ob i motivation concepts & applications- perception & attitudes

Motivation Concepts & ApplicationsPerception & Individual Decision making

Attitudes & Job Satisfaction

04/12/23 PGC Business Management- XLRI

Shivkumar Menon

Motivation Concepts04/12/23 PGC Business Management- XLRI

Learning Objectives

1. Define Motivation and describe its 3 key elements

2. Early Theories of Motivation and its applicability today

3. Apply the predictions of Self Determination theory to intrinsic and extrinsic rewards

4. Understand the implications of employee engagement for management

5. Compare and contrast goal setting theory and management by objectives (MBO)

6. Contrast reinforcement theory and goal setting theory

7. Demonstrate how organizational justice is a refinement of equity theory

8. Apply the key tenets of expectancy theory to motivating employees

9. Compare contemporary theories of motivation04/12/23 PGC Business Management- XLRI

Motivation & Key Éléments“as the processes that account for an individual’s intensity, direction and persistence of effort towards achieving a goal”

Intensity – How hard a person tries. This is the most commonly observed factor when we talk about motivation. But this may not alone result in effective job performance outcomes.

Direction – Quality of the direction is equally important for effective outcomes.

Persistence – this dimension measures how long a person can maintain effort. Motivated individuals stay with a task long enough to achieve their goal


4 theories of motivation formulated in the 1950’s are still the best known ones even though its validity in today’s context is highly questionable.

Hierarchy of Needs Theory : Abraham MaslowHierarchy of Needs Theory : Abraham Maslow

Physiological: Includes hunger, thirst, sex, other bodily needs, shelter

Safety: Security, protection from physical and emotional harm

Social: Affection, belongingness, acceptance & friendship

Esteem: Internal factors such as self respect, autonomy & achievement and external factors like status, recognition & attentionSelf Actualization: Drive to become what we are capable of becoming including growth, achieving our potential and self-fulfillment

early théories of motivation


Hierarchy of Needs Theory: Abraham Maslow Hierarchy of Needs Theory: Abraham Maslow

The TheoryAlthough no need is ever fully gratified, a substantially satisfied need no longer motivates. Thus as each becomes substantially gratified, the next one becomes dominant.

In order to motivate someone, you need to understand what level of the hierarchy that person is currently on and focus on satisfying needs at or above that levelMaslow broke the five needs into higher and lower orders

Hig

her

Ord

er

Need

s

1. Self Actualization

2. Esteem

3. Social

Low

er O

rder

Need

s

1. Physiological

2. Safety

Limitation of Maslow’s TheoryThe importance of higher and lower order is influenced considerably by culture and hence differs upon country to counter and empirical evidence to support the theory is missing

(Satisfied Internally i.e. within the person)

(Satisfied externally i.e. pay, union contracts and tenure)



Theory X and Theory Y : Douglas MacgregorTheory X and Theory Y : Douglas MacgregorDouglas Macgregor proposed two distinct views of human beings, basically one negative Theory X and other positive Theory Y

(-) Theory X

Managers believe employees inherently dislike work and therefore need to be directed or coerced into performing it.

(+) Theory Y

Managers assume employees can view work as being as natural like rest or play & therefore the average person can learn to accept and to seek responsibility. A similarity can be drawn to Maslow’s higher order social, esteem and self actualization needs of people. Hence based on this assumption, Douglas proposed ideas like participative decision making, responsibilities, challenges to bring cohesion and better productivity in teams.Limitation of Douglas Macgregor’s TheoryNo empirical evidence again to support that this theory actually works in the workplace



Psychologist Frederick Herzberg came up with a two factor theory also called as Motivation Hygiene Theory . The premise was that an individual’s relationship to work is basic & that attitude towards work can determine success or failure.

What makes people feel exceptionally good or bad in a job?Based on his study, Herzberg suggested that the opposite of satisfaction is no satisfaction and opposite of dissatisfaction is no dissatisfaction

Removing dissatisfying factors did not ensure Job Satisfaction.

“Factors which give satisfaction at the workplace are distinctly different from factors which give dissatisfaction”

Intrinsic factors related to job satisfaction & extrinsic factors to dissatisfaction.

Two Factor Theory aka Motivation Hygiene Theory: Frederick HerzbergTwo Factor Theory aka Motivation Hygiene Theory: Frederick Herzberg



Comparison of Satisfiers & Dissatisfiers (hygiene factors) at the workplace





Limitation of Herzberg’s Theory

1. Methodology of compiling data was through self reports. When things go well, people take credit and when it goes bad, blame it to the external environment

2. Reliability of methodology is questionable. Contamination of findings was possible

3. No overall measure of satisfaction was utilized.

4. To make his theory work, we have to assume that satisfaction and productivity are strongly related, which may be unrealistic often .




McClelland’s theory of NeedsMcClelland’s theory of Needs

nAch

nPow

nAff

Mc Clelland’s theory looks at 3 needs: Achievement, Power and Affiliation.

(nach) : the drive to excel, to achieve in relationship to a set of standards

(nPow) : is the need to make others to behave in a way they would not have otherwise

(nAff) : is the desire for friendly and close interpersonal relationships

Limitation of McClelland’s TheoryProcess of evaluating is very time consuming and expensive and hence few organizations are willing to invest in measuring this concept


Contemporary Theories of Motivation

Self Determination Theory: Edward L. Deci & Richard M. RyanSelf Determination Theory: Edward L. Deci & Richard M. Ryan“It proposes that people prefer to feel they have control over their actions, so anything that makes a previously enjoyed task feel more like an obligation, than a freely chosen activity will undermine motivation”

Self Determination Theory focuses on cognitive evaluation theory which hypothesizes that extrinsic rewards will reduce intrinsic interest in a task.

When people are paid for work, it feels less like something they want to do and more like something they have to do.

Extrinsic rewards work act like motivators for employees when they perceive them as a reward for doing a good job but when they still enjoy it and are in control of the task.

If a sales representative really enjoys selling, a commission indicates she’s been doing a good job and increases her sense of competence by providing feedback that could improve intrinsic motivation.

But on the flip side, if a programmer values writing code because she likes to solve problems, a reward for an externally imposed standard she does not accept, such as daily target on the number of programs she has to code, she may find the entire activity coercive and her intrinsic motivation would suffer.

A couple of examples are as outlined


Goal Setting Theory: Edwin LockeGoal Setting Theory: Edwin Locke


Research on goal setting theory reveals impressive effect of goal specificity, challenge and feedback on performance. Specific goals produce a higher level of output than the generalized goal “do your best”. It’s a cognitive approach, proposing that an individual’s purposes direct his actions.

People are motivated by difficult goals. Why?

1. Challenging goals gets our attention and thus tends to help us focus

2. Difficult goals energize us because we have to work harder to attain them

3. When goals are difficult, people in persist in trying to attain them.

4. Difficult goals leads us to strategies that help us to perform our job or task more effectively.

Factors influencing goals

Feedback – Feedback on progress of goals helps to identify discrepancies or slippages early helping to take corrective action at the right time

Goal Commitment - the theory believes he or she can achieve the goal and wants to achieve it.

Task Characteristics – Goals themselves affect performance when the set tasks are simple

National Culture – Goal setting and achievement statistics will be different in individualistic and collectivist cultures


Management by Objectives: Peter DruckerManagement by Objectives: Peter Drucker


A systematic way to utilize goal setting is with management by objectives which emphasizes participatively set goals that are tangible, verifiable and measurable.Four ingredients are common to Goal Setting theory and MBO, goal specificity, participation in goal setting, time period and performance feedback.

The only area of disagreement between both theories is participation. In Goal setting theory participative as well as assigned goals are considered to be effective.


Self Efficacy Theory: Albert BanduraSelf Efficacy Theory: Albert Bandura


Self Efficacy theory aka Social cognitive theory or social learning theory refers to an individual’s belief that he or she is capable of performing a task. The higher your self efficacy the more confidence you in your ability to succeed.

How will managers use Self Efficacy theory to achieve goals and how will they help their employees to achieve high levels of self efficacy?

•Individuals who already possess a high self efficacy will try harder to master the challenge, whereas individuals with low self efficacy will give up on the task altogether. Surprisingly individuals with higher self efficacy get egged on even with negative feedback

•Managers will bring goal setting and self efficacy theory together to help employees to achieve higher self efficacy. Both the theories complement each other.

•Employees whose manager sets difficult goals will have a higher self efficacy and set higher goals for their own performance. Setting difficult goals shows their confidence on your abilities. People with low self efficacy will feel they are getting picked up on and reduce their efforts further.


Albert Bandura proposes 4 approaches to increase self efficacy

Enactive Mastery – gaining relevant experience with the task or job. IF an individual has successfully done the job earlier, he/she is more confident to do the job successfully again

Vicarious Modeling – becomes more confident when you see someone else who is an equal to you, succeeding in the task. Someone equal to you is more important than seeing a Hulk break boulders and expecting yourself to do the same task effectively

Verbal Persuasion – commonly used by trainers in their training programs, convincing you about possessing the skills to become successful. The best way to use verbal persuasion is through the Pygmalion or Galatea effect. It’s a form of self fulfilling prophecy in which believing something can make it true.Arousal – leads to an energized state, so the person gets “psyched up” and performs better.


Self Efficacy Theory: Albert BanduraSelf Efficacy Theory: Albert Bandura


Reinforcement Theory: B F SkinnerReinforcement Theory: B F Skinner


Reinforcement theory states that behavior is a function of consequence. It ignores the inner state of the individual & concentrates solely on the what happens when he or she takes action.

Operant conditioning or the Law of Effect is the most relevant component of the Reinforcement theory. It says, people learn to get something they want or to avoid something they don’t want.

Hence reinforcement strengthens a behavior and increases the likelihood it will be repeated.

Individuals can learn by being told or by observing what happens to other people as well as through direct experiences. This view that we can learn through both observation and direct experience is called the Social Learning TheoryFour processes determine social learning theory’s influence on an individualAttentional Processes – people learn when the model is attractive and they recognize and pay attention to its critical features.

Retention Processes – influence of the model depends on the retention of the models’ action & capability in the individual’s mind

Motor Reproduction Processes – after a person has seen a new behavior by observing the model, watching must be converted to doing

Reinforcement Processes – individuals are motivated to exhibit the modeled behavior if positive incentives or rewards are provided.04/12/23 PGC Business Management- XLRI


Employees perceive what they get from a job situation (salary, perks, recognition) in relationship to what they put into it and then they compare their outcome: input ratio with that of relevant others and respond to the inequities in a positive or a negative manner depending on the type of inequities observed by themReferents to the Equity Theory

Self – Inside : employee’s experiences in a different position inside the same organization

Self – Outside : employee’s experiences in a situation or position outside the organization

Other – Inside : another individual or group of individuals inside the organizationOther – Outside: another individual or group of individuals outside the organization

Employees might compare themselves with multiple referents inside the organization or outside but their behavior at work gets influenced by the equity theory after a comparison of outcome: input ratio.

Equity Theory / Organizational Justice: John Stacy AdamsEquity Theory / Organizational Justice: John Stacy Adams


Equity Theory / Organizational Justice: John Stacy AdamsEquity Theory / Organizational Justice: John Stacy Adams

Choices employees can make when they perceive inequity

Choices employees can make when they perceive inequity

1. Change inputs (slack off)

2. Change outcomes (increase output)

3. Distort/change perceptions of self

4. Distort/change perceptions of others

5. Choose a different referent person

6. Leave the field (quit the job)

1. Change inputs (slack off)

2. Change outcomes (increase output)

3. Distort/change perceptions of self

4. Distort/change perceptions of others

5. Choose a different referent person

6. Leave the field (quit the job)

Focus of Equity Theory/Organizational Justice

Distributive Justice: Employees’ perceived fairness of the amount rewards among individuals and who received them.

Procedural Justice: the perceived fairness of the process used to determine the distribution of rewards.

Interactional Justice: individual’s perception of the degree to which he/she is treated with dignity, concern and respect.



Expectancy Theory: Victor VroomExpectancy Theory: Victor Vroom


“ the strength of our tendency to act a certain manner depends on the strength of our expectation of a given outcome and its attractiveness”

In practical terms, employees will be motivated to exert a high level of effort when they believe it will lead to a good performance appraisal; that a good performance appraisal will lead to organizational rewards such as bonuses, salary increases or promotions and that the rewards will satisfy the employee’s personal goals


Integrating contemporary theories of motivation

Goals effort loop reminds us that goals direct behavior.

Expectancy theory predicts employees will exert a high level of effort if they perceive a strong relationship between effort & performance, performance & rewards, rewards & satisfaction of personal goals.

Each of these relationships is in turn influenced by other factors. For effort to lead to good performance, the individual must have the ability to perform and perceive the performance appraisal process to be fair and objective.

Performance Reward relationship will be strong if the individual perceives that performance (rather than seniority, nepotism or other criterion) is rewarded.

If cognitive evaluation theory was fully valid in the workplace, we would predict here that basing rewards on performance should decrease the individual’s intrinsic motivation.

The final link in the expectancy theory is the rewards-goal relationship. Motivation is high if the rewards for the high performance satisfied the dominant needs consistent with individual goals04/12/23 PGC Business Management- XLRI

Motivation: Concepts to Application


Learning Objectives

1. Describe the Job Characteristics Model & evaluate the way it motivates by changing the work environment

2. Compare and contrast the main ways jobs can be redesigned

3. Identify three alternative work arrangements and show they might motivate employees

4. Give examples of employee involvement measures and show how they can motivate employees

5. Demonstrate how the different types of variable pay programs can increase employee motivations

6. Show how flexible benefits turn benefits into motivators

7. Identify the motivational benefits of intrinsic rewards04/12/23 PGC Business Management- XLRI

Motivating by Job Design: The Job Characteristics Model

5 Core Job Dimensions

Research on motivation focuses on approaches that link motivational concepts to changes in the way work is structured. Research in Job design suggests the way the elements of a job can increase or decrease effort. But first the JCM and then Job redesign.

Skill Variety: is the degree to which a job requires a variety of different activities so the worker can use a number of different skills & talent. Viz. A garage owner-operator scores high on skill variety and a body shop worker scores lowTask Identity: is the degree to which a job requires completion of a whole & identifiable piece of work. A cabinet maker scores high on Task Identity and a job scoring low on this dimension is a man operating a lathe machine solely to make table legs

Task Significance: is the degree to which a job affects the lives or work of other people. A nurse scores high on this dimension and a sweeper in the same hospital would score low04/12/23 PGC Business Management- XLRI


5 Core Job Dimensions

(Contd…)

Autonomy: is the degree to which a job provides the worker freedom, independence and discretion in scheduling work and determining the procedures in carrying it out. A sales person will score high on this dimension and a software programmer cracking codes will score low

Feedback: is the degree to which carrying out work activities, generates direct and clear information about your own performance. A job with high feedback is assembling ipads and testing them to see whether they operate properly and a factory worker who assembles ipads receives low feedback

MPS = Skill Variety + Task Identity + Significance * Autonomy * Feedback

3

To be high on MPS, jobs must be high on at least one of the 3 factors that lead to experienced meaningfulness and high on both autonomy & feedback. If jobs score high on MP, it predicts motivation, performance & satisfaction will improve and absence & turnover will reduce



When employees suffer from monotony and routine work two approaches which can reduce absenteeism or employee turnover is Job Rotation & Job Enrichment

Job Rotation is the periodic shifting of an employee from one task to another task which has similar skill requirements at the same organizational level.

Strengths: eliminates monotony, increases motivation and helps employee to understand how their work contributes to the organization.

Weakness: can hamper productivity and efficiency with frequent job rotations in teams, team members may take time to adjust to new employees and supervisors will have to spend more time in monitoring and hand holding the new employee. Training costs also increases exponentially.

Job Enrichment expands the job by increasing the degree of control to the worker by adding planning, executing, evaluation of the work and adding feedbacks on his performance in different forms.

Strengths: helps the employee understand the impact and significance of their roles in the organization, feedback can be internal or external which also allows them to value their work better, expansion of the role helps them to learn more new skills and breaks monotony

Weakness: works best when it compensates for poor feedback and rewards systems.



Flextime: employees must work a specific number of hours per week but are free to vary their hours of work within certain limits. Each day consists of a common core time usually 6 hours with a flexibility band surrounding it.

The core may be 10 am to 4 pm with the office opening at 7 am and closing at 10pm giving employees the flexibility to work the balance 2 hours either at the start of the day or end of the day.

Benefits: Reduced absenteeism, less employee turnover, higher productivity, organizational citizenship behavior, employee engagement or involvement in the organization

Job sharing: allows two or more individuals to split a traditional 40 or 60 hour week job. One might perform the job from 8 am to noon and the other from noon to 8 pm.

Benefits : 2 heads but pay for one, reduced absenteeism, less employee turnover, higher productivity, opportunity to hire skilled workers in women with young children or retirees etc.

Drawbacks : getting the right combination or pair to work together on a project



Telecommuting: work from home

Benefits : access to skilled workers, reduced absenteeism, less employee turnover, higher productivity, opportunity to hire skilled workers in women with young children or retirees etc.

Drawbacks : for the employee, “out of sight could become out of mind” and they may get skipped from promotions, informal workplace interaction with co—workers plays a vital role in boosting morale of employees, hence employees who have a high need for social interaction will find such alterations at the work place stifling


Employee Involvement

Employee involvement is a participative process that uses employees’ input to increase their commitment to the organization’s success. Increasing autonomy and control over their work lives will keep the employees motivated, feel important in their roles and hence keep them committed to the organizationExamples of Employee Involvement ProgramsParticipative ManagementSubordinates share a significant degree of decision making with immediate superiors. Participative management works only when the ability of the employees is commensurate to the task or it may alternatively lead to low productivity

Representative ParticipationIts goal is to redistribute power within an organization putting labor on a more equal footing with the interests of the management and stockholders by having a representation in the board for workers. But in reality, board representatives though elected employees are generally figure heads and do not have the power to influence the management and there is also a wide gap between the elected employees and the employees of the organization itself for the benefits to trickle down to all the employees04/12/23 PGC Business Management- XLRI

Using Rewards to Motivate Employees

What to pay?

How to pay

Process of initially setting pay levels entails balancing internal equity (the worth of the job to the organization (job evaluation) ) to external equity (the external competitiveness of an organization’s pay relative to pay in the industry)

Employee cost is the highest operating cost for any business and taking a decision to pay above the market median or below is a strategic decision which has widespread implications on employee turnover, productivity, company’s profitability and positioning in the market

A number of organizations are moving from paying based on credentials, tenure of service to productivity and contribution instead of entitlement. Variable pay programs are getting introduced in different forms to motivate employees to perform well in business.



Piece Rate Pay

Merit Based Pay

Bonuses

As a means of compensating production workers with a fixed sum for each unit of production completed. This plan provides no base salary and pays the employees only for what he or she produces.

They are not feasible for many jobs as all jobs cannot be linked to successful outcomes. Viz. Surgeon

Pays for an individual performance based on performance appraisal ratings. If designed correctly, merit based plans let individuals perceive a strong relationship between performance and rewards

Recent Hewitt studies suggest companies give 10% to the top performers, 3.6% to average performers and 1.5% to low performers. Limitations are that this plan is annually based and hence are as valid as the performance ratings itself.

Bonus is a significant component of total compensation for many jobs. Limitations of bonus as a variable pay is that over a period of time, workers consider this as entitlement and a critical part of salaries and if not declared in a bad year, can lead to sudden spikes in employee turnnover



Skill Based Pay

Profit Sharing Plans

Gainsharing

Aka competency based or knowledge based pay is an alternative to job based pay that bases pay levels on the number of skills possessed by the individual has or how many jobs they can do.

Distributes compensation based on some established formula designed around a company’s profitability. Compensation can be in the form of direct cash outlays or employee stock options

Gain sharing is different from profit sharing in tying rewards to productivity gains rather than profits, so employees can receive incentive awards even when the organization isn’t profitable. As benefits accrue to groups of workers good performers pressurize low performers to improve their performance



Employee Stock Ownership Plans (ESOP)A company established benefit plan in which employees acquire stock at below market prices. Often given to senior leaders in the organization , in some organizations, ESOPS’ are offered at all levels.

ESOP plans for top management can reduce unethical behavior when the stock prices are linked to individual profitability, top management has ample incentive to desist from inflating balance sheets or fabricating key performance indicators for personal gains

Variable pay programs increase motivation and productivity. Research supports that profit sharing plans have higher levels of profitability than those without them


Flexible Benefits: Developing a benefit package

A standardized benefit package would be unlikely to meet all the needs of the different demographic set of groups employed in organizations today.

One size does not fit all. The employee mix in today’s context is more of singles, two income families with no children and families with children. Flexible benefits package allows all groups to choose and opt for the best benefits they can leverage from the organization.

3 types of flexible benefit plans in vogue today.

Modular plans – employees can choose between different modules based on their requirements

Core Plus Plans - consists of a core of essential benefits and a menu like selection of others from which employees can select. Employees are given “benefit credits” which allow the purchase of additional benefits that uniquely meet his or her needs

Flexible spending plans – allows employees to set aside pretax money up to the amount offered in the plan to pay for particular benefits, such as healthcare and dental premiums etc.


Intrinsic Rewards: Employee Recognition Programs

Rewards can fulfill the extrinsic and intrinsic needs of employees and organizations are realizing that fulfilling the intrinsic needs by recognizing employees in the workplace increases motivation, citizen ship behavior and reduces turnover.


Perception & Individual Decision makingPerception & Individual Decision making

38Learning ObjectivesLearning Objectives

Define Perception & factors that influence it

Attribution Theory

Common Shortcuts adopted by Individuals to make Judgments

Link between Perception & Individual Decision making

Rational Model of Decision Making

Common Decision Biases & Errors

Individual Differences & Organizational Constraints affecting decision making

Ethics in Decision making

Define Creativity & its 3 component model

39Perceptions & Factors influencing it

“a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment”

Importance of Perception in the study of OBImportance of Perception in the study of OB

People’s behavior is based on their perception of what reality is, not on reality itself

The world as it is perceived, is the world that is behaviorally important

40Factors influencing Perception

41Attribution Theory

Attribution Theory suggests that when we observe an individual’s behavior, we attempt to determine whether it was internally or externally caused.

That determination also depends on 3 factorsa.distinctivenessb.consensusc.consistency

Internally caused behaviorsThose we believe to be

under the personal control of the individual

Externally caused behaviors

What we imagine the situation forced the individual to do

For example if one of your employees is late for work, you might attribute that to his partying into the wee hours and oversleeping. This is an internal attribution

But if you attribute his lateness to an automobile accident that tied up traffic, its an external attribution

42Attribution Theory

Distinctiveness

refers to whether an individual displays different behaviors in different situations. Viz. Is the employee who is late today, a regular in blowing off commitments? If the behavior is unusual, it could be an external attribution, but if it’s a frequent feature, it comes as an internal attribution

Consensus If everyone who faces a similar situation responds in the same manner the behavior shows consensus

Consistency

An observer looks for consistency in a person’s actions. Does the person respond in the same way over time? Coming in 10 minutes late for work, is not perceived in the same way for an employee who has never been late, than an employee who is late 2 to 3 times in a week. The more consistent the behavior, the more we are inclined to attribute this to internal causes

43Fundamental Attribution Error

An important finding from attribution theory research is that errors or biases distort attribution. We underestimate the influence of external factors and overestimate the influence of internal or personal factors while judging the behavior of other people

The fundamental attribution error explains why a sales manager is prone to attribute the performance of his/her sales agents to laziness rather than to an innovative product line introduced by a competitor.

People tend to attribute their own successes to internal factors such as ability or effort, but blame failure on external factors such as a bad luck or unproductive workers

People tend to attribute ambiguous information as relatively flattering and accept positive feedback while rejecting negative feedback. This is self serving bias

44Frequently used shortcuts while judging othersSelective PerceptionPeople selectively interpret what they see on the basis of their interests, background, experience, and attitudes

AnalogyDearborn and Simon asked 23 executives (6 in sales, 5 in production, 4 in accounting and 8 in miscellaneous functions) to read a comprehensive case describing the organization and activities of a steel company. Each manager was asked to write down the most important problem in the case.

83% of the sales executives rated sales important, whereas only 29% of the others did so. Participants perceived as important the aspects of a situation specifically related to their own unit’s activities and goals.

A group’s perception of organizational activities is selectively altered to align with the vested interests the group represents.

45Frequently used shortcuts while judging othersHalo EffectDrawing a general impression about an individual on the basis of a single characteristic such as intelligence, sociability or appearance

For example, If you are a critic of President Obama, try listing 10 things you admire about him and if you are an admirer, try listing 10 things you dislike about him. No matter which group describes you, odds are you wont’ find this exercise easy!

That’s the halo effect! Our general views contaminate our specific ones

Contrast EffectContrast effect can distort perceptions. We don’t evaluate a person in isolation. Our reactions are influenced by other person we have recently encountered.

For example, in a series of job interviews, interviewers can get distorted in their views about a candidate based on where the candidate is placed in the interview schedule.

A candidate is likely to receive a favorable evaluation if preceded by mediocre applicants and a less favorable one if preceded by a strong applicant

46Frequently used shortcuts while judging othersStereotyping

When we judge a person on the basis of our perception of the group to which he or she belongs we are using the shortcut called stereotyping.

For example, Women are generally considered as bad drivers. A sweeping generalization made in this context is that, their judging capabilities are poor and they get anxious very fast. But there may not be a shred of truth when applied to a specific person or situation.

But stereotyping helps us to make decisions faster in our day to day life.

47Specific Applications of shortcuts in OrganizationsPeople in organizations are always judging each other. Managers must appraise their employee performances. Co-workers size up each other or a new person who has joined the group. Our judgments have important consequences for the organization

Employment Interview Interviewers form impressions within the first few seconds of meeting a candidate and form opinions within the next 4 to 5 minutes. Very often they may be inaccurate ones or stereotypes based on their past experience, situations, temperament or behavior of the candidate in the initial introductions. Most interviewers change their decisions about candidates very little after forming their initial opinion.

Performance Expectations Self fulfilling prophecy or the pygmalion effect describe how an individuals’ behavior is determined by other people’s expectations.

If a manager expects big things from his/her people, they are not likely to let down and if they expect nothing spectacular from a team member, they don’t feel let down.

Expectations become reality, because expectations are also formed based on the perception of the perceiver about the target, which may not be objective or actual reality but a distorted view of the perceiver

48Specific Applications of shortcuts in Organizations

Performance Evaluation an employee’s future is closely tied to the appraisal- promotion, pay raises and continuation of employment are among the most obvious outcomes.

Although appraisals can be objective but in many roles in an organization, many jobs are evaluated on subjective terms. Even sales roles, which are conventionally evaluated objectively, often have subjective elements in the appraisal process, which may have positive or negative outcomes based on the perception of the manager or leaders.

Subjective evaluations often fall prey to errors and biases like selective perception, halo effect, contrast effect and so on.

Ironically sometimes performance ratings say as much about the evaluator as they do about the employee

49The link between Perception & Individual Decision making

Decision making in organizations have moved from the conventional. Hence we find non managerial personnel also taking decisions at the workplace. But individual decision making & the quality of choices he/she takes, is also heavily influenced by their perception.

Decision making happens often as a reaction to a problem. A problem is defined as a discrepancy between current state of affairs to some desired state.

Problems do not come labeled as “Problems”. Hence for example, a sales manager In a division of a business can see a 2% drop in business in comparison to last year as alarming and the same may not hold true for another sales manager in a different business. Both may have different reasons for feeling so, but at the same time, their individual perceptions will actually influence their decisions in their roles.

These are called Perceptual distortions which often surface and can bias analysis and conclusions.

50Rational Model of Decision making

Assumptions made by the Rational Decision Making Model

1. Decision maker has complete information2. Ability to identify all relevant options in an

unbiased manner3. Chooses an option with the highest utility

Unlike the assumptions in the model, people are usually content to find an acceptable and reasonable solution to a problem rather than an optimal one

6 step process in the Rational decision making model

1) Define the problem

2) Identify the decision criteria

3) Allocate weights to the criteria

4) Develop the alternatives

5) Evaluate the alternatives

6) Select the best alternative

51Bounded Rationality & Intuition

Human mind cannot formulate and solve complex problems with full rationality and hence operates with the limited confines of bounded rationality.

We construct simplified models that extract essential features from problems with out capturing all their complexity.

There is nothing wrong in taking decisions on the basis of bounded rationality. Very often the cost, time spent and extracting all relevant information for a rational decision making model to work may still give the same results than if operated on bounded rationality or the ends may not justify the means.

Bounded Rationality

IntuitionIntuitive decision making , an unconscious process created from distilled experience.

Intuition isn’t rational, but not may not be entirely wrong too. Intuition is a highly developed form of reasoning that is based on years of experience and learning.

52Common biases & errors in decision makingOverconfidence Biasbelieving too much in our ability to take correct decisions. Holding a

very optimistic view of our decisions.

Anchoring Bias

tendency to fixate on initial information & fail to adequately adjust for subsequent information. Our mind gives a disproportionate amount of emphasis to the first information it receives.

Confirmation Bias

confirmation bias represents a case of selective perception; we seek out information that reaffirms our past choices, and we discount information that contradicts them.

Availability Biastendency to base judgments based on readily available information. Events that evoke emotions or that are vivid in our minds leading us to overestimate or underestimate. Viz. appraisals where the manager recollects current behavior of employee more than an objective assessment of the whole year

53Common biases & errors in decision makingEscalation of commitmentstaying with a decision even when there is clear evidence its wrong.

Individuals escalate commitment to a failing course of action when they view themselves are responsible for the failure aka throwing good money over bad

Randomness Errortendency to believe we can predict the outcome of random events is the randomness error. Decision making suffers when we try to create meaning in random events

Risk Aversion tendency to prefer a sure thing over a risky outcome is risk aversion.

Hindsight biastendency to believe falsely, after the outcome is known, that we’d have accurately predicted it.

54Influences on Decision making: Individual Differences

Decision making in practice is characterized by bounded rationality, biases, errors and intuition. Individual differences also create deviations in the rational model.Personality Personality has a strong influence in decision making. Conscientiousness and Self Esteem are two personality traits which are taken as an example.

Two specific facets of the same personality trait viz. Conscientiousness can influence different & contrasting decisions in the same situation.

Achievement striving people were more likely to escalate their commitment, as they hate to fail and hope to forestall failure by escalating commitment ; they also seem to more susceptible to hindsight bias , because they have a greater need to justify their actions

Dutifulness in people makes them more inclined to see what is best for the organization which is a direct contrast to achievement striving people

55Influences on Decision making: Individual DifferencesGender

Rumination offers insights on gender differences in decision making. Rumination is reflecting at length. Women tend to reflect a lot analyzing past, present and future.

Overanalyzing problems makes it harder to solve. One reason seems to be that women tend to base their self esteem and well being on what others thinks about themMental AbilityPeople with higher mental ability also get influenced by common errors and biases but have the ability to comprehend faster and desist from repeating the same errors

Cultural DifferencesCultural differences influences personality which has its effects in decision making. In an individualistic society like the US, emphasis on solving a problem and administering solutions is much higher than in Asian economies, where accepting is more the norm because of their beliefs in the Yin and Yan concept

56Influences on Decision making: Organizational ConstraintsPerformance Evaluation

Managers are strongly influenced by the criteria on which they are evaluated and will go to any lengths to ensure those criterias are met irrespective of its impact on people and organizational efficiency.

Reward Systems

Reward systems in organizations influences decision making by suggesting which choices will have better personal pay offs. If the organization believes in risk aversion, managers make conservative choices and on the flip side, if it believes in “pay for performance”, managers make riskier choices to achieve success.

Formal RegulationsRules and regulations in organizations can at times become a

constraint in taking decisions. Example Macdonalds the restaurant has more than 72 rules and regulations which needs to be monitored by restaurant managers on a daily basis.

57Influences on Decision making: Organizational Constraints

System Imposed Time ConstraintsAll important decisions come with explicit deadlines, which may eventually

impact or put pressure on completeness of information to take optimal decisions. A new product development team may have to submit their findings to the executive committee review board which may evaluate it for further funding.

Historical Precedents

Decisions are not made in vacuum and generally have context to it. Hence we find budgets for the next year are generally based on last year’s budgets.

58Ethics in Decision making

Ethical considerations form an important criterion in organizational decision making. Three ethical decision criterias are outlined below.

Utilitarianismfocuses purely on making decisions for business outcomes, for the

greater good. Its consistent with goals such as productivity, efficiency and high profits

Advantages Limitations

promotes efficiency & productivity & focuses on profit generation for shareholders and investors

sidelines rights of individuals for the greater good.

Rights

emphasis on rights in decision making means respecting and protecting the basic rights of individuals, such as right to privacy, speech and due process. Whistleblowers are an example of protection of right to speech


protects individuals from injury & is consistent with freedom and privacy

brings a legalistic environment hindering productivity and efficiency

59Ethics in Decision making

Justice

impose and enforce rules fairly and impartially to ensure justice or an equitable distribution of benefits & costs. Union members typically favor this view. Justifies paying fair wages to all employees and base pay on seniority instead of performance criterions.


focus on justice ensure the minority representation is adequate

encourages sense of entitlement that reduces risk taking, innovation and productivity. Viz. Indian economy

60Creativity & the 3 component model of Creativity

Rational decision making will often improve decisions, but a rational decision maker also needs creativity, the ability to produce novel and useful ideas.

What can individuals and organizations do to stimulate employee creativity?

Three-Component Model of Creativity

The three component model proposes that individual creativity requires expertise, creative thinking skills and task motivation and each feeds on the other in order to develop creative ideas which eventually aid in rational decision making

Attitudes & Job Satisfaction

Attitude isn’t everything, but its’ close…

Learning Objectives

a) What is Attitude and contrast its 3 components

b) Relationship between Attitudes and behavior

c) Compare and contrast the major Job Attitudes

d) Define Job Satisfaction and how we can measure it.

e) Summarize the main causes of Job Satisfaction

f) Identify 4 employee responses to dissatisfaction

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Attitude & its main components

Attitudes

Evaluative statements or judgments concerning objects, people, or events.

They reflect how we feel about something.

Affective ComponentThe emotional or feeling segment of an attitude.

Emotion: “I’m angry over how little I’m paid”

Cognitive componentThe opinion or belief segment of an attitude.

Belief: “My pay is low”

Behavioral ComponentAn intention to behave in a certain way toward someone or something.

Intention: “I’m going to look for another job that pays better”

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Relationship between Attitudes and BehaviorRelationship between Attitudes and Behavior

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Measuring A-B Relationship

Does Behavior follow Attitude or is it the other way round? Leon Festinger, a researcher argued that Attitude follows behavior. As an example, a friend of yours has consistently argued that the quality of Indian Jeans is poor as compared to imports from the US, but his sister unaware of his views, buys him a nice pair of jeans from Flying Machine. Notice how he suddenly says that Indian denims are really world class.

Theory of Cognitive Dissonance

any incompatibility an individual might perceive between two or more attitudes or between behavior and attitudes.

Individuals seek to reduce this gap, or “dissonance”. They either alter the attitudes or the behavior, or they develop a rationalization for the discrepancy.

Desire to reduce dissonance depends on the following moderating factors:

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Moderating Variables

Research indicates that there is a strong relationship between attitudes and behavior and the moderating variables are:

Correspondence to Behavior

Importance of Attitude

Important attitudes reflect our fundamental values, self interest or identification with individuals or groups we value.

Specific attitudes tend to predict specific behaviors, whereas general attitudes tend to best predict general behaviors. viz. Asking someone about her intention to stay with an organization for the next 6 months is likely to better predict turnover for that person than asking her how satisfied she is with her job overall.

On the other hand, overall job satisfaction would better predict a general behavior, such as whether the individual was engaged in her work or motivated to contribute to her organizations

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Moderating Variables

Attitude behavior relationship is likely to be much stronger if an attitude refers to some thing with which we have direct personal experience.

Asking a college student with no work experience to respond to working for an authoritarian supervisor is far less likely to predict actual behavior than asking the same question to employees who have actually worked for such an individual.

Accessibility

Attitudes that our memories can easily access are more likely to predict our behavior. So attitudes which are frequently exhibited by a person shapes their behavior towards it.

Social Pressures

Discrepancies between attitudes & behavior happen often on account of social pressures to behave in a certain manner hold merit. This could be the reason why tobacco executives who are not smokers themselves and who tend to believe the research linking smoking to cancer don’t actively discourage people from smoking

Direct Experience with the attitude

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Job AttitudesJob Attitudes

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Major Job Attitudes

Job InvolvementIdentifying with the job, actively participating in it, and considering performance important to self-worth

Job SatisfactionA collection of positive and/or negative feelings that an individual holds toward his or her job resulting from an evaluation of its characteristics

Perceived Organizational Support (POS)

Degree to which employees feel the organization cares about their well-being

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Major Job Attitudes

Employee Engagement

An individual’s involvement, satisfaction with, and enthusiasm for the organization

Organizational CommitmentIdentifying with a particular organization and its goals, and wishing to maintain membership in the organization (Affective, Normative, and Continuance Commitment)

The 3 Component Model of Organizational CommitmentThe 3 Component Model of Organizational Commitment

Affective Continuance Commitment

Normative Commitment

(Affection for (Affection for your job)your job)

(Fear of Loss)(Fear of Loss) (Sense of (Sense of Obligation to stay)Obligation to stay)04/12/23

Job SatisfactionJob Satisfaction

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How do you define Job Satisfaction…

A positive / negative feeling about a job resulting from evaluation of its characteristics is a very broad term. Jobs require interacting with co-workers & bosses, following organizational rules and policies, meeting performance standards, living with less than ideal working conditions.

Hence an employee’s assessment of his/her satisfaction at the workplace is a complex summation of many discrete elements, which may either leave them enthused, disenchanted or may condition them to remain static and not think about satisfaction at all.

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Measuring Job Satisfaction

Two approaches are popular globally.

Both approaches are not wrong.

The Single Global Rating scale is simplistic in nature and saves time

The Summation of job facets breaks the numerous elements involved in a job to point out the specific elements which are causing dissatisfaction or high satisfaction if any 04/12/23

Causes of Job Satisfaction

• Pay only influences Job Satisfaction to a point– After about INR 20 Lacs per annum, there is no relationship between

amount of pay and job satisfaction.

• Personality can influence job satisfaction– Negative people are usually not satisfied with their jobs. People with

positive core self evaluations viz. who believe in their inner worth and basic competence are more satisfied with their jobs than people with negative core self-evaluations.

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The Impact of Satisfied and Dissatisfied Employees on the Workplace

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what happens when employees like / dislike their jobs?

Exit

Behavior directed toward leaving the organization

Voice

Active and constructive attempts to improve conditions

Neglect

Allowing conditions to worsen

LoyaltyPassively waiting for conditions to improve

The framework’s 4 responses differ along 2 dimensions

Constructive / Destructive Active / Passive

Exit is a destructive response

Voice involves active and constructive attempts to improve conditions

Loyalty is a passive response but optimistically waiting for conditions to improve

Neglect response is also passive but allows conditions to worsen including absenteeism or lateness and basically destructive to the business

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Outcomes of Job Satisfaction / Dissatisfaction at the workplace

Job Satisfaction & Job Performance

Happy workers are more likely to productive workers. There is a strong positive co-relation between Satisfaction and Performance.

Job Satisfaction & OCB

Job Satisfaction is moderately correlated with Organizational Citizenship behavior (OCB). Satisfied employees talk positively about the organization and help others. But its still moderately correlated because those who feel co-workers support them are more likely to engage in OCB than those who have antagonistic relationships with co-workers

Job Satisfaction & Customer Satisfaction

Job Satisfaction is moderately correlated with Organizational Citizenship behavior (OCB). Satisfied employees talk positively about the organization and help others. But its still moderately correlated because those who feel co-workers support them are more likely to engage in OCB than those who have antagonistic relationships with co-workers

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Job Satisfaction & Absenteeism

Job Satisfaction has a consistent negative relationship but its moderate to weak. Dissatisfied employees are more likely to miss work, but other factors also affect the relationship

Outcomes of Job Satisfaction / Dissatisfaction at the workplace

Job Satisfaction & Turnover

Relationship between Job Satisfaction & turnover is stronger than between satisfaction & absenteeism. Job dissatisfaction is more likely to result into turnover when employment opportunities are plentiful and the pull factor exists

Job Satisfaction & Workplace Deviance

Job Dissatisfaction and antagonistic relationships with co-workers predict a variety of behaviors which organizations find undesirable like unionization, substance abuse, stealing, pilfering and tardiness. Moreover when the work environment is not satisfactory, employee withdrawal or counterproductive behavior occurs in the workplace

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Strong empirical evidence suggests that job satisfaction is directly co-related to the bottom line. A study conducted by a management consulting firm separates large organizations into high morale ((< 70% employees satisfied), medium and low morale

The stock prices of the companies in the high morale group grew by 19.4% compared with 10% for the medium to low morale group

Even then managers in most organizations are totally unconcerned about job satisfaction unless organization policies are framed in a manner where job satisfaction becomes a key indicator for personal growth of managers

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ob i motivation concepts & applications- perception & attitudes

Education

theory ymanagers

hierarchy of needs theory

asmotivation hygiene

onenegative theory x

contrast reinforcement

early theories of motivation

contrast goal setting

motivation key lmentsas