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Chapter 16 M otiv a ting Employees

JOB CHARACTERISTICS MODEL

Hackman and Oldham identified five dimensions that determine a job’s motivational potential: ●

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In the past, an employee might have been assigned to complete just one step in the overall assembly of a new vehicle, car after car after car. A second worker would do the next step, and so forth. In manufacturing plants where job enrichment is practiced, however, one employee might be asked to complete a whole series of steps in the assembly process. Not only does the variety make the work more interesting and engaging, it also helps the employee feel more responsible and invested in his or her work.

Skill variety. This is the number of diverse activities that compose a job and the number of skills used to perform it. A routine, repetitious assembly-line job is low in variety, whereas an applied research position that involves working on new problems every day is high in variety. Task identity. This is the degree to which an employee performs a total job with a recognizable beginning and ending. A chef who prepares an entire meal has more task identity than a worker on a cafeteria line who ladles mashed potatoes. Task significance. This is the degree to which the job is perceived as important and having an impact on the company or consumers. People who distribute penicillin and other medical supplies during times of emergencies would feel that they have significant jobs. Autonomy. This is the degree to which the worker has freedom, discretion, and selfdetermination in planning and carrying out tasks. A house painter can determine how to paint the house; a paint sprayer on an assembly line has little autonomy. Feedback. This is the extent to which doing the job provides feedback to the employee about his or her performance. Jobs vary in their ability to let workers see the outcomes of their efforts. A football coach knows whether the team won or lost, but a basic research scientist may have to wait years to learn whether her research project was successful.

The job characteristics model says that the more these five core characteristics can be designed into the job, the more the employees will be motivated and the higher will be the employees’ performance, quality of work, and satisfaction. Critical Psychological States

The model posits that core job dimensions are more rewarding when individuals experience three psychological states in response to job design. In Exhibit 16.8, skill variety, task identity, and task significance tend to influence the employee’s psychological state of

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Core Job Dimensions

Andy Sacks/Jupiter Images

One significant approach to job design is the job characteristics model developed by Richard Hackman and Greg Oldham.58 Hackman and Oldham’s research concerned work redesign, which is de fined as altering jobs to increase both the quality of employees’ work experience and their productivity. Hackman and Oldham’s research into the design of hundreds of jobs yielded the job characteristics model, which is illustrated in Exhibit 16.8. The model consists of three major parts: core job dimensions, critical psychological states, and employee growth-need strength.

Concept Connection

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EXHIBIT

16.8

The Job Characteristics Model

Core Job Dimensions

Critical Psychological States

Skill variety Task identity Task significance

Experienced meaningfulness of the work

Autonomy

Experienced responsibility for outcomes of the work

Personal and Work Outcomes

High internal work motivation High-quality work performance

Feedback

Knowledge of the actual results of the work activities

High satisfaction with the work Low absenteeism and turnover

Employee Growth-Need Strength

SOURCE: Adapted from J. Richard Hackman and G. R. Oldham, “Motivation Through the Design of Work:Test of a Theory,” Organizational Behavior and Human Performance 16 (1976): 256.

experienced meaningfulness of work. The work itself is satisfying and provides intrinsic rewards for the worker. The job characteristic of autonomy influences the worker’s experienced responsibility. The job characteristic of feedback provides the worker with knowledge of actual results. The employee thus knows how he or she is doing and can change work performance to increase desired outcomes. Personal and Work Outcomes

The impact of the five job characteristics on the psychological states of experienced meaningfulness, responsibility, and knowledge of actual results leads to the personal and work outcomes of high work motivation, high work performance, high satisfaction, and low absenteeism and turnover. Employee Growth-Need Strength

The final component of the job characteristics model is called employee growth-need strength, which means that people have different needs for growth and development. If a person wants to satisfy low-level needs, such as safety and belongingness, the job characteristics model has less effect. When a person has a high need for growth and development, including the desire for personal challenge, achievement, and challenging work, the model is especially effective. People with a high need to grow and expand their abilities respond favorably to the application of the model and to improvements in core job dimensions. One interesting finding concerns the cross-cultural differences in the impact of job characteristics. Intrinsic factors such as autonomy, challenge, achievement, and recognition can be highly motivating in countries such as the United States. However, they may contribute little to motivation and satisfaction in a country such as Nigeria and might even lead to demotivation. A recent study indicates that the link between intrinsic characteristics and job motivation and satisfaction is weaker in economically disadvantaged countries with poor governmental social welfare systems, as well as in countries that value high power distance, as defined in Chapter 4.59 Thus, the job characteristics model would be expected to be less effective in these countries.

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Chapter 16 M otiv a ting Employees

Remember This cause performing their components may provide intrinsic rewards that meet employees’ needs.

vators, such as achievement, recognition, and opportunities for growth, into the work.

structure of work to improve motivation, productivity, and satisfaction.

the quality of employees’ work experience and their productivity.

and are using job rotation, job enlargement, and job enrichment to provide employees with greater variety, stimulation, and satisfaction.

that considers core job dimensions, individuals’ critical psychological states, and employee growth-need strength.

Innovative Ideas for Motivating

EMPOWERING PEOPLE

TO

MEET H IGHER NEEDS

One significant way that managers can meet higher motivational needs is to shift power down from the top of the organization and share it with employees to enable them to achieve goals. Empowerment is power sharing, the delegation of power and authority to

Go to the “Ethical Dilemma” on pages 579–580, which pertains to the use of incentive compensation as a motivational tool.

HOT TOPIC

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Organizations are increasingly using various types of incentive compensation as a way to motivate employees to higher levels of performance. For example, when Elise Lelon, owner of the leadership consulting firm The You Business, couldn’t give pay raises because of budget pressures, she created a generous lump-sum bonus program tied to the amount of revenue that employees generated for the firm. “It gets their juices flowing and it helps the business grow,” Lelon says.60 Exhibit 16.9 summarizes several popular methods of incentive pay. Variable compensation and forms of “at risk” pay such as bonus plans are key motivational tools that are becoming more common than fixed salaries at many companies. However, unless they are carefully designed, incentive plans can backfire, as evidenced by problems in the mortgage and finance industries, where some people resorted to overly aggressive and even unethical behavior to earn huge bonuses. Numerous companies, including financial firms such as Morgan Stanley, Credit Suisse, and Goldman Sachs, as well as other organizations such as Home Depot, Verizon, and Aflac, are revising their compensation plans to make sure that incentives reward the desired behaviors.61 Unfortunately, many managers are still encouraging the wrong kinds of behavior by rewarding people who behave unethically to get more business, signaling to employees that profits are more important than integrity. The most recent National Business Ethics Survey from the Ethics Resource Center indicates that 45 percent of people have witnessed ethical misconduct at work, and 13 percent say that they have felt pressure to bend the rules or even break the law to earn rewards—an increase of 5 percentage points from the previous survey in 2010.62 Incentive programs can be effective if they are used appropriately and combined with motivational ideas that also provide people with intrinsic rewards and meet higher-level needs. The most effective motivational programs typically involve much more than money or other external rewards in order to create an environment in which people thrive. Three important approaches are empowerment, engagement, and making progress, as described in the following sections.

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EXHIBIT

16.9

New Motivational Compensation Programs

Program

Purpose

Pay for performance

Rewards individual employees in proportion to their performance contributions. Also called merit pay.

Gain sharing

Rewards all employees and managers within a business unit when predetermined performance targets are met. Encourages teamwork.

Employee stock ownership plan (ESOP)

Gives employees part ownership of the organization, enabling them to share in improved profit performance.

Lump-sum bonuses

Rewards employees with a one-time cash payment based on performance.

Pay for knowledge

Links employee salary with the number of task skills acquired. Workers are motivated to learn the skills for many jobs, thus increasing company flexibility and efficiency.

Flexible work schedule and arrangements

Flextime allows workers to set their own hours. Job sharing allows two or more part-time workers to jointly cover one job. Telecommuting, sometimes called flex-place, allows employees to work from home or an alternative workplace.

Team-based compensation

Rewards employees for behavior and activities that benefit the team, such as cooperation, listening, and empowering others.

Lifestyle awards

Rewards employees for meeting ambitious goals with luxury items, such as tickets to big-name sporting events or exotic travel.

subordinates in an organization.63 Increasing employee power heightens motivation for task accomplishment because people improve their own effectiveness, choosing how to do a task and using their creativity.64 At Ritz-Carlton hotels, employees have up to $1,000 to use at their discretion to create a great customer experience. When homes in the area near the Ritz in Laguna Niguel, California, were evacuated due to risk of fires, the hotel made an exception to its “no pets” rule. One employee anticipated the need for pet food and drove to the nearest grocery for dog and cat food, making life a little easier for harried guests who were temporarily homeless.65 Empowering employees involves giving them four elements that enable them to act more freely to accomplish their jobs: information, knowledge, power, and rewards.66 1. Employees receive information about company performance. In companies where employees are fully empowered, all employees have access to all financial and operational information. 2. Employees have knowledge and skills to contribute to company goals. Companies use training programs and other development “I think a lot of times it’s tools to help people acquire the knowledge and skills that they not money that’s the need to contribute to organizational performance. 3. Employees have the power to make substantive decisions. primary motivation factor; Empowered employees have the authority to influence work it’s the passion for your job procedures and organizational performance directly, such as through quality circles or self-directed work teams. and the professional and 4. Employees are rewarded based on company performance. personal satisfaction that Organizations that empower workers often reward them based on the results shown in the company’s bottom line. you get out of doing what Organizations may also use other motivational compensation you do that motivates you.” programs described in Exhibit 16.9 to tie employee efforts to company performance. —MARTIN YAN, CHINESE CHEF, AUTHOR,

AND HOST OF COOKING SHOW S, INCLUDING YAN CAN COOK AND MARTIN YAN’S CHINA

The following example from Hilcorp Energy illustrates the four elements of empowerment.

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Hilcorp Energy, based in Houston,Texas, is the nation’s fourth-largest private producer of onshore crude oil and natural gas. But Hilcorp is different from most energy companies. Hilcorp takes over holes abandoned by the big energy companies—and produces about 25 million barrels of oil and gas a year from them. Hilcorp is different from most other energy companies in its approach to managing people, too. Managers attribute the company’s success to the people on the front lines. All associates have access to all financial and operating information. Because managers put decision-making power in the hands of people on the front lines, those people need to have full information to make good choices. “You want to know how we’re doing? How your slice of the pie is performing? We share the good news and the bad,” said a senior financial analyst. “We owe that to every employee whose work generates the numbers we report.” Associates at Hilcorp are always interested in how well the company is doing because they are rewarded based on company performance. Associates can earn bonuses of up to 60 percent of their annual salaries based on meeting performance goals. At Hilcorp, employees truly do feel like owners.“Since we pull together, not competing against each other, and we all have skin in the game, it’s amazing what we can accomplish,” said founder Jeff Hildebrand.67

Innovative Way Hilcorp Energy

At companies such as Hilcorp Energy empowerment means giving employees almost complete freedom and power to make decisions and exercise initiative and imagination. However, organizations empower workers to varying degrees, from a situation where managers encourage employee ideas but retain final authority for decisions to a condition of full empowerment such as that at Hilcorp. Research shows that empowerment typically increases employee satisfaction, motivation, and productivity.68

GIVING MEANING

TO

WORK T HROUGH ENGAGEME NT

Employee engagement means that people enjoy their jobs and are satisfied with their work conditions, contribute enthusiastically to meeting team and organizational goals, and feel a sense of belonging and commitment to the organization. Alarmingly, recent surveys show that only 30 percent of employees in the United States are engaged and inspired at work, and 18 percent are actively disengaged.69 Fully engaged employees care deeply about the organization and actively seek ways to serve the mission.70 Active disengagement means that people are actively undermining their organization’s success. How do managers engage employees? Exhibit 16.10 illustrates the three elements that create employee engagement: a sense of meaningfulness, a sense of connection, and a sense of 16.10

Employee Engagement Model

Meaningfulness

High Performance

∙ Increased employee performance

Connectedness

Learning/Growth

Engagement

∙ Less turnover ∙ Higher profits ∙ Greater employee and customer loyalty

SOURCE: Based on Fig. 1, “Integrative Model of Employee Engagement,” in J. Lee Whittington and Timothy J. Galpin, “The Engagement Factor: Building a High-Commitment Organization in a Low-Commitment World,” Journal of Business Strategy 32, no. 5 (2010): 14–24.

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growth.71 When managers organize the workplace in such a way as to create these feelings, employee engagement grows, leading to high motivation and high organizational performance. ●

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People feel that they are working toward something important. When employees have a chance to accomplish something that provides real value, they feel a sense of meaningfulness. Good managers help people understand the purpose of their work, which contributes to feelings of pride and dignity. Kenexa, the leading human resources (HR) services company in the United States (recently purchased by IBM), uses psychologists and other scientists to study what motivates employees. One finding is that turnover is significantly lower among people who feel pride in their company and its mission than among those who don’t.72 People feel connected to the company, to one another, and to their managers. In a survey asking people what factors contribute to their engagement, 79 percent of people said “good relationships with coworkers” drove engagement to a high or very high extent. Even more (91 percent) pointed to good relationships with their immediate supervisor as highly important.73 The behavior of managers makes the biggest difference in whether or not people feel engaged at work.74 Managers promote engagement when they listen to employees, genuinely care about their concerns, and help them develop positive relationships with colleagues. People have the chance to learn, grow, and advance. To be fully engaged, people need not only to feel that they are competent to handle what is asked of them, but also that they have the chance to learn and expand their potential. Good managers help employees understand their own unique set of talents, skills, interests, attitudes, and needs; put people in jobs where they can make their best contribution and receive intrinsic rewards every day; and make sure that people have what they need to perform well. In addition, they give people the chance to work on challenging projects, offer high-quality training and learning programs, and provide opportunities for advancement within the organization.

Studies have identified a correlation between employee engagement and company performance, including less turnover, greater profitability, and stronger employee and customer loyalty, as illustrated in Exhibit 16.10.75 Managers can use strategies to facilitate engagement and improve performance. Consider the following example from Prudential UK and Europe, which provides life insurance and pensions for around 7 million customers.

Innovative Way Prudential UK and Europe

Like other companies in the financial services industry, Prudential UK and Europe (Pru UK) is operating in a highly turbulent environment that has been wracked further by the global economic crisis and scandals in the financial industry. Cathy Lewis, Pru UK’s director of HR, CEO Rob Dev...