcement

Goals
Direct
Behavior

604 Part 5 Leading

to illustrate that goals direct behavior. Expectancy theory predicts that an employee
will exert a high level of effort if he or she perceives a strong relationship between
effort and performance, performance and rewards, and rewards and satisfaction of
personal goals. Each of these relationships is in turn influenced by certain factors.
You can see from the model that the level of individual performance is determined not
only by the level of individual effort but also by the individual’s ability to perform and
by whether the organization has a fair and objective performance evaluation system.
The performance-reward relationship will be strong if the individual perceives that
performance (rather than seniority, personal favorites, or some other criterion) is what
is rewarded. The final link in expectancy theory is the rewards-goal relationship. The
traditional need theories come into play at this point. Motivation would be high to the
degree that the rewards an individual received for his or her high performance satisfied
the dominant needs consistent with his or her individual goals.

A closer look at the model also shows that it considers the achievement-need,
reinforcement, equity, and JCM theories. The high achiever isn’t motivated by the
organization’s assessment of his or her performance or organizational rewards; hence
the jump from effort to individual goals for those with a high nAch. Remember that
high achievers are internally driven as long as the jobs they’re doing provide them with
personal responsibility, feedback, and moderate risks. They’re not concerned with the
effort-performance, performance-reward, or rewards-goals linkages.

Reinforcement theory is seen in the model by recognizing that the organization’s
rewards reinforce the individual’s performance. If managers have designed a reward
system that is seen by employees as “paying off ” for good performance, the rewards
will reinforce and encourage continued good performance. Rewards also play a key
part in equity theory. Individuals will compare the rewards (outcomes) they have
received from the inputs or efforts they made with the inputs-outcomes ratio of rel-
evant others. If inequities exist, the effort expended may be influenced.

Finally, the JCM is seen in this integrative model. Task characteristics (job design)
influence job motivation at two places. First, jobs designed around the five job dimen-
sions are likely to lead to higher actual job performance because the individual’s moti-
vation will be stimulated by the job itself; that is, they will increase the linkage between
effort and performance. Second, jobs designed around the five job dimensions also
increase an employee’s control over key elements in his or her work. Therefore, jobs
that offer autonomy, feedback, and similar task characteristics help to satisfy the indi-
vidual goals of employees who desire greater control over their work.

REALlegte’st
The Scenario:

Sam Grisham is the plant manager at a Source: Oscar Valencia
bathroom vanity manufacturer. When
business is brisk, employees have to work
overtime to meet customers’ demands.
Aside from a few people, he has a horrible
time getting employees to work overtime. “I
practically have to beg for volunteers.”

What suggestions do you have for Sam?

As plant manager, I would rotate the Oscar Valencia
overtime for all employees. During busy
times, everyone must chip in. I would also Manufacturing Manager

suggest implementing mandatory overtime for employees according to
seniority in order to keep it fair.

Chapter 17 Motivation 605

If your professor has assigned this, go to www.mymanagementlab.com to complete the Try It!
Simulation: Motivation and get a better understanding of the challenges of knowing
how to motivate employees.

CURRENT issues in motivation

LO17.4 For its 150th anniversary, the German chemical giant BASF created a
year-long employee motivational program called “Connected to Care,”
combining social responsibility with teamwork and a bit of friendly competition. Each
employee had the opportunity to form a volunteer team with coworkers and jointly
propose a social responsibility project focusing on one of BASF’s key areas of focus:
food, urban living, or smart energy. More than 35,000 employees participated in teams,
submitting hundreds of ideas for projects to improve BASF communities worldwide.
After an organization-wide vote, BASF donated money to implement the 150 projects
that received the most votes—adding to the motivation of the winning teams.63
Understanding and predicting employee motivation is one of the most popular areas
in management research. We’ve introduced you to several motivation theories. However,
even the contemporary theories of employee motivation are influenced by some signifi-
cant workplace issues—managing cross-cultural challenges, motivating unique groups
of workers, and designing appropriate rewards programs.

Managing Cross-Cultural Motivational The motivation of these employees working
Challenges at the research and development facility
at the Daihatsu Motor plant near Jakarta,
Scores of employees at Denmark’s largest brewer, Carlsberg Indonesia, is influenced by their national
A/S, walked off their jobs in protest after the company tight- culture. Indonesia has a strong collectivist
ened rules on workplace drinking and removed beer coolers culture, where employees are motivated less
from work sites.64 Now that’s a motivational challenge you don’t by receiving individual praise because their
often see in U.S. workplaces! culture places a greater emphasis on harmony,
belonging, and consensus.
In today’s global business environment, managers can’t Source: Kyodo/Newscom
automatically assume motivational programs that work in one
geographic location are going to work in others. Most cur-
rent motivation theories were developed in the United States
by Americans and about Americans.65 Maybe the most blatant
pro-American characteristic in these theories is the strong emphasis on individualism
and achievement. For instance, both goal-setting and expectancy theories emphasize
goal accomplishment as well as rational and individual thought. Let’s look at the moti-
vation theories to see their level of cross-cultural transferability.

Maslow’s needs hierarchy argues that people start at the physiological level and then
move progressively up the hierarchy in order. This hierarchy, if it has any application at
all, aligns with American culture. In countries like Japan, Greece, and Mexico, where
uncertainty avoidance characteristics are strong, security needs would be the founda-
tional layer of the needs hierarchy. Countries that score high on nurturing character-
istics—Denmark, Sweden, Norway, the Netherlands, and Finland—would have social
needs as their foundational level.66 We would predict, for instance, that group work will
be more motivating when the country’s culture scores high on the nurturing criterion.

Another motivation concept that clearly has an American bias is the achievement
need. The view that a high achievement need acts as an internal motivator presupposes
two cultural characteristics—a willingness to accept a moderate degree of risk (which
excludes countries with strong uncertainty avoidance characteristics) and a concern
with performance (which applies almost singularly to countries with strong achieve-
ment characteristics). This combination is found in countries such as the United
States, Canada, and Great Britain.67 On the other hand, these characteristics are rela-
tively absent in countries such as Chile and Portugal.

606 Part 5 Leading

Equity theory has a relatively strong following in the United States, which is not
surprising given that U.S.-style reward systems are based on the assumption that
workers are highly sensitive to equity in reward allocations. In the United States,
equity is meant to closely link pay to performance. However, recent evidence suggests
that in collectivist cultures, especially in the former socialist countries of Central and
Eastern Europe, employees expect rewards to reflect their individual needs as well as
their performance.68 Moreover, consistent with a legacy of communism and centrally
planned economies, employees exhibited a greater “entitlement” attitude—that is, they
expected outcomes to be greater than their inputs.69 These findings suggest that U.S.-
style pay practices may need to be modified in some countries in order to be perceived
as fair by employees.

Another research study of more than 50,000 employees around the world exam-
ined two cultural characteristics from the GLOBE framework—individualism and
masculinity—(see Chapter 3 for a discussion of these characteristics) in relation to
motivation.70 The researchers found that in individualistic cultures such as the United
States and Canada, individual initiative, individual freedom, and individual achieve-
ment are highly valued. In more collective cultures such as Iran, Peru, and China,
however, employees may be less interested in receiving individual praise but place a
greater emphasis on harmony, belonging, and consensus. They also found that in mas-
culine (achievement/assertive) cultures such as Japan and Slovakia, the focus is on
material success. Those work environments are designed to push employees hard and
then reward top performers with high earnings. However, in more feminine (nurturing)
cultures such as Sweden and the Netherlands, smaller wage gaps among employees are
common, and employees are likely to have extensive quality-of-life benefits.

Despite these cross-cultural differences in motivation, some cross-cultural consis-
tencies are evident. In a recent study of employees in 13 countries, the top motivators
included (ranked from number one on down) being treated with respect, work-life
balance, the type of work done, the quality of people worked with and the quality
of the organization’s leadership (tied), base pay, working in an environment where
good service can be provided to others, long-term career potential, flexible working
arrangements, learning and development opportunities and benefits (tied), promotion
opportunities, and incentive pay or bonus.71 And other studies have shown that the
desire for interesting work seems important to almost all workers, regardless of their
national culture. For instance, employees in Belgium, Britain, Israel, and the United
States ranked “interesting work” number one among 11 work goals. It was ranked
either second or third in Japan, the Netherlands, and Germany.72 Similarly, in a study
comparing job-preference outcomes among graduate students in the United States,
Canada, Australia, and Singapore, growth, achievement, and responsibility were rated
the top three and had identical rankings.73 Both studies suggest some universality to
the importance of intrinsic factors identified by Herzberg in his two-factor theory.
Another recent study examining workplace motivation trends in Japan also seems to
indicate that Herzberg’s model is applicable to Japanese employees.74

Motivating Unique Groups of Workers

At Deloitte, employees are allowed to “dial up” or “dial down” their job responsibili-
ties to fit their personal and professional goals.75 The company’s program called Mass
Career Customization has been a huge hit with its employees! In the first 12 months
after it was rolled out, employee satisfaction with “overall career/life fit” rose by 25 per-
cent. Also, the number of high-performing employees staying with Deloitte increased.

Motivating employees has never been easy! Employees come into organizations with
different needs, personalities, skills, abilities, interests, and aptitudes. They have different
expectations of their employers and different views of what they think their employer has
a right to expect of them. And they vary widely in what they want from their jobs. For
instance, some employees get more satisfaction out of their personal interests and pur-
suits and only want a weekly paycheck—nothing more. They’re not interested in making
their work more challenging or interesting or in “winning” performance contests. Others

derive a great deal of satisfaction in their jobs and are motivated to exert high levels of Chapter 17 Motivation 607
effort. Given these differences, how can managers do an effective job of motivating the
unique groups of employees found in today’s workforce? One thing is to understand the It’s Your Career
motivational requirements of these groups, including diverse employees, professionals,
contingent workers, and low-skilled minimum-wage employees.
MOTIVATING A DIVERSE WORKFORCE To maximize motivation among today’s
workforce, managers need to think in terms of flexibility. For instance, studies tell us that
men place more importance on having autonomy in their jobs than women. In contrast,
the opportunity to learn, convenient and flexible work hours, and good interpersonal
relations are more important to women.76 Having the opportunity to be independent
and to be exposed to different experiences is important to Gen Y employees, whereas
older workers may be more interested in highly structured work opportunities.77 Manag-
ers need to recognize that what motivates a single mother with two dependent children
who’s working full time to support her family may be very different from the needs of
a single part-time employee or an older employee who is working only to supplement
his or her retirement income. A diverse array of rewards is needed to motivate employ-
ees with such diverse needs. For instance, many organizations have developed flexible
work arrangements—such as compressed workweeks, flextime, and job sharing, which
we discussed in Chapter 11—that recognize different needs. Another job alternative we
also discussed earlier is telecommuting. However, keep in mind that not all employees
embrace the idea of telecommuting. Some workers relish the informal interactions at
work that satisfy their social needs and are a source of new ideas.

Do flexible work arrangements motivate employees? Although such arrangements
might seem highly motivational, both positive and negative relationships have been
found. For instance, a recent study that looked at the impact of telecommuting on job
satisfaction found that job satisfaction initially increased as the extent of telecommut-
ing increased, but as the number of hours spent telecommuting increased, job satisfac-
tion started to level off, decreased slightly, and then stabilized.78
Self-Motivation—If your instructor is using Pearson MyLab Management, log onto
mymanagementlab.com and test your self-motivation knowledge. Be sure to refer back
to the chapter opener!

F U T U R E V I S I O N Individualized Rewards

Organizations have historically assumed that “one size club memberships, and work-from-home options. In
the future, most organizations will structure individual
fits all” when it comes to allocating rewards. Managers reward packages in ways that will maximize employee
typically assumed that everyone wants more money motivation.
and more vacation time. But as organizations become
less bureaucratic and more capable of differentiating If your professor has chosen to assign this, go to
rewards, managers will be encouraged to differentiate www.mymanagementlab.com to discuss the follow-
rewards among employees as well as for individual em- ing questions.
ployees over time.
TALK ABOUT IT 1: What are the positive aspects
Organizations control a vast number of potential of having individualized rewards? (Think in terms of em-
rewards that employees might find appealing. A par- ployees and managers.)
tial list would include increased base pay, bonuses,
shortened workweeks, extended vacations, paid sab- TALK ABOUT IT 2: What are the negative aspects
baticals, flexible work hours, part-time employment, of having individualized rewards? (Again, think in terms
guaranteed job security, increased pension contribu- of employees and managers.)
tions, college tuition reimbursement, personal days off,
help in purchasing a home, recognition awards, paid

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Managers of home rental website Airbnb MOTIVATING PROFESSIONALS In contrast to a gen-
motivate the firm’s young employees at its eration ago, the typical employee today is more likely to be a
San Francisco headquarters with an open and professional with a college degree than a blue-collar factory
collaborative work environment that promotes worker. What special concerns should managers be aware of
teamwork and a sense of community and when trying to motivate a team of engineers at Intel’s India De-
stimulates innovation. Employees have the velopment Center, software designers at SAS Institute in North
freedom to work where they want and enjoy Carolina, or a group of consultants at Accenture in Singapore?
amenities such as a cafeteria, nap room,
library, yoga classes, organic lunches, and Professionals are different from nonprofessionals.79 They
$2,000 each year for personal travel. have a strong and long-term commitment to their field of
Source: Airbnb, San Francisco. USA. Inte/ expertise. To keep current in their field, they need to regularly
ZUMA Press/Newscom update their knowledge, and because of their commitment to
their profession, they rarely define their workweek as 8 a.m.
to 5 p.m., five days a week.

What motivates professionals? Money and promotions
typically are low on their priority list. Why? They tend to be
well paid and enjoy what they do. In contrast, job challenge tends to be ranked high.
They like to tackle problems and find solutions. Their chief reward is the work itself.
Professionals also value support. They want others to think that what they are work-
ing on is important. That may be true for all employees, but professionals tend to be
focused on their work as their central life interest, whereas nonprofessionals typically
have other interests outside of work that can compensate for needs not met on the job.
MOTIVATING CONTINGENT WORKERS We discussed in Chapter 11 the increased
number of contingent workers employed by organizations. There’s no simple solution
for motivating these employees. For that small set of individuals who prefer the freedom
of their temporary status, the lack of stability may not be an issue. In addition, tempo-
rariness might be preferred by highly compensated physicians, engineers, accountants, or
financial planners who don’t want the demands of a full-time job. But these individuals
are the exceptions. For the most part, temporary employees are not temporary by choice.
What will motivate involuntarily temporary employees? An obvious answer is the
opportunity to become a permanent employee. In cases in which permanent employees
are selected from a pool of temps, the temps will often work hard in hopes of becom-
ing permanent. A less obvious answer is the opportunity for training. The ability of a
temporary employee to find a new job is largely dependent on his or her skills. If an
employee sees that the job he or she is doing can help develop marketable skills, then
motivation is increased. From an equity standpoint, when temps work alongside per-
manent employees who earn more and get benefits too for doing the same job, the per-
formance of temps is likely to suffer. Separating such employees or perhaps minimizing
interdependence between them might help managers counteract potential problems.80
How do these issues influence contingent workers’ job satisfaction? Research shows
that differences in job satisfaction between contingent and permanent workers is not
significant until we consider the particular contingent work arrangements—temporary
employee versus independent contractor.81 Temporary workers are less satisfied than
permanent workers. This difference may be explained by the fact that most temporary
employees do not receive benefits such as paid vacation and are paid lower wages than
earned by comparably skilled permanent workers. In contrast, independent contrac-
tors are about as equally satisfied as permanent workers. This may be the case because
organizations are more likely to recognize the importance of independent contractors’
contributions because they’re mostly highly skilled individuals. For instance, manage-
ment consultants are well educated and have a proven track record of success.
MOTIVATING LOW-SKILLED, MINIMUM-WAGE EMPLOYEES Suppose in
your first managerial position after graduating, you’re responsible for managing a
work group of low-skilled, minimum-wage employees. Offering more pay to these
employees for high levels of performance is out of the question: Your company just
can’t afford it. In addition, these employees have limited education and skills. What are
your motivational options at this point?

Chapter 17 Motivation 609

One trap we often fall into is thinking that people are motivated only by money.
Although money is important as a motivator, it’s not the only reward that people seek
and that managers can use. In motivating minimum-wage employees, managers might
look at employee recognition programs. Many managers also recognize the power of
praise, although these “pats on the back” must be sincere and given for the right rea-
sons. Inventive managers can come up with creative awards that match employees’
interests. For instance, one trucking company awarded cases of beer to truck loaders
who demonstrated good performance.82

Designing Appropriate Rewards Programs

As the Group Company approached its tenth anniversary of success in the travel
business, founder Helen Bilton wanted to reward her workforce for outstanding per-
formance. Rather than plan a huge party, she arranged for all 32 employees to visit
Barbados on a luxurious, all-expenses-paid three-day holiday. Rewards like this play a
powerful role in motivating employee behavior.83

OPEN-BOOK MANAGEMENT Within 24 hours after managers of the Heavy Duty open-book management
Division of Springfield Remanufacturing Company (SRC) gather to discuss a multi- A motivational approach in which an
page financial document, every plant employee will have seen the same information. organization’s financial statements (the
If the employees can meet shipment goals, they’ll all share in a large year-end bonus.84 “books”) are shared with all employees
Many organizations of various sizes involve their employees in workplace decisions
by opening up the financial statements (the “books”). They share that information
so employees will be motivated to make better decisions about their work and better
able to understand the implications of what they do, how they do it, and the ultimate
impact on the bottom line. In many cases, employees begin to think like owners rather
than hired hands.85 This approach is called open-book management, and a number
of organizations are using it.86 For instance, at A Yard & a Half Landscaping, founder
Eileen Michaels holds monthly meetings to share the firm’s profit and loss statement
line by line with her employees. Employees then use this information to assess how to
cut expenses and get work done more efficiently.87

The goal of open-book management is to get employees to think like an owner
by seeing the impact their decisions have on financial results. Since many employees
don’t have the knowledge or background to understand the financials, they have to
be taught how to read and understand the organization’s financial statements. Once
employees have this knowledge, however, managers need to regularly share the num-
bers with them. By sharing this information, employees begin to see the link between
their efforts, level of performance, and operational results.

EMPLOYEE RECOGNITION PROGRAMS Employee recognition programs employee recognition programs
consist of personal attention and expressing interest, approval, and appreciation for a Personal attention and expressing
job well done.88 They can take numerous forms. For instance, Kelly Services introduced interest, approval, and appreciation for a
a new version of its points-based incentive system to better promote productivity and job well done
retention among its employees. The program, called Kelly Kudos, gives employees more
choices of awards and allows them to accumulate points over a longer time period. It’s
working. Participants generate three times more revenue and hours than employees not
receiving points.89 Nichols Foods, a British manufacturer, has a comprehensive recogni-
tion program. The main hallway in the production department is hung with “bragging
boards” on which the accomplishments of employee teams are noted. Monthly awards
are presented to people who have been nominated by peers for extraordinary effort on
the job. And monthly award winners are eligible for further recognition at an off-site
meeting for all employees.90 At Wayfair.com, a seller of home furnishings, a recognition
wall provides space where anyone in the company can write about anyone else in the
company and give that person rewards dollars. It’s used to recognize people for some-
thing they did for a customer or some other accomplishment.91 Most managers, however,
use a far more informal approach. For example, Marks & Spencer encourages spontane-
ous posts recognizing the extra efforts of employees and peers on the U.K. department

610 Part 5 Leading

FYI store’s internal social network. Every month, the store posts an award for employee of
the month, chosen from peer nominations. In Singapore, managers at the e-commerce
Companies that have at least one firm ShopBack sometimes open a bottle of Champagne during informal celebrations of
recognition program do the follow- employee accomplishments such as clearing all outstanding customer service inquiries.
ing: At other times, managers surprise high-performing employee teams with free zoo tick-
ets. ShopBack’s human resources manager explains the reasoning behind this approach:
• 87 percent of companies “Cash rewards connote a transactional relationship, while non-cash rewards are power-
recognize length of service. ful in building team relationships.” The restaurant chain PizzaExpress Singapore has a
“golden ticket” reward system, with tickets representing travel or shopping vouchers.
• 76 percent of companies When senior managers make unscheduled visits to the restaurants, they give away golden
recognize above-and-beyond tickets to employees who have performed exceptionally well. “Our employees are what
performance. make the brand so successful, and we want to give back in more personal ways,” says the
general manager. Employee recognition is very important, but so is a tangible follow-up
• 51 percent of companies reward, he states: “More often than not, an actual gift means more than words.”92
recognize specific behavior.
A recent survey of organizations found that 89 percent had some type of program
• 48 percent of companies use to recognize worker achievements.93 Another survey found that 12 percent of employees
peer-to-peer recognition. say they receive frequent appreciation for a job well done; 7 percent of employees say
their company is excellent at showing appreciation for great work.94 And do employees
• 34 percent of companies think these programs are important? You bet! In a survey conducted a few years ago, a
recognize retirement.96 wide range of employees was asked what they considered the most powerful workplace
motivator. Their response? Recognition, recognition, and more recognition!95

Consistent with reinforcement theory, rewarding a behavior with recognition imme-
diately following that behavior is likely to encourage its repetition. And recognition can
take many forms. You can personally congratulate an employee in private for a good job.
You can send a handwritten note or e-mail message acknowledging something positive
that the employee has done. For employees with a strong need for social acceptance, you
can publicly recognize accomplishments. To enhance group cohesiveness and motiva-
tion, you can celebrate team successes. For instance, you can do something as simple
as throw a pizza party to celebrate a team’s accomplishments. During the economic
recession, managers got quite creative in how they showed employees they were appreci-
ated.97 For instance, employees at one company got to take home fresh vegetables from
the company vegetable garden. In others, managers treated employees who really put
forth efforts on a project to a special meal or movie tickets. Also, managers can show
employees that no matter their role, their contributions matter. Some of these things
may seem simple, but they can go a long way in showing employees they’re valued.

Watch It 2! If your professor has assigned this, go to www.mymanagementlab.com to watch a video
titled: Joie de Vivre Hospitality: Employee Motivation and to respond to questions.

pay-for-performance programs PAY-FOR-PERFORMANCE Here’s a survey statistic that may surprise you: 40 per-
Variable compensation plans that cent of employees see no clear link between performance and pay.98 So what are the
pay employees on the basis of some companies where these employees work paying for? They’re obviously not clearly com-
performance measure municating performance expectations.99 Pay-for-performance programs are variable
compensation plans that pay employees on the basis of some performance measure.100
Piece-rate pay plans, wage incentive plans, profit-sharing, and lump-sum bonuses are
examples. What differentiates these forms of pay from more traditional compensation
plans is that instead of paying a person for time on the job, pay is adjusted to reflect
some performance measure. These performance measures might include such things
as individual productivity, team or work group productivity, departmental productiv-
ity, or the overall organization’s profit performance.

Pay-for-performance is probably most compatible with expectancy theory. Individ-
uals should perceive a strong relationship between their performance and the rewards
they receive for motivation to be maximized. If rewards are allocated only on nonperfor-
mance factors—such as seniority, job title, or across-the-board pay raises—then employ-
ees are likely to reduce their efforts. From a motivation perspective, making some or

Chapter 17 Motivation 611

REALlegte’st
The Scenario:

The associates at Footwear Unlimited are
paid minimum wage, but can increase
their pay with commissions on sales that
they ring up. As a result, the associates
work hard to greet customers and help Source: Matt O’Rourke
them find the right shoe sizes. However,
Christy Jefferson, the store manager, is
concerned that the current commission
plan discourages employees from working
as a team. She has noticed that some
associates won’t help others since only
Matt O’Rourke
one associate will receive the commission Supply Chain Engineer
for a sale. Further, associates seem to be
ignoring some duties around the store such as straightening displays.

Should Christy consider a different approach to pay-for-performance?

Don’t accept an environment that discourages teamwork; strong
teams are a key factor in achieving business results. Rather than
reward individual sales, Christy should consider modifying the pay-for-
performance plan to incorporate team goals. A bonus could be paid to
the team for achieving critical results such as total number of sales for a
period of time or a non-monetary reward for straightening up the store.
A strong team and company culture is worth the change in approach.

all of an employee’s pay conditional on some performance measure focuses his or her
attention and effort toward that measure, then reinforces the continuation of the effort
with a reward. If the employee’s team’s or organization’s performance declines, so does
the reward. Thus, there’s an incentive to keep efforts and motivation strong.

Pay-for-performance programs are popular. Some 94 percent of employers have
some form of variable pay plan.101 Common pay-for-performance plans reward employ-
ees for project completion or company profits. These types of pay plans have also been
tried in other countries, such as Canada and Japan. About 30 percent of Canadian
companies and 22 percent of Japanese companies have company-wide pay-for-perfor-
mance plans.102 In Japan, most companies reward employees based on age, but many
companies are rethinking this practice. For instance, Toyota is considering replacing
its seniority-based wage system with a performance-based system. The traditional
approach has resulted in pay gaps between younger and older employees, making it
difficult to attract younger talent.103 Performance-based pay also fits with Toyota’s mis-
sion of efficiency and constant improvement of the quality of its automobiles. Other
Japanese companies including Hitachi, Panasonic, and Sony are following suit.104

Do pay-for-performance programs work? The jury is still out. For the most part,
studies seem to indicate that they do. For instance, one study found companies that
used pay-for-performance programs performed better financially than those that did
not.105 Another study showed pay-for-performance programs with outcome-based
incentives had a positive impact on sales, customer satisfaction, and profits.106 In orga-
nizations that use work teams, managers should consider group-based performance
incentives that will reinforce team effort and commitment. However, others say that
linking pay to performance doesn’t work.107 So if a business decides it wants to use
pay-for-performance programs, managers need to ensure they’re specific about the
relationship between an individual’s pay and his or her expected level of appropriate
performance. Employees must clearly understand exactly how performance—theirs
and the organization’s—translates into dollars on their paychecks.108

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Chapter 17

CHAPTER SUMMARY by Learning Objectives

LO17.1 DEFINE motivation.
LO17.2
Motivation is the process by which a person’s efforts are energized, directed, and sus-
LO17.3 tained toward attaining a goal.

The energy element is a measure of intensity, drive, or vigor. The high level of
effort needs to be directed in ways that help the organization achieve its goals. Employ-
ees must persist in putting forth effort to achieve those goals.

COMPARE and contrast early theories of motivation.

In Maslow’s hierarchy, individuals move up the hierarchy of five needs (physiologi-
cal, safety, social, esteem, and self-actualization) as needs are substantially satisfied. A
need that’s substantially satisfied no longer motivates.

A Theory X manager believes people don’t like to work or won’t seek out respon-
sibility so they have to be threatened and coerced to work. A Theory Y manager
assumes people like to work and seek out responsibility, so they will exercise self-
motivation and self-direction.

Herzberg’s theory proposed that intrinsic factors associated with job satisfaction
were what motivated people. Extrinsic factors associated with job dissatisfaction sim-
ply kept people from being dissatisfied.

Three-needs theory proposed three acquired needs that are major motives in
work: need for achievement, need for affiliation, and need for power.

COMPARE and contrast contemporary theories of motivation.

Goal-setting theory says that specific goals increase performance, and difficult goals,
when accepted, result in higher performance than easy goals. Important points in
goal-setting theory include intention to work toward a goal as a major source of job
motivation; specific hard goals that produce higher levels of output than generalized
goals; participation in setting goals as preferable to assigning goals, but not always;
feedback that guides and motivates behavior, especially self-generated feedback; and
contingencies that affect goal setting—goal commitment, self-efficacy, and national
culture. Reinforcement theory says that behavior is a function of its consequences. To
motivate, use positive reinforcers to reinforce desirable behaviors. Ignore undesirable
behavior rather than punishing it.

Job enlargement involves horizontally expanding job scope by adding more tasks
or increasing how many times the tasks are done. Job enrichment vertically expands
job depth by giving employees more control over their work. The job characteris-
tics model says five core job dimensions (skill variety, task identity, task significance,
autonomy, and feedback) are used to design motivating jobs. Another job design
approach proposed looking at relational aspects and proactive aspects of jobs.

Equity theory focuses on how employees compare their inputs-outcomes ratios to
relevant others’ ratios. A perception of inequity will cause an employee to do some-
thing about it. Procedural justice has a greater influence on employee satisfaction than
distributive justice.

Expectancy theory says an individual tends to act in a certain way based on the
expectation that the act will be followed by a desired outcome. Expectancy is the
effort-performance linkage (how much effort do I need to exert to achieve a certain
level of performance?); instrumentality is the performance-reward linkage (achieving
at a certain level of performance will get me a specific reward); and valence is the
attractiveness of the reward (is it the reward that I want?).

Chapter 17 Motivation 613

LO17.4 DISCUSS current issues in motivation.

Managers must cope with three current motivation issues: managing cross-cultural
challenges, motivating unique groups of workers, and designing appropriate rewards
programs.

Most motivational theories were developed in the United States and have a North
American bias. Some theories (Maslow’s needs hierarchy, achievement need, and
equity theory) don’t work well for other cultures. However, the desire for interesting
work seems important to all workers, and Herzberg’s motivator (intrinsic) factors may
be universal.

Managers face challenges in motivating unique groups of workers. A diverse
workforce is looking for flexibility. Professionals want job challenge and support and
are motivated by the work itself. Contingent workers want the opportunity to become
permanent or to receive skills training. Recognition programs and sincere appreciation
for work done can be used to motivate low-skilled, minimum-wage workers.

Open-book management is when financial statements (the books) are shared with
employees who have been taught what they mean. Employee recognition programs
consist of personal attention, approval, and appreciation for a job well done. Pay-for-
performance programs are variable compensation plans that pay employees on the
basis of some performance measure.

Pearson MyLab Management

Go to mymanagementlab.com to complete the problems marked with
this icon .

REVIEW AND DISCUSSION QUESTIONS

17-1. What is motivation? Explain the three key elements 17-5. Briefly explain equity theory and what happens if
of motivation. there are iniquities at work.

17-2. Describe each of the four early theories of 17-6. What do you understand by the term open-book
motivation. management? Is it effective?

17-3. How do goal-setting, reinforcement, and equity 17-7. Identify examples of pay-for-performance programs
theories explain employee motivation? used by some organizations.

17-4. What are the different job design approaches to 17-8. Can an individual be too motivated? Discuss.
motivation?

Pearson MyLab Management

If your professor has assigned these, go to mymanagementlab.com for the
following Assisted-graded writing questions:

17-9. What economic and cross-cultural challenges do managers face when moti-
vating employees?

17-10. Explain, in the context of a diverse and flexible workforce, why managers
need to use a range of different motivational approaches. Identify some
distinct groups and how they can be motivated.

614 Part 5 Leading

PREPARING FOR: My Career

PERSONAL INVENTORY ASSESSMENTS P I A PERSONAL
INVENTORY
ASSESSMENT

Work Motivation Indicator

How motivated are you? Use this PIA to assess your own level of work motivation.

ETHICS DILEMMA

Advocates of open-book management point to the have access to company financial details but also to staff
advantages of getting employees to think like owners and performance reviews and individual pay information.109
to be motivated to make better decisions about how they 17-11. What do you think? What are the pros and cons of
do their work once they see how their decisions impact
financial results. However, is there such a thing as “too such an approach?
much openness?” At some companies, employees not only 17-12. What potential ethical issues do you see here? How

might managers address these ethical issues?

SKILLS EXERCISE Developing Your Motivating Employees Skill

About the Skill and the opportunity to participate in goal setting and
Because a simple, all-encompassing set of motivational decision making.
guidelines is not available, the following suggestions draw • Link rewards to performance. You need to make rewards
on the essence of what we know about motivating employees.
contingent on performance. Rewarding factors other
Steps in Practicing the Skill than performance will only reinforce the importance of
• Recognize individual differences. Almost every those other factors. Key rewards such as pay increases
and promotions should be given for the attainment of
contemporary motivation theory recognizes that employees’ specific goals.
employees are not homogeneous. They have different
needs. They also differ in terms of attitudes, personality, • Check the system for equity. Employees should perceive
and other important individual variables. that rewards or outcomes are equal to the inputs given.
• Match people to jobs. A great deal of evidence shows On a simplistic level, experience, ability, effort, and
other obvious inputs should explain differences in pay,
the motivational benefits of carefully matching people responsibility, and other obvious outcomes.
to jobs. People who lack the necessary skills to perform
successfully will be at a disadvantage. • Don’t ignore money. It’s easy to get so caught up in
• Use goals. You should ensure that employees have hard, setting goals, creating interesting jobs, and providing
opportunities for participation that you forget that money
specific goals and feedback on how well they’re doing in is a major reason why most people work. Thus, the
pursuit of those goals. In many cases, these goals should allocation of performance-based wage increases, piece-
be participatively set. work bonuses, employee stock ownership plans, and other
pay incentives are important in determining employee
• Ensure goals are perceived as attainable. Regardless of motivation.
Practicing the Skill
whether goals are actually attainable, employees who see Create a motivational plan for each of the groups of
goals as unattainable will reduce their effort. Be sure, employees listed below. Include ideas on what kinds of
therefore, that employees feel confident that increased rewards or incentives would be appropriate for each group.
efforts can lead to achieving performance goals. a. Fast-food workers
b. Software development engineers
• Individualize rewards. Because employees have different c. High school teachers
d. Construction site workers
needs, what acts as a reinforcer for one may not do
so for another. Use your knowledge of employee
differences to individualize the rewards over which you
have control. Some of the more obvious rewards that
you can allocate include pay, promotions, autonomy,

Chapter 17 Motivation 615

WORKING TOGETHER Team Exercise

How can you motivate low income workers? In groups motivators and create a list. Be prepared to share your
of three or four, consider how you might motivate ideas with the class. Have you all come up with the same
professionals. Identify some common themes of effective suggestions?

MY TURN TO BE A MANAGER

• A good habit to get into if you don’t already do it is goal- associate, utility company meter reader, and checkout
setting. Set goals for yourself using the suggestions from cashier at a discount store. In a written report, describe
goal-setting theory. Write these down and keep them in for each job at least two specific actions you would take
a notebook. Track your progress toward achieving these for each of the five core job dimensions.
goals. • Do some serious thinking about what you want from your

• Describe a task you’ve done recently for which you job after graduation. Using the chapter-opening It’s Your
exerted a high level of effort. Explain your behavior, using Career, make a list of what’s important to you. Think
any three of the motivation approaches described in this about how you will discover whether a particular job will
chapter. help you get those things.
• Pay attention to times when you’re highly motivated • Find three different examples of employee recognition
and times when you’re not as motivated. Write down a programs from organizations with which you’re familiar
description of these. What accounts for the difference in or from articles that you find. Write a report describing
your level of motivation? your examples and evaluating what you think about the
• Interview three managers about how they motivate their various approaches.

employees. What have they found that works the best? • Have you ever participated in a pay-for-performance
Write up your findings in a report and be prepared to program? If not, ask your friends and find someone who
present it in class. has participated in such a program. Consider your or your
• Using the job characteristics model, redesign the friend’s program. Was it effective in motivating employees?
Why or why not? How could the program be improved?
following jobs to be more motivating: retail store sales

616 Part 5 Leading

1CASE APPLICATION Hong Kong Disneyland: HR
Programs to Motivate
Employees

Providing a magical experience for every guest (customer), Disney, with all its hotels
and parks, is a global leader in the theme-park and service industry. The company’s
performance depends on a motivated workforce. The HR Training plays a pivotal role
in keeping cast (staff) members motivated.

In 2005, Hong Kong Disneyland (HKDL) opened its doors to the public. Since
then, the theme park has served 46 million guests from around the world. In 2013,
it saw a 10 percent increase in visitors, with a record-high attendance of 7.4 million
visitors. Representing about 30 different nationalities, the resort employs workforce
of more than 8,000 full-time and part-time employees at the theme park and its two
hotels during the most popular summer period. Most of the resort’s staff are under
25 years old. The magic begins with the recruitment of employees who are friendly,
innovative, responsible, and are passionate about Disney stories. Disney manage-
ment understands what is important to cast members or what excites them in HKDL.
Therefore, HKDL address the value proposition of young talents through comprehen-
sive training programs, transparent career paths and opportunities, recognition and
engagement, and by providing a fun environment.

Cast members learn Disney culture in a number of ways such as training and
socialization. HKDL provides 380,000 hours of professional and technical training
to the entire workforce during the year. They help employees to become knowledge-
able cast members, fostering open communication and having fun with their guests.
This involves organizing a number of internal and external programs to encourage its
cast members to support initiatives for education, health, social, and other outreach
services.

The resort also conducts employee surveys to better understand its staff. The re-
sults show that cast members in HKDL take pride in their roles and they are motivated
and empowered to excel in their roles. As a result, HKDL has received outstanding
guest-satisfaction ratings and a range of awards from the hospitality and entertain-
ment sectors including the recipient of the 2014 Randstad Award for Best Workplace
Culture.

While the appeal of Disney’s characters is enduring, the decade-old HKDL is in
the red again. The theme park cited a drop in mainland visitors as the main reason in
explaining its disappointing performance. Additional competition with the “one coun-
try, two theme parks” situation is imminent as the Shanghai Disney Resort opened in
June this year. With regional demand being adequate enough to be shared between the
parks, the management at HKDL remain hopeful about the future. In the meantime,
they are also working to provide each park with a fresh feel and competitive business
environment by providing new investments on theme attractions and promotional of-
fers. Furthermore, the management at HKDL must continue to use HR programs to
motivate cast members.110

DISCUSSION QUESTIONS
17-13. What would it be like to work at Hong Kong Disneyland (HKDL)?
17-14. Using what you’ve learned from studying the various motivation theories,

what does HKDL’s situation tell you about employee motivation?
17-15. What is HKDL’s biggest challenge in keeping employees motivated?
17-16. As a manager at HKDL, how would you keep the theme-park employees

motivated?

Chapter 17 Motivation 617

2CASE APPLICATION Balancing Success and
Happiness

The John Lewis Partnership (JLP) is different; any number of news items or academic
journal articles will confirm this. JLP operates 48 John Lewis stores across the United
Kingdom, 34 of which are department stores selling everything from lingerie to elec-
trical goods. The partnership also includes 351 Waitrose supermarkets (a company
purchased by JLP in 1937). However, it isn’t the number of stores, nor the retail offer-
ing that make this organization different, it is the 88,900 permanent staff who are the
partners of JLP. With profits flowing to the partners and not the external sharehold-
ers, JLP is very different to most capitalist enterprises.

In 1864, John Spedan Lewis started trading on Oxford Street in London; however,
it was not until 1929 that the John Lewis Partnership was established. John believed
that business success should be balanced with the happiness of employees and that by
making them partners he was allowing employees to share the responsibility of owner-
ship as well as the rewards in the form of a share of the profits. These rewards have not
been insubstantial, averaging 17 percent of average pay, since 1970, when cash bonuses
started being paid.

The role of the partners is not limited to simply receiving a share of the part-
nership profits. The Partnership Council, a democratically elected body, looks after
the partners’ interests. The Council has a say in how profits are spent, can influence
matters such as pay and pensions, and directly elects five members of the Partner-
ship Board. There are mechanisms in place to ensure that this structure allows all
partners across the business to have a voice. At a local level, elected partners work
alongside managers to influence the running of the individual store. JLP also dis-
tributes a weekly in-house newspaper called the Gazette, which actively encourages
partners to ask questions, with each question receiving a personal response from
management.

So what is it like to work at JLP? In 2010, an article for The Guardian newspaper
interviewed a number of JLP employees, both present and past. There was a real sense
of connection and belonging, even amongst those who had retired. When asked why
people stayed with the company twice as long as the industry average, one partner
simply replied that if people weren’t happy, they had the responsibility and support to
do something about it. Other partners referred to a willingness to make extra effort,
specifically noting that motivation felt different. Perhaps the greatest praise for this
system came from a partner who confirmed she would only begrudgingly move to
another company if it offered her twice the salary!

While employee ownership is rare, JLP is not alone. They are members of the
Employee Ownership Association (EOA), which represents U.K. organizations that
are currently employee-owned or currently moving to this new form of ownership.
According to EOA figures, the number of employee owned businesses in the United
Kingdom is increasing by 10 percent per annum. In 2009, an independent report by the
Demos think tank estimated that the employee-owned sector was worth £25 billion to
the U.K. economy and further development should be supported. In 2012, this grow-
ing belief in employee-ownership was further supported when the U.K. Deputy Prime
Minister called for more companies to follow the JLP model, arguing that firms where
staff had more of a stake were more innovative and had higher levels of productivity.

It is unlikely that the JLP model will totally replace the typical capitalist enterprise
any time soon. However, the continued success of JLP and the general feeling that a
business should be measured against more than share price could see employee-owned
organizations becoming far more common in the future.111

618 Part 5 Leading

DISCUSSION QUESTIONS

17-17. Is there a link between the approach at the John Lewis partnership and the
earlier theories of motivation?

17-18. Considering the Goal-setting theory, how do you think this partnership
structure will affect the setting and achievement of challenging individual goals?

17-19. “Money is not a motivator.” Discuss this statement in light of the JLP case.
17-20. Do you think that this partnership approach will solve any of the problems

associated with the Equity theory? Why or why not?
17-21. What could be the potential drawbacks of this type of organizational

ownership?

ENDNOTES

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624 Part 5 Leading

PART 5 Management Practice

A Manager’s Dilemma a cubicle and is annoyed at Glen for not standing up for
him when offices were assigned. But John didn’t complain
How would you feel as a new employee if your boss asked because he didn’t want to get an office only because of his
you to do something and you had to admit that you didn’t friendship with Glen. Another problem brewing is that the
know how to do it? Most of us would probably feel pretty roommates compete to outlast one another at working late.
inadequate and incompetent. Now imagine how strange and Kurt’s boss is afraid that he’s going to burn out. Other awk-
uncomfortable it would be if, after experiencing such an inci- ward moments arise whenever the company’s performance
dent, you went home with the boss because you were room- is discussed. When Glen wants to get something off his
mates and have been friends since fourth grade. That’s the chest about work matters, he has to stop himself. And then
situation faced by John, Glen, and Kurt. John and Kurt are there’s the “elephant in the room.” If the software company
employees at a software company that their friend Glen and is ever bought out by a larger company, Glen (and his three
four others started. The business now has 39 employees, and partners) stand to profit dramatically, thereby creating some
the “friends” are finding out that mixing work and friend- interesting emotional issues for the roommates. Although it
ships can be tricky! At home, they’re equals. They share a might seem easy to say the solution is to move, real estate is
three-bedroom condo and divide up housework and other too expensive and, besides that, these guys are good friends.
chores. However, at work, equality is out the door. Glen
is John’s boss and Kurt’s boss is another company man- Put yourself in Glen’s shoes. Using what you’ve learned
ager. Recently, the company moved into a new workspace. in Part 5 about individual behavior, communication, em-
As part of the four-person management team, Glen has a ployee motivation, and leadership, how would you han-
corner office with windows. However, John was assigned dle this situation?

Part 5 Management Practice 625

Global Sense Discuss the following questions in light of what you
learned in Part 5.
As you discovered in this part of the text, employee engage-
ment is an important focus for managers. Managers want • What role do you think external factors such as the
their employees to be connected to, satisfied with, and global economic downturn or a country’s culture play
enthusiastic about their jobs; that is, to be engaged. Why is in levels of employee engagement? Discuss.
employee engagement so important? The level of employee
engagement serves as an indicator of organizational health • What role does an organization’s motivational pro-
and ultimately business results—success or failure. The lat- grams play in whether an employee is engaged or
est available data (2013) on global employee engagement not? Discuss.
levels showed that only 13 percent of employees (surveyed
from 142 countries) were engaged in their jobs; 63 per- • How might a manager’s leadership style affect an em-
cent were not engaged, and 24 percent were actively dis- ployee’s level of engagement? Discuss.
engaged. That is, only 13 percent of employees worldwide
say they’re passionate about and deeply connected to their • Look at what we discussed about managerial commu-
work. The region of East Asia showed the lowest propor- nication in this part. What could a manager do in the
tion of engaged employees at 6 percent. The global regions way he or she communicates to affect an employee’s
of Australia and New Zealand and the United States and level of engagement?
Canada showed the highest levels of employee engagement
at around 24 percent. And the highest level of active disen- • You’re a manager of a workplace that has different
gagement of employees is in the MENA region—Middle “generations.” How will you approach engaging your
East and North Africa. employees? Do you think Gen Y employees are going
to be more difficult to “engage”? Discuss.
So what can managers do to get and keep employees
engaged? Some important efforts include providing oppor- Sources: The State of the Global Workplace: Employee Engagement Insights for
tunities for career advancement, offering recognition, and Business Leaders Worldwide, Gallup Organization, http://www.gallup.com/strategic-
having a good organization reputation. consulting/164735/state-global-workplace.aspx, accessed August 15, 2014; M. Wil-
son, “Study: Employee Engagement Ticking Up, But It’s Not All Good News,” www.
hrcommunication.com, June 18, 2012; “2012 Trends in Global Employee Engagement,”
www.aon.com, June 17, 2012; K. Gurchiek, “Engagement Erosion Plagues Employers
Worldwide,” HR Magazine, June 2012, p. 17; and T. Maylett and J. Nielsen, “There Is
No Cookie-Cutter Approach to Engagement,” T&D, April 2012, pp. 54–59.

626 Part 5 Leading

Continuing Case to employee attitudes. For instance, in a survey from 2005,
well over half (64 percent) of partners responded to the sur-
Starbucks—Leading vey—much higher than the number of respondents to the
Once people are hired or brought into organizations, man- previous survey in 2003, in which the partner response rate
agers must oversee and coordinate their work so that orga- was only 46 percent. Responses to questions about partner
nizational goals can be pursued and achieved. This is the satisfaction and partner engagement were extremely posi-
leading function of management. And it’s an important tive: 87 percent of partners said they were satisfied or very
one! However, it also can be quite challenging. Managing satisfied, and 73 percent said they were engaged with the
people successfully means understanding their attitudes, company. (The numbers in 2003 were 82 percent satisfied
behaviors, personalities, individual and team work efforts, and 73 percent engaged.) In addition, partners specifically
motivation, conflicts, and so forth. That’s not an easy thing said they “Know what is expected of them at work; believe
to do. In fact, understanding how people behave and why someone at work cares about them; and work for managers
they do the things they do is downright difficult at times. who promote work/life balance.” In a 2015 survey, partners
Starbucks has worked hard to create a workplace environ- ranked themselves as most happy compared to workers in
ment in which employees (partners) are encouraged to and other U.S. retail firms. It shouldn’t be a surprise that part-
want to put forth their best efforts. Howard Schultz says he ners tend to stay with the company. Some reports estimate
believes that people everywhere have the same desire—to be that Starbucks’ turnover rate is 120 percent less than the
respected, valued, and appreciated. industry average. But partners also identified some areas
where they felt improvements were needed. These included
Starbucks—Focus on Individuals “Celebrate successes more; provide more effective coaching
and feedback; and improve communication with partners.”
Even with some 235,000 full- and part-time partners And Starbucks’ managers try to address any concerns
around the world, one thing that’s been important to How- raised in these surveys or concerns expressed in other ways.
ard Schultz from day one is the relationship he has with In another review published by Glassdoor.com, Starbucks
employees. Schultz is an ardent proponent of a people-first employees gave the company 3.8 stars out of 5 and 91
approach and recognizes that the success of Starbucks is percent approved of CEO Howard Schultz.
due to its partners (employees). And one way Starbucks
demonstrates the concern it has for the relationship with its Every organization needs employees who will be able to
partners is through an attitude survey that gives partners an do their jobs efficiently and effectively. Starbucks states that
opportunity to voice their opinions about their experiences. it wants employees who are “adaptable, self-motivated, pas-
It also measures overall satisfaction and engagement—the sionate, creative team players.” As you can see, this “ideal”
degree to which partners are connected to the company. It’s Starbucks partner should have individual strengths and
been an effective way for Starbucks to show that it cares should be able to work as part of a team. In the retail store
about what its employees think. setting, especially, individuals must work together as a team
to provide the experience that customers expect when they
For example, a partner view survey was conducted in
early 2010 with partners in the United States and Canada Knowing that its people are the heart and soul of its success, Starbucks values
and in the international regional support centers in Europe/ its employees and has created an environment that motivates them to work
Middle East/Africa, Asia Pacific and Latin America, at efficiently and effectively, rewards their accomplishments, and gives them training
Starbucks Coffee Trading Company in Switzerland, at opportunities and generous benefits. The baristas shown here handing out gift bags
Starbucks Coffee Agronomy Company in Costa Rica, and to shareholders at an annual meeting represent Starbucks’ “ideal” employee who
at the coffee roasting facility in Amsterdam. At the end of is adaptable, self-motivated, passionate, and a creative team player.
the survey, Howard Schultz thanked partners for taking Source: Elaine Thompson/Associated Press
the survey. He also acknowledged that the previous year
and a half had been difficult (it was the time of Schultz
transitioning back into the CEO position) and that part-
ners had been asked to do a lot during that time. The tough
and emotional decisions to be made and the company’s fi-
nancial crisis weren’t easy for any of them—from the top
to the bottom of the organization. But Schultz also reit-
erated that his number-one commitment was to the com-
pany’s partners and reinventing the partner experience at
Starbucks. Although results aren’t publicly available, it’s
likely that managers heard the good and the bad stuff that
partners experienced and were feeling. It was a good ba-
rometer for gauging employee attitudes after a difficult time
of transition and transformation for the company. Earlier
partner surveys have provided relevant and important clues

Part 5 Management Practice 627

walk into a Starbucks. If that doesn’t happen, the compa- difference, I wouldn’t leave people behind.” And those per-
ny’s ability to pursue its mission and goals is likely to be sonal experiences have shaped the way that Starbucks cares
affected. for its partners—the relationships and commitments the
company has with each and every employee. In fact, dur-
Communication at Starbucks ing the recent economic recession, Schultz was contacted
by an institutional shareholder about trimming the health
Keeping organizational communication flowing in all direc- insurance for part-time employees. Schultz’s reply? There’s
tions is important to Starbucks. And that commitment no way that benefit at Starbucks is being cut.
starts at the top. Howard Schultz tries to visit at least 30
to 40 stores a week. Not only does this give him an upfront One of the best reflections of how Starbucks treats its
view of what’s happening out in the field, it gives partners a eligible part- and full-time partners is its Total Pay pack-
chance to talk with the top guy in the company. The CEO age, which includes competitive base pay, bonuses, a com-
also likes to “get out in the field” by visiting the stores and prehensive health plan, paid time-off plans, stock grants,
roasting facilities. For instance, Starbucks China established a generous retirement savings program, and partner perks
the Partner Family Forum to recognize the special role fami- (which includes a pound of coffee each week). In 2015,
lies play and highlighted Starbucks’ commitment to its part- Starbucks launched the College Achievement Program that
ners. During one meeting Schultz stated, “I am so incredibly will pay for most employees to earn an online bachelor’s de-
proud of what you (company partners) have accomplished. gree from Arizona State University. Although specific ben-
And I promise you (the parents of Starbucks partners) we efits differ between regions and countries, all Starbucks in-
will grow this company the right way. I am a true believer in ternational partners share the “Total Pay” philosophy. For
the future of China because of the humanity and the heart instance, in Malaysia and Thailand, partners are provided
and the conscience of the Chinese people.” Despite these extensive training opportunities to further their careers
efforts by the top executives, partners have indicated on past in addition to health insurance, paid vacation, sick leave,
employee surveys that communication needed improvement. and other benefits. In Turkey, the “Total Pay” package for
Managers listened and made some changes. Starbucks’ partners includes transportation subsidies and
access to a company doctor who provides free treatment.
An initial endeavor was the creation of an internal video And, in China, partners receive a monthly housing allow-
newsletter that conveyed information to partners about ance to help them overcome the financial challenges of
company news and announcements. Another change was starting their careers.
the implementation of an internal communication audit
that asks randomly selected partners for feedback on how Partner (employee) recognition is important to Star-
to make company communication more effective. In ad- bucks. The company has several formal recognition pro-
dition, partners can voice concerns about actions or deci- grams in place that partners can use as tools to encourage,
sions where they believe the company is not operating in a reward, and inspire one another. These programs range
manner consistent with the guiding principles to the Mis- from formal company awards to informal special acknowl-
sion Review team, a group formed in 1991 and consisting edgments given by coworkers. One tool—developed in
of company managers and partners. The concept worked response to suggestions on the partner survey—is an on-
so well in North America that many of Starbucks’ interna- the-spot recognition card that celebrates partner and team
tional units have provided similar communication forums successes.
to their partners.
To assist partners who are facing particularly difficult
Starbucks—Motivating Employees circumstances (such as natural disaster, fire, illness), the
company has a CUP (Caring Unites Partners) fund that
A story from Howard Schultz’s childhood provides some provides financial support. After Hurricanes Katrina and
clues into what has shaped his philosophy about how to treat Rita in 2005, more than 300 partners from the Gulf Coast
people. Schultz’s father worked hard at various blue-collar region received more than $225,000 in assistance from the
jobs. However, when he didn’t work, he didn’t get paid. CUP fund. In China, Starbucks has set aside RMB1 mil-
When his father broke his ankle when Howard was seven lion (about $152,000 in today’s currency exchange) for the
years old, the family “had no income, no health insurance, Starbucks China CUP fund to be used to provide financial
no worker’s compensation, nothing to fall back on.” The assistance to partners in times of significant or immediate
image of his father with his leg in a cast unable to work left needs. This is the type of caring and compassion that How-
a lasting impression on the young Schultz. Many years later, ard Schultz vowed to provide after seeing his father not able
when his father died of lung cancer, “he had no savings, no to work and have an income because of a broken ankle.
pension, and more important, he had never attained ful-
fillment and dignity from work he found meaningful.” The In 2015, Starbucks was named one of the top 10 “Best
sad realities of the types of work environments his father Workplaces in Canada” for the fifth consecutive year. In
endured had a powerful effect on Howard, and he vowed 2013, Starbucks again was named one of Fortune maga-
that if he were “ever in a position where I could make a zine’s 100 Best Companies to Work For (in the United
States)—the fifteenth time since 1998 that Starbucks has
received this recognition. Although being recognized as

628 Part 5 Leading

a great company to work for is commendable, Starbucks down from the CEO position, and Howard Schultz once
has seen its ranking drop. In 2008, it was ranked number 7; again assumed the position. At that time, Schultz realized
in 2009, number 24; in 2010, number 93; and in 2011, num- his job was to step up as a leader to transform and revitalize
ber 98. However, in 2012 its ranking rose to number 73, Starbucks.
but it fell to number 94 in 2013 and did not make the list
in 2014, 2015, or 2016. Like many companies, Starbucks Starbucks also recognizes the importance of having in-
had to make some tough strategic decisions during one of dividuals with excellent leadership skills throughout the
the toughest economic periods faced recently. Despite the company. In addition to the leadership development train-
challenges, it’s a testament to Starbucks’ treatment of its ing for upper-level managers, Starbucks offers a program
partners that it made the top 100 list for 15 years straight. called Learning to Lead for hourly employees (baristas) to
However, there may be some underlying employee issues to develop leadership skills. This training program also covers
address after failing to be cited as one of the 100 Best Com- store operations and effective management practices. In ad-
panies to Work For in the most recent survey. dition, Starbucks offers to managers at all organizational
levels additional training courses on coaching and provid-
Starbucks—Fostering Leadership ing feedback to help managers improve their people skills.

Not surprisingly, Howard Schultz has some definite views Discussion Questions
about leading and leadership. He says being a great leader
involves finding a balance between celebrating what’s made P5-1. Do the overwhelmingly positive results from the
a company successful in the past and knowing when to not 2005 partner survey surprise you? Why or why not?
continue following the status quo. He also said being a great Do you think giving employees an opportunity to
leader means identifying a path your organization needs to express their opinions in something like an attitude
follow and then creating enough confidence in your people survey is beneficial? Why or why not?
so they follow that path and don’t “veer off course because
it’s an easier route to go.” He also said leaders, particularly P5-2. How might the results of the partner survey
of growing companies, need to stay true to those values affect the way a local store manager does his or
and principles that have guided how their business is done her job? How about a district manager? How
and not let those values be compromised by ambitions of about the president of global development? Do
growth. you think there are differences in the impact of
employee surveys on how managers at different
Since 1982, Howard Schultz has led Starbucks in a way organizational levels lead? Why or why not?
that has allowed the company to successfully grow and meet
and exceed its goals and to do so ethically and responsibly. P5-3. As Starbucks continues to expand globally,
From the creation of the company’s Guiding Principles to what factors might affect partner responses on a
the various innovative strategic initiatives, Schultz has never partner view survey? What are the implications for
veered from his belief about what Starbucks, the company, managers?
could be and should be. In 2011, Fortune named Howard
Schultz the Businessperson of the Year. P5-4. Look at the description of the types of people
Starbucks seeks. What individual behavior issues
Unlike many companies, Starbucks and Howard Schultz might arise in managing these types of people?
have taken their leadership succession responsibilities seri- (Think in terms of attitudes, personality, etc.) What
ously. In 2000 when Schultz was still CEO, he decided to work team issues might arise? (Think in terms of
move into the chairman’s position. His replacement, Orin what makes teams successful. Hint: Can a person
Smith (president and chief operating officer of Starbucks be self-motivated and passionate and be a good
Coffee U.S.), had been “groomed” to take over the CEO team player?)
position. Smith made it a top priority to plan his own suc-
cession. First, he established an exit date—in 2005 at age P5-5. Discuss the “ideal” Starbucks employee in terms of
62. Then he monitored the leadership skills development of the various personality trait theories.
his top executives. Two years into the job, Smith recognized
that the internal candidates most likely to replace him would P5-6. Describe in your own words the workplace
still be too “unseasoned” to assume the CEO position by environment Starbucks has tried to create. What
his stated exit date. At that point, the decision was made impact might such an environment have on
to look externally for a promising successor. That’s when motivating employees?
Jim Donald was hired from Pathmark, a regional grocery
chain, where he was chairman, president, and CEO. For P5-7. Using the Job Characteristics Model in Exhibit
three years, Donald was immersed in Starbucks’ business as 16–6, redesign a part-time hourly worker’s job
president of the largest division, the North American unit, to be more motivating. Do the same with a store
before assuming the CEO position in 2005, as planned. As manager’s job.
described in earlier parts, in early 2008, Jim Donald stepped
P5-8. Does Starbucks “care” too much for its partners?
Can a company ever treat its employees too well?
Why or why not?

P5-9. Howard Schultz says, “We all want the same thing
as people—to be respected and valued as employees

Part 5 Management Practice 629

and appreciated as customers.” Does the company S. Stebbins, and A. Kent, “America’s 25 Best Companies
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relationships? ers to Work for This Year,” Forbes online, www.forbes.
P5-10. Former CEO Jim Donald once said, “Spending com, November 17, 2015; J. Mooney, “Is Starbucks Really
money to put people first is smart money.” Do you a Great Place to Work?” Society for Human Resource
agree or disagree? Why? Management online, www.shrm.org, August 25, 2015; B.
P5-11. If you were an executive, would you be concerned Rooney, “Starbucks to Give Workers a Full Ride for Col-
about the drastic drop in ranking on the list of best lege,” CNN Money online, www.money.cnn.com, April 6,
companies to work for and not being ranked in the 2015; News release, “Starbucks Named One of the Top
most current list? Why or why not? What actions 10 Places to Work in Canada,” news.starbucks.com, April
might you take? 10, 2015; “Happy Work & Work Happy,” 5hue online,
P5-12. Give some examples of the types of communication www.5hue.com/reflections/happywork-work-happy, Feb-
taking place at Starbucks. ruary 6, 2014; company website, www.starbucks.com;
P5-13. Suppose you’re a Starbucks store manager in Glassdoor Company Review, “Starbucks,” https://www.
Birmingham, Alabama. How do you find out glassdoor.com/Reviews/Starbucks-Reviews-E2202.htm,
what’s going on in the company? How might you June 6, 2016; Corporate Social Responsibility, Starbucks
communicate your concerns or issues? Fiscal 2005 Annual Report, “Beyond the Cup,” p. 65;
P5-14. Describe Howard Schultz’s leadership style. Would News release, “Starbucks Strengthens Commitment to
his approach be appropriate in other types of Being the Employer of Choice in China,” news.starbucks.
organizations? Why or why not? com, April 18, 2012; J. Certner, “Starbucks: For Infusing a
P5-15. Do you agree that leadership succession planning is Steady Stream of New Ideas to Revive Its Business,” Fast
important? Why or why not? Company, March 2012, pp. 112+; D. A. Kaplan, “Strong
P5-16. What is Starbucks doing “right” with respect to Coffee,” Fortune, December 12, 2011, pp. 100+; “Howard
the leading function? Are they doing anything Schultz, On Getting a Second Shot,” Inc., April 2011, pp.
“wrong?” Explain. 52–54; C. Cain Miller, “A Changed Starbucks. A Changed
P5-17. Which of the company’s principles (see website) CEO,” New York Times online, www.nytimes.com, March
influence the leading function of management? 12, 2011; “Howard Schultz Promises Partners a Better Star-
Explain how the one(s) you chose would affect bucks Experience in the Future,” StarbucksMelody.com,
how Starbucks’ managers deal with (a) individual www.starbucksmelody.com/2010/03/06/howard-schultz-
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Fortune, February 8, 2010, pp. 75+; Starbucks Ad, USA
Notes for the Part 5 Continuing Case Today, May 19, 2009, p. 9A; Interview with Jim Donald,
Smart Money, May 2006, pp. 31–32; A. Serwer, “Interview
Information from Starbucks Corporation 2015 Annual with Howard Schultz,” Fortune (Europe), March 20, 2006,
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