Critical Thinking Questions
Describe four drive theory and discuss its implications for motivating employees.
Illustrates how a person’s drives and needs results in decisions and behaviors. Explain how theories fit into their decisions and behaviors.
Even though all people have the same drives, they don’t have the same emotional responses (such as loneliness, curiosity or anger) or needs in the same situation. Explain why this difference occurs?
How drives influences employees motivation?
5
Foundations of
Employee Motivation
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Diagram and discuss the relationship
between human drives, needs, and
behavior.
2. Summarize Maslow’s needs hierarchy and
discuss Maslow’s contribution to the field of
motivation.
3. Summarize McClelland’s learned needs
theory, including the three needs he studied.
4. Describe four-drive theory and discuss its
implications for motivating employees.
5. Diagram the expectancy theory model
and discuss its practical implications for
motivating employees.
6. Describe the characteristics of effective
goal setting and feedback.
7. Summarize equity theory and describe how
to improve procedural justice.
8. Identify the factors that influence
procedural justice, as well as the
consequences of procedural justice.
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132 Part Two Individual Behavior and Processes
Rewards, social events, strength-based feedback, and various celebrations for good
performance are designed to maintain and improve employee motivation at Rack-
space Hosting. This motivation has catapulted the company’s performance in a highly
competitive market. Rackspace is also recognized as one of the best places to work.
Recall from Chapter 2 that motivation refers to the forces within a person that affect
the direction, intensity, and persistence of voluntary behavior. 2 Motivated employees
are willing to exert a particular level of effort (intensity), for a certain amount of time
(persistence), toward a particular goal (direction). Motivation is one of the four essen-
tial drivers of individual behavior and performance.
This chapter introduces the core theories of employee motivation. We begin by
introducing employee engagement, an increasingly popular concept associated with
motivation. Next, we distinguish between drives and needs and explain how needs
are shaped through the individual’s self-concept and other personal factors. Three
theories that focus on drives and needs—Maslow’s needs hierarchy, McClelland’s
learned needs theory, and four-drive theory—are introduced and evaluated. Next, we
turn our attention to the popular rational decision model of employee motivation:
expectancy theory. This is followed by a discussion of the key elements of goal setting
and feedback. In the final section, we look at organizational justice, including the
dimensions and dynamics of equity theory and procedural justice.
Employee Engagement
When Rackspace Hosting executives discuss employee motivation, they are just as likely
to use the phrase employee engagement. This concept, which is closely connected to em-
ployee motivation, has become so popular in everyday language that we introduce it
here. Employee engagement’s popularity far exceeds its conceptual development; its
definition varies across studies, and its distinction from job satisfaction, organizational
commitment, and other variables is unclear. 3 Even so, there are enough threads of simi-
larity that we can cautiously define employee engagement as the employee’s emo-
tional and cognitive motivation, self-efficacy to perform the job, perceived clarity of the
organization’s vision and his or her specific role in that vision, and belief that he or she
has the resources to get the job done. 4 This definition relates to the four cornerstones of
individual behavior and performance identified in the MARS model (see Chapter 2):
motivation, ability, role perceptions, and situational factors. Employee engagement en-
compasses the employee’s beliefs about and emotional responses to these conditions.
Additionally, some writers suggest that employee engagement includes a high level of
absorption in the work—the experience of “getting carried away” while working.
Employee engagement is a hot topic among executives and consultants. One re-
port estimates that one in every four large organizations has a formal employee en-
gagement program, and three out of five intend to develop plans to improve employee
engagement. 5 Some companies even have employee engagement departments or
managers. The popularity of employee engagement is partly due to preliminary evi-
dence that it improves organizational effectiveness. Royal Bank of Scotland calcu-
lated that when its employee engagement scores increase, productivity rises and staff
turnover falls. British retailer Marks & Spencer claims that a 1 percent improvement
in the engagement levels of its workforce produces a 2.9 percent increase in sales per
square foot. JCPenney has calculated that stores with higher employee engagement
produce higher sales. Other research indicates that employee engagement is associ-
ated with higher organizational citizenship and lower turnover intentions. 6
motivation
The forces within a
person that affect the
direction, intensity, and
persistence of voluntary
behavior.
employee engagement
The employee’s emo-
tional and cognitive
motivation, self-efficacy
to perform the job,
perceived clarity of the
organization’s vision
and his or her specific
role in that vision, and
belief that he or she has
the resources to get the
job done.
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Chapter 5 Foundations of Employee Motivation 133
The challenge facing organizational leaders is that most employees aren’t very en-
gaged. Several consulting reports estimate that only about one-quarter of American
employees are highly engaged, which is slightly above the global average. Less than
60 per cent are somewhat engaged, and approximately one-fifth have low engagement
or are actively disengaged. Actively disengaged employees tend to be disruptive at work,
not just disconnected from work. Globally, employees in Mexico and Brazil seem to
have the highest levels of engagement, whereas several Asian countries (notably Japan,
China, and South Korea) and a few European countries (notably Italy, Netherlands,
and France) have the lowest levels. 8 Some writers suggest that globalization, informa-
tion technology, corporate restructuring, and other changes have potentially under-
mined the levels of trust and commitment necessary to motivate employees beyond
minimum standards. 9 Others point out that companies have not adjusted to the chang-
ing needs and expectations of new workforce entrants. 10 Overall, these reports of low
employee engagement imply that many employees are not very motivated to perform
their jobs. To create a more motivated workforce, we first need to understand employee
drives and needs and how these concepts relate to individual goals and behavior.
After reading this section, you should be able to:
1. Diagram and discuss the relationship between human drives, needs,
and behavior.
2. Summarize Maslow’s needs hierarchy and discuss Maslow’s con-
tribution to the field of motivation.
3. Summarize McClelland’s learned needs theory, including the three
needs he studied.
4. Describe four-drive theory and discuss its implications for motivat-
ing employees.
Getting Engaged at JCPenney In the hypercompetitive retail industry,
the number-one ingredient for winning the hearts and pocketbooks of
customers is the quality, style, and price of the merchandise. What’s
the second most important ingredient? It’s employee engagement,
according to executives at JCPenney. “We feel strongly there’s a
correlation between engaged associates and store profitability,” says
Myron “Mike” Ullman, CEO of the Plano, Texas, retailer. In fact, the
company’s internal research revealed that stores with the top-quartile
engagement scores generate about 10 percent more in sales per
square foot and 36 percent greater operating income than similar-size
stores in the lowest quartile. A few years ago, about two-thirds of
JCPenney associates were “engaged.” Thanks to improved training,
career development, and other management practices, more than
three-quarters of employees now are engaged. Per-share earnings
have more than doubled since JCPenney management focused on
improving employee engagement. “We see a 200 basis-point [increase
in] profit when we engage the associates,” Ullman claims. “This isn’t
just warm, fuzzy stuff. It’s solid business logic.”7
Learning
Objectives
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134 Part Two Individual Behavior and Processes
Self-concept, social norms,
and past experience
Drives
(primary needs)
and emotions
Needs
(secondary)
Decisions and
behavior
Exhibit 5.1
Drives, Needs, and
Behavior
drives
Hardwired characteris-
tics of the brain that
correct deficiencies or
maintain an internal
equilibrium by produc-
ing emotions to energize
individuals.
needs
Goal-directed forces
that people experience.
Employee Drives and Needs
To figure out how to create a more engaged and motivated workforce, we first need
to understand the motivational “forces” within people. Unfortunately, many writers
conveniently avoid this topic, and the result is a stream of confusing phrases such as
innate drives, learned needs, motivations, instincts, secondary drives, and primary needs. 11 We
define drives (also called primary needs or innate motives ) as hardwired characteristics
of the brain that correct deficiencies or maintain an internal equilibrium by produc-
ing emotions to energize individuals. 12 Drives are the “prime movers” of behavior
because they generate emotions, which put people in a state of readiness to act on
their environment (see Chapter 4). Although typically overlooked in organizational
behavior, emotions play a central role in motivation. 13 In fact, both words (emotion
and motivation) are derivations of the same Latin word, movere, which means “to
move.” Although there is no clear list of human drives, several are consistently identi-
fied in research, such as the drives for social interaction, understanding of the envi-
ronment, competence or status, and defense of oneself against physiological and
psychological harm. 14
We define needs as goal-directed forces that people experience. Needs are the
motivational forces of emotions channeled toward particular goals to correct deficien-
cies or imbalances. So drives produce emotions, and needs are essentially the emo-
tional experience channeled toward goals believed to address the source of emotion.
Consider the following example: Everyone has a drive to bond—an inherent need to
be associated with other people to some degree. The drive to bond generates nega-
tive emotions when we are rejected by others or lack social interaction over time.
These negative emotions are experienced as unfulfilled needs; they motivate us to do
something that will increase our connectedness to and acceptance by other people.
Individual Differences in Needs
Even though all people have the same drives, they don’t have the same emotional
responses (such as loneliness, curiosity, or anger) or needs in the same situation.
Exhibit 5.1 explains why this difference occurs. The left side of the model shows that
the individual’s self-concept (including personality and values), social norms, and
past experience amplify or suppress drive-based emotions, thereby resulting in stron-
ger or weaker needs. 15 People who define themselves as very sociable typically expe-
rience a strong need for social interaction if alone for a while, whereas people who
view themselves as less sociable would experience a less intense need to socialize
over that time. These individual differences also explain, as you shall discover later in
this chapter, why needs can be “learned” to some extent. Socialization and reinforce-
ment may cause people to alter their self-concept somewhat, resulting in a stronger or
weaker need for social interaction, achievement, and so on.
Self-concept, social norms, and past experience do more than adjust the emotions
generated by our built-in drives. The right side of Exhibit 5.1 shows that these individual
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Chapter 5 Foundations of Employee Motivation 135
Maslow’s needs
hierarchy theory
A motivation theory of
needs arranged in a
hierarchy, whereby
people are motivated
to fulfill a higher need
as a lower one becomes
gratified.
characteristics also regulate a person’s motivated goals and behavior. Even if you have a
strong desire for social interaction, you probably wouldn’t walk up to strangers and start
talking to them; this action is contrary to social norms of behavior in most (but not all)
cultures. Similarly, suppose that you dislike your boss’s decision to assign you to a par-
ticular project. Openly confronting the boss about this assignment is common in some
companies and cultures and much less common in other contexts. People regulate their
goals and behavior on the basis of these social and cultural norms, as well as their self-
concept and reinforcement (or observation of others) in previous situations. Employees
are more likely to direct their emotional energy toward speaking up if they view them-
selves as being forthright, live in a low power distance culture, and work in a company
that encourages constructive debate.
We have presented this detail about needs and drives for a few reasons. 16 First, as
mentioned, motivation theories use the terms needs, drives, and motivations so loosely
that they make it difficult to compare theories, so it is important to settle this confu-
sion at the outset. Second, the field of organizational behavior has been woefully slow
to acknowledge the central role of emotions in employee motivation, as will be ap-
parent when we review most motivation theories in this chapter. Third, Exhibit 5.1
provides a useful template for understanding various motivation theories. In fact, you
will see pieces of this theory when we discuss four-drive theory, expectancy theory,
goal setting, and other concepts in this chapter. The remainder of this section de-
scribes theories that try to explain the dynamics of drives and needs. Later theories
in this chapter explain how experiences—such as expectancies, feedback, and work
experiences—influence the motivation process.
Maslow’s Needs Hierarchy Theory
By far, the most widely known theory of human motivation is Maslow’s needs
hierarchy theory (see Exhibit 5.2 ). Developed by psychologist Abraham Maslow
Exhibit 5.2
Maslow’s Needs
Hierarchy
Belongingness
Safety
Physiological
Source: Based on information in A. H. Maslow, “A Theory of Human Motivation,” Psychological Review 50 (1943),
pp. 370–396.
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136 Part Two Individual Behavior and Processes
in the 1940s, the model condenses and integrates the long list of needs that had
been studied previously into a hierarchy of five basic categories (from lowest to
highest): 17
Physiological. The need for food, air, water, shelter, and the like.
Safety. The need for a secure and stable environment and the absence of pain,
threat, or illness.
Belongingness/love. The need for love, affection, and interaction with other
people.
Esteem. The need for self-esteem through personal achievement as well as social
esteem through recognition and respect from others.
Self-actualization. The need for self-fulfillment, realization of one’s potential.
Along with developing these five categories, Maslow identified the desire to
know and the desire for aesthetic beauty as two innate drives that do not fit within
the hierarchy.
Maslow’s list represents drives (primary needs) because they are described as
innate and universal. According to Maslow, we are motivated simultaneously by
several needs but the strongest source is the lowest unsatisfied need at the time. As
the person satisfies a lower-level need, the next higher need in the hierarchy becomes
the primary motivator and remains so even if never satisfied. Physiological needs are
initially the most important, and people are motivated to satisfy them first. As they
become gratified, the desire for safety emerges as the strongest motivator. As safety
needs are satisfied, belongingness needs become most important, and so forth. The
exception to this need fulfillment process is self-actualization; as people experience
self-actualization, they desire more rather than less of this need. Thus, while the
bottom four groups are deficiency needs because they become activated when unful-
filled, self-actualization is known as a growth need because it continues to develop even
when fulfilled.
Limitations and Contributions of Maslow’s Work In spite of its popularity,
Maslow’s needs hierarchy theory has been dismissed by most motivation experts. 18
Maslow developed the theory from only his professional observations, and he was
later surprised that it was so widely accepted before anyone tested it. Empirical stud-
ies have concluded that people do not progress through the hierarchy as the theory
predicts. For example, some people strive more for self-esteem before their belong-
ingness needs have been satisfied. The theory also assumes that needs priorities shift
over a long time, whereas in reality needs priorities rise and fall far more frequently
with the situation. A person’s needs for status, food, social interaction, and so forth,
change daily or weekly, not every few years. As Global Connections 5.1 describes,
companies around the world routinely motivate all staff through recognition. These
examples illustrate that people regularly need—and are motivated to receive—respect
and belongingness in the workplace.
Although needs hierarchy theory has failed the reality test, Maslow deserves
credit for bringing a more holistic, humanistic, and positive approach to the study of
human motivation. 19 First, Maslow brought a more holistic perspective by explain-
ing that needs and drives should be studied together because human behavior is
typically initiated by more than one of them at the same time. Previously, motiva-
tion experts had splintered needs or drives into dozens of categories, each studied in
isolation. 20
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Shining the Spotlight on
Employee Recognition
David Gachuru lives by a motto that motivates employees with
much more than money: “If an employee’s work calls for a
thumbs-up, I will appreciate him or her as many times as pos-
sible.” Translating this advice into practice is a daily event for
the general manager of Sarova Panafric Hotel in Nairobi, Kenya.
In addition to thanking staff personally and through e-mails,
Gachuru holds bimonthly meetings at which top-performing em-
ployees are congratulated and receive paid holidays with their
family. Employee achievements are also celebrated in the
hotel’s newsletter, which is distributed to guests as well as
to employees.
Sarova Panafric Hotel and other firms are returning to good
old-fashioned praise and recognition to regularly motivate
staff. Good thing, because recent surveys in several countries
identify lack of praise, recognition, or appreciation as a major
reason why employees are demotivated and disengaged and
decide to find work elsewhere. For instance, on the basis of
1,000 exit interviews, Ireland’s Small Firms Association (SMA)
recently reported that lack of recognition was a top reason
why employees in that country quit their jobs. “Increasingly
people need to feel that their contribution is valued,” suggests
SMA director Patricia Callan. “If people do not feel important,
they are not motivated to stay.”
The challenge of recognition is to “catch” employees do-
ing extraordinary work or showing organizational citizenship.
Peer recognition, in which co-workers identify exemplary per-
formers, is an increasingly popular way for companies to iden-
tify employees deserving special recognition and reward. At
the Ritz-Carlton Hotel in Kuala Lumpur, Malaysia, co-workers
write words of appreciation to each other using First Class
Cards. “This serves as a motivational aspect of the work envi-
ronment,” says an executive at Ritz-Carlton Kuala Lumpur,
which is rated as one of the best places to work in Asia.
Amgen, the California-based biotechnology company, re-
cently introduced globally a more intricate peer recognition pro-
gram called Bravo! Tier I recognition is an e-mail–based
thank-you sent by co-workers through a special Bravo Web site.
Tier II peer recognitions are accompanied by an electronic gift
certificate. At Tier III, employees nominate individuals or teams,
and an “award wizard” determines the amount of the reward
(ranging from $100 to $500). A Tier IV recognition is accompanied
by a larger financial reward for those who significantly improved
the company’s operations. The Tier V award, which is reviewed
by the executive team, is received by employees who have made
the highest material impact on company performance.21
Global Connections 5.1
David Gachuru (left in photo) motivates staff at Sarova Panafric Hotel in Nairobi, Kenya, through
plenty of praise and recognition.
137
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138 Part Two Individual Behavior and Processes
Second, Maslow brought a more humanistic perspective to the study of motiva-
tion. In particular, he suggested that higher-order needs are influenced by personal
and social influences, not just instincts. In other words, he was among the first to rec-
ognize that human thoughts (including self-concept, social norms, and past experience)
play a role in motivation. Previous motivation experts had focused almost entirely on
human instincts without considering that motivation could be shaped by human
thought.
Third, Maslow brought a more positive perspective of employee motivation by
focusing on need gratification rather than only on need deprivation. In particular, he
popularized the previously developed concept of self-actualization, suggesting that
people are naturally motivated to reach their potential and that organizations and
societies need to be structured to help people continue and develop this motiva-
tion. 22 Due to his writing on self-actualization and the power of need gratification,
Maslow is a pioneer in positive organizational behavior . Recall from Chapter 3 that
positive OB says that focusing on the positive rather than negative aspects of life
will improve organizational success and individual well-being. In other words, this
approach advocates building positive qualities and traits within individuals or
institutions as opposed to focusing on trying to fix what might be wrong with
them. 23
What’s Wrong with Needs Hierarchy Models?
Maslow’s theory is not the only attempt to map employee needs onto a single hier-
archy. Another hierarchy model, called ERG theory , reorganizes Maslow’s five
groups into three—existence, relatedness, and growth. 24 Unlike Maslow’s theory,
which only explained how people progress up the hierarchy, ERG theory also
describes how people regress down the hierarchy when they fail to fulfill higher
needs. ERG theory seems to explain human motivation somewhat better than
Maslow’s needs hierarchy, but that’s mainly because it is easier to cluster human
needs around ERG’s three categories than Maslow’s five categories. Otherwise,
research studies have found that ERG theory only marginally improves our under-
standing of human needs. 25
Why have Maslow’s needs hierarchy theory, ERG theory, and other needs hierar-
chies largely failed to explain the dynamics of employee needs? The most glaring
explanation is that people don’t fit into a single needs hierarchy. Some people place
social status at the top of their personal hierarchy; others consider personal develop-
ment and growth an ongoing priority over social relations or status. There is increas-
ing evidence that needs hierarchies are unique to each person, not universal, because
needs are strongly influenced by each individual’s self-concept, including personal
values and social identity. If your most important values lean toward stimulation and
self-direction, you probably pay more attention to self-actualization needs. If power
and achievement are at the top of your value system, status needs will likely be at the
top of your needs hierarchy. This connection between values and needs suggests that
a needs hierarchy is unique to each person and can possibly change over time, just as
values change over a lifetime. 26
Learned Needs Theory
Earlier in this chapter we said that drives (primary needs) are innate whereas needs
are shaped, amplified, or suppressed through self-concept, social norms, and past
ERG theory
A needs hierarchy
theory consisting of
three fundamental
needs—existence,
relatedness, and
growth.
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Chapter 5 Foundations of Employee Motivation 139
experience. Maslow noted that individual characteristics influence the strength of
higher-order needs, such as the need to belong. Psychologist David McClelland
further investigated the idea that need strength can be altered through social influ-
ences. In particular, he recognized that a person’s needs can be strengthened
through reinforcement, learning, and social conditions. McClelland examined three
“learned” needs: achievement, power, and affiliation. 27
Need for Achievement People with a strong need for achievement (nAch)
want to accomplish reasonably challenging goals through their own effort. They
prefer working alone rather than in teams, and they choose tasks with a moderate
degree of risk (i.e., neither too easy nor impossible to complete). High-nAch people
also desire unambiguous feedback and recognition for their success. Money is a weak
motivator, except when it provides feedback and recognition. 28 In contrast, employ-
ees with a low nAch perform their work better when money is used as an incentive.
Successful entrepreneurs tend to have a high nAch, possibly because they establish
challenging goals for themselves and thrive on competition. 29
Need for Affiliation Need for affiliation (nAff) refers to a desire to seek approval
from others, conform to their wishes and expectations, and avoid conflict and con-
frontation. People with a strong nAff try to project a favorable image of themselves.
They tend to actively support others and try to smooth out workplace conflicts. High-
nAff employees generally work well in coordinating roles to mediate conflicts and in
sales positions where the main task is cultivating long-term relations. However, they
tend to be less effective at allocating scarce resources and making other decisions that
potentially generate conflict. People in decision-making positions must have a rela-
tively low need for affiliation so that their choices and actions are not biased by a
personal need for approval. 30
Need for Power People with a high need for power (nPow) want to exercise
control over others and are concerned about maintaining their leadership position.
They frequently rely on persuasive communication, make more suggestions in meet-
ings, and publicly evaluate situations more often. McClelland pointed out that there
are two types of nPow. Individuals who enjoy their power for its own sake, use it to
advance personal interests, and wear their power as a status symbol have personalized
power . Others mainly have a high need for socialized power because they desire power
as a means to help others. 31 McClelland argues that effective leaders should have a
high need for socialized rather than personalized power. They must have a high
degree of altruism and social responsibility and be concerned about the consequences
of their own actions on others.
Learning Needs McClelland’s research supported his theory that needs can be
learned (more accurately, strengthened or weakened), so he developed training pro-
grams for this purpose. In his achievement motivation program, trainees write
achievement-oriented stories and practice achievement-oriented behaviors in busi-
ness games. They also complete a detailed achievement plan for the next two years
and form a reference group with other trainees to maintain their newfound achieve-
ment motivation style. 32 These programs seem to work. Participants attending a need-
for-achievement course in India subsequently started more new businesses, had
greater community involvement, invested more in expanding their businesses, and
need for achievement
(nAch)
A need in which people
want to accomplish
reasonably challenging
goals and desire unam-
biguous feedback and
recognition for their
success.
need for affiliation (nAff)
A need in which people
seek approval from
others, conform to their
wishes and ex pectations,
and avoid conflict and
confrontation.
need for power (nPow)
A need in which people
want to control their
environment, including
people and material
resources, to benefit
either themselves
(personalized power)
or others (socialized
power).
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140 Part Two Individual Behavior and Processes
employed twice as many people as nonparticipants did. Research on similar achieve-
ment motivation courses for American small-business owners reported dramatic in-
creases in the profitability of the participants’ businesses. In essence, these programs
attempt to alter the individual’s self-concept or experiences such that they amplify or
suppress related drive-generated emotions.
Four-Drive Theory
One of the central messages of this chapter is that emotions play a significant role
in employee motivation. This view is supported by a groundswell of research in
neuroscience, but it is almost completely absent from contemporary motivation
theories in organizational behavior. Also, social scientists in several fields (psy-
chology, anthropology, etc.) increasingly agree that human beings have several
hardwired drives, including social interaction, learning, and dominance. One of
the few theories to apply this emerging knowledge is four-drive theory . 33 Devel-
oped by Harvard Business School professors Paul Lawrence and Nitin Nohria,
four-drive theory states that everyone has the drive to acquire, bond, learn, and
defend:
• Drive to acquire . This is the drive to seek, take, control, and retain objects and
personal experiences. The drive to acquire extends beyond basic food and
water; it includes enhancing one’s self-concept through relative status and re-
cognition in society. 34 Thus, it is the foundation of competition and the basis
of our need for esteem. Four-drive theory states that the drive to acquire is
insatiable because the purpose of human motivation is to achieve a higher
position than others, not just to fulfill one’s physiological needs.
• Drive to bond . This is the drive to form social relationships and develop mutual
caring commitments with others. It explains why people form social identities
by aligning their self-concept with various social groups (see Chapter 2). It
may also explain why people who lack social contact are more prone to serious
health problems. 35 The drive to bond motivates people to cooperate and, con-
sequently, is a fundamental ingredient in the success of organizations and the
development of societies.
• Drive to learn . This is the drive to satisfy our curiosity, to know and understand
ourselves and the environment around us. 36 When observing something that is
inconsistent with or beyond our current knowledge, we experience a tension
that motivates us to close that information gap. In fact, studies have revealed
that people who are removed from any novel information will crave even
boring information; the drive to learn generated such strong emotions that the
study participants eventually craved month-old stock reports! 37 The drive to
learn is related to the higher-order needs of growth and self-actualization
described earlier.
• Drive to defend . This is the drive to protect ourselves physically and socially.
Probably the first drive to develop, it creates a “fight-or-flight” response in the
face of personal danger. The drive to defend goes beyond protecting our physi-
cal self. It includes defending our relationships, our acquisitions, and our belief
systems.
These four drives are innate and universal, meaning that they are hardwired in our
brains and are found in all human beings. They are also independent of each other.
four-drive theory
A motivation theory that
is based on the innate
drives to acquire, bond,
learn, and defend and
that incorporates both
emotions and rationality.
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Chapter 5 Foundations of Employee Motivation 141
There is no hierarchy of drives, so one drive is neither dependent on nor inherently
inferior or superior to another drive. Four-drive theory also states that these four
drives are a complete set—there are no fundamental drives excluded from the model.
Another key feature is that three of the four drives are proactive—we regularly try to
fulfill them. Only the drive to defend is reactive—it is triggered by threat. Thus, any
notion of fulfilling drives is temporary, at best.
How Drives Influence Employee Motivation Four-drive theory draws from
current neuroscience knowledge to explain how drives translate into goal-directed
effort. To begin with, recall from previous chapters that the information we re-
ceive is quickly and nonconsciously tagged with emotional markers that subse-
quently shape our logical analysis of a situation. 38 According to four-drive theory,
the four drives determine which emotions are tagged to incoming stimuli. If you
arrive at work one day to see a stranger sitting in your office chair, you might
quickly experience worry, curiosity, or both. These emotions are automatically
created by one or more of the four drives. In this example, the emotions produced
are likely strong enough to demand your attention and motivate you to act on this
observation.
Most of the time, we aren’t aware of our emotional experiences because they are
subtle and fleeting. However, emotions do become conscious experiences when they
are sufficiently strong or when we experience conflicting emotions. Under these cir-
cumstances, our mental skill set relies on social norms, past experience, and personal
values to direct the motivational force of our emotions to useful and acceptable goals
that address the source of those emotions (see Exhibit 5.3 ). In other words, the emo-
tions generated by the four drives motivate us to act, and our mental skill set chooses
courses of action that are acceptable to society and our own moral compass. 39 This is
the process described at the beginning of this chapter, namely, that drives produce
emotions; our self-concept, social norms, and past experience translate these emo-
tions into goal-directed needs, and these individual characteristics also translate needs
into decisions and behavior.
Drive to
acquire
Social
norms
Mental skill set
resolves competing
drive demands
Goal-directed
choice and effort
Personal
values
Past
experience
Drive to
bond
Drive to
learn
Drive to
defend
Exhibit 5.3 Four-Drive Theory of Motivation
Source: Based on information in P. R. Lawrence and N. Nohria, Driven: How Human Nature Shapes Our Choices (San Francisco:
Jossey-Bass, 2002).
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142 Part Two Individual Behavior and Processes
Evaluating Four-Drive Theory Although four-drive theory was introduced very
recently, it is based on a deep foundation of research that dates back more than three
decades. The drives have been identified from psychological and anthropological
studies. The translation of drives into goal-directed behavior originates from consid-
erable research on emotions and neural processes. The theory avoids the assumption
that everyone has the same needs hierarchy, and it explains why needs vary from
one person to the next. Notice, too, that four-drive theory is both holistic (it relates to
all drives, not just one or two) and humanistic (it acknowledges the role of human
thought and social influences, not just instinct). Maslow had identified these two
principles as important features of an effective motivation theory. Four-drive theory
also provides a much clearer understanding of the role of emotional intelligence in
employee motivation and behavior. Employees with high emotional intelligence are
more sensitive to competing demands from the four drives, are better able to avoid
impulsive behavior from those drives, and can judge the best way to act to fulfill
those drive demands in a social context.
Even with its well-researched foundations, four-drive theory is far from complete.
First, most experts would argue that one or two other drives exist that should be in-
cluded. Second, social norms, personal values, and past experience probably don’t
represent the full set of individual characteristics that translate emotions into goal-
directed effort. For example, other elements of self-concept beyond personal values,
such as personality and social identity, likely play a significant role in translating
drives into needs and needs into decisions and behavior.
Practical Implications of Four-Drive Theory The main recommendation from four-
drive theory is to ensure that individual jobs and workplaces provide a balanced oppor-
tunity to fulfill the drives to acquire, bond, learn, and defend. 40 There are really two
recommendations here. The first is that the best workplaces for employee motivation
and well-being offer conditions that help employees fulfill all four drives. Employees
continually seek fulfillment of their innate drives, so successful companies provide suffi-
cient rewards, learning opportunities, social interaction, and so forth, for all employees.
The second recommendation is that fulfillment of the four drives must be kept in
balance; that is, organizations should avoid too much or too little opportunity to ful-
fill each drive. The reason for this advice is that the four drives counterbalance each
other. The drive to bond counterbalances the drive to acquire; the drive to defend
counterbalances the drive to learn. An organization that energizes the drive to ac-
quire without the drive to bond may eventually suffer from organizational politics
and dysfunctional conflict. Change and novelty in the workplace will aid the drive to
learn, but too much of it will trigger the drive to defend to such an extent that em-
ployees become territorial and resistant to change. Thus, the workplace should offer
enough opportunity to keep all four drives in balance.
These recommendations help explain why Rackspace Hosting, described at the be-
ginning of this chapter, has a motivated workforce and is rated as one of the best places
to work in America and the United Kingdom. Rackspace has internal competitions that
fulfill the drive to acquire, yet it balances the competitive conditions with generously
funded social events where employees maintain a supportive social environment. The
opening vignette also noted that the Web hosting and IT services company encourages
staff to learn through training and career-enhancing assignments. At the same time,
these are balanced by a nurturing environment that emphasizes employee strengths
rather than faults. The company likely also minimizes the drive to defend because it is
in a growth phase with little probability of layoffs or other risks to personal well-being.
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Chapter 5 Foundations of Employee Motivation 143
expectancy theory
A motivation theory
based on the idea that
work effort is directed
toward behaviors that
people believe will lead
to desired outcomes.
Outcome 1
� or �
Outcome 2
� or �
Outcome 3
� or �
Performance
E-to-P
Expectancy
P-to-O
Expectancy
Outcome
Valence
Effort
Exhibit 5.4
Expectancy Theory
of Motivation
After reading the next three sections, you should be able to:
5. Diagram the expectancy theory model and discuss its practical
implications for motivating employees.
6. Describe the characteristics of effective goal setting and feedback.
7. Summarize equity theory and describe how to improve procedural
justice.
8. Identify the factors that influence procedural justice, as well as the
consequences of procedural justice.
Expectancy Theory of Motivation
The theories described so far mainly explain the internal origins of employee motiva-
tion. But how do these drives and needs translate into specific effort and behavior?
Four-drive theory recognizes that social norms, personal values, and past experience
direct our effort, but it doesn’t offer any more detail. Expectancy theory , on the
other hand, offers an elegant model based on rational logic to predict the chosen
direction, level, and persistence of motivation. Essentially, the theory states that work
effort is directed toward behaviors that people believe will lead to desired outcomes.
In other words, we are motivated to achieve the goals with the highest expected
payoff. 41 As illustrated in Exhibit 5.4 , an individual’s effort level depends on three
factors: effort-to-performance (E-to-P) expectancy, performance-to-outcome (P-to-O)
expectancy, and outcome valences. Employee motivation is influenced by all three
components of the expectancy theory model. If any component weakens, motivation
weakens.
• E-to-P expectancy. This is the individual’s perception that his or her effort will
result in a particular level of performance. In some situations, employees may
believe that they can unquestionably accomplish the task (a probability of 1.0).
In other situations, they expect that even their highest level of effort will not
result in the desired performance level (a probability of 0.0). In most cases, the
E-to-P expectancy falls somewhere between these two extremes.
Learning
Objectives
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144 Part Two Individual Behavior and Processes
• P-to-O expectancy. This is the perceived probability that a specific behavior or perfor-
mance level will lead to a particular outcome. In extreme cases, employees may
believe that accomplishing a particular task (performance) will definitely result in a
particular outcome (a probability of 1.0), or they may believe that successful perfor-
mance will have no effect on this outcome (a probability of 0.0). More often, the
P-to-O expectancy falls somewhere between these two extremes.
• Outcome valences. A valence is the anticipated satisfaction or dissatisfaction that an
individual feels toward an outcome. It ranges from negative to positive. (The
actual range doesn’t matter; it may be from �1 to +1 or from �100 to +100.)
An outcome valence represents a person’s anticipated satisfaction with the out-
come. 42 Outcomes have a positive valence when they are consistent with our
values and satisfy our needs; they have a negative valence when they oppose
our values and inhibit need fulfillment.
Expectancy Theory in Practice
One of the appealing characteristics of expectancy theory is that it provides clear
guidelines for increasing employee motivation. 43 Several practical applications of ex-
pectancy theory are listed in Exhibit 5.5 and described below.
Exhibit 5.5 Practical Applications of Expectancy Theory
Expectancy theory
component Objective Applications
E→P expectancies
P→O expectancies
Outcome valences
To increase the belief that employees
are capable of performing the job
successfully.
To increase the belief that good
performance will result in certain
(valued) outcomes.
To increase the expected value of
outcomes resulting from desired
performance.
• Select people with the required skills and
knowledge.
• Provide required training and clarify job
requirements.
• Provide sufficient time and resources.
• Assign simpler or fewer tasks until employees
can master them.
• Provide examples of similar employees who
have successfully performed the task.
• Provide coaching to employees who lack
self-confidence.
• Measure job performance accurately.
• Clearly explain the outcomes that will result
from successful performance.
• Describe how the employee’s rewards were
based on past performance.
• Provide examples of other employees
whose good performance has resulted in
higher rewards.
• Distribute rewards that employees value.
• Individualize rewards.
• Minimize the presence of countervalent
outcomes.
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Chapter 5 Foundations of Employee Motivation 145
Increasing E-to-P Expectancies E-to-P expectancies are influenced by the indi-
vidual’s belief that he or she can successfully complete the task. Some companies in-
crease this can-do attitude by assuring employees that they have the necessary
competencies, clear role perceptions, and necessary resources to reach the desired
levels of performance. Matching employees to jobs on the basis of their abilities and
clearly communicating the tasks required for the job are important parts of this pro-
cess. Similarly, E-to-P expectancies are learned, so behavioral modeling and support-
ive feedback (positive reinforcement) typically strengthen the individual’s belief that
he or she is able to perform the task.
Increasing P-to-O Expectancies The most obvious ways to improve P-to-O expec-
tancies are to measure employee performance accurately and distribute more valued
rewards to those with higher job performance. P-to-O expectancies are perceptions, so
employees need to know that higher performance will result in higher rewards, and they
need to know how that connection occurs. Companies meet these needs by explaining
how specific rewards are connected to specific past performance and by using examples,
anecdotes, and public ceremonies to illustrate when behavior has been rewarded.
Many companies claim they provide higher rewards to people with higher per-
formance, yet surveys repeatedly find that the performance-to-outcome linkage is
foggy to most staff. Less than half of the 6,000 American employees surveyed in
one study said they know how to increase their base pay or cash bonuses. Another
poll reported that only 32 percent of employees believe that people at their com-
pany are paid more for doing a better job. Less than half of employees in a large-
scale Malaysian survey said they believe their company rewards high performance
or deals appropriately with poor performers. Only one-quarter of 10,000 Canadian
employees recently surveyed said they regularly receive rewards for a job well done.
This is consistent with another survey which reported that only 27 percent of Cana-
dian employees say there is a clear link between their job performance and pay. 44
Increasing Outcome Valences Everyone has unique values and experiences,
which translate into different needs at different times. Consequently, individualizing
rather than standardizing rewards and other performance outcomes is an important
ingredient in employee motivation. At the same time, leaders need to watch for coun-
tervalent outcomes—consequences with negative valences that reduce rather than
enhance employee motivation. For example, peer pressure may cause some employ-
ees to perform their jobs at the minimum standard even though formal rewards and
the job itself would otherwise motivate them to perform at higher levels.
Overall, expectancy theory is a useful model that explains how people rationally
figure out the best direction, intensity, and persistence of effort. It has been tested in
a variety of situations and predicts employee motivation in different cultures. 45 How-
ever, critics have a number of concerns with how the theory has been tested. Another
concern is that expectancy theory ignores the central role of emotion in employee
effort and behavior. The valence element of expectancy theory captures some of this
emotional process, but only peripherally. 46
Goal Setting and Feedback
Walk into almost any customer contact center (i.e., call center)—whether it’s Sitel’s
offices in Albuquerque, New Mexico, or Dell’s contact center in Quezon City in
the Philippines—and you will notice that work activities are dominated by goal
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146 Part Two Individual Behavior and Processes
setting and plenty of feedback. 48 Contact-center performance is judged on several
key performance indicators (KPIs), such as average time to answer the call, length of
time per call, and abandon rates (customers who hang up before the call is handled
by a customer service representative). Some contact centers have large electronic
boards showing how many customers are waiting, the average time they have been
waiting, and the average time before someone talks to them. A few even have
“emotion detection” software, which translates words and voice intonation into
a measure of the customer’s level of happiness or anger during the telephone
conversation. 49
Goal setting is the process of motivating employees and clarifying their role per-
ceptions by establishing performance objectives. It potentially improves employee
performance in two ways: (1) by amplifying the intensity and persistence of effort and
(2) by giving employees clearer role perceptions so that their effort is channeled to-
ward behaviors that will improve work performance. Goal setting is more complex
than simply telling someone to “do your best.” It requires several specific character-
istics. Some consultants refer to these as “SMART goals,” but the acronym doesn’t
quite capture all of the key ingredients identified by goal-setting research. The six key
characteristics are specific goals, relevant goals, challenging goals, goal commitment,
participation in goal formation (sometimes), and goal feedback. 50
• Specific goals. Employees put more effort into a task when they work toward
specific goals rather than “do your best” targets. Specific goals have measurable
levels of change over a specific and relatively short time frame. For example,
New York City mayor Michael Bloomberg has set the goal of replacing 300 gas-
guzzling yellow cabs with fuel-efficient models every month. Specific goals
communicate more precise performance expectations, so employees can direct
their effort more efficiently and reliably.
• Relevant goals. Goals must also be relevant to the individual’s job and be within
his or her control. For example, a goal to reduce waste materials would have
Goal Setting Makes Every Day Count in NYC When New York City
mayor Michael R. Bloomberg gives a speech or writes a memo, he
lets it be known that the time remaining in his second mayoral term is
quickly passing by. The successful entrepreneur-turned- politician
has announced challenging goals to accomplish, and he doesn’t want
any of his remaining tenure wasted. To be sure that New York City
employees also experience this deadline urgency, Bloomberg had
special clocks installed in a dozen city government offices that count
down how many days remain in his mayoral term. Above many of
these countdown clocks is the catchphrase: “Make every day count.”
Bloomberg’s penchant for specific, challenging, measurable goals is
most apparent in PlaNYC, which includes 127 environmental initia-
tives captured in 10 overarching goals. Bloomberg aims to reduce
greenhouse gas emissions citywide by 30 percent by 2030. He
recently announced plans to have 300 new hybrid taxis on the road
each month until the city’s entire fleet of 13,000 taxis is fuel-efficient
by 2012. (Bloomberg is shown here in front of one of the new “green”
hybrid taxis.) Another goal is to plant 1 million trees over the next
decade, including at least 10,000 street trees per year.47
goal setting
The process of motivat-
ing employees and
clarifying their role per-
ceptions by establishing
performance objectives.
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Chapter 5 Foundations of Employee Motivation 147
little value if employees don’t have much control over waste in the production
process.
• Challenging goals. Challenging goals (rather than easy ones) cause people to raise
the intensity and persistence of their work effort and to think through informa-
tion more actively. They also fulfill a person’s achievement or growth needs
when the goal is achieved. General Electric, Goldman Sachs, and many other
organizations emphasize stretch goals . These goals don’t just stretch a person’s
abilities and motivation; they are goals that people don’t even know how to
reach, so they need to be creative to achieve them.
• Goal commitment. Ideally, goals should be challenging without being so difficult
that employees lose their motivation to achieve them. 51 This is the same as the
E-to-P expectancy that you learned about in the section on expectancy theory.
The lower the E-to-P expectancy that the goal can been accomplished, the less
committed (motivated) the employee is to the goal.
• Goal participation (sometimes). Goal setting is usually (but not always) more
effective when employees participate in setting the goals. 52 Participation poten-
tially creates a higher level of goal commitment than is found when goals are
set alone by the supervisor. Participation may also improve goal quality, be-
cause employees have valuable information and knowledge that may not be
known to those who initially formed the goal.
• Goal feedback. Feedback is another necessary condition for effective goal setting. 53
Feedback is any information that lets us know whether we have achieved the goal
or are properly directing our effort toward it. Feedback redirects our effort, but it
potentially also fulfills our growth needs.
Balanced Scorecard
A popular form of organizational-level goal setting is the balanced scorecard
(BSC) . The balanced scorecard translates the organization’s vision and mission
into specific, measurable performance goals related to financial, customer, inter-
nal, and learning/growth (i.e., human capital) processes. The objective of BSC is
to ensure that the full range of organizational performance is captured in the goal-
setting process. Each dimension includes several goals related to specific opera-
tions within the organization, thereby connecting each work unit to the overall
corporate objectives. For example, an airline might include on-time performance
as one of its customer process goals and number of hours of safety training per
employee as a learning and growth process goal. These specific goals are often
weighted and scored to create a composite measure of achievement across the organi-
zation each year.
The Richmond, Virginia, school board implemented a BSC to help it achieve six
goals, including improving student achievement, promoting a safe and nurturing en-
vironment, and providing strong leadership for effective and efficient operations.
Each goal has several outcome measures. For instance, the goal of improving student
achievement includes a dozen measures, such as percentage of students who meet a
state-sanctioned completion rate, percentage of special education students moving to
a higher reading level, and percentage of students enrolling in specific math and sci-
ence courses. “Our BSC lays out a challenging set of process measures and targets for
us, and it holds us accountable for reaching our goals,” explains Yvonne Brandon,
superintendent of Richmond Public Schools. 54
balanced scorecard
(BSC)
A goal-setting and
reward system that
translates the organiza-
tion’s vision and mission
into specific, measur-
able performance goals
related to financial,
customer, internal,
and learning/growth
(i.e., human capital)
processes.
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148 Part Two Individual Behavior and Processes
Characteristics of Effective Feedback
Whirlpool Corp. employees complained that they weren’t getting enough feedback
from their bosses, so the appliance manufacturer asked managers to meet with their
immediate subordinates quarterly rather than the previous schedule’s every six
months. Jeffrey Davidoff, head of marketing for Whirlpool’s North American con-
sumer brands, has taken the feedback frequency even further; he meets with his eight
direct reports for up to 45 minutes every two weeks. “I’m noticing much better re-
sults,” Mr. Davidoff says. 55
Whirlpool managers are discovering that feedback is an important practice in em-
ployee motivation and performance. Along with clarifying role perceptions and im-
proving employee skills and knowledge, feedback motivates when it is constructive
and when employees have strong self-efficacy. 56 As with goal setting, feedback should
be specific and relevant . In other words, the feedback should refer to specific metrics
(e.g., sales increased by 5 percent last month) and to the individual’s behavior or
outcomes within his or her control. Feedback should also be timely; the information
should be available soon after the behavior or results occur so that employees see a
clear association between their actions and the consequences.
Effective feedback is also sufficiently frequent . How frequent is “sufficiently”? The
answer depends on at least two things. One consideration is the employee’s knowl-
edge and experience with the task. Feedback is a form of reinforcement, so em-
ployees working on new tasks should receive more frequent corrective feedback
because they require more behavior guidance and reinforcement (see Chapter 3).
Employees who perform repetitive or familiar tasks can receive less frequent feed-
back. The second factor is how long it takes to complete the task. Feedback is
necessarily less frequent in jobs with a long cycle time (e.g., executives and scien-
tists) than in jobs with a short cycle time (e.g., grocery store cashiers). The final
characteristic of effective feedback is that it should be credible . Employees are more
likely to accept feedback (particularly corrective feedback) from trustworthy and
credible sources.
Feedback through Strength-Based Coaching Forty years ago, Peter Drucker rec-
ognized that leaders are more effective when they focus on strengths rather than weak-
nesses. “The effective executive builds on strengths—their own strengths, the strengths
of superiors, colleagues, subordinates; and on the strength of the situation,” wrote the
late management guru. 57 Rackspace Hosting, Inc., which was described at the begin-
ning of this chapter, has adopted this positive OB approach. It gives employees oppor-
tunities to develop their strengths rather than requiring them to focus on areas where
they have limited interest or talent. This is the essence of strength-based coaching
(also known as appreciative coaching )—maximizing the person’s potential by focusing on
her or his strengths rather than weaknesses. 58 In strength-based coaching, the em-
ployee describes areas of work where he or she excels. The coach guides this discus-
sion by asking exploratory questions and by helping the employee to discover ways
of leveraging his or her strength. For example, the pair would explore situational bar-
riers to practicing the coachee’s strength as well as aspects of this strength that require
further development.
Strength-based coaching is logical because people inherently seek feedback about
their strengths, not their flaws. Recall from Chapter 2 that people engage in self-
enhancement, at least for those domains of self which are most important. Strength-
based coaching also makes sense because personality becomes quite stable before a
person reaches midcareer, and this stability limits the flexibility of the person’s interests,
strength-based
coaching
A positive organizational
behavior approach to
coaching and feedback
that focuses on building
and leveraging the em-
ployee’s strengths rather
than trying to correct his
or her weaknesses.
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Chapter 5 Foundations of Employee Motivation 149
preferences, and competencies. 60 In spite of these research observations, most compa-
nies focus goal setting and feedback on tasks that employees are performing poorly.
After the initial polite compliments, many coaching or performance feedback sessions
analyze the employee’s weaknesses, including determining what went wrong and what
the employee needs to do to improve. These inquisitions sometimes produce so much
negative feedback that employees become defensive; they can also undermine self-
efficacy, thereby making the employee’s performance worse rather than better. By
focusing on weaknesses, companies fail to realize the full potential of the employee’s
strengths. One survey reports that only 20 percent of employees in large organizations
say that they have an opportunity to perform tasks that they do best. 61
Sources of Feedback
Feedback can originate from nonsocial or social sources. Nonsocial sources provide
feedback without someone communicating that information. Employees at contact
centers view electronic displays showing how many callers are waiting and the
Sony Europe Builds on Strengths When competition from Korea and China threatened Sony Europe’s
market position, the electronics and music company decided that its competitive advantage would be to
leverage the power of strengths rather than battle against weaknesses. Employees were asked to iden-
tify activities in which they excel, enjoy the work, and feel at ease. On the basis of this information, Sony
Europe designed jobs around these strengths, instead of molding people to fit into existing, rigid job
structures. For example, the performance of a Sony Europe employee dropped after he moved to
another sales position. Rather than pushing the employee to deliver higher performance in the new job,
Sony compared the individual’s strengths against the job requirements. The company learned that the
employee’s strength was in face-to-face communication, whereas his new job required very little social
interaction. Sony created a new role for the employee that leveraged his strengths. Within a year, the
employee’s team had delivered record sales and increased profits at a lower cost. Strength-based
coaching “ensures that everybody in Sony is focusing on what they do best,” says Ray White, Sony
Europe’s vice president of human resources. “They’re aligning their ‘A’ talents to make their best
contribution to the business and their best contributions are outstanding.”59
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150 Part Two Individual Behavior and Processes
average time they have been waiting. Nova Chemicals operators receive feedback
from a computer screen that monitors in real time the plant’s operational capacity,
depicted as a gently flowing green line, and actual production output, shown as a
red squiggly line. Soon after Nova installed the feedback system, employees en-
gaged in friendly bouts of rivalry to determine who could keep the actual produc-
tion output as close as possible to the plant’s maximum capacity. 62
Corporate intranets allow many executives to receive feedback instantaneously on
their computer, usually in the form of graphic output on an executive dashboard.
Almost half of Microsoft’s employees use a dashboard to monitor project deadlines,
sales, and other metrics. Microsoft CEO Steve Ballmer regularly reviews dashboard
results in one-on-one meetings with his division leaders. “Every time I go to see
Ballmer, it’s an expectation that I bring my dashboard with me,” says the head of the
Microsoft Office division. 63
Multisource (360-Degree) Feedback Erik Djukastein knew that he needed
feedback on his leadership skills, but asking his boss for performance feedback
wasn’t possible because Djukastein owns the company, Contech Electronics. In-
stead, he asked all 20 employees and managers at the company to anonymously
complete a written report about his strengths and weaknesses. “It was illuminating
and scary looking at the results—when your staff say you don’t follow through on
your commitments, that hurts,” Djukastein admits. “But the good news is that it
enabled me to open my eyes to things that were instrumental in changing my men-
tal attitude.” 64
Erik Djukastein relied on multisource (360-degree) feedback to provide him
with meaningful feedback. As the name implies, multisource feedback is informa-
tion about an employee’s performance collected from a full circle of people, includ-
ing subordinates, peers, supervisors, and customers. Almost all the Fortune 500
companies use multisource feedback, typically for managers rather than nonman-
agement employees. 65 Multisource feedback tends to provide more complete and
accurate information than feedback from a supervisor alone. It is particularly useful
when the supervisor is unable to observe the employee’s behavior or performance
throughout the year. Lower-level employees also feel a greater sense of fairness and
open communication when they are able to provide upward feedback about their
boss’s performance. 66
However, multisource feedback also creates challenges. Having several people re-
view so many other people can be expensive and time-consuming. With multiple
opinions, the 360-degree process can also produce ambiguous and conflicting feed-
back, so employees may require guidance to interpret the results. A third concern is
that peers may provide inflated rather than accurate feedback to avoid conflicts dur-
ing the forthcoming year. A final concern is that employees experience a stronger
emotional reaction when they receive critical feedback from many people rather than
from just one person (such as the boss). “Initially you do take it personally,” admits a
manager at software maker Autodesk. “[360-degree feedback] is meant to be con-
structive, but you have to internally battle that.” 67
Choosing Feedback Sources With so many sources of feedback—multisource
feedback, executive dashboards, customer surveys, equipment gauges, nonverbal
communication from your boss—which one works best under which conditions? The
preferred feedback source depends on the purpose of the information. To learn about
their progress toward goal accomplishment, employees usually prefer nonsocial
multisource (360-degree)
feedback
Information about an
employee’s perfor-
mance collected from
a full circle of people,
including subordinates,
peers, supervisors, and
customers.
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Chapter 5 Foundations of Employee Motivation 151
feedback sources, such as computer printouts or feedback directly from the job. This
is because information from nonsocial sources is considered more accurate than in-
formation from social sources. Corrective feedback from nonsocial sources is also less
damaging to self-esteem. In contrast, social sources tend to delay negative informa-
tion, leave some of it out, and distort the bad news in a positive way. 68 When employ-
ees want to improve their self-image, they seek out positive feedback from social
sources. It feels better to have co-workers say that you are performing the job well
than to discover this from a computer screen.
Evaluating Goal Setting and Feedback
Goal setting represents one of the “tried-and-true” theories in organizational behav-
ior, so much so that scholars consider it to be one of the top OB theories in terms of
validity and usefulness. 69 In partnership with goal setting, feedback also has an excel-
lent reputation for improving employee motivation and performance. At the same
time, putting goal setting into practice can create problems. 70 One concern is that
goal setting tends to focus employees on a narrow subset of measurable performance
indicators while ignoring aspects of job performance that are difficult to measure.
The saying, “What gets measured, gets done” applies here. A second problem is that
when goal achievement is tied to financial rewards, many employees are motivated
to set easy goals (while making the boss think they are difficult) so that they have a
higher probability of the bonus or pay increase. As a former CEO at Ford Motor
Company once quipped: “At Ford, we hire very smart people. They quickly learn
how to make relatively easy goals look difficult!” 71 A third problem is that setting
performance goals is effective in established jobs but seems to interfere with the learn-
ing process in new, complex jobs. Thus, we need to be careful not to apply goal setting
where an intense learning process is occurring.
Organizational Justice
The government of Tasmania, Australia’s island state, recently bought the unfinished
Bell Bay power station when the original owners experienced financial problems.
United Group, the construction company hired to finish building the electricity gen-
eration station, brought in crews from other states to work alongside the Tasmanian
workers at the site. It wasn’t long before the Tassie workers discovered a huge gap in
pay rates. The new interstate workers were being paid $31.50 per hour, whereas the
Tasmanian workers were paid $22 for doing the same job at the same work site. “The
situation is basically unfair and the Tasmanian workers are very angry,” says the local
labor union leader. 72
Most organizational leaders know that treating employees fairly is both morally
correct and good for employee motivation, loyalty, and well-being. Yet the feel-
ings of injustice that the Tasmanian workers at the Bell Bay power station site re-
cently experienced are regular occurrences in the workplace. To minimize these
incidents, we need to first understand that there are two forms of organizational
justice: distributive justice and procedural justice. 73 Distributive justice refers to
perceived fairness in the outcomes we receive compared to our contributions and
the outcomes and contributions of others. Procedural justice , on the other hand,
refers to fairness of the procedures used to decide the distribution of resources.
The Tasmanian workers experienced distributive injustice because co-workers
from other parts of Australia earned much bigger paychecks for doing the same
distributive justice
Perceived fairness in
the individual’s ratio of
outcomes to contribu-
tions compared with a
comparison other’s
ratio of outcomes to
contributions.
procedural justice
Perceived fairness of
the procedures used to
decide the distribution
of resources.
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152 Part Two Individual Behavior and Processes
work. Depending on how this pay gap was determined and how the employer,
United Group, addresses these grievances, the workers might also experience pro-
cedural injustice.
Equity Theory
The first thing we usually think about and experience in situations of injustice is
distributive injustice—the belief (and its emotional response) that the pay and
other outcomes we receive in the exchange relationship are unfair. What is con-
sidered “fair” varies with each person and situation. We apply an equality principle
when we believe that everyone in the group should receive the same outcomes
(such as when everyone at Rackspace gets free dinners with teammates). The need
principle is applied when we believe that those with the greatest need should re-
ceive more outcomes than others with less need. The equity principle infers that
people should be paid in proportion to their contribution. The equity principle is
the most common distributive justice rule in organizational settings, so let’s look
at it in more detail.
To explain how the equity principle operates, OB scholars developed equity
theory , which says that employees determine feelings of equity by comparing their
own outcome/input ratio to the outcome/input ratio of some other person. 74 The
outcome/input ratio is the value of the outcomes you receive divided by the value of the
inputs you provide in the exchange relationship. Inputs include such things as skill,
effort, reputation, performance, experience, and hours worked. Outcomes are what
employees receive from the organization in exchange for the inputs, such as pay,
promotions, recognition, preferential treatment, or preferred jobs in the future. In our
example, the Tasmanian workers likely believed that collectively they and the inter-
state workers provided the same skills, effort, and hours of work, but the interstate
workers received much more favorable outcomes—bigger paychecks.
Equity theory states that we compare our outcome/input ratio with that of a com-
parison other. 75 In our example, the Tasmanian workers compared themselves to
other employees in the same job, namely, the interstate workers at the same work
site. In other situations, the comparison other might be another person or group of
people in other jobs (e.g., comparing your pay against how much the CEO is paid) or
another organization. Some research suggests that employees frequently collect infor-
mation on several referents to form a “generalized” comparison other. 76 For the most
part, however, the comparison other varies from one person to the next and is not
easily identifiable.
People develop feelings of equity or inequity by comparing their own outcome/
input ratio with the comparison other’s ratio. Exhibit 5.6 diagrams the three equity
evaluations. In the underreward inequity situation—which the Tasmanian workers
experienced—people believe their outcome/input ratio is lower than the compari-
son other’s ratio. In the equity condition, people believe that their outcome/input
ratio is similar to the ratio of the comparison other. In the overreward inequity
condition, people believe their ratio of outcomes/inputs is higher than the com-
parison other’s ratio. However, overreward inequity isn’t as common as underre-
ward inequity because people often change their perceptions to justify the favorable
outcomes.
Inequity and Employee Motivation How does the equity evaluation relate to em-
ployee motivation? The answer is that feelings of inequity generate negative emotions,
equity theory
A theory explaining
how people develop
perceptions of fairness
in the distribution and
exchange of resources.
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Chapter 5 Foundations of Employee Motivation 153
and as we have pointed out throughout this chapter, emotions are the engines of mo-
tivation. In the case of inequity, people are motivated to reduce the emotional ten-
sion. Consider the plight of the underpaid Tasmanian workers at the Bell Bay power
station construction site. These individuals experienced anger and frustration when
they discovered how much less they earned than co-workers who came in from other
places in Australia. These emotions motivated the workers to contact their labor
union to correct the problem. There are many other ways that people respond to
feelings of underreward inequity. The most common responses (some of which are
unethical) include: 77
• Reduce our inputs. Perform the work more slowly, give fewer helpful suggestions,
engage in less organizational citizenship behavior.
• Increase our outcomes. Ask for a pay increase directly or through a labor union,
make unauthorized use of company resources.
• Increase the comparison other’s inputs. Subtly ask the better-off co-worker to do a
larger share of the work to justify his or her higher pay or other outcomes.
• Reduce the comparison other’s outcomes. Ask the company to reduce the
co-worker’s pay.
• Change our perceptions . Believe that the co-worker really is doing more (e.g.,
working longer hours) or that the higher outcomes (e.g., better office) he or she
receives really aren’t so much better than what you get.
• Change the comparison other. Compare yourself to someone else closer to your
situation (job duties, pay scale).
• Leave the field. Avoid thinking about the inequity by keeping away from the
work site where the overpaid co-worker is located, take more sick leave, move
to another department, or quit your job.
Although the seven responses to inequity remain the same, people who feel
overreward inequity would, of course, act differently. Some overrewarded employ-
ees reduce their feelings of inequity by working harder. “What helps motivate me is
that I look around the office and I see people who are working as hard or harder
than I am. You feel guilty if you’re not pulling your weight,” says a New Jersey
accountant. However, many overrewarded employees don’t work harder. Some
might encourage the underrewarded co-worker to work at a more leisurely pace. A
Effort
Skill
You Comparison
other
(a) Underreward
inequity
Rewards Rewards
Effort
Skill
Effort
Skill
You Comparison
other
(c) Overreward
inequity
RewardsRewards
Effort
Skill
Effort
Skill
You Comparison
other
(b) Equity
RewardsRewards
Effort
Skill
Exhibit 5.6
Equity Theory Model
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154 Part Two Individual Behavior and Processes
common reaction, however, is that the overrewarded employee changes his or her
perceptions to justify the more favorable outcomes. As author Pierre Berton once
said: “I was underpaid for the first half of my life. I don’t mind being overpaid for
the second half.” 78
Individual Differences: Equity Sensitivity Thus far, we have described equity
theory as though everyone has the same feelings of inequity in a particular situation.
The reality, however, is that people vary in their equity sensitivity , that is, their
outcome/input preferences and reaction to various outcome/input ratios. 79 At one
end of the equity sensitivity continuum are the “benevolents”—people who are toler-
ant of situations where they are underrewarded. They might still prefer equal out-
come/input ratios, but they don’t mind if others receive more than they do for the
same inputs. In the middle are people who fit the standard equity theory model.
These “equity sensitives” want their outcome/input ratio to be equal to the outcome/
input ratio of the comparison other. Equity sensitives feel increasing inequity as the
ratios become different. At the other end are the “entitleds.” These people feel more
comfortable in situations where they receive proportionately more than others. They
might accept having the same outcome/input ratio as others, but they would prefer
receiving more than others performing the same work.
Evaluating Equity Theory Equity theory is widely studied and quite successful at
predicting various situations involving feelings of workplace injustice. 80 However,
equity theory isn’t so easy to put into practice because it doesn’t identify the com-
parison other and doesn’t indicate which inputs or outcomes are most valuable to
each employee. The best solution here is for leaders to know their employees well
enough to minimize the risk of inequity feelings. Open communication is also a key,
enabling employees to let decision makers know when they feel decisions are unfair.
A second problem is that equity theory accounts for only some of our feelings of
equity sensitivity
An individual’s outcome/
input preferences and
reaction to various
outcome/input ratios.
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Chapter 5 Foundations of Employee Motivation 155
fairness or justice in the workplace. Experts now say that procedural justice is at least
as important as distributive justice.
Procedural Justice
Recall that procedural justice refers to fairness of the procedures used to decide the
distribution of resources. How do companies improve procedural justice? 82 A good
way to start is by giving employees “voice” in the process; encourage them to present
their facts and perspectives on the issue. Voice also provides a “value-expressive”
function; employees tend to feel better after having an opportunity to speak their
mind. Procedural justice is also higher when the decision maker is perceived as unbi-
ased, relies on complete and accurate information, applies existing policies consis-
tently, and has listened to all sides of the dispute. If employees still feel unfairness in
the allocation of resources, their feelings tend to weaken if the company allows the
employee to appeal the decision to a higher authority.
Finally, people usually feel less inequity when they are given a full explanation of
the decision and their concerns are treated with respect. If employees believe a deci-
sion is unfair, refusing to explain how the decision was made could fuel their feelings
of inequity. For instance, one study found that nonwhite nurses who experienced rac-
ism tended to file grievances only after experiencing disrespectful treatment in their
attempt to resolve the racist situation. Another study reported that employees with
repetitive strain injuries were more likely to file workers’ compensation claims after
experiencing disrespectful behavior from management. A third recent study noted
that employees have stronger feelings of injustice when the manager has a reputation
of treating people unfairly most of the time. 83
Costco Wholesale CEO Keeps Executive Pay Equitable John
Pierpont Morgan, who in the 1800s founded the financial giant now
called J.P. Morgan Chase, warned that no CEO should earn more
than 20 times an average worker’s pay. That advice didn’t stop
James L. Dimon from earning an average of $40 million in total
compensation for each of his first two years as the current CEO of
J.P. Morgan Chase. Dimon took home more than 1,200 times the
pay of the average employee in the United States. Costco Whole-
sale chief executive Jim Sinegal (shown in photo) thinks such a
large wage gap is blatantly unfair and can lead to long-term em-
ployee motivation problems. “Having an individual who is making
100 or 200 or 300 times more than the average person working on
the floor is wrong,” says Sinegal, who cofounded the Issaquah,
Washington, company. Even though Costco is one of the world’s
largest retailers, Sinegal’s annual salary and bonus usually amount
to less than $600,000. Stock options raised his latest total compen-
sation to $3.2 million, which was much less than Costco’s board
wanted to pay him. Sinegal explained that receiving higher pay
would not affect his motivation and performance. At the same time,
Costco employees enjoy some of the highest pay rates in the retail
industry (averaging $17 per hour).81
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156 Part Two Individual Behavior and Processes156 Part Two Individual Behavior and Processes
Consequences of Procedural Injustice Procedural justice has a strong influ-
ence on a person’s emotions and motivation. Employees tend to experience anger
toward the source of the injustice, which generates various response behaviors that
scholars categorize as either withdrawal or aggression. 84 Notice how these response
behaviors are similar to the fight-or-flight responses described earlier in the chap-
ter regarding situations that activate our drive to defend. Research suggests that
being treated unfairly threatens our self-concept and social status, particularly
when others see that we have been unjustly treated. Employees retaliate to restore
their self-concept and reinstate their status and power in the relationship with the
perpetrator of the injustice. Employees also engage in these counterproductive
behaviors to educate the decision maker, thereby trying to minimize the likeli-
hood of future injustices. 85
Chapter Summary
Motivation consists of the forces within a person that
affect his or her direction, intensity, and persistence
of voluntary behavior in the workplace. Drives (also
called primary needs) are neural states that energize
individuals to correct deficiencies or maintain an inter-
nal equilibrium. They are the “prime movers” of be-
havior, activating emotions that put us in a state of
readiness to act. Needs—goal-directed forces that people
experience—are shaped by the individual’s self-concept
(including personality and values), social norms, and
past experience.
Maslow’s needs hierarchy groups needs into a hier-
archy of five levels and states that the lowest needs are
initially most important but higher needs become more
important as the lower ones are satisfied. Although very
popular, the theory lacks research support, as does
ERG theory, which attempted to overcome some of the
limitations in Maslow’s needs hierarchy. Both models
assume that everyone has the same hierarchy, whereas
the emerging evidence suggests that needs hierarchies
vary from one person to the next according to their
personal values.
McClelland’s learned needs theory argues that needs
can be strengthened through learning. The three needs
studied in this respect have been need for achievement,
need for power, and need for affiliation. Four-drive the-
ory states that everyone has four innate drives—the drives
to acquire, bond, learn, and defend. These drives activate
emotions that we regulate through a skill set that consid-
ers social norms, past experience, and personal values.
The main recommendation from four-drive theory is to
ensure that individual jobs and workplaces provide a
balanced opportunity to fulfill the four drives.
Expectancy theory states that work effort is deter-
mined by the perception that effort will result in a par-
ticular level of performance (E-to-P expectancy), the
perception that a specific behavior or performance level
will lead to specific outcomes (P-to-O expectancy), and
the valences that the person feels for those outcomes. The
E-to-P expectancy increases by improving the employee’s
ability and confidence to perform the job. The P-to-O ex-
pectancy increases by measuring performance accurately,
distributing higher rewards to better performers, and
showing employees that rewards are performance-based.
Outcome valences increase by finding out what employ-
ees want and using these resources as rewards.
Goal setting is the process of motivating employees
and clarifying their role perceptions by establishing
performance objectives. Goals are more effective when
they are specific, relevant, and challenging; have em-
ployee commitment; and are accompanied by meaning-
ful feedback. Participative goal setting is important in
some situations. Effective feedback is specific, relevant,
timely, credible, and sufficiently frequent.
Organizational justice consists of distributive justice
(perceived fairness in the outcomes we receive relative to
our contributions and the outcomes and contributions of
others) and procedural justice (fairness of the procedures
used to decide the distribution of resources). Equity the-
ory has four elements: outcome/input ratio, comparison
other, equity evaluation, and consequences of inequity.
The theory also explains what people are motivated to do
when they feel inequitably treated. Companies need to
consider not only equity of the distribution of resources
but also fairness in the process of making resource alloca-
tion decisions.
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potential through self-actualization. What theory are
these friends referring to? How does their statement
differ from what you learned about that theory in
this chapter?
6. Using your knowledge of the characteristics of effec-
tive goals, establish two meaningful goals related to
your performance in this class.
7. Several service representatives are upset that the
newly hired representative with no previous experi-
ence will be paid $3,000 a year above the usual
starting salary in the pay range. The department
manager explained that the new hire would not ac-
cept the entry-level rate, so the company raised the
offer by $3,000. All five reps currently earn salaries
near the top of the scale ($15,000 higher than the
new recruit), although they all started at the mini-
mum starting salary a few years earlier. Use equity
theory to explain why the five service representa-
tives feel inequity in this situation.
8. Organizational injustice can occur in the classroom
as well as in the workplace. Identify classroom situa-
tions in which you experienced feelings of injustice.
What can instructors do to maintain an environment
that fosters both distributive and procedural justice?
1. Four-drive theory is conceptually different from
Maslow’s needs hierarchy (as well as ERG theory)
in several ways. Describe these differences. At the
same time, needs are based on drives, so the four
drives should parallel the seven needs that Maslow
identified (five in the hierarchy and two additional
needs). Map Maslow’s needs onto the four drives in
four-drive theory.
2. Learned needs theory states that needs can be
strengthened or weakened. How might a company
strengthen the achievement needs of its manage-
ment team?
3. Exhibit 5.1 illustrates how a person’s drives and
needs result in decisions and behavior. Explain
where the expectancy theory of motivation fits into
this model.
4. Use all three components of expectancy theory to
explain why some employees are motivated to show
up for work during a severe storm whereas others
make no effort to leave their home.
5. Two friends who have just completed an organiza-
tional behavior course at another college inform you
that employees must fulfill their need for self-esteem
and social esteem before they can reach their full
Critical Thinking Questions
157
balanced scorecard (BSC), p. 147
distributive justice, p. 151
drives, p. 134
employee engagement, p. 132
equity sensitivity, p. 154
equity theory, p. 152
ERG theory, p. 138
expectancy theory, p. 143
four-drive theory, p. 140
goal setting, p. 146
Maslow’s needs hierarchy
theory, p. 135
motivation, p. 132
multisource (360-degree)
feedback, p. 150
need for achievement (nAch), p. 139
need for affiliation (nAff), p. 139
need for power (nPow), p. 139
needs, p. 134
procedural justice, p. 151
strength-based coaching, p. 148
Key Terms
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occasions, stores have faced stock shortages because
merchandise was not stocked or reorder forms were
not completed in a timely manner. Potential sales
have suffered from empty shelves when plenty of
merchandise was available in the back storeroom
or at the warehouse. The company’s new automatic
inventory system could reduce some of these prob-
lems, but employees must still stock shelves and
assist in other aspects of inventory management.
Store managers have tried to correct the inventory
problem by assigning employees to inventory duty,
but this has created resentment among the employees
selected. Other managers have threatened sales staff
with dismissal if they do not do their share of inven-
tory management. This strategy has been somewhat
effective when the manager is in the store, but staff
members sneak back onto the floor when the man-
ager is away. It has also hurt staff morale, particularly
relations with the store manager.
To reduce the tendency of sales staff to hoard
customers at the store entrance, some managers
have assigned employees to specific areas of the
store. This has also created some resentment among
employees stationed in areas with less traffic or
lower-priced merchandise. Some staff have openly
complained of lower paychecks because they have
been placed in a slow area of the store or have been
given more than their share of inventory duties.
Discussion Questions
1. What symptom(s) in this case suggest that some-
thing has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should Vêtements executives take
to correct these problems?
© 1989 Steven L. McShane.
158
Case Study 5.1 VÊTEMENTS LTÉE
Vêtements Ltée is a chain of men’s retail clothing
stores located throughout the province of Quebec,
Canada. Two years ago, the company introduced
new incentive systems for both store managers and
sales employees. Store managers in each store re-
ceive a salary with annual merit increases based on
sales above targeted goals, store appearance, store
inventory management, customer complaints, and
several other performance measures. Some of this
information (e.g., store appearance) is gathered dur-
ing visits by senior management, while other infor-
mation is based on company records (e.g., sales
volume).
Sales employees are paid a fixed salary plus a com-
mission based on the percentage of sales credited to
that employee over the pay period. The commission
represents about 30 percent of a typical paycheck and
is intended to encourage employees to actively serve
customers and to increase sales volume. Because re-
turned merchandise is discounted from commissions,
sales employees are discouraged from selling prod-
ucts that customers do not really want.
Soon after the new incentive systems were intro-
duced, senior management began to receive com-
plaints from store managers regarding the per formance
of their sales staff. They observed that sales employees
tended to stand near the store entrance waiting to
“tag” customers as their own. Occasionally, sales staff
would argue over “ownership” of the customer. Man-
agers were concerned that this aggressive behavior
intimidated some customers. It also tended to leave
some parts of the store unattended by staff.
Many managers were also concerned about in-
ventory duties. Previously, sales staff would share
responsibility for restocking inventory and com-
pleting inventory reorder forms. Under the new
compensation system, however, few employees
were willing to do these essential tasks. On several
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159
Class Exercise 5.3 NEEDS PRIORITY EXERCISE
PURPOSE This class exercise is designed to help
you understand the characteristics and contingencies
of employee needs in the workplace.
INSTRUCTIONS (LARGE CLASS)
1. The table on page 160 lists in alphabetical order
14 characteristics of the job or work environment.
Working alone, use the far-left column to rank-
order these characteristics in terms of how im-
portant they are to you personally. Write in “1”
beside the most important characteristic, “2” for
the second most important, and so on through
to “14” for the least important characteristic on
this list.
2. In the second column, rank-order these charac-
teristics in the order that you think human re-
source managers believe they are important for
their employees.
3. The instructor will ask students, by a show of
hands (or use of classroom technology), to iden-
tify the top-ranked options.
4. The instructor will provide results of a recent
large-scale survey of employees. When these
results are presented, identify the reasons for
any noticeable differences. Relate the differ-
ences to your understanding of the emerging
view of employee needs and drives in work
settings.
Case Study 5.2 MOTIVATING STAFF WHEN THE MONEY IS TIGHT
College grads aren’t exactly
beating a path to the hotel in-
dustry to get rich quick. New
staff would be lucky to earn $40,000 in their first
year. Yet when Marriott International visited the
University of Delaware, it was able to attract re-
cruits with something else that motivates—the
chance to help run a hotel. In industries where the
money is tight, companies are using other incen-
tives to motivate people to join and stay with them.
Many offer the lure of interesting work; others
point out the work—life balance or “cool” work-
place perks. A growing number of employers are
also trying the carrot-and-stick approach by re-
structuring their 401(k) matches and vesting sched-
ules to entice new employees to stay until the
richer benefits kick in.
This BusinessWeek case study describes how com-
panies with limited payroll budgets try to win the
war for talent. Read the full text of this BusinessWeek
article at www.mhhe.com/mcshane5e , and prepare
for the discussion questions below.
Discussion Questions
1. This case study describes several different strate-
gies for attracting and retaining new employees.
On the basis of the four drives described in four-
drive theory and the needs listed in Maslow’s
needs hierarchy, identify the drives and needs as-
sociated with each of these initiatives. Which
needs or drives seem to dominate in this article?
2. If Claire Pignataro and some other recruits earn
less pay than people in other industries, to what
extent would the attraction and retention initia-
tives described in this case study reduce feelings
of inequity?
Source: L. Gerdes, “The Best Places to Launch a Career,” Business-
Week, 15 September 2008, p. 36.
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http://www.mhhe.com/mcshane5e
160160
Team Exercise 5.4 A QUESTION OF FEEDBACK
PURPOSE This exercise is designed to help you
understand the importance of feedback, including
problems that occur with imperfect communication
in the feedback process.
MATERIALS The instructor will distribute a few
pages of exhibits to one person on each team. The
other students will require a pencil with eraser and
blank paper. Movable chairs and tables in a large
area are helpful.
INSTRUCTIONS (SMALL CLASS)
1. The class is divided into pairs of students. Each
pair is ideally located in a private area, where
they are away from other students and one per-
son can write. One student is given the pages of
exhibits from the instructor. The other student
in each pair is not allowed to see these exhibits.
2. The student holding the materials will describe
each of the exhibits and the other student’s task is
to accurately replicate each exhibit. The pair of
INSTRUCTIONS (SMALL CLASS)
Same as above for steps 1 to 4.
5. Students are assigned to teams, where they com-
pare their rank-order results and explain their
ranking. Rationales for different rankings should
be noted and discussed with the entire class.
Students should pay close attention to different
needs, self-concepts, and various forms of diver-
sity (culture, profession, age, etc.) to identify
possible explanations for any variation of results
across students.
Importance to
you
What HR
managers
believe are
important to
employees
Autonomy and independence
Benefits (health care, dental, etc.)
Career development opportunities
Communication between employees and senior
management
Compensation/pay
Feeling safe in the work environment
Flexibility to balance work–life issues
Job security
Job-specific training
Management recognition of employee job
performance
Opportunities to use skills and abilities
Organization’s commitment to professional
development
Relationship with immediate supervisor
The work itself
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161
students can compare the replication with the
original at the end of each drawing. They may
also switch roles for each exhibit, if they wish. If
roles are switched, the instructor must distribute
exhibits separately to each student so that they are
not seen by the other person. Each exhibit has a
different set of limitations, as described below:
• Exhibit 1 . The student describing the exhibit
cannot look at the other student or his or her
diagram. The student drawing the exhibit can-
not speak or otherwise communicate with the
person describing the exhibit.
• Exhibit 2 . The student describing the exhibit may
look at the other student’s diagram. However, he
or she may say only “yes” or “no,” when the stu-
dent drawing the diagram asks a specific ques-
tion. In other words, the person presenting the
information can use only these words for feed-
back and can use them only when asked a ques-
tion by the student doing the drawing.
• Exhibit 3 : (optional, if time permits). The student
describing the exhibit may look at the other stu-
dent’s diagram and may provide any feedback
at any time to the person replicating the exhibit.
3. The class will gather to analyze this exercise.
This may include discussion on the importance
of feedback and the characteristics of effective
feedback for individual motivation and learning.
INSTRUCTIONS (LARGE CLASS)
Some parts of this exercise are possible in large
classes. Here is one variation:
1. Students are asked to prepare for the exercise by
having a pencil and paper ready.
2. One student volunteers to provide instructions
from the front of the class regarding Exhibit 1.
The volunteer receives the first exhibit and de-
scribes it to the class, while other students try to
replicate the exhibit. When finished, the exhibit
is shown to the class on a transparency or com-
puter projection.
3. For Exhibit 2, one student volunteers to provide
instructions and a few other students serve as
feedback helpers. The helpers have a copy of
Exhibit 2, which they may view, but it cannot be
shown to students doing the drawing. The help-
ers are dispersed to various parts of the room to
provide feedback to a group of students under
their care (if the class has 100 students, the exer-
cise might have 5 helpers, each responsible for
feedback to 20 students). Helpers can say only
“yes” or “no,” but they may point to specific lo-
cations of the student’s drawing when uttering
these words (because these helpers provide feed-
back to many students). Throughout this activ-
ity, the student describing the exhibit must not
stop his or her description. After the speaker has
finished and the drawings are completed, the
helpers might be asked to select the most accu-
rate drawing among those within their domain.
The students who drew the accurate depictions
might be asked to discuss their experience with
feedback.
© 2008 Steven L. McShane.
Self-Assessment 5.5
NEED-STRENGTH QUESTIONNAIRE
Although everyone has the same innate drives, our
secondary or learned needs vary on the basis of our
self-concept. This self-assessment provides an esti-
mate of your need strength on selected secondary
needs. Read each of the statements below and check
the response that you believe best reflects your posi-
tion regarding each statement. Then use the scoring
key in
at the end of the book to calculate
your results. To receive a meaningful estimate of your
need strength, you need to answer each item honestly
and with reflection on your personal experiences.
Class discussion will focus on the meaning of the
needs measured in this self-assessment as well as their
relevance in the workplace.
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162
How accurately do each of
the following statements
describe you?
1. I would rather be myself than
be well thought of.
Very
accurate
description
of me
Moderately
accurate
Moderately
inaccurate
Very
inaccurate
description
of me
Neither
accurate nor
inaccurate
2. I’m the type of person who never
gives up.
3. When the opportunity occurs,
I want to be in charge.
4. I try not to say things that others
don’t like to hear.
5. I find it difficult to talk about my
ideas if they are contrary to
group opinion.
6. I tend to take control of things.
7. I am not highly motivated to
succeed.
8. I usually disagree with others
only if I know my friends will
back me up.
9. I try to be the very best at what
I do.
10. I seldom make excuses or
apologize for my behavior.
11. If anyone criticizes me, I can
take it.
12. I try to outdo others.
13. I seldom change my opinion
when people disagree with
me.
14. I try to achieve more than what
others have accomplished.
15. To get along and be liked, I
tend to be what people expect
me to be.
Personal Needs Questionnaire
Sources: Adapted from instruments described and/or presented in L. R. Goldberg, J. A. Johnson, H. W. Eber, R. Hogan, M. C. Ashton, C. R. Cloninger,
and H. C. Gough, “The International Personality Item Pool and the Future of Public-Domain Personality Measures,” Journal of Research in Personality 40
(2006), pp. 84–96; H. J. Martin, “A Revised Measure of Approval Motivation and Its Relationship to Social Desirability,” Journal of Personality Assessment 48
(1984), pp. 508–519.
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163
Self-Assessment 5.6
MEASURING YOUR GROWTH-NEED STRENGTH
Abraham Maslow’s need hierarchy theory distin-
guished between deficiency needs and growth needs.
Deficiency needs become activated when unfulfilled,
such as the need for food or belongingness. Growth
needs, on the other hand, continue to develop even
when temporarily fulfilled. Maslow identified self-
actualization as the only category of growth needs.
Research has found that Maslow’s needs hierarchy
theory overall doesn’t fit reality but that specific ele-
ments, such as the concept of growth needs, remain
valid concepts. This self-assessment is de-
signed to estimate your level of growth-need
strength. This instrument asks you to con-
sider what it is about a job that is most important to
you. Please indicate which of the two jobs you per-
sonally would prefer if you had to make a choice
between them. In answering each question, assume
that everything else about the jobs is the same. Pay
attention only to the characteristics actually listed.
Self-Assessment 5.7
YOUR EQUITY SENSITIVITY
Some people experience stronger or weaker feelings
of unfairness in specific situations. This self-assessment
estimates your level of equity sensitivity. Read each of
the statements in this questionnaire, and indicate the
response that you believe best reflects your position
regarding each statement. This exercise should be
completed alone so that you assess yourself
honestly, without concerns of social compari-
son. Class discussion will focus on equity
theory and the effect of equity sensitivity on percep-
tions of fairness in the workplace.
After reading this chapter, if you need additional information, see www.mhhe.com/mcshane5e
for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/mcshane5e
Strange as this may seem, one of Europe’s most successful banks doesn’t believe in
budgets or centralized financial targets. Executives at Svenska Handelsbanken AB learned
decades ago that these costly controls from the head office motivate dysfunctional behavior
rather than customer-focused
performance. Therefore, the
Swedish bank gives local managers
and their staff autonomy to run
their local branches as their own.
“Nobody knows the local market
or the customers better than our
branch managers and their staff,”
explains Handelsbanken CEO Pär
Boman.
Even with 10,000 employees
across more than 450 branches
in 21 countries (mostly Nordic
countries and the United Kingdom),
Handelsbanken leaves most
decisions to branch managers
and staff. “We decide which of the
bank’s products to offer and at
what price,” says a Handels banken
branch manager. “My staff are fully involved in the preparation of the work program (the
branch’s action plan).” Branch managers also decide how to advertise products, how
many people to employ and at what salary, and how much to pay for property leases.
Only mutual fund management, high-level risk decisions, office equipment, and the bank’s
computer systems are centralized.
Handelsbanken further motivates staff by distributing a monthly report card on each
branch’s cost-to-income ratio, profit per employee, and total profit. Branch performance
is also compared to that of competing banks in the area. “[We] find that our people are
driven by their urge to show a better result than their competitors—to be above average,”
says Jan Wallander, the former Handelsbanken CEO who transformed the 140-year-old
bank in the 1970s.
This competitive culture apparently does not undermine cooperation because employees
are rewarded through a unique form of profit sharing and employee stock ownership, not
individual or branch performance. In years when Handelsbanken is more profitable than the
average of competing banks, it transfers one-third of the excess profits to an employee fund
(called the Octogonen Foundation). Everyone receives the same number of shares in the
fund for each year of service, which can be cashed out at 60 years of age. About 75 percent
of the fund is invested in Handelsbanken. It currently holds 10 percent of the bank’s stock,
making employees the bank’s largest shareholder.1
Svenska Handelsbanken is one of the most successful banks in Europe, in part
because it engages employees through financial rewards, motivating jobs,
and empowerment.
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Chapter 1 – Introduction To The Field Of Organizational Behavior����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Field Of Organizational Behavior����������������������������������������������������������������������������������������������������������������������������
Perspectives Of Organizational Effectiveness����������������������������������������������������������������������������������������������������������������������������������������������������
Types Of Individual Behavior����������������������������������������������������������������������������������������������������
Contemporary Challenges For Organizations�������������������������������������������������������������������������������������������������������������������������������������������
Anchors Of Organizational Behavior Knowledge����������������������������������������������������������������������������������������������������������������������������������������������������
����������������������������������������������������������������������������������������������������������������������������������������������
Chapter 2 – Individual Behavior, Personality, And Values����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Mars Model Of Individual Behavior And Performance�������������������������������������������������������������������������������������������������������������������������������������������������������������������
Personality In Organizations����������������������������������������������������������������������������������������������������
Self-concept: The “i” In Organizational Behavior����������������������������������������������������������������������������������������������������������������������������������������������������������������
Values In The Workplace�������������������������������������������������������������������������������������
Values Across Cultures����������������������������������������������������������������������������������
Ethical Values And Behavior�������������������������������������������������������������������������������������������������
Chapter 3 – Perception And Learning In Organizations����������������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Perceptual Process����������������������������������������������������������������������������������
Social Identity And Stereotyping����������������������������������������������������������������������������������������������������������������
Attribution Theory����������������������������������������������������������������������
Self-fulfilling Prophecy����������������������������������������������������������������������������������������
Other Perceptual Errors�������������������������������������������������������������������������������������
Improving Perceptions�������������������������������������������������������������������������������
Learning In Organizations�������������������������������������������������������������������������������������������
From Individual To Organizational Learning����������������������������������������������������������������������������������������������������������������������������������������������
Chapter 4 – Workplace Emotions, Attitudes, And Stress�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Emotions In The Workplace�������������������������������������������������������������������������������������������
Managing Emotions At Work�������������������������������������������������������������������������������������������
Emotional Intelligence����������������������������������������������������������������������������������
Job Satisfaction����������������������������������������������������������������
Organizational Commitment�������������������������������������������������������������������������������������������
Work-related Stress And Its Management����������������������������������������������������������������������������������������������������������������������������������
Chapter 5 – Foundations Of Employee Motivation����������������������������������������������������������������������������������������������������������������������������������������������������������
Employee Engagement�������������������������������������������������������������������������
Employee Drives And Needs�������������������������������������������������������������������������������������������
Expectancy Theory Of Motivation�������������������������������������������������������������������������������������������������������������
Goal Setting And Feedback�������������������������������������������������������������������������������������������
Organizational Justice����������������������������������������������������������������������������������
Chapter 6 – Applied Performance Practices�������������������������������������������������������������������������������������������������������������������������������������������
The Meaning Of Money In The Workplace�������������������������������������������������������������������������������������������������������������������������������
Financial Reward Practices����������������������������������������������������������������������������������������������
Job Design Practices����������������������������������������������������������������������������
Empowerment Practices�������������������������������������������������������������������������������
Self-leadership Practices�������������������������������������������������������������������������������������������
Chapter 7 – Decision Making And Creativity����������������������������������������������������������������������������������������������������������������������������������������������
Rational Choice Paradigm Of Decision Making�������������������������������������������������������������������������������������������������������������������������������������������������
Identifying Problems And Opportunities����������������������������������������������������������������������������������������������������������������������������������
Evaluating And Choosing Alternatives����������������������������������������������������������������������������������������������������������������������������
Implementing Decisions����������������������������������������������������������������������������������
Evaluating Decision Outcomes����������������������������������������������������������������������������������������������������
Employee Involvement In Decision Making�������������������������������������������������������������������������������������������������������������������������������������
Creativity����������������������������������������������
�������������������������������������������������������������������������������������������
Chapter 8 – Team Dynamics�������������������������������������������������������������������������������������������
Teams And Informal Groups�������������������������������������������������������������������������������������������
Advantages And Disadvantages Of Teams�������������������������������������������������������������������������������������������������������������������������������
A Model Of Team Effectiveness�������������������������������������������������������������������������������������������������������
Team Design Elements����������������������������������������������������������������������������
Team Processes����������������������������������������������������������
Self-directed Teams�������������������������������������������������������������������������
Virtual Teams�������������������������������������������������������
Team Decision Making����������������������������������������������������������������������������
Chapter 9 – Communicating In Teams And Organizations����������������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Importance Of Communication�������������������������������������������������������������������������������������������������������������
A Model Of Communication����������������������������������������������������������������������������������������
Communication Channels����������������������������������������������������������������������������������
Choosing The Best Communication Channel�������������������������������������������������������������������������������������������������������������������������������������
Communication Barriers (noise)����������������������������������������������������������������������������������������������������������
Cross-cultural And Cross-gender Communication�������������������������������������������������������������������������������������������������������������������������������������������������������
Improving Interpersonal Communication�������������������������������������������������������������������������������������������������������������������������������
Improving Communication Throughout The Hierarchy����������������������������������������������������������������������������������������������������������������������������������������������������������������
Communicating Through The Grapevine�������������������������������������������������������������������������������������������������������������������������
Chapter 10 – Power And Influence In The Workplace�������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Meaning Of Power����������������������������������������������������������������������������
Sources Of Power In Organizations�������������������������������������������������������������������������������������������������������������������
Contingencies Of Power����������������������������������������������������������������������������������
Influencing Others����������������������������������������������������������������������
Influence Tactics And Organizational Politics�������������������������������������������������������������������������������������������������������������������������������������������������������
Chapter 11 – Conflict And Negotiation In The Workplace����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Is Conflict Good Or Bad?����������������������������������������������������������������������������������������
Conflict Process Model����������������������������������������������������������������������������������
Structural Sources Of Conflict In Organizations�������������������������������������������������������������������������������������������������������������������������������������������������������������
Interpersonal Conflict-handling Styles����������������������������������������������������������������������������������������������������������������������������������
Structural Approaches To Conflict Management����������������������������������������������������������������������������������������������������������������������������������������������������
Resolving Conflict Through Negotiation����������������������������������������������������������������������������������������������������������������������������������
Third-party Conflict Resolution�������������������������������������������������������������������������������������������������������������
Chapter 12 – Leadership In Organizational Settings����������������������������������������������������������������������������������������������������������������������������������������������������������������������
What Is Leadership?�������������������������������������������������������������������������
Competency Perspective Of Leadership����������������������������������������������������������������������������������������������������������������������������
Behavioral Perspective Of Leadership����������������������������������������������������������������������������������������������������������������������������
Contingency Perspective Of Leadership�������������������������������������������������������������������������������������������������������������������������������
Transformational Perspective Of Leadership����������������������������������������������������������������������������������������������������������������������������������������������
Implicit Leadership Perspective�������������������������������������������������������������������������������������������������������������
Cross-cultural And Gender Issues In Leadership����������������������������������������������������������������������������������������������������������������������������������������������������������
����������������������������������������������������������������������������������������������������������������������
Chapter 13 – Organizational Structure�������������������������������������������������������������������������������������������������������������������������������
Division Of Labor And Coordination����������������������������������������������������������������������������������������������������������������������
Elements Of Organizational Structure����������������������������������������������������������������������������������������������������������������������������
Forms Of Departmentalization����������������������������������������������������������������������������������������������������
Contingencies Of Organizational Design����������������������������������������������������������������������������������������������������������������������������������
Chapter 14 – Organizational Culture�������������������������������������������������������������������������������������������������������������������������
Elements Of Organizational Culture����������������������������������������������������������������������������������������������������������������������
Deciphering Organizational Culture Through Artifacts����������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Is Organizational Culture Important?����������������������������������������������������������������������������������������������������������������������������
Merging Organizational Cultures�������������������������������������������������������������������������������������������������������������
Changing And Strengthening Organizational Culture�������������������������������������������������������������������������������������������������������������������������������������������������������������������
Organizational Socialization����������������������������������������������������������������������������������������������������
Chapter 15 – Organizational Change����������������������������������������������������������������������������������������������������������������������
Lewin’s Force Field Analysis Model����������������������������������������������������������������������������������������������������������������������
Unfreezing, Changing, And Refreezing����������������������������������������������������������������������������������������������������������������������������
Change Agents, Strategic Visions, And Diffusing Change����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Four Approaches To Organizational Change����������������������������������������������������������������������������������������������������������������������������������������
Cross-cultural And Ethical Issues In Organizational Change����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Organizational Behavior: The Journey Continues����������������������������������������������������������������������������������������������������������������������������������������������������������
����������������������������������������������������������������
Case 1: A Mir Kiss?�������������������������������������������������������������������������
Case 2: Arctic Mining Consultants�������������������������������������������������������������������������������������������������������������������
Case 3: Big Screen’s Big Failure����������������������������������������������������������������������������������������������������������������
Case 4: Bridging The Two Worlds—the Organizational Dilemma����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Case 5: Fran Hayden Joins Dairy Engineering�������������������������������������������������������������������������������������������������������������������������������������������������
Case 6: From Lippert-johanson Incorporated To Fenway Waste Management�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Case 7: Glengarry Regional Medical Center�������������������������������������������������������������������������������������������������������������������������������������������
Case 8: High Noon At Alpha Mills����������������������������������������������������������������������������������������������������������������
Case 9: Keeping Suzanne Chalmers����������������������������������������������������������������������������������������������������������������
Case 10: Northwest Canadian Forest Products Limited�������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Case 11: Perfect Pizzeria�������������������������������������������������������������������������������������������
Case 12: Simmons Laboratories�������������������������������������������������������������������������������������������������������
Case 13: Treetop Forest Products����������������������������������������������������������������������������������������������������������������
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Video Cases For Part Two����������������������������������������������������������������������������������������
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Cover
Title Page
Copyright
About The Authors
Dedication
Contents
Preface
Part One Introduction
Chapter 1 – Introduction To The Field Of Organizational Behavior
The Field Of Organizational Behavior
Perspectives Of Organizational Effectiveness
Types Of Individual Behavior
Contemporary Challenges For Organizations
Anchors Of Organizational Behavior Knowledge
Part Two Individual Behavior And Processes
Chapter 2 – Individual Behavior, Personality, And Values
Mars Model Of Individual Behavior And Performance
Personality In Organizations
Self-concept: The “i” In Organizational Behavior
Values In The Workplace
Values Across Cultures
Ethical Values And Behavior
Chapter 3 – Perception And Learning In Organizations
The Perceptual Process
Social Identity And Stereotyping
Attribution Theory
Self-fulfilling Prophecy
Other Perceptual Errors
Improving Perceptions
Learning In Organizations
From Individual To Organizational Learning
Chapter 4 – Workplace Emotions, Attitudes, And Stress
Emotions In The Workplace
Managing Emotions At Work
Emotional Intelligence
Job Satisfaction
Organizational Commitment
Work-related Stress And Its Management
Chapter 5 – Foundations Of Employee Motivation
Employee Engagement
Employee Drives And Needs
Expectancy Theory Of Motivation
Goal Setting And Feedback
Organizational Justice
Chapter 6 – Applied Performance Practices
The Meaning Of Money In The Workplace
Financial Reward Practices
Job Design Practices
Empowerment Practices
Self-leadership Practices
Chapter 7 – Decision Making And Creativity
Rational Choice Paradigm Of Decision Making
Identifying Problems And Opportunities
Evaluating And Choosing Alternatives
Implementing Decisions
Evaluating Decision Outcomes
Employee Involvement In Decision Making
Creativity
Part Three Team Processes
Chapter 8 – Team Dynamics
Teams And Informal Groups
Advantages And Disadvantages Of Teams
A Model Of Team Effectiveness
Team Design Elements
Team Processes
Self-directed Teams
Virtual Teams
Team Decision Making
Chapter 9 – Communicating In Teams And Organizations
The Importance Of Communication
A Model Of Communication
Communication Channels
Choosing The Best Communication Channel
Communication Barriers (noise)
Cross-cultural And Cross-gender Communication
Improving Interpersonal Communication
Improving Communication Throughout The Hierarchy
Communicating Through The Grapevine
Chapter 10 – Power And Influence In The Workplace
The Meaning Of Power
Sources Of Power In Organizations
Contingencies Of Power
Influencing Others
Influence Tactics And Organizational Politics
Chapter 11 – Conflict And Negotiation In The Workplace
Is Conflict Good Or Bad?
Conflict Process Model
Structural Sources Of Conflict In Organizations
Interpersonal Conflict-handling Styles
Structural Approaches To Conflict Management
Resolving Conflict Through Negotiation
Third-party Conflict Resolution
Chapter 12 – Leadership In Organizational Settings
What Is Leadership?
Competency Perspective Of Leadership
Behavioral Perspective Of Leadership
Contingency Perspective Of Leadership
Transformational Perspective Of Leadership
Implicit Leadership Perspective
Cross-cultural And Gender Issues In Leadership
Part Four Organizational Processes
Chapter 13 – Organizational Structure
Division Of Labor And Coordination
Elements Of Organizational Structure
Forms Of Departmentalization
Contingencies Of Organizational Design
Chapter 14 – Organizational Culture
Elements Of Organizational Culture
Deciphering Organizational Culture Through Artifacts
Is Organizational Culture Important?
Merging Organizational Cultures
Changing And Strengthening Organizational Culture
Organizational Socialization
Chapter 15 – Organizational Change
Lewin’s Force Field Analysis Model
Unfreezing, Changing, And Refreezing
Change Agents, Strategic Visions, And Diffusing Change
Four Approaches To Organizational Change
Cross-cultural And Ethical Issues In Organizational Change
Organizational Behavior: The Journey Continues
Additional Cases
Case 1: A Mir Kiss?
Case 2: Arctic Mining Consultants
Case 3: Big Screen’s Big Failure
Case 4: Bridging The Two Worlds—the Organizational Dilemma
Case 5: Fran Hayden Joins Dairy Engineering
Case 6: From Lippert-johanson Incorporated To Fenway Waste Management
Case 7: Glengarry Regional Medical Center
Case 8: High Noon At Alpha Mills
Case 9: Keeping Suzanne Chalmers
Case 10: Northwest Canadian Forest Products Limited
Case 11: Perfect Pizzeria
Case 12: Simmons Laboratories
Case 13: Treetop Forest Products
Video Cases
Video Cases For Part One
Video Cases For Part Two
Video Cases For Part Three
Video Case For Part Four
Appendix A
Appendix B
Glossary
References
Photo Credits
Name Index
Subject Index
Url Index
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