ORGANIZATIONAL BEHAVIOR

S T E P H E N P. R O B B I N S
WWW.PRENHALL.COM/ROBBINS

T E N T H E D I T I O N
OBJECTIVES
AFTER STUDYING THIS CHAPTER,
YOU SHOULD BE ABLE TO:

1. Identify the four ingredients common to MBO

programs.
2. Explain why managers might want to use
LEARNING

employee involvement programs.

3. Contrast participative management with
employee involvement.
4. Define quality circles.
5. Explain how ESOPs can increase employee
motivation.

© 2003 Prentice Hall Inc. All rights reserved. 7–2

O B J E C T I V E S (cont’d)
AFTER STUDYING THIS CHAPTER,
YOU SHOULD BE ABLE TO:

6. Contrast gain-sharing and profit-sharing.

7. Describe the link between skill-based pay
plans and motivation theories.
8. Explain how flexible benefits turn benefits into
motivators.
9. Contrast the challenges of motivating
LEARNING

professional employees versus low-skilled

employees.

© 2003 Prentice Hall Inc. All rights reserved. 7–3

 What
What is
is MBO?
MBO?

Key
KeyElements
Elements
1.
1. Goal
Goalspecificity
specificity
2.
2. Participative
Participativedecision
decisionmaking
making
3.
3. An
Anexplicit
explicittime
timeperiod
period
4.
4. Performance
Performancefeedback
feedback
© 2003 Prentice Hall Inc. All rights reserved. 7–4
 Why
Why MBO’s
MBO’s Fail
Fail
 Unrealistic expectations about MBO results
 Lack of commitment by top management
 Failure to allocate reward properly
 Cultural incompatibilities

© 2003 Prentice Hall Inc. All rights reserved. 7–5

 Cascading
Cascading of
of Objectives
Objectives

© 2003 Prentice Hall Inc. All rights reserved. 7–6

 Linking
Linking MBO
MBO with
with Goal-Setting
Goal-Setting Theory
Theory
Goal setting theory demonstrates that hard goals
result in a higher level of individual performance than
do easy goals, that specific hard goals result in
higher levels of performance than do no goals at all
or the generalized goal of “do your best”, and that
feedback on one’s performance leads to higher
performance.
Compare these findings with MBO

© 2003 Prentice Hall Inc. All rights reserved. 7–7

 Employee
Employee Recognition
Recognition Programs
Programs
 Types of programs
– Personal attention
– Expressing interest
– Approval
– Appreciation for a job well done
 Benefits of programs
– Fulfills employees’ desire for recognition.
– Encourages repetition of desired behaviors.
– Enhances group/team cohesiveness and
motivation.
– Encourages employee suggestions for improving
processes and cutting costs.

© 2003 Prentice Hall Inc. All rights reserved. 7–8

 Linking
Linking Employee
Employee Recognition
Recognition Programs
Programs and
and
Reinforcement
Reinforcement Theory
Theory
Consistent with reinforcement theory, rewarding a
behavior with recognition immediately following that
behavior is likely to encourage its repetition.

Recognition ma take place many forms.

You may personally congratulate an employee in

private for a good job.
You can send a handwritten note or an email
message acknowledging something positive that
employee has done.

© 2003 Prentice Hall Inc. All rights reserved. 7–9

 What
What is
is Employee
Employee Involvement?
Involvement?

© 2003 Prentice Hall Inc. All rights reserved. 7–10

 Employee
Employee Involvement
Involvement Programs
Programs

1. Participative Management
2. Representative Participation
3. Work Councils
4. Board Representatives
5. Quality Circles
6. Employee Stock Ownership Plans

© 2003 Prentice Hall Inc. All rights reserved. 7–11

 Examples
Examples of
of Employee
Employee Involvement
Involvement Programs
Programs

© 2003 Prentice Hall Inc. All rights reserved. 7–12

 Examples
Examples of
of Employee
Employee Involvement
Involvement Programs
Programs
(cont’d)
(cont’d)

© 2003 Prentice Hall Inc. All rights reserved. 7–13

 Examples
Examples of
of Employee
Employee Involvement
Involvement Programs
Programs
(cont’d)
(cont’d)

© 2003 Prentice Hall Inc. All rights reserved. 7–14

 How
HowaaTypical
Typical
Quality
QualityCircle
Circle
Operates
Operates

© 2003 Prentice Hall Inc. All rights reserved. 7–15

 Examples
Examples of
of Employee
Employee Involvement
Involvement Programs
Programs
(cont’d)
(cont’d)

© 2003 Prentice Hall Inc. All rights reserved. 7–16

 Linking
Linking Employee
Employee Involvement
Involvement Programs
Programs and
and
Motivation
Motivation theories
theories

Theory Y is consistent with Participative management,

while Theory X aligns with the more traditional autocratic
style of managing people.
In Two-Factor Theory, employee involvement programs
could provide employees with intrinsic motivation by
increasing opportunities for growth, responsibility, and
involvement in the work itself.
Employee involvement with compatible with ERG theory
and efforts to stimulate the achievement need.

© 2003 Prentice Hall Inc. All rights reserved. 7–17

 Variable
Variable Pay
Pay Programs
Programs

© 2003 Prentice Hall Inc. All rights reserved. 7–18

 Types
Types of
of Variable
Variable Pay
Pay Programs
Programs

1. Piece-rate pay plans

2. Profit-sharing plans
3. Gain sharing

© 2003 Prentice Hall Inc. All rights reserved. 7–19

 Variable
Variable Pay
Pay Programs
Programs

© 2003 Prentice Hall Inc. All rights reserved. 7–20

 Variable
Variable Pay
Pay Programs
Programs (cont’d)
(cont’d)

© 2003 Prentice Hall Inc. All rights reserved. 7–21

 Skill-Based
Skill-Based Pay
Pay Plans
Plans

Benefits
Benefitsof
ofSkill-based
Skill-basedPay
PayPlans:
Plans:
1.1. Provides
Providesstaffing
staffingflexibility.
flexibility.
2.2. Facilitates
Facilitatescommunication
communicationacross acrossthe
theorganization.
organization.
3.3. Lessens
Lessens“protection
“protectionof
ofterritory”
territory”behaviors.
behaviors.
4.4. Meets
Meetsthe
theneeds
needsofofemployees
employeesforforadvancement
advancement
(without
(withoutpromotion).
promotion).
5.5. Leads
Leadsto
toperformance
performanceimprovements.
improvements.
© 2003 Prentice Hall Inc. All rights reserved. 7–22
 Skill-Based
Skill-Based Pay
Pay Plans
Plans (cont’d)
(cont’d)

Drawbacks
Drawbacksof
ofSkill-based
Skill-basedPay
PayPlans:
Plans:
1.1. Lack
Lackof
ofadditional
additionallearning
learningopportunities
opportunitiesthat
thatwill
will
increase
increaseemployee
employeepay.
pay.
2.2. Continuing
Continuingto
topay
payemployees
employeesfor
forskills
skillsthat
thathave
have
become
becomeobsolete.
obsolete.
3.3. Paying
Payingfor
forskills
skillswhich
whichare
areof
ofno
noimmediate
immediateuse
use
to
tothe
theorganization.
organization.
4.4. Paying
Payingfor
foraaskill,
skill,not
notfor
forthe
thelevel
levelof
ofemployee
employee
performance
performancefor forthe
theparticular
particularskill.
skill.

© 2003 Prentice Hall Inc. All rights reserved. 7–23

 Flexible
Flexible Benefits
Benefits

Core-plus
Core-plusPlans:
Plans:
aacore
coreof
ofessential
essential
benefits
benefitsand
andaamenu-like
menu-like
selection
selectionof
ofother
otherbenefit
benefit
options.
options.

Modular Flexible
FlexibleSpending
SpendingPlans:
Plans:
ModularPlans:
Plans: allow
predesigned
predesignedbenefits
benefits allowemployees
employeestotouse
use
packages their
theirtax-free
tax-freebenefit
benefit
packagesfor
forspecific
specific dollars
groups
groupsof
ofemployees.
employees. dollarsto
topurchase
purchase
benefits
benefitsand
andpay
payservice
service
premiums.
premiums.

© 2003 Prentice Hall Inc. All rights reserved. 7–24

 Special
Special Issues
Issues in
in Motivation
Motivation
 Motivating Professionals
– Provide challenging projects.
– Allow them the autonomy to be productive.
– Reward with educational opportunities.
– Reward with recognition.
– Express interest in what they are doing.
– Create alternative career paths.
 Motivating Contingent Workers
– Provide opportunity for permanent status.
– Provide opportunities for training.
– Provide equitable pay.

© 2003 Prentice Hall Inc. All rights reserved. 7–25

 Special
Special Issues
Issues in
in Motivation
Motivation (cont’d)
(cont’d)
 Motivating the Diversified Workforce
– Provide flexible work, leave, and pay
schedules.
– Provide child and elder care benefits.
– Structure working relationships to account for
cultural differences and similarities.
 Motivating Low-Skilled Service Workers
– Recruit widely.
– Increase pay and benefits.
– Make jobs more appealing.

© 2003 Prentice Hall Inc. All rights reserved. 7–26

 Special
Special Issues
Issues in
in Motivation
Motivation (cont’d)
(cont’d)
 Motivating People Doing Highly Repetitive Tasks
– Recruit and select employees that fit the job.
– Create a pleasant work environment.
– Mechanize the most distasteful aspects of the
job.

© 2003 Prentice Hall Inc. All rights reserved. 7–27