Chapter 7 Decision Making

- Top Hat: - Consider the letter K. Is K more likely to to appear as the first letter in a word, or as

he third letter?- Answer: first - Easier to think of words that start with “K” than words that have “K” as the

third letter

- Two Decision Making Systems - System 1

- Fast, automatic, and largely unconscious - This is our intuition

- System 2 - Slow, deliberate, analytical, and very conscious - This is when we analyze possibilities, collect and consider available

information, etc.

- A baseball bat and ball cost $1.10. The bat costs $1 more than the ball. How much does the ball cost?

- Will tomorrow’s high temp. Be over 70 degrees?

- Habits Exist in System 1 - The power of Habit

- More than 40% of the decisions we make each day are habitual. - Cue- Routine - Reward

- A cue is a trigger that tells your brain which habit to use and puts its into automatic mode.

- A routine is what we do to act out the habit. This can be physical, mental, or emotional.

- A reward is the result of the routine and reinforces the habit.

- Intuition and “Thin Slicing” - Thin-slicing

- The unconscious mind’s ability to find patterns and meaning in the most fleeting “slices” of experience and impressions.

- Examples: - Expert psychologists ability to predict, with 95% accuracy, whether a

couple will still be together in 15 year’s time- Another psychologists ability to judge someone’s closest friends just

based on the contents of his or her dorm room. - Textbooks calls this a “holistic hunch”

- Intuition Model

- Intuition is making a choice without the use of conscious thought or logical inference; stems from:

- Expertise , which is a person’s explicit and tacit knowledge about a person, a situation, an object, or a decision opportunity (also known as a holistic hunch)

- Automated experience , which is the involuntary emotional response to those same matters.

- System 2 - Slow, deliberate, analytical, and very conscious - Rational Decision Making

- Stage 1: identify the problem or opportunity - Stage 2: think up alternative solutions- Stage 3: evaluate alternatives and select a solution- Stage 4: implement and evaluate the solution chosen.

- Some Hindrances to Rational Decision Making - Complexity - Time and money constraints - Different cognitive capacity. Values, skills, habits, and unconscious

reflexes - Imperfect information- Information overload - Different priorities - Conflicting goals

- Evidence-Based Decision Making - Evidence-based management

- The translation of principles based on best evidence into organizational practice

- Brings rationality to the decision-making process

- Seven implementation Principles of Evidence-Based Management - 1. Treat your organization as an unfinished prototype. - 2. Don’t brag, just use facts. - 3. See yourself and your organization as outsiders do. - 4. Evidence-based management is not just for senior executives. - 5. Like everything else, you still need to sell it. - 6. IF all else fails, slow the spread of bad practice. - 7. The best diagnostic question: What happens when people fail?

- What Makes it Hard to be Evidence Based - There’s too much evidence- There’s not enough good evidence

- The evidence doesn’t quite apply. - People are trying to mislead you. - You are trying to mislead you. - The side effects outweigh the cure. - Stories are more persuasive anyway.

- Computer-Aided Decision Making - Decision support system

- A computer-based information system that provides a flexible tool for analysis and helps managers focus on the future

- Produces collected information known as business intelligence.

- Rules for Brainstorming - 1. Defer judgment - 2. Build the ideas of others- 3. Encourage wild ideas. - 4. Go for quantity or quality - 5. Be visual - 6. One conversation at at time.

- Group Decision Making: How to work with others - Advantages of group decision making - Greater pool of knowledge - Different perspectives - Intellectual stimulation- Better understanding of decision rationale- Deeper commitment to the decision.

- What managers Need to Know about Groups and Decision Making - Groups take longer to make decisions - Their size affects decision quality

- Optimal group size may be 5 or 7 people - Odd group numbers are best

- They may be too confident - Knowledge counts

- Disadvantages of Group Decision Making - Few people dominate or intimidate- Satisficing - the “good enough” decision - Goal displacement - other issues may arise

- Groupthink- agreeing for the sake of unanimity and thus avoid accurately assessing the decision situation.

- Systems of Groupthink- Sense of invulnerability - Rationalization - Illusion of unanimity and peer pressure- “The wisdom of crowds”

Chapter 7 Review

1. [__]_ is associated with fastm automatic, and largely unconscious decision making. a. System 1b. System 2

2. According to our textbook, the second stage in the rational decision making process is to:

a. Take stock of current position b. Think up alternative solutions c. Evaluate alternatives d. Identify the problem or opportunity

3. When brainstorming, the group should: a. Go for quantity over quality b. Defer judgementc. Encourage wild ideas d. All of the above

4. Which of the following is NOT a difficulty to rational decision making, as identified by our textbook?

a. Complexity b. Imperfect informationc. Ineffectiveness of consensus building d. Different priorities

2-28-2019 Chapter 8

Culture, Structure, Design

- Utilizing culture and Structure to implement Strategy

- “A leader’s job is to help inspire every team member to help execute strategy.”

- Organizational Culture - Norms, Values, and Beliefs That Bind Us

- Organizational culture - The shared, often taken-for-granted assumptions that a group

holds and that determines how it perceives, thinks about, and reacts to its various environments

- Organizational Culture - What are its building blocks?

- Symbols - An object, an act, a quality, or event conveys meaning to others

- Stories - Narrative based on true events repeated- and sometimes

embellished upon - to emphasize a particular value - Heroes

- Person who accomplishments embody the values of the organization

- Rites and rituals - Activities and ceremonies that celebrate important occasions and

accomplishments - Organizational socialization

- The process by which people learn the values, norms, and required behaviors of an organization

- Top Hat - Question:

- In the Mary Kay Cosmetics Co., the best salespeople receive pink Cadillac in special awards ceremonies. THis is an example of:

- Both a symbol and a rite - A symbol - A rite or ritual - A value

- Competing Values Framework

- Four Types of Organizational Culture- Clan Culture

- Has an internal focus - Values flexibility rather than stability - Encourages collaboration among employees

- Adhocracy Culture - Has an external focus - Values flexibility - Adaptable, creative, and quick to respond to changes in the marketplace

- Market Culture - Focused on the external environment - Values stability and control - Driven by competition and a strong desire to deliver results

- Hierarchy Culture - Has an internal focus - Vales stability and control over flexibility - Formalized, structured work environment

- Organizational Structure - Who reports to Whom and Who Does What

- Organizational Structure - A formal system of task and reporting relationships that

coordinated and motivates an organization’s members so that they can work together to achieve the organization’s goals

- Concerned with who reports to whom and who specializes in what work

- Common Elements of Organizations - Four Proposed by Edgar Schein:

- 1. Common Purpose- Gives everyone an understanding of the organization’s reason for

being - 2. Coordinated Effort

- The coordination of individual effort into group-wide effort - 3. Division of Labor

- Having discrete parts of a task done by different people- 4. Hierarchy of Authority

- Making sure the right people do the right things at the right time (unity of command)

- Three more that authorities agree on: - 1. Span of Control

- The number of people reporting directly to a given manager; narrow or wide

- 2. Authority - Accountability, responsibility, and delegation; the line versus staff

positions - 3. Centralized versus decentralized authority

- Who makes decisions; upper management or middle

- Mechanistic Versus Organic Organizations

- How to Stand Out in a New Job - Fitting into an organization’s Culture in the First 60 Days

- 1. Be aware of the power of first impressions - 2. See how people behave by arriving early and staying late - 3. Network with people and find out how the organization works - 4. Ask for advice - 5. Overdeliver

- What Does It Mean to “Fit”? Anticipating a Job Interview - Person-organization fit

- Reflects the extent to which personality and values match the climate and culture in an organization

- The four most frequently asked interview questions used by hiring managers, according to a survey involving 285,000 kinds of interview questions.

- What’s your favorite movie? - What’s your favorite website?- What makes you uncomfortable? - What’s the last book you read for fun?

- Three Levels of Organizational Culture - Level 1: Observable Artifact

- Physical manifestations of culture - Level 2: Espoused Values

- Explicitly stated Values and Norms - Level 3: Basic Assumptions

- Core Values of the Organization

- The Results Revealed… - An organization’s culture matters - Employees have more positive work attitudes when working in organizations with

clan cultures - Clan and market cultures are more likely to deliver higher customer satisfaction

and market share

- Operational outcomes, quality and innovation are more strongly related to clan, adhocracy and market cultures than to hierarchical ones

- An organization’s financial performance is not strongly related to organizational culture

- Companies with market cultures tend to have more positive organizational outcomes

- A Dozen Ways to Change Organizational Culture - Formal statements: mission, vision, values - Language, slogans, sayings, and acronyms - Rites and rituals - Stories, legends, and myths - Managerial responses to critical incidents - Role modeling, training, and coaching - Through physical design - With rewards, titles, promotions and bonuses - Establishing goals and performance criteria - Through measurable and controllable activities - By changing organizational structure - Using organizational systems and procedures

- Organizational Fit and OCB - There is a positive relationship between organizational fit and OCB.- The relationship between organizational fit and OCB is mediated (best explained)

by the norm of reciprocity.

Chapter 9

- Human Capital- is the economic or productive potential of employee knowledge, experience and

actions. - A knowledge worker

- is someone whose occupation is primicplayy concerned with generating or interpreting information, as opposed to manual labor.

- Social Capital - is the economic or productive potential of strong, trusting, and cooperative

relationships.- Strategic human resource

- planning consists of developing a systematic, comprehensive strategy for (a) understanding current employee needs and (b) predicting future employee needs.

- Job analysis

- is to determine, by observation and analysis, the basic elements of a job. - Job Description

- summarized what the holder of the job does and how and why he or she does it - Job specification

- which described the minimum qualifications a person must have to perform the job successfully.

- Human Resource inventory- a report listing your organization’s employees by nam, education, training,

languages, and other important information. - Job Posting- placing information about job vacancies and qualifications on bulletin

boards, in newsletters and on the organization’s intranet. - External Recruiting- attracting job applicants from outside the organization - Realistic Job Preview

- gives a candidate a picture of both positive and negative features of the job and the organization before he or she is hired

- Selection Process- the screening of job applicants to hire the best candidate. - Unstructured Interview- asking probing questions to find out what the applicant is like.v- Structured Interview

- asking each applicant the same questions and comparing their responses to a standardized set of answers

- Situational Interview- focuses on hypothetical situations - Ex. → “what would you do if you saw two of your people arguing loudly

in the work area?”- Behavioral-description interview

- the interviewer explores what applicants have actually done in the past. - Employment Tests

- are legally considered to consist of any procedure used in the employment selection decision process, even application forms, interviews and educational requirements

- Reliability - The degree to which a test measures the same thing consistently

- Validity - The test measures what it purports to measure and is free of bias

- Base Pay - Consists of the basic wage or salary paid employees in exchange for doing their

jobs

- Incentives- Commissions, bonuses, profit-sharing plans and stock options

- Benefits- additional non monetary forms of compensation - Onboarding

- Programs that help employees to integrate and transitions to new jobs by making them familiar with corporate policies, procedures, cultures, and politics by clarifying work-role expectations and responsibilities

- Orientation - Helping the newcomer fit smoothly into the job and the organization

- 5 Steps in the Training Process: - Assessment - Objectives - Selection - Implementation - Evaluation

- Development- Educating professional and managers in the skills they need to do their jobs in

the future - Microlearning (bite size learning)

- Enabling a student to master one piece of learning before advancing to anything else

- Performance management - Defined as a set of processes and managerial behaviors that involve defining,

monitoring, measuring, evaluating and providing consequence for performance expectations

- 4 steps - Define - Monitor and evaluate performance - Review performance - Provide consequences

- Objective appraisals - Based on facts and are often numerical

- SUbjective Appraisals - Based on a manager’s perceptions of an employees traits and behaviors

- 360-degree assessment - In which employees are appraised not only by their managerial superiors but also

by peers, subordinates, and sometimes clients - Forced ranking performance systems

- All employees within a business unit are ranked against one another and grades are distributed along some sort of bell curve

- Informal Appraisals - Conducted on an unscheduled basis and consist of less rigorous indications of

employee performance - Non Disparagement agreement

- Contract between two parties that prohibits one part from criticizing the other; it is often used in severance agreements to prohibit former employees from criticizing their former employers

- Fair Labor Standards Act of 1938 - Established minimum living standards for workers engaged in interstate

commerce, including provision of a federal minimum wage - Union-Security Clause

- The part of the labor management agreement that states that employees who receive union benefits must join the union, or at least pay dues to it

- Grievance - Is a complaint by an employee that management has violated the terms of the

labor-management agreement - Mediation

- Is the process in which a neutral third party, a meditator, listens to both slides in a dispute, makes suggestions, and encourages them to agree on a solution

- Arbitration - Is the process in which a neutral third party, an arbitrator, listen to both parties in

a dispute and makes a decision that the parties have agreed will be binding on them.

Chapter 9 Quiz

- Melanie scheduled a special interview with Gina before was hired, in which Melanie painted both a

- Realistic interview preview - An advantage of recruiting employees to higher-level internally from within the company

(as opposed to externally from the outside the company) is: - The whole process of advertising, interviewing, and so on is cheaper

- Joe, a human resources specialist for Jersey Office Supplies Co., rides along with the furniture delivery people to observe the problems

- Job analysis - According to the textbook, someone whose occupation is principally concerned

- Knowledge worker

3-5-2019

- Chapter 8 Review - According to Edgar Schein and as discussed in the textbook, which of the

following is NOT a common element of organizations - Common purpose - Coordinated effort - Division of Labor - Clan Culture - Hierarchy of authority

- JP Morgan is an investment bank headquartered in NYC. The bank’s corporate culture is externally focused, values, stability and control and is driven by competition and a strong desire to deliver results. It’s primary goal is profitability. JP Morgan’s organizAtional culture can be best described as a(n) ____ culture.

- Hierarchy - Market - Clan

- Adhocracy - Which organizational type typically has decentralized hierarchy of authority?

- Organic organizations - Mechanistic organizations

- Which organizational type typically has many shared tasks (as opposed to specialized tasks)?

- Organic organizations - Mechanistic organizations

Chapter 9

- Human Resource Management - Human Resource Management (HRM)

- Consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce

- Human Capital - The economic or productive potential of employee knowledge, experience

and actions

- Knowledge worker - Someone whose occupation is principally concerned with generating or

interpreting information, as opposed to a manual laborer - Social Capital

- The economic or productive potential of strong, trusting, and cooperative relationships.

- The Life Cycle of an Employer - From the company/manager/employer’s perspective

- Understand the organization’s current needs and predict future needs - Recruit, interview, Select, Onboard, Train - Manage, Evaluate, Provide Feedback (then repeat) - Maintain, Transfer, Promote, or Let Go

- The Strategic HRM Process - Strategic human resource planning consists of developing a systematic,

comprehensive strategy for: - Understanding current employee needs and - Predicting future employee needs

- Understanding Current Employee Needs - Job Analysis

- Determining the basic elements of a job by observation and analysis - Job Description

- Summarizes what the holder of the job does and how and why he or she does it

- Job Specification - Describes the minimum qualifications a person must have to perform a

job successfully

- Predicting Future Employee Needs - Predicting future needs

- Become knowledgeable about the staffing the organization might need - Know the likely sources for staffing

- Human resource inventory - A report listing your organization’s employees by name, education,

training, languages, and other important information

- Recruitment and Selection - Recruitment

- Process of locating and attracting qualified applicants for jobs open in the organization

- Internal- hiring from the inside - external - from the outside - Culture matters when considering internal vs. external

- Clan cultures are more conducive to recruiting internally

- Internal and External Recruiting: Advantages and Disadvantages

- Which External Recruiting Methods Work Best?- Most effective sources

- Employee referrals - E-recruitment tools (member directories, social media such as Linkedin,

“dot-jobs” websites). - Realistic job preview

- Gives a candidate a picture of both the positive and negative features of the job and the organization before joining a firm

- Interviewing: Unstructured - Unstructured Interview

- No fixed set of questions and no systematic scoring procedure - Involves asking probing questions to find out what the applicant is like

- Interviewing: Structured - Structured Interview

- Asking each applicant the same questions and comparing their responses to a standardized set of answers

- Type 1: Situational interview - Focuses of hypothetical situations

- Type 2: Behavioral interview - Explore what applicants have actually done in the past

- Employment Tests - Ability Tests

- Measure physical abilities, strength and stamina, mechanical ability, mental abilities, and clerical abilities

- Performance tests- Also known as skills test, measure performance on actual job tasks- so

called job tryouts - May take place in an assessment center

- Personality tests - Measure such personality traits as adjustment, energy, sociability,

independence, and need for achievement - May include career-assessment tests

- Integrity tests - Assess attitudes and experiences related to a person’s honesty,

dependability, trustworthiness, reliability and prosocial behavior - Other tests

- Drug testing, polygraph, genetic screening

- Selection: How to Choose the Best Person for the Job - Selection Process

- Screening of job applicants to hire the best candidate - Involves three components

- Background information - Interviewing - Employment tests

- Many jobs, such as those in warehousing and trucking, require that job applicants take a drug test.

- Orientation, Training, and Development- Onboarding

- Programs that help employees to integrate and transition to new jobs - Familiarize new employees with corporate policies, procedures, cultures

and politics - Clarify work-role expectations and responsibilities

- Orientation - Helping the newcomer fit smoothly into the job and the organization - Designed to give employees the information they need to be successful - Following orientation, the employee should emerge with information

about: - The job routine - The organization’s mission, and operations - The organization’s work rules and employee benefits

- Call with Alan Gording at Capital One - Finance professional at Capital One in the commercial real estate group - Previous experience includes automotive captive finance as a Chief of Staff and

corporate finance specialist, 4 years in credit research of industrial companies. M&A on nearly $35B of FIG and TMT transactions, and international project finance for alternative energy and infrastructure deals

- Specialities: - Automotive finance - Process improvement - Financial modeling - Due diligence - M&A - FP&A- Management presentations- Project finance

- Bloomberg - Credit analysis - Credit risk - Leveraged finance- Fixed income - Bankruptcy - Relationship manAGement - Strategy

- MA from University of Pennsylvania and MBA from Wharton

3-7-2019 Financial Statements

- Question - Why don’t people, organizations, institutions, etc. just save cash and sit on it?

Why invest savings? - The risks of inflation, and the benefits of long-term compound interest

- Inflation - SInce the end of WWII, the average rate of inflation in the US has been 3.8%. - As of January 2019, the current rate of inflation if 1.9%.

- Compound Interest- “Compound interest is the 8th wonder of the world. One who understands it,

earns it. One who doesn’t, pays it.” - Why is compound interest at the core of all finance? - If a company is values at $1million today and grows by 10% each year over the

next two years, how much is the company worth two years from now? - The Rule of 72

- Individuals and organizations want to protect against inflation and benefit form compound interest, so they can invest

3-19-2018 Chapter 11

- Personality and Individual Behavior - Personality

- The stable psychological traits and behavioral attributes that give a person his or her identity

- Proactive personality - Someone who is more apt to take initiative and persevere to influence the

environment

- The Big Five Personality Dimensions (EACEO)

-

Think-Pair-Share - inventive/curious vs. consistent/cautious → Openness to Experience - efficient/organized vs. easy-going/careless → Conscientiousness - outgoing/energetic vs. solitary/reserved → extroversion - friendly/compassionate vs. challenging/detached → agreeableness - sensitive/nervous vs. secure/confident → emotional stability

- Self-Efficacy - Self-efficacy

- Belief in one’s ability to do a task - Learned helplessness

- The debilitating lack of faith in one’s ability to control one’s environment - Associated with low self-efficacy

- What can managers do? - Give constructive pointers and positive feedback - Create goals that are progressively more challenging - Offer guided experiences, mentoring and role modeling

- Self-Esteem - Self-esteem

- The extent to which people like or dislike themselves - High self-esteem: more apt to handle failure better, emphasize the

positive and to take more risks - Low self esteem: tend to focus more on one’s weaknesses, may be more

dependent on others

- What can managers do? - Reinforce employees’ positive attributes and skills - Provide positive feedback whenever possible - Break larger projects into smaller tasks and projects - Express confidence in employees’ abilities to complete their tasks - Provide coaching when employees are struggling to complete tasks

- Locus of Control - Locus of Control

- Indicates how much people believe they control their fate through their own efforts

- Internal locus on control: you believe you control your destiny - External Locus on control: you believe external forces control you

- What can managers do?- Employees with internal locus of control should probably be placed in jobs

requiring high initiative and lower compliance - Employees with external locus of control might do better in highly

structured jobs requiring greater compliance - Internals may prefer and respond more productively to incentives such as

merit pay or sales commissions

- Self-Efficacy, Self-Esteem, and Locus of Control - “Whether you believe you can or you believe you can’t- you’re right”

- Chapter 11 Top Hat Questions - John is interviewing Bambi for a job opening at his accounting firm, He notices

that she has several tattoos visible on both arms. He does not believe that people with tattoos can be good accountants. John is engaged in

- Counseling - Stereotyping - Behavioral interviewing - Situational interviewing

- Susan loves going to partes, where she talks to everyone there. Susan is probably high in

- Extroversion - Agreeableness- Emotional stability - conscientiousness

- The statement “I am never going to eat at this restaurant again” reflects the ____ component of an attitude.

- Behavioral - Decisional

- Cognitive - Affective

- ____ are abstract ideals that guide one’s thinking and behavior across all situations

- Values - The statement “You can’t judge a book by its cover” can be most clearly

associated with which of the following Chapter 11 concepts? - The halo effect - Cognitive dissonance - Emotional intelligence - Self-fulfilling prophecy

- Emotional Stability - The extent to which people feel secure and unworried and to which they are

likely to experience negative emotions under pressure - Low levels are prone to anxiety and tend to view the world negatively - High levels tend to show better job performance

- Emotional Intelligence (EI or EQ) - Emotional Intelligence

- Ability to monitor your and others’ feelings and to use this information to guide your thinking and actions

- First introduced in 1909, some claim it ot be the “secret elixir” to happiness and higher performance

- Moderately associated with - Better social relations, well-being, and satisfaction - Higher creativity - Better emotional control - Conscientiousness and self-efficacy - Self-related performance

- The Traits of Emotional Intelligence

- Values, Attitudes and Behavior - Organizational Behavior

- Dedicated to better understanding and managing people at work - Tries to help managers explain and predict work behavior, so they can

better lead and motivate their employees to perform productively

- Values and Attitudes - Values

- Abstract ideals that guide one’s thinking and behavior across all situations - Attitude

- A learned predisposition toward a given object - Directly influence our behavior

- Three Components of Attitudes - Affective “I feel”

- Feelings or emotions one has about a situation - Cognitive “I believe”

- Beliefs and knowledge one has about a situation - Behavioral “I intend”

- How one intends or expects to behavior toward a situation

- Cognitive Dissonance - The psychological discomfort a person experiences between his or her cognitive

attitude and incompatible behavior - How people deal with the discomfort depends on:

- Importance- can you live with the ambiguity? - Control- how much control do you have over the situation?

- Rewards- what rewards are at stake with the dissonance?

- Perceptions and Individual Behavior - Perception

- Process of interpreting and understanding one’s environment

- Distortions in Perceptions: Stereotyping - Stereotyping

- Tendency to attribute to an individual the characteristics one believes are typical of the group to which that individual belongs

- Sex-role stereotypes - Research revealed that men were preferred for male-dominated jobs,

women have harder time being perceived as effective leaders - Age stereotypes

- Inaccurately believing that older workers are less motivated, resistant to change, less trusting and less healthy (research refuted all of these)

- Race stereotypes - Studies demonstrated that people of color experienced more perceived

discrimination and less psychological support than whites

- Distortions in Perceptions: Implicit Bias- Implicit bias

- Attitudes or beliefs that affect our understanding, actions, and decision in an unconscious manner

- “I really dont think I’m biased, but i just have feelings about some people.” - > 85% of americans consider themselves to be unprejudiced, but

researchers conclude most hold some degree of implicit racial bias - Implicit bias is at the forefront of public discussion in 2016.

- How to take steps forward?- Requiring intergroup contact, positive feedback, clear norms of behavior

- Distortions in Perception: Halo Effect - Halo Effect

- Forming an impression of an individual based on a single trait - “One trait tells me all i need to know”

- Distortions in Perception: The Recency Effect - Tendency to remember recent information better than earlier information - Examples:

- Employees has recently made a mistake, and it ends up being the only topic of a performance review

- Student’s course evaluations of professors may be affected by course activity closer to the time of formal appraisal

- Some stock market investors leap into holdings that are doing well and cash out investments that are doing poorly, ignoring trends

- Distortions in Perception: Causal Attributions - Causal attributions

- Inferring causes for observed behavior - Fundamental attribution bias

- People attribute another person’s behavior to his or her personal characteristics rather than to situational factors

- Self-serving bias - People tend to make more personal responsibility for success than for

failure

- Self-fulfilling prophecy - Self-fulfilling prophecy

- Is a phenomenon by which people’s expectations of themselves or others lead to behave in ways that makes those expectations come true

- Managerial expectations powerfully influence employee behavior and performance

- What can managers do? - Create positive performance expectations - Recognize that everyone has the potential to increase performance - Introduce new employees as if they have outstanding potential - Encourage employees to visualize successful execution of tasks - Help employees master key skills

- Work-Related Attitudes and Behaviors - Employee engagement

- An individual's involvement, satisfaction, and enthusiasm for work - Engaged employees’ feelings of urgency, intensity, and enthusiasm, as

well as focus, making them more committed - Employees more likely to become engaged when a culture promotes

employee development, recognition, and trust

- Job Satisfaction - Extent to which you feel positively or negatively about various aspects of your

work - Depends on how you feel about several components, such as work, pay,

promotions, coworkers, and supervision - Key correlates

- Stronger motivation, job involvement, and life satisfaction - Less absenteeism, tardiness, turnover, and stress

- Organizational Commitment - Reflects the extent to which an employee identifies with an organization and is

committed to its goals - Research shows a significant positive relationship between organizational

commitment and job satisfaction performance, turnover and organizational citizenship behavior

- Important Workplace Behaviors - Why, as a manager, do you need to learn how to manage individual differences?

So that you can influence employees to do their best work. - Evaluating the performance of employees should include:

- Performance and productivity - Absenteeism and turnover - Organizational citizenship behaviors - Counterproductive work behaviors

- Cautions about Using Personality Testing in the Workplace

- Core Self-Evaluations - Represents a broad personality trait comprising four positive individual traits

- 1. Self-efficacy - 2. Self-Esteem - 3. Locus of Control - 4. Emotional Stability

-

- Key Terms in Chapter 12 - Acquired Needs Theory

- Theory states that there are three needs - Achievement - Affiliation - Power

- Are the major motives determine people’s behavior in the workplace- Bonuses

- Cash awards given to employees who achieve specific performance objectives

- Content Perspectives - Also know as need-based perspectives- Theories that emphasize the needs that motivate people

- Distributive Justice - Reflects the perceived fairness of how resources and rewards are

distributed or allocated - Equity Theory

- A model of motivation that explains how people strive for fairness and justice in social exchange or give and take relationships

- Expectancy - The belief that a particular level of effort will lead to a particular level of

performance - Expectancy Theory

- Suggests that people are motivated by 2 things - How much they want something - How likely they think they are to get it

- Extinction - The weakening of behavior by ignoring it or making sure it is not

reinforced - Extrinsic Reward

- The payoff, such as money that a person receives from others for performing a particular task

- Flourishing - The extent to which our lives contain positive emotions, engagement,

relationships, meaning, and achievement (PERMA) - Gainsharing

- The distribution of savings or “gains” to groups of employees who reduce costs and increase measurable productivity

- Goal-setting theory- Employee motivation approach that employees can be motivated by goals

that are specific and challenging but achievable - Hierarchy of needs theory

- Psychological structure proposed by Maslow whereby people are motivated by five levels of needs

- Psychological - Safetly - Love - Esteem - Self-actualization

- Hygiene Factors - Factors associated with job dissatisfaction- such as salary, working

conditions, interpersonal relationships and company policy- all of which affect the job context or environment in which people work

- Instrumentality - The expectation that successful performance of the task will lead to the

outcome desired - Interactional Justice

- Related to the “quality of the interpersonal treatment people receive when procedures are implemented”

- Intrinsic Reward - The satisfaction, such as a feeling of accomplishment, a person received

from performing a task - Job Characteristics Model

- The job design model that consists of 5 core job characteristics that affect three critical psychological states of an employee that in turn affect work outcomes- the employees motivation, performance, and satisfaction

- Job Design - The division of an organization’s work among its employees and the

application of motivational theories to jobs to increase satisfaction and performance

- Job enlargement - Increasing the number of tasks in a job to increase variety and motivation

- Job enrichment - Building into a job such motivating factors as responsibility, achievement,

recognition, stimulating work and advancement - Law of effect

- Behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear

- Meaningfulness - The sense of “belonging to and serving something that you believe is

bigger than the self.” - Motivating Factors

- FActors associated with job satisfaction such as achievement, recognition, responsibility and advancement- all of which affect the job content or the rewards of work performance

- Motivation - Psychological process that arouse and direct goal directed behavior

- Needs

- Physiological or psychological deficiencies that arouse behavior - Negative Reinforcement

- Process of strengthening a behavior or withdrawing something negative- Pay for Knowledge

- Situation in which employees’ pay is tied to the number of job relevant skills they have or academic degrees they earn

- Pay for Performance - Situation in which an employee's pay is based on the results he or she

achieves - Piece rate

- Pay based on how much output an employee produces - Positive reinforcement

- The use of positive consequences to strengthen a particular behavior - Procedural justice

- The perceived fairness of the process and procedures used to make allocation decisions

- Process perspectives - Theories of employee motivation concerned with the thought processes

by which people decide how to act: expectancy theory, equity theory and goal setting theory

- Profit sharing - The distribution to employees of a percentage of the company’s profits

- Punishment - The process of weakening behavior by presenting something something

negative or withdrawing something positive - Reinforcement

- Anything that causes a given behavior to be repeated or inhibited; the four types are positive, negative, extinction and punishment

- Reinforcement theory - The belief that behavior reinforced by positive consequences tends to be

repeated, whereas behavior reinforced by negative consequences tends not to be repeated

- Sales commission - The sales percentage of a company’s earnings as the result of a

salesperson’s sales that is paid to the salesperson - Scientific management

- Management approach that emphasizes the scientific study of work methods to improve the productivity of individual workers

- Self-determination theory - Theory that assumes that people are driven to try to grow and attain

fulfillment, with their behavior and well-being influenced by three innate needs:

- Competence, autonomy, and relatedness - Stock options

- The right to buy a company’s stock at a future date for a discounted price - Two factor theory

- Theory that proposes that work satisfaction and dissatisfaction arise from 2 different work factors- work satisationg form so-called motivating factors and work dissatisfaction form so-called hygiene factors

- Valence - The value or the importance a worker assigns to a possible outcome or

reward - Voice

- Employees upward expression of challenging but constructive opinions, concerns, or ideas on work related issues to their managers

- Well-being - The combined impact of 5 elements

- Positive emotions- Engagement - Relationships- Meaning- Achievement

- PERMA - Work life benefits

- Are employer sponsored benefit programs or initiatives designed to help all employees balance work life with home life

3-21-2019 Chapter 12

Motivating Employees

- Motivation: What it is, Why it’s important - Motivation

- The psychological processes that arouse and direct goal-directed behavior

- Extrinsic rewards - Payoff a person

receives from others for performing a particular task

- Intrinsic rewards - Satisfaction a person

receives from performing the particular task itself

- Why is motivation important? - Within the context of an organization, we want to motivate people to:

- Join our organization- Stay with our organization - Show up for work at our organization - Be engaged and active while at our organization - Do extra for our organization

- Four Major Perspectives on Motivation - The four main perspectives on motivation:

- Content - Proess- Job design - Reinforcement

- Content Perspectives on Motivation - Content perspectives

- Theories that emphasize the needs that motivate people - Needs

- Physiological or psychological deficiencies that arouse behavior - Content theorists ask “What kind of needs motivate employees in the

workplace?”

- Maslow’s Hierarchy of Needs

- Self actualization - Need for self-fulfillment, increasing competence, using abilities to the

fullest. - Workplace examples: sabbatical leave to further personal growth,

operating consistently in your personal “flow” - Esteem

- Need for self-respect, status, reputation, recognition, self-confidence- Workplace examples: bonuses, promotions, awards (extrinsic); sense of

self worth, sense of importance on a team, feeling of progress toward a goal (intrinsic)

- Love and Belonging- Need for love, friendship, affection. Workplace examples: camaraderie

between employees; acceptance into and within a team - Safety

- Need for physical safety, emotional security, avoidance of violence. Workplace examples: health insurance, job security, safe work environment, pension plans, retirement plans, etc.

- Physiological - Need for food, clothing, shelter, comfort, self-preservation. Workplace

example: these needs are covered by wages and benefits

- A Comparison of the Content Theories

- McClelland’s Acquired Needs Theory - Acquired Needs Theory

- Three needs are major motives determining people’s behavior in the workplace

- Achievement: desire to achieve excellence in challenging tasks - Affiliation: desire for friendly and warm relationships - Power: desire to influence or control others

- Deci and Ryan’s Self-Determination Theory - Self-determination theory

- Assumes people are driven to try to grow and attain fulfillment, with their behavior and well-being influenced by three innate needs: competence, autonomy and relatedness

- Focuses primarily on intrinsic motivation and rewards

- The three innate needs of Self-Determination THeory- Competence

- People need to feel qualified, knowledgeable, and capable of completing a goal or task and to learn different skills

- Autonomy - People need to feel they have the freedom and the discretion to

determine what they want to be and how they want to do it - Relatedness

- People need to feel a sense of belongings, of attachment to others

- Herzberg’s Two Factor Theory - Two-factor theory

- Proposed that work satisfaction and dissatisfaction arise from 2 different factors- work satisfaction from so-called motivating factors and work dissatisfaction from so-called hygiene factors

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