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Understanding Business, 6/e
William G. Nickels
James M. McHugh
Susan M. McHugh
Chapter 10: Motivating Employees and Building Self-Managed Teams
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The PROFILE at the beginning of this chapter focuses on HERB KELLEHER of SOUTHWEST AIRLINES. The company now ranks as the 4th largest airline in the nation. Analysts credit this achievement to the engaging management style of the company’s chairman, HERB KELLEHER.
  1. THE IMPORTANCE OF MOTIVATION.
    2.
    1. The key to leadership success is MOTIVATING OTHERS TO DO THEIR BEST.
      2.
      1. The importance of satisfaction in the workforce cannot be overstated.
        1. Losing an employee can cost over $100,000.
        2. Motivating the right people to join and remain with the organization is a key function of managers.
      2. People are motivated by a variety of things.
        3.
        1. An INTRINSIC REWARD is the good feeling you have when you have done a good jobPower Point Presentation.
        2. An EXTRINSIC REWARD is something given to you by someone else as recognition for good work and include pay increases, praise, and promotions.
          3.
      3. MOTIVATION, the drive to satisfy a need, ultimately comes from WITHIN AN INDIVIDUAL. Concept Check CONCEPT CHECK
      4. The purpose of this chapter is to help you learn how to stimulate people and bring out that natural drive to do a good job.
        5.
      5. The job of a manager is to find each workers’ commitment, encourage it, and focus it on some common goal
    2. EARLY MANAGEMENT STUDIES (TAYLOR).

      3. Explain Taylor’s scientific management.

      1. FREDERICK TAYLOR is known as the "FATHER OF SCIENTIFIC MANAGEMENT."
        1. His book The Principles of Scientific Management was published in 1911.
        2. TAYLOR’S GOAL was to INCREASE PRODUCTIVITY by studying the most efficient ways of doing things and then teaching workers these methods.
        3. The way to improve productivity was to scientifically study the most efficient way to do things then teach people those methods (SCIENTIFIC MANAGEMENT.)
        4. THREE ELEMENTS of his approach were: TIME, METHODS, and RULES OF WORK.
        5. TIME-MOTION STUDIES break down the tasks needed to do a job and measure the time needed to do each task.
      2. Henry L. Gant, on of Taylor’s followers, developed GANTT CHARTS by which managers plotted the work of employees a day in advance.
      3. FRANK AND LILLIAN GILBRETH used Taylor’s ideas in the PRINCIPLE OF MOTION ECONOMY—breaking down every job into a series of motions (therbligs) and then analyzing each motion to make it more efficient.
      4. SCIENTIFIC MANAGEMENT viewed people as MACHINES that needed to be properly programmed.
        1. There was little concern for the psychological or human aspects of work.
        2. Much emphasis in some companies is still placed on conformity to work rules rather than on creativity, flexibility, and responsiveness.
    3. THE HAWTHORNE STUDIES (MAYO.)

      4. Describe the Hawthorne studies and relate their significance to human-based management.

      1. The HAWTHORNE STUDIES were conducted by Elton Mayo at the WESTERN ELECTRIC COMPANY’s Hawthorne plant in Cicero, Illinois.
        1. Begun in 1927, the studies ended six years later.
        2. The PURPOSE of the studies were to DETERMINE THE BEST LIGHTING for optimum productivity.
        3. The PRODUCTIVITY of the experimental group INCREASED compared to the control group whether the lighting was bright or dim.
        4. These results confused the researchers, who had expected productivity to fall as the lighting was dimmed.
      2. A second series of studies were conducted to see if OTHER FACTORS, such as temperature and humidity, contributed to increased production.
        1. PRODUCTIVITY INCREASED during each of the 13 experimental periods.
        2. When conditions were returned to their original status (before the studies were started), PRODUCTIVITY CONTINUED TO GO UP. Why?
      3. Mayo hypothesized that HUMAN or PSYCHOLOGICAL FACTORS caused the increases:
        1. The workers in the test room thought of themselves as a SOCIAL GROUP.
        2. The workers were involved in the PLANNING of the experiments.
        3. The workers enjoyed the SPECIAL ATMOSPHERE and ADDITIONAL PAY for the increased productivity.
      4. The term HAWTHORNE EFFECT refers to the tendency for people to behave differently when they know they’re being studied.
        1. The Hawthorne studies’ results encouraged researchers TO STUDY HUMAN MOTIVATION and the MANAGERIAL STYLES that lead to more productivity.
        2. Mayo’s findings led to NEW ASSUMPTIONS ABOUT EMPLOYEES.
        3. MONEY was found to be a relatively LOW MOTIVATOR.
  2. MOTIVATION AND MASLOW’S HIERARCHY OF NEEDS.
    3.

    Identify the levels of Maslow’s hierarchy of needs and relate their importance to employee motivationConcept Check CONCEPT CHECK .

    1. ABRAHAM MASLOW believed that MOTIVATION ARISES FROM NEED.
      1. One is motivated to satisfy unmet needs.
      2. Satisfied needs NO LONGER MOTIVATE.
    2. Maslow placed needs on a HIERARCHY of importance:
      1. PHYSIOLOGICAL NEEDS: Basic survival needs including the need to drink, eat, and be sheltered from heat and cold.
      2. SAFETY NEEDS: The need to feel secure at work and at home.
      3. SOCIAL NEEDS: The need to feel loved, accepted, and part of the group.
      4. ESTEEM NEEDS: The need for recognition and acknowledgment from others, as well as self-respect and a sense of status.
      5. SELF-ACTUALIZATION NEEDS: The need to develop to your fullest potential.
    3. When one need is satisfied, another, higher-level need emerges to be satisfied.
      4.
      1. A SATISFIED NEED is no longer a motivator.
        2.
      2. Lower-level needs, however, can pop up at any time and take attention away from higher-level needsPower Point Presentation.
    4. APPLYING MASLOW’S THEORY
      1. The text relates how Andrew Grove, president of Intel, uses Maslow’s concepts to motivate employees in his firm.
      2. Once one understands the need level of employees, it is easier to design programs that will trigger self-motivation.
  3. MCGREGOR’S THEORY X AND THEORY Y

    4. Differentiate among Theory X, Theory Y, and Theory Z.
    1. DOUGLAS MCGREGOR categories managers by THEIR ATTITUDES which lead to different managerial styles: THEORY X and THEORY Y.
    2. THEORY X.
      3.
      1. The ASSUMPTIONS of Theory X management are:
        1. The average person DISLIKES WORK and will avoid it if possible.
        2. Because of this dislike, the average person must be FORCED, CONTROLLED, DIRECTED, OR THREATENED WITH PUNISHMENT TO BE MOTIVATED to put forth the effort to achieve the organization’s goals.
        3. The average worker prefers to be directed, wishes TO AVOID RESPONSIBILITY, has relatively LITTLE AMBITION, and wants SECURITY.
        4. Primary motivators are FEAR and MONEY.
      2. The CONSEQUENCE OF SUCH ATTITUDES is a manager who is very "busy."
        3.
        1. Motivation is more likely to take the form of PUNISHMENT for bad work rather than REWARD for good work.
        2. Theory X managers give workers little responsibility, authority, or flexibility.
          3.
        3. Those were the assumptions behind Taylor’s scientific management
    3. THEORY Y.
      1. THEORY Y Concept Check CONCEPT CHECK makes entirely different ASSUMPTIONS about people:
        2.
        1. Most people LIKE WORK; it is as natural as play or rest.
        2. Most people NATURALLY WORK TOWARD GOALS to which he or she is committed.
        3. The depth of a person’s commitment to goals depends on the perceived REWARDS for achieving them.
        4. Under certain conditions, most people not only accept but SEEKS RESPONSIBILITY.
        5. People are capable of using a high degree of IMAGINATION, CREATIVITY, and CLEVERNESS to solve problems.
        6. In industry, the average person’s INTELLECTUAL POTENTIAL IS ONLY PARTIALLY REALIZED.
          7.
        7. People are MOTIVATED BY A VARIETY OF REWARDS. Each worker is stimulated by a reward unique to that worker (time off, money, recognition, etc.)Power Point Presentation
      2. Theory Y emphasizes a relaxed managerial atmosphere in which workers are free to set objectives and be flexible.
      3. EMPOWERMENT is a key technique in meeting these objectives. To be a real motivator, empowerment requires management to:
        1. Find out what people think the problems in the organization are.
        2. Let them design the solutions.
        3. Get out of the way and let them put those solutions into action.
      4. The trend in many U.S. businesses is toward Theory Y management.
        5.
  4. OUCHI’S THEORY Z.
    5.
    1. Another reason for a more flexible managerial style is to meet competition from foreign firms.
    2. In the 1980s WILLIAM OUCHI researched how corporations in Japan are run differently from U.S. companies.
      1. The Japanese management approach, called TYPE J, involved:
        1. Lifetime employment.
        2. Consensual decision making.
        3. Collective responsibility for the outcomes of decisions.
        4. Slow evaluation and promotion.
        5. Implied control mechanisms.
        6. Nonspecialized career paths.
        7. Holistic concern for employees.
      2. The American management approach, called TYPE A, involved:
        1. Short-term employment.
        2. Individual decision making.
        3. Individual responsibility for the outcomes of decisions.
        4. Rapid evaluation and promotion.
        5. Explicit control mechanism.
        6. Specialized career paths.
        7. Segmented concern for employees.
      3. Type J firms are based on the culture of Japan; Type A firms are based on the culture of America.
      4. Ouchi realized that American managers could not be expected to accept a concept based on another culture.
      5. Ouchi recommended a hybrid of the two approaches, THEORY Z.
        1. Long-term employment.
        2. Collective decision making.
        3. Individual responsibility for the outcome of decisions.
        4. Slow evaluation and promotion.
        5. Moderately specialized career path.
        6. Holistic concern for employees.
    3. Today economic changes are forcing Japanese managers to reevaluate their management styles.
      1. Today there is a realization that Japanese firms need to become more efficient.
      2. Some Japanese managers are changing the way they do business.
      3. Many managers think that conformity has hurt Japanese business.

        Many managers think that conformity has hurt Japanese business.

      Distinguish between motivators and hygiene factors identified by Herzberg

      Concept Check CONCEPT CHECK .

    4. THEORIES X, Y, AND Y are CONCERNED WITH MANAGEMENT STYLES.
        1. Another theory looks at what managers can do with the job itself to motivate employees.
        2. FREDERICK HERZBERG’S work is CONCERNED IS WITH THE CONTENT OF WORK rather than style of management.
    5. Frederick HERZBERG surveyed workers to find out how they RANK JOB-RELATED FACTORS. The results were:
        1. Sense of achievement.
        2. Earned recognition.
        3. Interest in the work itself.
        4. Opportunity for growth.
        5. Opportunity for advancement.
        6. Importance of responsibility.
        7. Peer and group relationships.
        8. Pay.
        9. Supervisor’s fairness.
        10. Company policies and rules.
        11. Status.
        12. Job security.
        13. Supervisor’s friendliness.
        14. Working conditions.
    6. Herzberg noted that the HIGHEST RANKING FACTORS DEALT WITH JOB CONTENT.
        1. He referred to these as MOTIVATORS since they gave employees a great deal of satisfaction.
        2. They include the work itself, achievement, and responsibility.
    7. The OTHER FACTORS had to do with JOB ENVIRONMENT.
        1. They could CAUSE DISSATISFACTION If them were missing but NOT NECESSARILY MOTIVATION if they increased.
        2. These so called HYGIENE FACTORS Key Term include working conditions and salary.
          3.
    8. APPLYING HERZBERG’S THEORIESConcept Check CONCEPT CHECK
        1. The text offers several current examples of Herzberg’s theories in action, including Kingston Technology and Sunnen Products.
        2. These firms believe that the best motivator for some employees is a simple "Thanks, I really appreciate what you’re doing."
        3. Further surveys support his finding that the number one motivator is not money, but a sense of achievement and recognition.
        4. One study identified lack of enough praise and recognition as the primary reason employees leave their job.
        5. There is a good deal of similarity in Maslow’s hierarchy and Herzberg’s two-factor theory.
          6.
  5. JOB ENRICHMENT.
    6.

    Explain how job enrichment Key Term affects employee motivation and performance

    1. JOB ENRICHMENT is a motivational strategy that emphasizes motivating the worker through the job itself.
    2. The FIVE CHARACTERISTICS of work believed to be IMPORTANT IN AFFECTING MOTIVATION AND PERFORMANCE are:
      1. SKILL VARIETY, the extent to which a job demands different skills of the person.
      2. TASK IDENTITY, the degree to which the job requires doing a task with a visible outcome from beginning to end.
      3. TASK SIGNIFICANCE, the degree to which the job has a substantial impact on the lives of others in the company.
      4. AUTONOMY, the degree of freedom, independence, and discretion in scheduling work and determining procedures.
      5. FEEDBACK, the amount of direct, clear information received about job performance.
    3. The text uses the examples of Herb Kelleher of Southwest Airlines, and Roger Sant if AES.
      4.
    4. OTHER JOB DESIGNS
      1. JOB SIMPLIFICATION produces task efficiency by breaking down the job into simple steps, sometimes necessary with people learning new skills.
      2. JOB ENLARGEMENT combines a series of tasks into one assignment that is more challenging and motivating.
        3.
      3. JOB ROTATION makes work more interesting by moving employees from one job to anotherPower Point Presentation Concept Check CONCEPT CHECK
  6. GOAL-SETTING THEORY AND MANAGEMENT BY OBJECTIVES.

    7. Identify the steps involved in implementing a management by objectives (MBO) program.
    1. GOAL-SETTING THEORY is based on setting specific, attainable goals.
      2.
      1. This will lead to high motivation and performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions.
        2.
      2. Peter Drucker developed such a system in the 1960s called MANAGEMENT BY OBJECTIVES (MBO.)Key Term
    2. MANAGEMENT BY OBJECTIVES (MBO) is an example of goal-setting.
      1. Management by Objectives was developed to HELP EMPLOYEES MOTIVATE THEMSELVES.
      2. MBO is a system of goal setting and implementation that involves a cycle of discussion, review, and evaluation of objectives among all levels of management and employees.
      3. There are six steps in the MBO process.
      4. Some critics see MBO as being out of date and inconsistent with contemporary management thought.
      5. Almost one-half of firms surveyed, however use some form of MBO.
    3. Management by objectives is most effective in relatively stable situations.
      1. It is important to understand the difference between helping and coaching subordinates because helping tends to make subordinates weak and dependent while coaching makes them feel capable and part of the team.
      2. HELPING is working with the subordinate, even doing part of the work if necessary.
      3. COACHING means acting as a resource—teaching guiding, recommending—but not helping by doing the task.
      4. Problems can arise when management uses MBO as a strategy for FORCING managers to commit to goals that are not mutually agreed upon.
  7. MEETING EMPLOYEE EXPECTATIONS: EXPECTANCY THEORY.
    8.

    Explain the key factors involved in expectancy theoryConcept Check CONCEPT CHECK .

    1. According to VICTOR VROOM’s EXPECTANCY THEORY, employee expectations can affect an individual’s motivation.
      1. The amount of effort employees exert on a specific task depends on their expectations of the outcome.
      2. Vroom contends that employees ask three questions before committing maximum effort to a task:
        1. Can I accomplish the task?
        2. If I do accomplish it, what’s my reward?
        3. Is the reward worth the effort?
      3. Expectation varies from individual to individual.
    2. FIVE STEPS TO IMPROVE EMPLOYEE PERFORMANCE:
      1. Determine what rewards are valued by employees.
      2. Determine the employee’s desired performance standard.
      3. Ensure performance standards are attainable.
      4. Guarantee rewards are tied to performance.
      5. Be certain rewards are considered adequate.
  8. TREATING EMPLOYEES FAIRLY: EQUITY THEORY.

    9. Examine the key principles of equity theory.

    1. The basic principle of EQUITY THEORY is that workers try to maintain equity between inputs and outputs compared to people in similar positions.
    2. When workers do perceive inequity, they will try to reestablish equitable exchanges.
      1. They can reduce or increase their efforts or rationalize the situation.
      2. In the workplace, inequity leads to lower productivity leads to lower productivity, reduced quality, increased absenteeism, and voluntary resignation.
    3. Equity judgements are based on perceptions, and are therefore subject to errors in perception.
      1. Organizations can try to deal with this by keeping salaries secret.
      2. However, the best remedy, in general, is clear and frequent communication.
  9. BUILDING TEAMWORK THROUGH OPEN COMMUNICATION.

    10. Explain how open communication builds teamwork, and describe how managers are likely to motivate teams in the future.

    1. Companies with highly motivated workforces usually have open communication systems and self-managed teams.
      1. Communication must flow freely when teams are empowered to make decisions.
      2. Also, most learning happens at the peer level.
      3. Empowerment works when people share their knowledge with their peers.
    2. PROCEDURES FOR ENCOURAGING OPEN COMMUNICATION INCLUDE:
      1. Create an organizational culture that rewards listening.
      2. Train supervisors and managers to listen.
      3. Remove barriers to open communication.
      4. Actively undertake efforts to facilitate communication.
    3. APPLYING OPEN COMMUNICATION IN SELF-MANAGED TEAMS.
      1. The text offers several examples of communication among members of self-managed teams in such organizations as FORD MOTOR COMPANY.
      2. For companies to implement such groups, managers must RE-INVENT WORK.
    4. CHANGING ORGANIZATIONS IS NOT EASY.
      1. MANY MANAGERS WERE TRAINED UNDER A DIFFERENT SYSTEM.
        1. Many are used to telling people what to do rather than consulting them.
        2. It is difficult for such managers to change.
      2. Employees often have a difficult time changing as well, and some have trouble getting involved in participative management.
    5. A MODEL FOR THE FUTURE: EMPLOYEE EMPOWERMENT.
      1. The text tells the story of MILLER BREWING COMPANY and MARY KAY COSMETICS as an example of a company that successfully created an efficient and effective team.
      2. Understanding what motivates employees is the key to success in goods-producing companies such as MILLER BREWING COMPANY and service-based firms such as MARK KAY COSMETICS.
    6. The lessons learned from these companies include:
      1. The future growth of industry depends on a motivated, productive work force.
      2. Motivation is largely internally generated by workers themselves.
      3. The first step in any motivational program is to establish open communications.
  10. MOTIVATION IN THE FUTURE Concept Check CONCEPT CHECK .
    1. Employees are not alike—different employees respond to different managerial and motivational styles.
    2. Tomorrow’s managers will not be able to use any one formula for all employees.
    3. They will need to work with each employee as an individual and fit the motivational effort to that individual.
    4. Different cultures experience motivational approaches differently.
    5. Cultural differences also apply to generations:
      1. Baby boomers (born between 1946 and 1964) experienced economic prosperity and optimism about the future.
      2. Generation X (born between 1965 and 1980) were raised with dual-career families and insecurity about a life-long job.
      3. Boomer managers need to be flexible with Gen X employees.
      4. Gen Xers focus on career security, not job security, and are willing to change jobs to do it.
    6. Gen Xers focus on career security, not job security, and are willing to change jobs to do it.
    7. Managers need to give workers what they need to do a good job—the right tools, the right information, and the right amount of cooperation.
      8.




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