The effective management of people in an organization requires an understanding
of motivation, job design, reward systems, and group influence.
Behavior Modification
Operant conditioning is the learning that takes place when the learner
recognizes the connection between a behavior and its consequences.
Positive reinforcement vs. punishment: rewarding desired behavior vs.
punishing undesired behavior.
Negative reinforcement: removing negative consequences from workers who
perform the desired behavior.
Extinction: removing whatever is currently reinforcing the undesirable
behavior.
Reinforcement schedules: variable, erratic reinforcement schemes are more
effective than steady reinforcement schedules.
Classical conditioning: if one gets sick after eating tacos, from that point
forward one may get sick from the smell of tacos. People are genetically
hard-wired to make certain associations. For example, sickness is associated
with food.
Expectancy Theory
The expectancy theory of motivation models motivational force as the product of
three factors perceived by the individual. There is research evidence to support
the theory, and it has become relatively widely accepted.
Principal-Agent Problem
In a company, stockholders are principals and managers are agents. The goal of a
compensation system is to align principals' and agents' interests.
Executives who are compensated based on financial performance may favor
diversifying the company since it evens out their incomes. But shareholders can
diversify their portfolios on their own if they want.
Promotion Tournaments
The purpose of high executive salaries is to motivate those at lower levels by
giving them a goal or prize for which to strive. If eight people are competing
for a position, only one of them has to be paid the big prize, but they all are
motivated.
Job Design
Scientific management took all authority away from the workers – no thinking was
needed. Skill variety, task identity, task significance, autonomy, and feedback
all were missing.
Giving people choices provides more job satisfaction. One way of doing this is
to propose an alternative or two that is inferior, and ask for the employee's
opinion. An exaggerated example that illustrates this point: in selecting the
foundation of a building, the manager, knowing concrete is better, can propose
wood. The employee proposes concrete and gains satisfaction from "convincing"
the manager of the right decision.
Equity Theory
People care about fairness and are willing to give up money to avoid unfair
treatment.
An example of this idea is a game in which one person is handed 100 dollars, and
this person must propose to give part of the money to a second person. The first
person must propose the amount that he or she will give to the second person,
and the second person can accept or reject the offer. If the second person
accepts the offer, then it stands as proposed. If the second person rejects the
offer, neither of the two people get to keep any of the money. Assuming that the
two people never will deal with each other again, the rational decision of the
second person is to accept any amount that the first person offers. However, if
the first person offers only one dollar, the second person may refuse this low
offer simply to punish the first person who is not offering a "fair" split.
Reward Systems
Employees like performance rating distributions in which almost everyone is at
the top, but in which a few really get punished. Employees hate systems in which
only a few get top ratings.
When people are given higher rewards than what they deserve, at first their
performance improves, but then they start reasoning that they really are worthy
and begin to slack off.
Efficiency Wages
For lower-level workers, performance increases with increased wages. Efficiency
wages are wages set at a higher-than-market clearing wage, set by employers to:
discourage shirking by raising the cost of being fired
encourage worker loyalty
raise group output norms
improve the applicant pool
raise morale
Rationalizing Behavior
Cognitive dissonance is the state of conflict that one faces when one's
attitudes are contradicted by the situation that one is experiencing. In this
situation, people often rationalize anything that is inconsistent in their
minds. For example, one may come to love the things for which he or she is
poorly compensated in order to resolve the inconsistency of doing something that
one does not want to do for below average pay.
Characteristics of Jobs and Work that Substitute for Formal Leadership
In flat organizations, there are fewer opportunities to formally manage the work
of others. In this situation, people may become de-motivated because they feel
that they are not advancing. However, some environments have characteristics
that can substitute for more formal leadership opportunities. These
characteristics are:
Professional orientation
Performance feedback provided by work itself
Cohesive, interdependent work groups and advisory panel
Written goals and rigid procedures
Groupthink
Concurrence-seeking may become so dominant in a group that it overrides
objective appraisal. In a cohesive group, individuals truly may believe that a
bad proposal is a good one without scrutinizing it.
Managing Individual and Group Performance
When one person excels, the others do not look as good. Furthermore, good
performance is often "rewarded" with increased quotas.
of motivation, job design, reward systems, and group influence.
Behavior Modification
Operant conditioning is the learning that takes place when the learner
recognizes the connection between a behavior and its consequences.
Positive reinforcement vs. punishment: rewarding desired behavior vs.
punishing undesired behavior.
Negative reinforcement: removing negative consequences from workers who
perform the desired behavior.
Extinction: removing whatever is currently reinforcing the undesirable
behavior.
Reinforcement schedules: variable, erratic reinforcement schemes are more
effective than steady reinforcement schedules.
Classical conditioning: if one gets sick after eating tacos, from that point
forward one may get sick from the smell of tacos. People are genetically
hard-wired to make certain associations. For example, sickness is associated
with food.
Expectancy Theory
The expectancy theory of motivation models motivational force as the product of
three factors perceived by the individual. There is research evidence to support
the theory, and it has become relatively widely accepted.
Principal-Agent Problem
In a company, stockholders are principals and managers are agents. The goal of a
compensation system is to align principals' and agents' interests.
Executives who are compensated based on financial performance may favor
diversifying the company since it evens out their incomes. But shareholders can
diversify their portfolios on their own if they want.
Promotion Tournaments
The purpose of high executive salaries is to motivate those at lower levels by
giving them a goal or prize for which to strive. If eight people are competing
for a position, only one of them has to be paid the big prize, but they all are
motivated.
Job Design
Scientific management took all authority away from the workers – no thinking was
needed. Skill variety, task identity, task significance, autonomy, and feedback
all were missing.
Giving people choices provides more job satisfaction. One way of doing this is
to propose an alternative or two that is inferior, and ask for the employee's
opinion. An exaggerated example that illustrates this point: in selecting the
foundation of a building, the manager, knowing concrete is better, can propose
wood. The employee proposes concrete and gains satisfaction from "convincing"
the manager of the right decision.
Equity Theory
People care about fairness and are willing to give up money to avoid unfair
treatment.
An example of this idea is a game in which one person is handed 100 dollars, and
this person must propose to give part of the money to a second person. The first
person must propose the amount that he or she will give to the second person,
and the second person can accept or reject the offer. If the second person
accepts the offer, then it stands as proposed. If the second person rejects the
offer, neither of the two people get to keep any of the money. Assuming that the
two people never will deal with each other again, the rational decision of the
second person is to accept any amount that the first person offers. However, if
the first person offers only one dollar, the second person may refuse this low
offer simply to punish the first person who is not offering a "fair" split.
Reward Systems
Employees like performance rating distributions in which almost everyone is at
the top, but in which a few really get punished. Employees hate systems in which
only a few get top ratings.
When people are given higher rewards than what they deserve, at first their
performance improves, but then they start reasoning that they really are worthy
and begin to slack off.
Efficiency Wages
For lower-level workers, performance increases with increased wages. Efficiency
wages are wages set at a higher-than-market clearing wage, set by employers to:
discourage shirking by raising the cost of being fired
encourage worker loyalty
raise group output norms
improve the applicant pool
raise morale
Rationalizing Behavior
Cognitive dissonance is the state of conflict that one faces when one's
attitudes are contradicted by the situation that one is experiencing. In this
situation, people often rationalize anything that is inconsistent in their
minds. For example, one may come to love the things for which he or she is
poorly compensated in order to resolve the inconsistency of doing something that
one does not want to do for below average pay.
Characteristics of Jobs and Work that Substitute for Formal Leadership
In flat organizations, there are fewer opportunities to formally manage the work
of others. In this situation, people may become de-motivated because they feel
that they are not advancing. However, some environments have characteristics
that can substitute for more formal leadership opportunities. These
characteristics are:
Professional orientation
Performance feedback provided by work itself
Cohesive, interdependent work groups and advisory panel
Written goals and rigid procedures
Groupthink
Concurrence-seeking may become so dominant in a group that it overrides
objective appraisal. In a cohesive group, individuals truly may believe that a
bad proposal is a good one without scrutinizing it.
Managing Individual and Group Performance
When one person excels, the others do not look as good. Furthermore, good
performance is often "rewarded" with increased quotas.