©Prentice Hall, 2001 Chapter 7 1

Motivation

From Concept To Applications

©Prentice Hall, 2001 Chapter 7 2

MBO: Cascading of ObjectivesMBO: Cascading of Objectives

OrganizationalOrganizationalObjectivesObjectives

DivisionalDivisionalObjectivesObjectives

DepartmentalDepartmentalObjectivesObjectives

IndividualIndividualObjectivesObjectives

The XYZ CompanyThe XYZ Company

Consumer ProductsConsumer Products Industrial ProductsIndustrial Products

DevelopmentDevelopmentResearchResearchMarketingMarketingCustomerCustomerServiceServiceSalesSalesProductionProduction

©Prentice Hall, 2001 Chapter 7 3

Key Elements of MBOKey Elements of MBO

GoalGoalSpecificitySpecificity

ExplicitExplicitTime PeriodTime Period

Participation inParticipation inDecision MakingDecision Making

PerformancePerformanceFeedbackFeedback

©Prentice Hall, 2001 Chapter 7 4

Linking MBO and Linking MBO and Goal-Setting TheoryGoal-Setting Theory

ParticipationParticipationin Goal Settingin Goal Setting

SpecificitySpecificityof Goalsof Goals

FeedbackFeedbackon Performanceon Performance

Difficulty Difficulty of Goals of Goals

©Prentice Hall, 2001 Chapter 7 5

Employee InvolvementPrograms

ParticipativeParticipativeManagementManagement

QualityQualityCirclesCircles

RepresentativeRepresentativeParticipationParticipation

EmployeeEmployeeStock OwnershipStock Ownership

©Prentice Hall, 2001 Chapter 7 6

VariablePay Plans

Piece Rate Profit Sharing

Bonus PlansGainsharing

©Prentice Hall, 2001 Chapter 7 7

Skill-Based Pay Plans

• Promotes FlexibilityPromotes Flexibility

• Facilitates CommunicationFacilitates Communication

• Satisfies Ambitious WorkersSatisfies Ambitious Workers

• “ “Topping Out”Topping Out”

• Obsolescence of SkillsObsolescence of Skills

• Performance versus SkillsPerformance versus Skills

AdvantagesAdvantages

DisadvantagesDisadvantages

©Prentice Hall, 2001 Chapter 7 8

Flexible BenefitsFlexible Benefits

Employees Choose From A Menu of OptionsEmployees Choose From A Menu of Options

• Expectancy TheoryExpectancy Theory

• Individual NeedsIndividual Needs

• Cost of ManagementCost of Management

• Cost of PremiumsCost of Premiums

©Prentice Hall, 2001 Chapter 7 9

Special Motivation IssuesSpecial Motivation Issues

• ProfessionalsProfessionals

• Contingent workersContingent workers

• Diversified workforceDiversified workforce

• Low-skilled service workersLow-skilled service workers

• Highly repetitive tasksHighly repetitive tasks