1/25 Prepared by Argie Butler Texas A&M University PowerPoint Presentation to accompany...

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Prepared by

Argie ButlerTexas A&M University

PowerPoint Presentation to accompany

Organizational Behavior11th Edition

Chapter 6—Motivation Through GoalSetting and Reward Systems

Don Hellriegel and John W. Slocum, Jr.

Chapter 6: PowerPoint 6.12/25

Learning Objectives for MotivationThrough Goal Setting and

Reward Systems

Explain how goal setting affects performance

State the effects of goal setting on job satisfaction and performance

Describe reward systems for fostering high performance


Importance of Goal Setting

Goals

Guide anddirect behavior

Providechallenges and

standards againstwhich performance

can be assessed

Justify tasksand the use of

resources

Definethe basis for theorganization’s

design

Servean organizing

function


Model of Goal Setting (Figure 6.1)

ChallengeGoal difficultyGoal claritySelf-efficacy

MediatorsDirectionEffortPersistenceTask strategy

Rewards SatisfactionPerformance

ModeratorsAbility

Goal commitment

Feedback

Task complexity

Conse-quences

Source: Adapted from Locke, E.A., and Latham, G.P. A Theory of Goal Setting And Task Performance. Englewood Cliffs, N.J.: Prentice-Hall, 1990, 253.


WHEN GOALS AREPERFORMANCE

WILL TEND TO BE

Specific and clear

Vague

Difficult and challenging

Easy and boring

Set participatively

Higher

Lower

Higher

Lower

Higher

Impact of Goals on Performance(Table 6.1)


WHEN GOALS AREPERFORMANCE

WILL TEND TO BE

Set by management (top down)

Accepted by employees

Rejected by employees

Accompanied by rewards

Unrelated to rewards

Lower

Higher

Lower

Higher

Lower

Impact of Goals on Performance(Table 6.1) (continued)


Moderators in the Goal-Setting Model

Moderators

Ability Limits capacity to respond

to challenge

Goal Commitment Determination

to reach a goal

Feedback Provides information

on outcomes and performance

Complexity Simple versus

complex tasks


When Is Goal Commitment Strong?

Public commitment to achieve the goal

Strong need for achievement

Belief in personal control (internal locus of control)

Participates in setting the goal

Positive outcomes depend on goal achievement

Expects to be punished for not achieving goals

Perceives equitable distribution of rewards


Characteristics ofUseful Feedback

Descriptive rather than evaluative

Timely

Delivered personally, not via e-mail

Not judgmental

Focused

Concrete and specific

Graphic


Mediators in the Goal-Setting Model

Direction of attention Focuses on goal-directed

behavior

Effort Positively related

to challenge

Persistence Willingness to continue

working at a task

Task strategy Approach to

tackling a taskMediators


Advantages of Setting EthicalGoals

Advantages

Identifies what the organization recognizes as acceptable

behaviors

Legitimizes ethics as part of decision

making

Avoids uncertainties about right and wrong

Avoids inconsistencies

caused by a system that

appears to reward unethical behavior


Why Goal Setting MotivatesHigh Performance

Difficult but achievable goals promptpeople to focus on achieving the goals

Difficult goals motivate people to spendtime and effort on developing methodsfor achieving them

Difficult goals increase people’spersistence in achieving their goals


Why Goal Setting Works

Goal Setting

Serves as a directive function

Has an energizing function

Affects persistence and action positively

Commits people to behavior


Employees lack competencies to performat a high level

When a considerable amount of learning isneeded, successful goal setting takes longer

When the goal-setting system rewards thewrong behavior, major problems can result

Limitations to Goal Setting


Consequencesof

Dissatisfaction

Job avoidance

Absenteeism, lateness

Psychological defenses

Constructive protest

Defiance

Aggression

Potential Consequencesof Dissatisfaction


Implications of Goal-Setting Model for Employees, Managers and Teams

Provides framework for diagnosing potential problems with low-performing or average-performing employees

Provides advice on creating a high-performance work environment

Shows the system of factors affecting the achievementof high performance


Reward Factors Involved inMotivating High Performance

Reward Factors

AvailabilityTimeliness

Performancecontingency

Durability

Equity

Visibility


Reward System Strengths Limitations

Gain-sharing programs Rewards employeeswho reach specified production levels and control costs.

Formula can be complex; employees must trust management

Profit-sharing programs Rewards organizational performance.

Difficult for individuals and teams to impact overall organizational performance.

Reward Systems in High-PerformanceWork Settings (Table 6.3)


Reward System Strengths Limitations

Skill-based pay Rewards employee with higher pay for acquiring new skills.

Labor costs increase as employees master more skills. Employees can “top out” at the highest wage rate.

Flexible benefits Tailored to fit individual needs.

Administrative costs high and difficult to use with teams.

Reward Systems in High-PerformanceWork Settings (Table 6.3) (continued)


Less than 500 employees Controllable by employees Open, trusting Participative No union or supportive one

Size of organization Product costsOrganizational climate Style of managementUnion status

OrganizationalCharacteristic

FavorableCondition

Conditions Favoring Gain-SharingPlans (Table 6.4)


Financials shared Trusted, committed, articulate Competent, participative Knowledgeable, participative

Communication policy Plant manager Management Workforce

OrganizationalCharacteristic

FavorableCondition

Conditions Favoring Gain-SharingPlans (Table 6.4) (continued)


Flexible Benefit Plans: Advantages and Limitations

Advantages Limitations Permits employees’

discretion in matchingneeds with benefit plans

Helps organizationscontrol costs

Highlights economicvalue of benefits

Record keeping becomes more complicated

Difficulty in accuratelypredicting employees’benefit choices


Deciding Among Alternative Reward Systems (Figure 6.2)

Are there accurate indicators of individual performance?Is the performance of one person independent from others?Are individual performance goals constant?Is the firm unionized?Is pay secrecy important?

Is the cost accounting system sophisticated?

Are employees accustomed to participating in decision making?

Will employees accept deferred payments?

Can managers measure performance objectively?

Is employee turnover high?

Is there a consensus on work goals?

* Profit-sharing programs* Flexible benefit plans

* Skill-based pay* Gain-sharing programs

Team Plans Individual Plans


Cultures and Reward Systems(Table 6.5)

POWER DISTANCE

INDIVIDUALISM/COLLECTIVISM

Pay based on individual performanceStatus symbols are importantPay tied to level in the organization’s

hierarchyStock options to MBO

Pay based on team performanceProfit sharingLittle emphasis on extrinsic rewards

CULTURE REWARD SYSTEM


Cultures and Reward Systems(Table 6.5) (continued)

GENDER ROLEORIENTATION

UNCERTAINTYAVOIDANCE

CULTURE REWARD SYSTEM

Extensive use of fringe benefitsGain sharingGoals set by participation linked to

team achievementsPay equality

Pay focuses on long-term orientationSeniority is important

Adapted from Tosi, J.L. and Greckhamer, T. Culture & CEO & CEO Compensation. Organization Science, 2004, 15, 657-670, and Hofstede, G. Cultures Consequences 2nd ed. Thousand Oaks, CA: Sage, 2001

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