Instructions:
Each Question must be answered with at least 250 words
each (this does not include references). A minimum of THREE references, along
with in-text citations is required. The textbook can be used as a reference. Note:
Please keep the answer and format setup.
For example: Question: XYZ
Answer: XYZ
Reference: XYZ
1. In a narrative format discuss the key facts and critical issues presented in the
case.
2. How does Patagonia provide a work environment and values that enhances
the lives of their employees?
3. Do you think all companies could inspire Patagonia's level of loyalty by
employees by providing work environments with similar benefits? Provide an
example of a company who you think could benefit from their HR practices?
4. As CEO of Patagonia, how would you deal with criticism that you focus
more on hiring employees that are social cause oriented, vs. the most talented
and skilled employees?
NOTE: Three references are required. The textbook may be one. The case study
for these questions start on page 352 (if viewing from PDF it’s page 60).
Reference for book: Ferrell, O., Hirt, G. & Ferrell, L. (2009). Business in a
Changing World. (7th ed.). McGraw Hill Publishing Company.
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part
Creating the Human
H
I
G
Resource Advantage
4
G
S
,
A
N
G
E the Workforce
CHAPTER 10 Motivating
L
CHAPTER 11 Managing
A Human Resources
APPENDIX C Personal Career Plan
1
0
3
8
2
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chapter
10
CHAPTER OUTLINE
Introduction
Nature of Human Relations
Motivating
the Workforce
Historical Perspectives
on Employee Motivation
Classical Theory
of Motivation
The Hawthorne Studies
Theories of Employee
Motivation
Maslow’s Hierarchy
of Needs
Herzberg’s Two-Factor
Theory
McGregor’s Theory X
and Theory Y
Theory Z
Variations on Theory Z
Equity Theory
Expectancy Theory
Strategies for Motivating
Employees
Behavior Modification
Job Design
Importance of Motivational
Strategies
fer11722_ch10_293-319.indd 294
OBJECTIVES
H
I
G
G
S
,
After reading this chapter, you will be able to:
A
N
Summarize early studies that laid the groundwork for understanding
employee motivation. G
E human-relations theories of Abraham
Compare and contrast the
Maslow and Frederick Herzberg.
L
Investigate various theories
A of motivation, including theories X, Y,
• Define human relations, and determine why its study is important.
•
•
•
and Z; equity theory; and expectancy theory.
• Describe some of the strategies that managers use to motivate
1
employees.
0
• Critique a business’s program
for motivating its sales force.
3
8
2
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H
I
G
G
Amadeus Consulting: Where Employees
S
Are the Company
,
At a time when Americans are among those working the longest hours of
individuals in any developed country, many employees are tired, stressed,
A
and pining for jobs in which they receive even the smallest amount of respect
N
and attention. Therefore, when a company actually goes above and beyond
G take notice. Founded in
the rare pat on the back, we should stand up and
E The company develops
1994, Amadeus Consulting is one such company.
custom software from its headquarters in Boulder,
L Colorado. Founders Lisa
Calkins and John Basso intended, from the beginning,
A to create a company
for which people would be motivated to work long term.
To retain employees, Calkins and Basso believe that it is important to
1
acknowledge the fact that employees have lives outside their jobs and to
encourage a balance between life and work. To 0
achieve this mind-set, they
3
strive to help their employees blend work, family, community involvement,
and the meeting of customer needs. It helps that8Calkins and Basso are not
interested in building a business only to sell it to2the highest bidder; rather,
they are dedicated to creating lifelong customers and employees.
Amadeus’s attention to employee well-being begins with the headquarters
itself. The 11,000-square-foot building is completely free from cubicles and
full of windows letting in tons of light. Employees may make use of a bistrolike lounge, a living room–like meeting place, and a library. Going beyond the
setting is the way employees approach their jobs. Life at Amadeus includes
team lunches, at which employees are likely to discuss personal as well as
work-related topics. Like many companies, Amadeus takes its employees on
ENTER THE WORLD OF BUSINESS
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retreats, but here families come along. Employees are also encouraged to
champion causes, which Amadeus then supports.
Amadeus sounds like an ideal place to work, but does the performance
match up? According to Inc. magazine it does. In 2007, the magazine placed
Amadeus number 1,155 on its list of the 5,000 Fastest Growing Private Companies in America. Also in 2007, the company doubled its employee count and
brought its revenue up to $2.6 million. Amadeus has been named a Microsoft
Gold Certified Partner, and it has won awards such as the Microsoft XP Solution Challenge for Ascriptus. The company was also named 2004 Colorado
Woman-Owned Business of the Year by Business & Professional Women.
Amadeus is proof that it is possible to succeed in business without leaving
life behind.1
H
I
G
G
S
Introduction
, teach some important lessons about how to
Successful businesses like Amadeus
interact with and motivate employees to do their best. Because employees do the
actual work of the business and influence whether the firm achieves its objectives, most top managers agree A
that employees are an organization’s most valuable
resource. To achieve organizational
N objectives, employees must have the motivation,
ability (appropriate knowledge and skills), and tools (proper training and equipG topices are the subject of Chapter 11; this chapment) to perform their jobs. These
ter focuses on employee motivation.
E
We examine employees’ needs and motivation, managers’ views of workers, and
L
several strategies for motivating employees. Managers who understand the needs of
A higher levels of productivity and thus contribtheir employees can help them reach
ute to the achievement of organizational goals.
1
Nature of Human0Relations
human relations
the study of the
behavior of individuals
and groups in
organizational settings
motivation
an inner drive that
directs a person’s
behavior toward goals
What motivates employees to perform on the job is the focus of human rela3 of individuals and groups in organizational settions, the study of the behavior
tings. In business, human relations
involves motivating employees to achieve
8
organizational objectives efficiently and effectively. The field of human relations
2
has become increasingly important over the years as businesses strive to understand
how to boost workplace morale, maximize employees’ productivity and creativity,
and motivate their ever more diverse employees to be more effective.
Motivation is an inner drive that directs a person’s behavior toward goals. A goal
is the satisfaction of some need, and a need is the difference between a desired state
and an actual state. Both needs and goals can be motivating. Motivation explains
why people behave as they do; similarly, a lack of motivation explains, at times, why
people avoid doing what they should do. A person who recognizes or feels a need is
motivated to take action to satisfy the need and achieve a goal (Figure 10.1). Consider a person who feels cold. Because of the difference between the actual temperature and the desired temperature, the person recognizes a need. To satisfy the need
296
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CHAPTER 10
Motivating the Workforce
297
FIGURE 10.1
Need
The Motivation Process
Goal-Directed
Behavior
Need Satisfaction
H
I
G
and achieve the goal of being warm, the person mayGadjust the thermostat, put on
a sweater, reach for a blanket, start a fire, or hug a friend.
S Human relations is concerned with the needs of employees, their goals and how they try to achieve them,
,
and the impact of those needs and goals on job performance.
One prominent aspect of human relations is morale—an employee’s attitude
toward his or her job, employer, and colleagues. High morale contributes to high
A
levels of productivity, high returns to stakeholders, and employee loyalty. Conversely,
N turnover (when employees
low morale may cause high rates of absenteeism and
quit or are fired and must be replaced by new employees). Google recognizes the
G
value of happy, committed employees and strives to engage in practices that will
minimize turnover. Employees have the opportunityEto have a massage every other
week; onsite laundry service; free all-you-can-eat gourmet
L meals and snacks; and the
“20% a week” rule, which allows engineers to work on whatever project they want
A faced turnover of employees
for one day each week. However, Google has recently
wanting to start their own businesses and going to other companies such as Facebook. Although morale is high, employees see opportunities and are solicited heav1
ily by other firms.2
Employees are motivated by their perceptions of 0
extrinsic and intrinsic rewards.
An intrinsic reward is the personal satisfaction and enjoyment that you feel from
3 personal enjoyment in learnattaining a goal. For example, in this class you may feel
ing how business works and aspire to have a career8in business or to operate your
own business one day. Extrinsic rewards are benefits and/or recognition that you
receive from someone else. In this class, your grade 2
is extrinsic recognition of your
efforts and success in the class. In business, praise and recognition, pay increases,
and bonuses are extrinsic rewards. If you believe that your job provides an opportunity to contribute to society or the environment, then that aspect would represent
an intrinsic reward. Both intrinsic and extrinsic rewards contribute to motivation
that stimulates employees to do their best in contributing to business goals.
Respect, involvement, appreciation, adequate compensation, promotions, a
pleasant work environment, and a positive organizational culture are all morale
boosters. Nike seeks to provide a comprehensive compensation and benefits package, which includes traditional elements such as medical, dental, vision, life and
disability insurance, paid holidays and time off as well as sabbaticals, and team
fer11722_ch10_293-319.indd 297
morale
an employee’s attitude
toward his or her
job, employer, and
colleagues
intrinsic rewards
the personal
satisfaction and
enjoyment feel after
attaining a goal
extrinsic rewards
benefits and/or
recognition received
from someone else
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PART 4
Creating the Human Resource Advantage
TABLE 10.1
1. Satisfied employees know clearly what is expected from them every day at work.
Top 10 Ways to Retain
Great Employees
2. The quality of the supervision an employee receives is critical to employee retention.
3. The ability of the employee to speak his or her mind freely within the organization is
another key factor in employee retention.
4. Talent and skill utilization is another environmental factor your key employees seek in
your workplace.
5. The perception of fairness and equitable treatment is important in employee retention.
6. Employees must have the tools, time, and training necessary to do their jobs well—or
they will move to an employer who provides them.
7. The best employees, those employees you want to retain, seek frequent opportunities to
learn and grow in their careers, knowledge, and skill.
8. Take time to meet with new employees
H to learn about their talents, abilities, and skills.
Meet with each employee periodically.
I never, ever threaten an employee’s job or income.
9. No matter the circumstances, never,
10. Staff members must feel rewarded,
G recognized, and appreciated.
G
S
,
Source: Susan M. Heathfield, “Top Ten Ways to Retain Your Great Employees,” About.com, http://humanresources.about.
com/od/retention/a/more_retention.htm (accessed May 15, 2008).
as well as individual compensation plans. More comprehensive benefits include
employee discounts on Nike products, health care and family care reimbursement
accounts, scholarships for children
A of employees, employee assistance plans, work/
life balance resources and referrals, adoption assistance, tuition assistance, group
legal plan, group long-term careN
plan, and matching gift programs. At the Beaverton,
Oregon,
world headquarters, employees may take
G
advantage of onsite day care; onsite fitness centers,
E and restaurants; a convenience store; an onsite
Did You Know? Absenteeism costs a typical
cafés
large company more than $3 million a year3
hair
L and nail salon, annual TriMet transit pass ($20
annual fee versus $600); chances to test products
A
under development; and an opportunity
to become a headquarters tour guide.4
Many companies offer a diverse array of benefits designed to improve the quality
of employees’ lives and increase their morale and satisfaction. As mentioned earlier,
1
many companies offer reward programs to improve morale, lower turnover, and
motivate employees. Some of the0“best companies to work for” offer onsite day care,
TABLE 10.2
You Can Make Their Day:
Tips for the Leader about
Employee Motivation
1.
2.
3
8
Use simple, powerful words.
Make sure people know what you2expect.
3. Provide regular feedback.
4. People need positive and not so positive consequences.
5. It ain’t magic. It’s discipline.
6. Continue learning and trying out new ideas for employee motivation.
7. Make time for people.
8. Focus on the development of people.
9. Share the goals and the context: communicate.
Source: Susan M. Heathfield, “You Can Make Their Day: Ten Tips for the Leader About Employee Motivation,” About.com,
http://humanresources.about.com/od/motivationsucces3/a/lead_motivation.htm (accessed May 15, 2008).
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299
concierge services (e.g., dry cleaning, shoe repair, prescription renewal), domestic
partner benefits to same-sex couples, and fully paid sabbaticals. Table 10.2 offers
suggestions as to how leaders can motivate employees on a daily basis.
Historical Perspectives on Employee
Motivation
Throughout the 20th century, researchers have conducted numerous studies to try
to identify ways to motivate workers and increase productivity. From these studies
have come theories that have been applied to workers with varying degrees of success. A brief discussion of two of these theories—the classical theory of motivation
and the Hawthorne studies—provides a background for understanding the present
H
state of human relations.
I
G to time and motion studThe birth of the study of human relations can be traced
ies conducted at the turn of the century by Frederick
GW. Taylor and Frank and Lillian Gilbreth. Their studies analyzed how workers perform specific work tasks in an
effort to improve the employees’ productivity. TheseS
efforts led to the application of
scientific principles to management.
,
Classical Theory of Motivation
According to the classical theory of motivation, money is the sole motivator for workers. Taylor suggested that workers who were paid more would produce
more, an idea that would benefit both companies and
Aworkers. To improve productivity, Taylor thought that managers should break down each job into its component tasks (specialization), determine the best way toNperform each task, and specify
the output to be achieved by a worker performing the
Gtask. Taylor also believed that
incentives would motivate employees to be more productive. Thus, he suggested
E He developed the piecethat managers link workers’ pay directly to their output.
rate system, under which employees were paid a certain
L amount for each unit they
produced; those who exceeded their quota were paid a higher rate per unit for all
A
the units they produced.
We can still see Taylor’s ideas in practice today in the use of mathematical models, statistics, and incentives. Moreover, companies are
1 increasingly striving to relate
pay to performance at both the hourly and managerial level. According to Marriott Hotels, roughly 40 percent of incentive planners0choose an individual incentive
to motivate and reward their employees. In contrast,
3 team incentives are used to
generate partnership and working together to accomplish organizational goals. The
8
state of Washington offers teams 25 percent of the revenue
generated (not to exceed
$10,000) as the result of a continuous improvement2or total quality process.5
More and more corporations are tying pay to performance in order to motivate—
even up to the CEO level. The topic of executive pay has become controversial in
recent years, and many corporate boards of directors have taken steps to link executive compensation more closely to corporate performance. CEO compensation,
although increasing, is not rising at the level of previous years. Compensation rose 5
percent, which is down from 13 percent in the previous year. Larry Elllison, CEO of
Oracle, topped the list with total compensation of $192.92 million and is considered
by many to be a valuable CEO.6
Like most managers of the early 20th century, Taylor believed that satisfactory
pay and job security would motivate employees to work hard. However, later studies
showed that other factors are also important in motivating workers.
fer11722_ch10_293-319.indd 299
classical theory
of motivation
theory suggesting that
money is the sole
motivator for workers
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Going Green
Motivating Employees by Being Green
Interface Inc., the largest modular tile carpet maker in the
United States, was founded in 1973. At the time, it was simply
another company. Today, thanks to its founder Ray Anderson,
Interface is a leader in sustainable and environmentally sound
practices. Anderson has been featured in two environmental
documentaries and received numerous awards such as the
Purpose Prize from Civic Ventures and the International Quality of Life award from Auburn University.
So, what makes this company so unique and so green?
Simply put, it’s the company’s Mission Zero, involving all employees. While team efforts to reduce the company’s environmental footprint to zero by 2020 is a target, they don’t plan to
stop there. Once they’ve achieved carbon neutrality, Interface employees plan to begin working toward restoring portions of the earth in need of care. In the move toward Mission
Zero, Interface recycles old carpet to avoid filling up landfills;
created Cool Carpet to offset emissions; uses 100 percent recycled carpet tile backing on its Cool Blue line; and is partially
powering the Cool Blue line with landfill gas captured by a
method invented, in part, by Interface. Interface has also reduced its greenhouse gas emissions by 60 percent in absolute
tonnage and runs many of its operations on wind and solar
power. And this is just the tip of the iceberg! Interface has
achieved about 50 percent of Mission Zero.
Anderson and Interface’s other executives know full well
that they could not achieve their goals without their dedicated
employees. In fact, Anderson recently stepped down as CEO
in order to educate companies and individuals around the
world about sustainability and environmentally sound practices. When the push toward Mission Zero began, Anderson
asked his employees to work with him to achieve this goal.
Initially, employees reacted to Mission Zero with skepticism,
but today this goal gives Interface employees something to
be passionate about at work—it makes their jobs meaningful, and some note that they feel great about giving their
children and children around the world a better future. To
motivate employees, Interface has invented the Fast Forward
training program to establish every employee as a Mission
Zero ambassador. Interface believes that by encouraging
employees
at work, they then become better spouses, parH
ents, friends, and community members. Employees have also
I encouraged to take their own steps toward helping the
been
environment.
For example, a night shift factory worker helped
G
suggest what has become the Cool Co2mmute program for
G employee commuting emissions.
offsetting
SThere is no arguing that Mission Zero is an important step
and that businesses and individuals would do well to take note
of, Ray Anderson and Interface and to follow this example.7
Discussion Questions
1.AHow does Ray Anderson set an example as CEO to motivate employees toward green business practices?
2.NHow does being green motivate employees in their everyGday jobs?
3. What does Interface do to involve employees in its deciEsions for running a green business?
L
A
The Hawthorne Studies
Elton Mayo and a team of researchers from Harvard University wanted to determine what physical conditions 1
in the workplace—such as light and noise levels—
would stimulate employees to be0most productive. From 1924 to 1932, they studied
a group of workers at the Hawthorne Works Plant of the Western Electric Company
and measured their productivity3under various physical conditions.
What the researchers discovered
8 was quite unexpected and very puzzling: Productivity increased regardless of the physical conditions. This phenomenon has
2
been labeled the Hawthorne effect. When questioned about their behavior, the
employees expressed satisfaction because their co-workers in the experiments were
friendly and, more importantly, because their supervisors had asked for their help
and cooperation in the study. In other words, they were responding to the attention they received, not the changing physical work conditions. The researchers concluded that social and psychological factors could significantly affect productivity
and morale. Medtronic, often called the “Microsoft of the medical-device industry,” has a built-in psychological factor that influences employee morale. The company makes life-saving medical devices, such as pacemakers, neurostimulators, and
stents. New hires at Medtronic receive medallions inscribed with a portion of the
firm’s mission statement, “alleviate pain, restore health, and extend life.” There is
300
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CHAPTER 10
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FIGURE 10.2
Percent
29
30
25
301
Work/Life Balance Is
More Important than Pay
23
What is the primary reason
you accepted your current
position?
20
15
Source: “Work-life Balance
Tops Pay,” USA Today
Snapshots, March 13, 2008,
p. B1.
13
10
5
5
H
I
G
G
S
,
W
or
an k/L
d ife
Fle B
xib ala
ili nc
Co ty e
m
pe
ns
at
io
n
W
or
kC
Tr
ai
ul
ni
tu
ng
re
Op
po
rtu
ni
tie
s
Ad
Op va
po nc
rtu em
ni en
tie t
s
0
5
an annual party where people whose bodies function thanks to Medtronic devices give testimonials. Obviously, Medtronic employees feel a sense ofA
satisfaction in their jobs. Figure 10.2 indicates thatN
work/life balance is important to many employees.
The Hawthorne experiments marked the begin-G
ning of a concern for human relations in the work-E
place. They revealed that human factors do influence
workers’ behavior and that managers who under-L
stand the needs, beliefs, and expectations of peopleA
have the greatest success in motivating their workers.
1
0
3 The employees who participated in the Hawthorne studies responded
The research of Taylor, Mayo, and many others has to the attention they received during the study and thereby improved
led to the development of a number of theories8 their performance, not the changing of the physical characteristics of
that attempt to describe what motivates employees2 their workplace. Do you think the workers in this photo improved their
pace or level of quality as this photo was taken?
Theories of Employee
Motivation
to perform. In this section, we will discuss some of
the most important of these theories. The successful
implementation of ideas based on these theories will vary, of course, depending on
the company, its management, and its employees. It should be noted, too, that what
worked in the past may no longer work today. Good managers must have the ability
to adapt their ideas to an ever-changing, diverse group of employees.
Maslow’s Hierarchy of Needs
Psychologist Abraham Maslow theorized that people have five basic needs: physiological, security, social, esteem, and self-actualization. Maslow’s hierarchy arranges
these needs into the order in which people strive to satisfy them (Figure 10.3).8
fer11722_ch10_293-319.indd 301
Maslow’s hierarchy
a theory that arranges
the five basic needs of
people—physiological,
security, social, esteem,
and self-actualization—
into the order in which
people strive to satisfy
them
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PART 4
Creating the Human Resource Advantage
FIGURE 10.3
Maslow’s Hierarchy
of Needs
Source: Adapted from Abraham
H. Maslow, “A Theory of Human
Motivation,” Psychology
Review 50 (1943), pp. 370–396.
American Psychology
Association.
SelfActualization
Needs
H
I
G
G
S
,
Esteem Needs
Social Needs
Security Needs
A
N
G
Physiological Needs
E
L
A
New parents who work for
Colgate-Palmolive get three
additional weeks of paid
leave in addition to the leave
mandated by the Family
Leave Act. Employees can
also take advantage of onsite
banking, a travel agency, and
film processing at work.
physiological needs
the most basic human
needs to be satisfied—
water, food, shelter, and
clothing
security needs
the need to protect
oneself from physical
and economic harm
fer11722_ch10_293-319.indd 302
1
0
3
8
2
Physiological needs, the most basic
and first needs to be satisfied, are the
essentials for living—water, food, shelter, and clothing. According to Maslow,
humans devote all their efforts to satisfying physiological needs until they are
met. Only when these needs are met can
people focus their attention on satisfying
the next level of needs—security.
Security needs relate to protecting yourself from physical and economic
harm. Actions that may be taken to
achieve security include reporting a dangerous workplace condition to management, maintaining safety equipment, and
purchasing insurance with income protection in the event you become unable to
work. Once security needs have been satisfied, people may strive for social goals.
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Social needs are the need for love, companionship, and friendship—the desire
for acceptance by others. To fulfill social needs, a person may try many things: making friends with a co-worker, joining a group, volunteering at a hospital, throwing
a party. Once their social needs have been satisfied, people attempt to satisfy their
need for esteem.
Esteem needs relate to respect—both self-respect and respect from others.
One aspect of esteem needs is competition—the need to feel that you can do something better than anyone else. Competition often motivates people to increase their
productivity. Esteem needs are not as easily satisfied as the needs at lower levels in
Maslow’s hierarchy because they do not always provide tangible evidence of success.
However, these needs can be realized through rewards and increased involvement in
organizational activities. Until esteem needs are met, people focus their attention on
achieving respect. When they feel they have achievedHsome measure of respect, selfactualization becomes the major goal of life.
I hierarchy, mean being the best
Self-actualization needs, at the top of Maslow’s
you can be. Self-actualization involves maximizing your
G potential. A self-actualized
person feels that she or he is living life to its fullest in every way. For Stephen King,
G fiction writer in the world;
self-actualization might mean being praised as the best
for actress Halle Berry, it might mean winning an Oscar.
S
Maslow’s theory maintains that the more basic needs at the bottom of the hierarchy must be satisfied before higher-level goals can, be pursued. Thus, people who
are hungry and homeless are not concerned with obtaining respect from their colleagues. Only when physiological, security, and social needs have been more or less
A suggests that if a low-level
satisfied do people seek esteem. Maslow’s theory also
need is suddenly reactivated, the individual will tryN
to satisfy that need rather than
higher-level needs. Many laid off workers probably shift their focus from highG
level esteem needs to the need for security. Almost 10,000 employees in 32 counE
tries in business, government, and nonprofit organizations
were surveyed for the
Global Employee Relationship Report. Fifty percent
of
the
respondents
said they
L
believe their organization cares about developing people for the long term, not
A
just for their current job. Just over half of the employees
believed their employers show them genuine care and concern.9 Managers should learn from Maslow’s
hierarchy that employees will be motivated to contribute to organizational goals
1 security, and social needs
only if they are able to first satisfy their physiological,
through their work.
0
303
social needs
the need for love,
companionship,
and friendship—the
desire for acceptance
by others
esteem needs
the need for respect—
both self-respect and
respect from others
self-actualization needs
the need to be the best
one can be; at the top
of Maslow’s hierarchy
3
In the 1950s psychologist Frederick Herzberg proposed
8 a theory of motivation that
focuses on the job and on the environment where work is done. Herzberg studied
2
various factors relating to the job and their relation to employee motivation and
Herzberg’s Two-Factor Theory
concluded that they can be divided into hygiene factors and motivational factors
(Table 10.3).
Hygiene factors, which relate to the work setting and not to the content of the
work, include adequate wages, comfortable and safe working conditions, fair company policies, and job security. These factors do not necessarily motivate employees
to excel, but their absence may be a potential source of dissatisfaction and high
turnover. Employee safety and comfort are clearly hygiene factors.
Many people feel that a good salary is one of the most important job factors,
even more important than job security and the chance to use one’s mind and abilities. Salary and security, two of the hygiene factors identified by Herzberg, make it
possible for employees to satisfy the physiological and security needs identified by
fer11722_ch10_293-319.indd 303
hygiene factors
aspects of Herzberg’s
theory of motivation
that focus on the work
setting and not the
content of the work;
these aspects include
adequate wages,
comfortable and safe
working conditions, fair
company policies, and
job security
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TABLE 10.3
Hygiene Factors
Motivational Factors
Herzberg’s Hygiene
and Motivational Factors
Company policies
Achievement
Supervision
Recognition
Working conditions
Work itself
Relationships with peers, supervisors,
and subordinates
Responsibility
Salary
Advancement
Security
Personal growth
motivational factors
aspects of Herzberg’s
theory of motivation
that focus on the
content of the work
itself; these aspects
include achievement,
recognition, involvement,
responsibility,
and advancement
Maslow. However, the presence H
of hygiene factors is unlikely to motivate employees
to work harder.
I relate to the content of the work itself, include
Motivational factors, which
achievement, recognition, involvement,
responsibility, and advancement. The abG
sence of motivational factors may not result in dissatisfaction, but their presence
is likely to motivate employees G
to excel. Many companies are beginning to employ
methods to give employees more
S responsibility and control and to involve them
more in their work, which serves to motivate them to higher levels of productiv, have tremendous latitude to satisfy customer’s
ity and quality. L.L. Bean employees
needs. One employee drove 500 miles from Maine to New York to deliver a canoe to
a customer who was leaving on a trip. L.L. Bean was number two on BusinessWeek’s
A
list of “Customer Service Champs” behind USAA Insurance. Besides empowering
N service training, answering every call within 20
employees, the company has strict
seconds.10 Disney has a similar commitment to empowering employees and making
G
customers happy.11
E and Maslow’s esteem and self-actualization needs
Herzberg’s motivational factors
are similar. Workers’ low-level needs
L (physiological and security) have largely been
satisfied by minimum-wage laws and occupational-safety standards set by various
A
government agencies and are therefore
not motivators. Consequently, to improve
productivity, management should focus on satisfying workers’ higher-level needs
(motivational factors) by providing opportunities for achievement, involvement,
1 good performance.
and advancement and by recognizing
0
3 Douglas McGregor related Maslow’s ideas about
In The Human Side of Enterprise,
personal needs to management.8McGregor contrasted two views of management—
the traditional view, which he called Theory X, and a humanistic view, which he
2
called Theory Y.
McGregor’s Theory X and Theory Y
Theory X
McGregor’s traditional
view of management
whereby it is assumed
that workers generally
dislike work and must
be forced to do their
jobs
fer11722_ch10_293-319.indd 304
According to McGregor, managers adopting Theory X assume that workers
generally dislike work and must be forced to do their jobs. They believe that the following statements are true of workers:
1. The average person naturally dislikes work and will avoid it when possible.
2. Most workers must be coerced, controlled, directed, or threatened with
punishment to get them to work toward the achievement of organizational
objectives.
3. The average worker prefers to be directed and to avoid responsibility, has
relatively little ambition, and wants security.12
9/17/08 5:00:27 PM
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Consider Ethics and Social Responsibility
Best Buy Brings Diversity to the Geek Squad
Almost all corporations use methods to motivate the workforce. Some of them are inventive, some bizarre, some fall
flat, and not all have impact. However, Best Buy is taking a
stance on diversity and using a powerful method to motivate
its managers to support the cause. Since 2004, Best Buy has
been conducting its diversity training at the Lorraine Motel,
made famous by the assassination of Dr. Martin Luther King
Jr. in 1968. The motel has been converted into the National
Civil Rights Museum, and those who enter the museum are
given a glimpse into the powerful civil rights movement.
Those at Best Buy believe that immersion is the best way
to educate its managers about the need for diversity, hence
H
the trip to Memphis. The company says it is dedicated to
I
inclusion and wants managers to personalize this message
and take it back with them to their stores to share with their
G
employees. Through diversity training, those at Best Buy say
G
they hope to encourage employees to be themselves.
Best Buy is also working to increase diversity in terms
S
of its male to female employee ratios. In 2003, the company
started WOLF, its Women’s Leadership Forum. Through the,
program, Best Buy aims to improve the experiences of both
female employees and female customers. As of fiscal 2007,
Best Buy had increased the number of female general managers by 40 percent, female sales managers by 100 percent,
and female district managers by 200 percent. Female employees working in home theater departments increased by 100
percent, and female Geek Squad employees increased by 284
percent.
Those at Best Buy say that both methods for increasing
diversity have helped the company create a more familylike
atmosphere while helping increase the bottom line as well.13
Discussion Questions:
1. Why is racial and gender diversity important when motivating employees?
2. How does Best Buy’s trip to Memphis encourage racial
diversity among managers and employees?
3. Why does a diverse workforce help increase the bottom
line in a retail company such as Best Buy?
A
N
Managers who subscribe to the Theory X view maintain
tight control over workers, provide almost constant supervision, try to motivate through fear, and make
G
decisions in an autocratic fashion, eliciting little or no input from their subordinates. The Theory X style of management focusesEon physiological and security
needs and virtually ignores the higher needs discussed
L by Maslow.
The Theory X view of management does not take into account people’s needs for
A Theory Y, the contrasting
companionship, esteem, and personal growth, whereas
view of management, does. Managers subscribing to the Theory Y view assume
that workers like to work and that under proper conditions employees will seek
1 esteem, and self-actualization
out responsibility in an attempt to satisfy their social,
needs. McGregor describes the assumptions behind 0
Theory Y in the following way:
1. The expenditure of physical and mental effort3
in work is as natural as play
or rest.
8
2. People will exercise self-direction and self-control to achieve objectives to
2
which they are committed.
3. People will commit to objectives when they realize that the achievement of
those goals will bring them personal reward.
4. The average person will accept and seek responsibility.
5. Imagination, ingenuity, and creativity can help solve organizational problems,
but most organizations do not make adequate use of these characteristics in
their employees.
6. Organizations today do not make full use of workers’ intellectual potential.14
Theory Y
McGregor’s humanistic
view of management
whereby it is assumed
that workers like to
work and that under
proper conditions
employees will seek
out responsibility in an
attempt to satisfy their
social, esteem,
and self-actualization
needs
Obviously, managers subscribing to the Theory Y philosophy have a management style very different from managers subscribing to the Theory X philosophy.
305
fer11722_ch10_293-319.indd 305
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306
PART 4
Creating the Human Resource Advantage
Theory Y managers maintain less control and supervision, do not use fear as the
primary motivator, and are more democratic in decision making, allowing subordinates to participate in the process. Theory Y managers address the high-level needs
in Maslow’s hierarchy as well as physiological and security needs. Today, Theory Y
enjoys widespread support and may have displaced Theory X.
Theory Z
Theory Z
a management
philosophy that
stresses employee
participation in all
aspects of company
decision making
Theory Z is a management philosophy that stresses employee participation in all
aspects of company decision making. It was first described by William Ouchi in his
book Theory Z—How American Business Can Meet the Japanese Challenge. Theory Z
incorporates many elements associated with the Japanese approach to management,
such as trust and intimacy, but Japanese ideas have been adapted for use in the United
States. In a Theory Z organization, managers and workers share responsibilities; the
H
management style is participative; and employment is long term and often lifelong.
Theory Z results in employees feeling
I organizational ownership. Research has found
that such feelings of ownership may produce positive attitudinal and behavioral
G
effects for employees.15 In a Theory Y organization, managers focus on assumptions
about the nature of the worker.GThe two theories can be seen as complementary.
Table 10.4 compares the traditional
S American management style, the Japanese management style, and Theory Z (the modified Japanese management style).
,
Variations on Theory Z
Theory Z has been adapted and modified for use in a number of U.S. companies. One
A
adaptation involves workers in decisions
through quality circles. Quality circles (also
called quality-assurance teams) are
small,
usually having five to eight members who
N
discuss ways to reduce waste, eliminate problems, and improve quality, communication, and work satisfaction. Such G
quality teams are a common technique for harnessing
the knowledge and creativity of hourly
E employees to solve problems in companies.
TABLE 10.4
L
Comparison of American, Japanese, and Theory A
Z Management Styles
American
Japanese
Theory Z
Duration of
employment
Relatively short term;
workers subject to layoffs
when business slows
Lifelong;
1 no layoffs
Long term; layoffs rare
Rate of promotion
Rapid
Amount of
specialization
Considerable; worker
develops expertise in one
area only
Decision making
Individual
0
3
Minimal; worker develops
8 in all aspects of
expertise
the organization
2
Consensual; input from
Slow
all concerned parties is
considered
Slow
Moderate; worker
learns all aspects of the
organization
Consensual; emphasis on
quality
Responsibility
Assigned to the individual
Shared by the group
Assigned to the individual
Control
Explicit and formal
Less explicit and less formal
Informal but with explicit
performance measures
Concern for workers
Focus is on work only
Focus extends to worker’s
whole life
Focus includes worker’s
life and family
Source: Adapted from William Ouchi, Theory Z—How American Business Can Meet the Japanese Challenge, p. 58. © 1981 by Addison-Wesley Publishing
Company, Inc. Reprinted by permission of Perseus Books Publishers, a member of Perseus Books, L.L.C.
fer11722_ch10_293-319.indd 306
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CHAPTER 10
Motivating the Workforce
307
Even more involved than quality circles are programs that operate under names
such as participative management, employee involvement, or self-directed work
teams. Regardless of the term used to describe such programs, they strive to give
employees more control over their jobs while making them more responsible for
the outcome of their efforts. Such programs often organize employees into work
teams of 5 to 15 members who are responsible for producing an entire product
item. Team members are cross-trained and can therefore move from job to job
within the team. Each team essentially manages itself and is responsible for its quality, scheduling, ordering and use of materials, and problem solving. Many firms
have successfully employed work teams to boost morale, productivity, quality, and
competitiveness.
Equity Theory
H
According to equity theory, how much people are willing to contribute to
an organization depends on their assessment of Ithe fairness, or equity, of the
rewards they will receive in exchange. In a fair situation,
G a person receives rewards
proportional to the contribution he or she makes to the organization. However,
G
in practice, equity is a subjective notion. Each worker regularly develops a personal input-output ratio by taking stock of his orSher contribution (inputs) to
the organization in time, effort, skills, and experience
, and assessing the rewards
(outputs) offered by the organization in pay, benefits, recognition, and promotions. The worker compares his or her ratio to the input-output ratio of some
other person—a “comparison other,” who may be A
a co-worker, a friend working
in another organization, or an “average”of several people working in the organiN feel that he or she is being
zation. If the two ratios are close, the individual will
treated equitably.
G
Let’s say you have a high-school education and earn $25,000 a year. When you
E who has a college degree
compare your input-output ratio with that of a co-worker
and makes $35,000 a year, you will probably feel thatLyou are being paid fairly. However, if you perceive that your personal input-output ratio is lower than that of your
college-educated co-worker, you may feel that youA
are being treated unfairly and
be motivated to seek change. But, if you learn that co-worker who makes $35,000
has only a high-school diploma, you may feel cheated by your employer. To achieve
1
equity, you could try to increase your outputs by asking for a raise or promotion.
You could also try to have your co-worker’s inputs 0
increased or his or her outputs
decreased. Failing to achieve equity, you may be motivated to look for a job at a dif3
ferent company.
Because almost all the issues involved in equity 8
theory are subjective, they can
be problematic. Author David Callahan has argued2that feelings of inequity may
underlie some unethical or illegal behavior in business. Due to employee theft and
shoplifting, Wal-Mart is experiencing increased inventory losses to nearly $3 billion
on sales of more than $348 billion. The growth is possibly tied to the company’s
decision to not prosecute minor cases of shoplifting. Declines in economic condition may also contribute to this growth.16 Callahan believes that employees who do
not feel they are being treated equitably may be motivated to equalize the situation
by lying, cheating, or otherwise “improving” their pay, perhaps by stealing.17 Managers should try to avoid equity problems by ensuring that rewards are distributed
on the basis of performance and that all employees clearly understand the basis for
their pay and benefits.
fer11722_ch10_293-319.indd 307
equity theory
an assumption that
how much people are
willing to contribute
to an organization
depends on their
assessment of the
fairness, or equity, of
the rewards they will
receive in exchange
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Rev. Confirming Pages
Destination CEO
Corporate Health
Workers’ Worth
Percentage of employers
attributing certain traits to
workers by career stage
Source: “Workers’ Worth,”
USA Today Snapshots, April 21,
2008, p. A1.
Percent
60
50
40
30
20
10
0
expectancy theory
the assumption that
motivation depends
not only on how much
a person wants
something but also on
how likely he or she is
to get it
H
Discussion Questions
1.I What is the primary motivation of companies such as
GPitney Bowes in investing in health care programs?
2. Which theory of motivation would Pitney Bowes’s
Gemphasis on health care programs be most aligned with?
3. Would a health care onsite facility be a motivator
Sor hygiene factor according to Herzberg’s theory of
, motivation?
A
N
G
E 54
L
A 38
122
0
3
8
2
35 34
22
Early
Mid
Late
FIGURE 10.4
These types of programs must be driven from the top
down, and this is true at Pitney Bowes. The CEO walks the
talk, literally. He wears a pedometer on his waist throughout the working day to ensure that he is walking a sufficient
amount. If he finds that he is not meeting his goals, he will
have those in his meetings walk around with him and hold the
meeting in that fashion. The key to successfully promoting
this proactive approach is education. More companies will
be willing to make an investment in improving the health of
their employees given the outstanding financial results from
the Pitney Bowes experience.
Early
Mid
Late
U.S. corporations are confronting a crisis of epic proportions.
Health care and insurance costs are exorbitant. Companies
have come to realize and embrace the fact that investment in
proactive programs designed to promote health and healthy
lifestyles is an important business decision. In fact, an investment of $1 in proactive healthy choice programs such as
exercise clinics, nutritional education, or even onsite health
care clinics, saves an average of $2 to $3 on lost productivity.
Pitney Bowes is a leader among businesses in programs
designed to promote and develop healthy lifestyles among
their employees. In their corporate facilities, there is a fully
staffed health care clinic, an exercise facility, and a cafeteria
that emphasizes nutritionally healthy food choices including
fresh fruits and vegetables. In addition, there are numerous
educational programs designed to promote healthy lifestyles.
According to Pitney Bowes and to its employees, healthy
employees are happier and more productive than those who are
not focused on promoting healthy lifestyles. For the corporation,
promoting health is a sound business decision that positively
affects the bottom line, and that is great for shareholders.
Loyalty
Creativity
Expectancy Theory
Psychologist Victor Vroom described expectancy theory, which states that
motivation depends not only on how much a person wants something but also on
the person’s perception of how likely he or she is to get it. A person who wants
something and has reason to be optimistic will be strongly motivated. For example,
308
fer11722_ch10_293-319.indd 308
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CHAPTER 10
Motivating the Workforce
309
say you really want a promotion. And, let’s say because you have taken some night
classes to improve your skills, and moreover, have just made a large, significant sale,
you feel confident that you are qualified and able to handle the new position. Therefore, you are motivated to try to get the promotion. In contrast, if you do not believe
you are likely to get what you want, you may not be motivated to try to get it, even
though you really want it.
Strategies for Motivating Employees
Based on the various theories that attempt to explain what motivates employees,
businesses have developed several strategies for motivating their employees and
boosting morale and productivity. Some of these techniques include behavior modification and job design, as well as the already described
H employee involvement programs and work teams.
I
Behavior Modification
G
Behavior modification involves changing behavior and encouraging appropriate
G
actions by relating the consequences of behavior to the behavior itself. The concept
S B. F. Skinner, who showed
of behavior modification was developed by psychologist
that there are two types of consequences that can ,modify behavior—reward and
punishment. Skinner found that behavior that is rewarded will tend to be repeated,
while behavior that is punished will tend to be eliminated. For example, employees
who know that they will receive a bonus such as anAexpensive restaurant meal for
making a sale over $2,000 may be more motivated to make sales. Workers who know
they will be punished for being tardy are likely to N
make a greater effort to get to
work on time.
G
However, the two strategies may not be equally effective. Punishing unacceptEto undesirable long-term side
able behavior may provide quick results but may lead
effects, such as employee dissatisfaction and increased
L turnover. In general, rewarding appropriate behavior is a more effective way to modify behavior.
behavior modification
changing behavior
and encouraging
appropriate actions
by relating the
consequences
of behavior to the
behavior itself
A
Job Design
Herzberg identified the job itself as a motivational factor. Managers have several
1
strategies that they can use to design jobs to help improve employee motivation.
0
These include job rotation, job enlargement, job enrichment,
and flexible scheduling strategies.
3
Job Rotation. Job rotation allows employees to8move from one job to another
in an effort to relieve the boredom that is often associated with job specialization.
2
Businesses often turn to specialization in hopes of increasing
productivity, but there
is a negative side effect to this type of job design: Employees become bored and dissatisfied, and productivity declines. Job rotation reduces this boredom by allowing
workers to undertake a greater variety of tasks and by giving them the opportunity
to learn new skills. With job rotation, an employee spends a specified amount of
time performing one job and then moves on to another, different job. The worker
eventually returns to the initial job and begins the cycle again.
Job rotation is a good idea, but it has one major drawback. Because employees
may eventually become bored with all the jobs in the cycle, job rotation does not
totally eliminate the problem of boredom. Job rotation is extremely useful, however,
fer11722_ch10_293-319.indd 309
job rotation
movement of employees
from one job to another
in an effort to relieve
the boredom often
associated with job
specialization
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310
PART 4
Creating the Human Resource Advantage
in situations where a person is being trained for a
position that requires an understanding of various
units in an organization. Eli Lilly is a strong believer
in the benefits of job rotation. The company leaves
employees in their current jobs and asks them to
take on additional assignments outside their field of
expertise or interest. The results of the process have
been positive, and Nokia is trying the same process
with similar outcomes.18 Many executive training
programs require trainees to spend time learning a
variety of specialized jobs. Job rotation is also used
to cross-train today’s self-directed work teams.
H Enlargement. Job enlargement adds
Job
more
I tasks to a job instead of treating each task as
separate. Like job rotation, job enlargement was
G
developed
to overcome the boredom associated with
specialization.
The rationale behind this strategy is
G
that jobs are more satisfying as the number of tasks
S
performed
by an individual increases. Employees
sometimes
enlarge, or craft, their jobs by noticing
,
what needs to be done and then changing tasks and
relationship boundaries to adjust. Individual orientation
A and motivation shape opportunities to craft
new jobs and job relationships. Job enlargement
N
strategies have been more successful in increasing
G satisfaction than have job rotation strategies.
job
IBM,
E AT&T, and Maytag are among the many companies that have used job enlargement to motivate
L
employees.
A Enrichment. Job enrichment incorpoJob
rates motivational factors such as opportunity
for achievement, recognition, responsibility, and ad1
vancement
into a job. It gives workers not only more
tasks
within
the job, but more control and author0
ity over the job. Job enrichment programs enhance
3
a worker’s feeling of responsibility and provide opportunities for growth and advancement when the worker is8able to take on the more challenging tasks. Hyatt
Hotels Corporation and General Foods use job enrichment to improve the quality
2
of work life for their employees. The potential benefits of job enrichment are great,
but it requires careful planning and execution.
Nucor Corporation’s 11,000-plus nonunion employees in Charlotte,
North Carolina, don’t see themselves as ordinary workers. There are
no special benefits or compensation plans for executives, and the
company’s flat organizational structure encourages employees to adopt
the mind-set of owner-operators.
job enlargement
the addition of more
tasks to a job instead
of treating each task
as separate
job enrichment
the incorporation of
motivational factors,
such as opportunity
for achievement,
recognition,
responsibility, and
advancement, into a job
fer11722_ch10_293-319.indd 310
Flexible Scheduling Strategies. Many U.S. workers work a traditional 40-hour
workweek consisting of five 8-hour days with fixed starting and ending times. Facing problems of poor morale and high absenteeism as well as a diverse workforce
with changing needs, many managers have turned to flexible scheduling strategies
such as flextime, compressed workweeks, job sharing, part-time work, and telecommuting. A survey by CareerBuilder.com showed that 40 percent of working fathers
were offered flexible work schedules versus 53 percent of working mothers.19
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CHAPTER 10
Motivating the Workforce
311
FIGURE 10.5
11
12
Core
Time
10
Flextime, Showing Core
and Flexible Hours
1
2
9
3
8
Start
Time
7
End
Time
6
4
5
H
I
G
Flextime is a program that allows employees to choose their starting and ending times, as long as they are at work during a specified
G core period (Figure 10.5).
It does not reduce the total number of hours that employees work; instead, it gives
S
employees more flexibility in choosing which hours they work. A firm may specify
that employees must be present from 10:00 a.m. to, 3:00 p.m. One employee may
choose to come in at 7:00 a.m. and leave at the end of the core time, perhaps to
attend classes at a nearby college after work. Another employee, a mother who
A to have time to drop off her
lives in the suburbs, may come in at 9:00 a.m. in order
children at a day-care center and commute by public
N transportation to her job.
Flextime provides many benefits, including improved ability to recruit and retain
G
workers who wish to balance work and home life. Customers
can be better served
by allowing more coverage of customers over longerEhours, workstations and facilities can be better utilized by staggering employee use, and rush hour traffic may
L associated with an increase
be reduced. In addition, flexible schedules have been
in healthy behaviors on the part of employees. More
A flexible schedules are associated with healthier lifestyle choices such as increased physical activity and healthier
sleep habits.20
Related to flextime are the scheduling strategies1of the compressed workweek
and job sharing. The compressed workweek is a four-day (or shorter) period
0
in which an employee works 40 hours. Under such a plan, employees typically work
3 weekend. The compressed
10 hours per day for four days and have a three-day
workweek reduces the company’s operating expenses
8 because its actual hours of
operation are reduced. It is also sometimes used by parents who want to have more
2 of Labor Statistics notes that
days off to spend with their families. The U.S. Bureau
the following career options provide greater flexibility in scheduling: medical transcriptionist, financial manager, nurse, database administrator, accountant, software developer, physical therapist assistant, paralegal, graphic designer, and private
investigator.21
Job sharing occurs when two people do one job. One person may work from
8:00 a.m. to 12:30 p.m.; the second person comes in at 12:30 p.m. and works until
5:00 p.m. Job sharing gives both people the opportunity to work as well as time to
fulfill other obligations, such as parenting or school. Thirty percent of companies
allow job sharing.22 With job sharing, the company has the benefit of the skills of
fer11722_ch10_293-319.indd 311
flextime
a program that allows
employees to choose
their starting and
ending times, provided
that they are at work
during a specified core
period
compressed workweek
a four-day (or shorter)
period during which
an employee works
40 hours
job sharing
performance of one
full-time job by two
people on part-time
hours
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PART 4
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two people for one job, often at a lower total cost for salaries and benefits than one
person working eight hours a day would be paid.
Two other flexible scheduling strategies attaining wider use include allowing fulltime workers to work part time for a certain period and allowing workers to work
at home either full or part time. Employees at some firms may be permitted to work
part time for several months in order to care for a new baby or an elderly parent or
just to slow down for a little while to “recharge their batteries.” By 2020, 40 percent
of U.S. workers will be caring for an aging parent, and employees are expected to
demand benefits that reflect this major shift.23 When the employees return to fulltime work, they are usually given a position comparable to their original full-time
position. Other firms are allowing employees to telecommute or telework (work at
home a few days of the week), staying connected via computers, modems, and telephones. More than 45 million Americans
work from home. Of those who work “at
H
home,” the average number of places these individuals work is 3.4, and these places
I
can include home, car, and restaurant
or coffee shop.24 Table 10.6 shows the companies in the Fortune 100 Best Companies
to Work For with the highest percentage of
G
telecommuters. Although many employees ask for the option of working at home
G for family members, some have discovered that
to ease the responsibilities of caring
they are more productive at home
S without the distractions of the workplace. An
assessment of 12 company telecommuting programs, including Apple, AT&T, and
, positive productivity changes occurred. Traveler’s
the state of California, found that
Insurance Company reports its telecommuters to be 20 percent more productive
than its traditional employees.25 Other employees, however, have discovered that
they are not suited for workingA
at home. Human resource management executives
are split as to whether telecommuting
N helps or hurts employees’ careers. Thirty percent feel telecommuting helps their careers, 25 percent feel that it hurts, while 39
G
percent feel it does neither.26 Still, work-at-home programs do help reduce overhead
E some companies used to maintain a surplus of
costs for businesses. For example,
office space but have reduced theLsurplus through employee telecommuting, “hoteling” (being assigned to a desk through a reservation system), and “hot-desking”
A but at different times).
(several people using the same desk
Companies are turning to flexible work schedules to provide more options to
employees who are trying to juggle their work duties with other responsibilities and
TABLE 10.6
Company
Best Companies to
Work For
Cisco Systems
Companies with Most Opportunities for Telecommuters in the
Fortune “100 Best Companies to
Work For”
Booz Allen Hamilton
eBay
1
0
3
8
2
Best Companies Rank
6
69
81
S.C. Johnson & Son
27
American Fidelity Assurance
24
Shared Technologies
25
Principal Financial Group
21
Goldman Sachs
Yahoo
Qualcomm
9
87
8
Source: http://money.cnn.com/magazines/fortune/bestcompanies/2008/benefits/telecommuting.html, (accessed
June 2, 2008).
fer11722_ch10_293-319.indd 312
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Entrepreneurship in Action
Matching Workers with Employers
Eli Portnoy
Business: HireWorkers.com
Founded: 2005
Success: Eli Portnoy founded HireWorkers.com in 2005 with
$20,000 startup money. The company has done almost $2 million in sales.
A large number of low-wage jobs in the United States are
filled by Latin American immigrants. Both finding and filling these jobs can be difficult. Jobseekers looking for lowwage jobs such as janitor, housekeeper, dishwasher, and
so on often lack access to the Internet. As a result, those
H
looking to hire these workers have three options: posting a
I
“help wanted” sign, advertising in print classifieds, or hiring
a staffing agency. The last two commonly used options can
G
be expensive for employers. As a Mexican immigrant himself,
G
Portnoy understood the problems immigrant jobseekers face
and saw an opportunity to fill a void and help both low-wage
S
,
jobseekers and their employers. Portnoy designed HireWorkers.com. Jobseekers are able to fill out HireWorkers.com
postcards with their job experience and background information. Portnoy’s company distributes these postcards to a large
number of retail locations (a form is also available online for
those who do have Internet access). The HireWorkers.com
service is free for jobseekers. Employers may use HireWorkers.com to post jobs and to search the company’s database.
Fees begin at $69 to post a job for a month and go up to $99 to
search the database. Once jobseekers and employers have
entered information with HireWorkers.com, the company’s
system goes to work. Via patent-pending technology, the
company is able to match employers’ requests with appropriate jobseekers in as little as two hours. Once matches have
been made, the system automatically sends phone calls to the
jobseekers. Portnoy says there are currently around 1 million
low-wage jobs available per month in the United States. HireWorkers.com makes filling and finding these jobs easier.27
needs. Preliminary results indicate that
A
flexible scheduling plans increase job satN
isfaction, which, in turn, leads to increases
in productivity. Some recent research,
G
however, has indicated there are potenE
tial problems with telecommuting. Some
managers are reluctant to adopt the pracL
tice because the pace of change in today’s
A
workplace is faster than ever, and telecommuters may be left behind or actually cause
managers more work in helping them stay
1
abreast of changes. Some employers also
worry that telecommuting workers create
0
a security risk by creating more oppor3
tunities for computer hackers or equipment thieves. Some employees have found
8
that working outside the office may hurt
2
career advancement opportunities, and
some report that instead of helping them
balance work and family responsibilities,
telecommuting increases the strain by
blurring the barriers between the office and home. Co-workers call at all hours, and
telecommuters are apt to continue to work when they are not supposed to (after
regular business hours or during vacation time).28
After implementing its Initiative for the Retention and
Advancement of Women,
the accounting firm Deloitte
can now boast that it has the
highest percentage of women
partners among America’s
Big Four public accounting firms. The program has
been successful because
many of the initiatives are
aimed at both women and
men. For example, Deloitte is
now testing a “mass career
customization” program that
allows employees to increase
or decrease their work
responsibilities as their personal needs change over the
course of their careers.
Importance of Motivational Strategies
Motivation is more than a tool that managers can use to foster employee loyalty
and boost productivity. It is a process that affects all the relationships within an
313
fer11722_ch10_293-319.indd 313
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PART 4
Creating the Human Resource Advantage
organization and influences many areas such as pay, promotion, job design, training
opportunities, and reporting relationships. Employees are motivated by the nature
of the relationships they have with their supervisors, by the nature of their jobs,
and by characteristics of the organization. Even the economic environment can
change an employee’s motivation. In a slow growth or recession economy, sales can
flatten or decrease and morale can drop because of the need to cut jobs. The firm
may have to work harder to keep good employees and to motivate all employees to
work to overcome obstacles.29 New rewards or incentives may help motivate workers in such economies. Motivation tools, then, must be varied as well. Managers
can further nurture motivation by being honest, supportive, empathetic, accessible,
fair, and open. Motivating employees to increase satisfaction and productivity is an
important concern for organizations seeking to remain competitive in the global
marketplace.
H
I
G
So You Think You May Be GoodG
at Motivating a Workforce
S
,
If you are good at mediation, smoothing conflict, and have
(bonuses,
raises, and perks) may not be the same as what
a good understanding of motivation and human relations
theories, then you might be a good leader, human resource
manager, or training expert. Most organizations, especially as they grow, will need to implement human relations programs. These are necessary to teach employees
about sensitivity to other cultures, religions, and beliefs,
as well as for teaching the workforce about the organization so that they understand how they fit in the larger
picture. Employees need to appreciate the benefits of
working together to make the firm run smoothly, and they
also need to understand how their contributions help the
firm. To stay motivated, most employees need to feel like
what they do each day contributes something of value to
the firm. Disclosing information and including employees
in decision-making processes will also help employees
feel valuable and wanted within the firm.
There are many different ways employers can reward
and encourage employees. However, employers must be
careful when considering what kinds of incentives to
use. Different cultures value different kinds of incentives
more highly than others. For example, a Japanese worker
would probably not like it if she were singled out from
the group and given a large cash bonus as reward for her
work. Japanese workers tend to be more group oriented,
and therefore anything that singles out individuals would
not be an effective way of rewarding and motivating.
American workers, on the other hand, are very individualistic, and a raise and public praise might be more effective. However, what might motivate a younger employee
fer11722_ch10_293-319.indd 314
motivates a more seasoned, experienced, and financially
successful employee (recognition, opportunity for greater
A
influence,
and increased training). Motivation is not an
easy
thing
to understand, especially as firms become
N
more global and more diverse.
GAnother important part of motivation is enjoying where
you
E work and your career opportunities. Here is a list of
the best places to do business and start careers in the
L States, according to Forbes magazine. Chances
United
are,
A workers who live in these places have encountered
fewer frustrations than those places at the bottom of the
list and, therefore, would probably be more content with
where
1 they work.30
Best
0 Places for Business and Careers
3
Rank
8
2 1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Metro Area
Raleigh, NC
Boise, ID
Fort Collins, CO
Des Moines, IA
Lexington, KY
Atlanta, GA
Richmond, VA
Olympia, WA
Spokane, WA
Knoxville, TN
Job Growth
Rank
Metro Area
Population
(in thousands)
21
13
80
60
110
69
75
22
36
84
1,034
585
281
543
443
5,266
1,211
240
452
673
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Motivating the Workforce
315
Review Your Understanding
Define human relations, and determine why its study is
important.
Human relations is the study of the behavior of individuals and groups in organizational settings. Its focus is what
motivates employees to perform on the job. Human relations is important because businesses need to understand
how to motivate their increasingly diverse employees to
be more effective, boost workplace morale, and maximize
employees’ productivity and creativity.
Summarize early studies that laid the groundwork for
understanding employee motivation.
H
Time and motion studies by Frederick Taylor and others
I
helped them analyze how employees perform specific
work tasks in an effort to improve their productivity. TaylorG
and the early practitioners of the classical theory of motivation felt that money and job security were the primaryG
motivators of employees. However, the Hawthorne stud-S
ies revealed that human factors also influence workers’
,
behavior.
Compare and contrast the human-relations theories of
Abraham Maslow and Frederick Herzberg.
A
Abraham Maslow defined five basic needs of all people
and arranged them in the order in which they must beN
satisfied: physiological, security, social, esteem, and self-G
actualization. Frederick Herzberg divided characteristics
of the job into hygiene factors and motivational factors.E
Hygiene factors relate to the work environment and mustL
be present for employees to remain in a job. Motivational
factors—recognition, responsibility, and advancement—A
relate to the work itself. They encourage employees to be
productive. Herzberg’s hygiene factors can be compared
to Maslow’s physiological and security needs; motiva-1
tional factors may include Maslow’s social, esteem, and
0
self-actualization needs.
work but seek out responsibility to satisfy their higherorder needs. Theory Z stresses employee participation
in all aspects of company decision making, often through
participative management programs and self-directed
work teams. According to equity theory, how much people
are willing to contribute to an organization depends on
their assessment of the fairness, or equity, of the rewards
they will receive in exchange. Expectancy theory states
that motivation depends not only on how much a person
wants something but also on the person’s perception of
how likely he or she is to get it.
Describe some of the strategies that managers use to
motivate employees.
Strategies for motivating workers include behavior modification (changing behavior and encouraging appropriate
actions by relating the consequences of behavior to the
behavior itself) and job design. Among the job design strategies businesses use are job rotation (allowing employees
to move from one job to another to try to relieve the boredom associated with job specialization), job enlargement
(adding tasks to a job instead of treating each task as a
separate job), job enrichment (incorporating motivational
factors into a job situation), and flexible scheduling strategies (flextime, compressed work weeks, job sharing, parttime work, and telecommuting).
Critique a business’s program for motivating its
sales force.
Using the information presented in the chapter, you should
be able to analyze and defend Eagle Pharmaceutical’s
motivation program in “Solve the Dilemma” on page 317
including the motivation theories the firm is applying to
boost morale and productivity.
3
Investigate various theories of motivation, including
Theories X, Y, and Z; equity theory; and expectancy theory.8
Douglas McGregor contrasted two views of management:2
Theory X (traditional) suggests workers dislike work, while
theory Y (humanistic) suggests that workers not only like
Revisit the World of Business
1.
2.
In what ways do founders Lisa Calkins and John
Basso motivate employees for the long term?
How does Amadeus’s office building help motivate
employees?
fer11722_ch10_293-319.indd 315
3.
What could other companies learn from Amadeus’s
performance in relation to its treatment of
employees?
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PART 4
Creating the Human Resource Advantage
Learn the Terms
behavior modification 309
classical theory of motivation
compressed workweek 311
equity theory 307
esteem needs 303
expectancy theory 308
extrinsic rewards 297
flextime 311
human relations 296
299
hygiene factors 303
intrinsic rewards 297
job enlargement 310
job enrichment 310
job rotation 309
job sharing 311
Maslow’s hierarchy 301
morale 297
motivation 296
Check Your Progress
1. Why do managers need to understand the needs of
their employees?
2. Describe the motivation process.
3. What was the goal of the Hawthorne studies? What
was the outcome of those studies?
4. Explain Maslow’s hierarchy of needs. What does it
tell us about employee motivation?
5. What are Herzberg’s hygiene and motivational
factors? How can managers use them to motivate
workers?
6. Contrast the assumptions of Theory X and Theory Y.
Why has Theory Y replaced Theory X in management
today?
Get Involved
1. Consider a person who is homeless: How would he
or she be motivated and what actions would that
person take? Use the motivation process to explain.
Which of the needs in Maslow’s hierarchy are likely
to be most important? Least important?
2. View the video Cheaper by the Dozen (1950) and
report on how the Gilbreths tried to incorporate their
passion for efficiency into their family life.
motivational factors 304
physiological needs 302
security needs 302
self-actualization needs 303
social needs 303
Theory X 304
Theory Y 305
Theory Z 306
H
I
7.
G What is Theory Z? How can businesses apply
Theory Z to the workplace?
G
8. Identify and describe four job-design strategies.
S Name and describe some flexible scheduling
9.
How can flexible schedules help
, strategies.
motivate workers?
10. Why are motivational strategies important to both
A employees and employers?
N
G
E
L
A
3. What events and trends in society, technology, and
1 economics do you think will shape human relations
management theory in the future?
0
3
8
2
Build Your Skills
MOTIVATING
Background:
Do you think that, if employers could
make work more like play, employees
would be as enthusiastic about their
jobs as they are about what they do in their
leisure time? Let’s see where this idea might take us.
fer11722_ch10_293-319.indd 316
Task:
After reading the “Characteristics of PLAY,” place a 冑 in
column one for those characteristics you have experienced in your leisure time activities. Likewise, check column three for those “Characteristics of WORK” you have
experienced in any of the jobs you’ve held.
9/17/08 5:02:04 PM
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CHAPTER 10
All That Apply
Characteristics of PLAY
Motivating the Workforce
All That Apply
Characteristics of WORK
1. New games can be played
on different days.
1. Job enrichment, job enlargement,
or job rotation.
2. Flexible duration of play.
2. Job sharing.
3. Flexible time of when to
play.
3. Flextime, telecommuting.
4. Opportunity to express
oneself.
4. Encourage and implement
employee suggestions.
5. Opportunity to use one’s
talents.
5. Assignment of challenging
projects.
6. Skillful play brings applause,
praise, and recognition from
spectators.
7. Healthy competition, rivalry,
and challenge exist.
8. Opportunity for social
interaction.
9. Mechanisms for scoring
one’s performance are
available (feedback).
10. Rules ensure basic fairness
and justice.
Discussion Questions
1. What prevents managers from making work more
like play?
2. Are these forces real, or imagined?
H
I
G
G
S
,
A
N
G
E
L
A
317
6. Employee-of-the-month awards,
press releases, employee
newsletter announcements.
7. Production goals with competition
to see which team does best.
8. Employee softball or bowling
teams.
9. Profit sharing; peer performance
appraisals.
10. Use tactful and consistent
discipline.
3. What would be the likely (positive and negative)
results of making work more like play?
4. Could others in the organization accept such creative
behaviors?
Solve the Dilemma
1
Eagle Pharmaceutical has long been0
recognized for its innovative techniques
3
for motivating its salesforce. It features
the salesperson who has been the most8
successful during the previous quarter in
the company newsletter, “Touchdown.” The salesperson2
MOTIVATING TO WIN
also receives a football jersey, a plaque, and $1,000 worth
of Eagle stock. Eagle’s “Superbowl Club” is for employees who reach or exceed their sales goal, and a “Heisman Award,” which includes a trip to the Caribbean, is
given annually to the top 20 salespeople in terms of goal
achievement.
Eagle employs a video conference hook-up between
the honored salesperson and four regional sales managers
to capture some of the successful tactics and strategies
fer11722_ch10_293-319.indd 317
the winning salesperson uses to succeed. The managers
summarize these ideas and pass them along to the salespeople they manage. Sales managers feel strongly that
programs such as this are important and that, by sharing
strategies and tactics with one another, they can be a successful team.
Discussion Questions
1. Which motivational theories are in use at Eagle?
2. What is the value of getting employees to compete
against a goal instead of against one another?
3. Put yourself in the shoes of one of the four regional
sales managers and argue against potential
cutbacks to the motivational program.
9/17/08 5:02:09 PM
Rev. Confirming Pages
318
PART 4
Creating the Human Resource Advantage
Build Your Business Plan
MOTIVATING THE WORKFORCE
As you determine the size of your workforce, you are going to face the reality that you cannot provide the level of
financial compensation that you would
like to your employees, especially when
you are starting your business.
Many employees are motivated by other things than
money. Knowing that they are appreciated and doing a
good job can bring great satisfaction to employees. Known
as “stroking,” it can provide employees with internal gratification that can be valued even more that financial incen-
See for
H
I
G
Yourself Videocase
TAKING VACATIONS CAN IMPROVE YOURG
CAREER
S
they felt more enthusiastic about their jobs. There are also
It might surprise you to learn that about
the
36 percent of workers use little or none
, health benefits to consider of the reduced stress and
of their paid vacation time. Much about
the workplace contributes to this issue.
Many companies, in America at least, maintain a work, work, work, 24/7 mind-set, causing employees
to fear that taking time off will indicate that they lack the
dedication needed to maintain or move up in their positions. Another major deterrent for the employee wary of
taking a vacation is the amount of work that will be waiting
upon his or her return. Some employees rack up so many
e-mails and voice-mail messages that they are unable to
get their main work done for days as they play catch-up.
Not taking vacation time can be dangerous for both
employers and employees. On the employer side, employees who lack energy and motivation can use up valuable
work time puttering around. Tired employees can also make
costly mistakes. On the employee side, not taking vacations can lead to burnout and serious mental and physical
illness. If an employee gets ill due to the increased stress,
this also has a negative impact on the employer.
Vacation and down time have long been valued in other
parts of the world such as Europe, Canada, and Australia, and now a small number of American companies are
beginning to realize the benefits of employees taking
their allotted vacation time, thanks to research to support
these benefits. The Families and Work Institute states that
employees should always take their vacations and that
vacations lasting more than a few days create greater
benefit. The Institute claims that employees who take
vacations are more productive and more creative at work.
A recent Expedia.com survey reported that 80 percent of
those surveyed claimed that after taking a true vacation
fer11722_ch10_293-319.indd 318
tives. Listening to your employees’ suggestions, involving
them in discussions about future growth and valuing their
input, can go a long way toward building loyal employees
and reducing employee turnover.
Think about what you could do in your business to
motivate your employees without spending much money.
Maybe you will have lunch brought in once a week or offer
tickets to a local sporting event to the employee with the
most sales. Whatever you elect to do, you must be consistent and fair with all your employees.
extra rest time gained during a vacation.
However, another problem presents itself. Even when
one
A takes a vacation, in the age of the Internet and remote
access it’s challenging to truly get away. Rosemary HaefNof CareerBuilder.com suggests that advanced planning
ner
may be the ticket to a true vacation, and Deb Perelman of
G
eWeek.com offers the following advice:
• E Let the office know about your vacation well in
L advance.
•
Schedule vacations at times when you’re less likely
A to be needed and when crises (if these are ever
possible to predict) are less likely to occur, such as
between major projects.
1
•
Schedule one specific time to check in with the
0 office and stick to it. Make sure everyone else sticks
to it as well.
3
•
Make use of your “Out of the Office” auto reply on
8 both e-mail and voice-mail. This may cut down a bit
on the number of messages waiting upon your return.
2For those who compulsively check in with the office,
certain hotels offer to lock up cell phones and PDAs!
A number of companies are beginning to encourage
employees to take advantage of vacation time. Here are
a few examples:
•
Electronics giant Sanyo gives employees who volunteer for social causes during certain workdays the
chance to earn up to six extra paid days off annually.
•
Software company Hyperion allows its employees to
earn Extended Paid Time Off if they remain employed
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Motivating the Workforce
319
Discussion Questions
with the company continuously from one year to the
next.
1. What are some reasons employees do not take all of
the vacation time allotted to them?
•
The wireless provider T-Mobile allows employees
to begin earning paid vacation time as soon as they
2. What can employers do to actively encourage
start working for the company. In many companies,
employees to take their vacation time?
vacation time is earned only after one or more years
3. What are the benefits of employee vacations, both to
with the company.
the employer and to the employee?
Although there is often an imbalance between the work
Remember to check out our Online Learning
and personal lives of many employees throughout the
Center at www.mhhe.com/ferrell7e.
United States, research clearly states that both employers and employees would benefit by each person taking
his or her allotted vacation time. Health, productivity, and
creativity are all given a boost when employees take time
H
to relax and recuperate.31
I
G
G
S
,
A
N
G
E
L
A
1
0
3
8
2
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chapter
11
CHAPTER OUTLINE
Introduction
The Nature of Human
Resources Management
Managing Human
Resources
Planning for Human
Resources Needs
Recruiting and Selecting
New Employees
Recruiting
Selection
Legal Issues in Recruiting
and Selecting
Developing the Workforce
Training and Development
Assessing Performance
Turnover
Compensating the
Workforce
Financial Compensation
Benefits
Managing Unionized
Employees
Collective Bargaining
Resolving Disputes
The Importance of
Workforce Diversity
OBJECTIVES
H
I
G
G
S
,
After reading this chapter, you will be able to:
A
N
Summarize the processes of recruiting and selecting human
G
resources for a company.
E trained and their performance appraised.
Discuss how workers are
L
Identify the types of turnover
companies may experience, and
explain why turnover isAan important issue.
• Define human resources management, and explain its significance.
•
•
•
• Specify the various ways a worker may be compensated.
• Discuss some of the issues
1 associated with unionized employees,
including collective bargaining and dispute resolution.
0
3
Assess an organization’s efforts to reduce its workforce size and
8
manage the resulting effects.
2
• Describe the importance of diversity in the workforce.
•
The Characteristics of
Diversity
Why Is Diversity
Important?
The Benefits of Workforce
Diversity
Affirmative Action
fer11722_ch11_320-358.indd 320
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H
I
G
G
Managing the Workforce during
Slow Times
S
Developing and compensating the workforce is, challenging in good economic times but even more difficult during an economic slowdown. During
the most recent downturn in the economy, many workers are faced with
A
a squeeze on their pay and benefits. The downturn, combined with rapidly
N placed many employincreasing energy prices and declining home values,
G have managed to keep
ees’ standard of living in jeopardy. Millions of people
their jobs, yet they have seen their pay slashed, E
or they have lost important
benefits.
L
While mergers and layoffs reduce the payroll for many companies, nearly
A
all employees who receive at least part of their compensation in the form of
commissions suffer a snowball pay decline, affecting a number of industries.
If a saleswoman receives a smaller commission, 1
for example, she is likely to
0 the wait staff’s salary.
tip less at her next restaurant meal, in turn lowering
It is estimated that 25 million employees at just the
3 1,500 largest companies
receive some type of variable pay. This means at
8 least part of their pay is
based on performance, commissions, or other nonguaranteed compensa2
tion. For example, there are 1.25 million real estate agents and 229,100 new
car salespersons whose income depends on sales. In the recent economic
downturn, these two industries saw a significant sales drop. Not included in
these numbers are the 20 million individuals who the Small Business Administration says own their own businesses but have no employees. In addition,
there are nearly 5 million small businesses that employ 10 or fewer workers,
often using variable pay. With a downturn in the economy, everything slows
down, including the time it takes to execute a business plan or gain partners
ENTER THE WORLD OF BUSINESS
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to help financially as everyone becomes more cautious. In these situations, it
is important to reassure good workers about their performance and how the
organization plans to compensate them in the long run. While some workers
may choose to keep their position in spite of pay cuts, the very best employees may always have other options.
Fair treatment of employees includes honoring compensation contracts
and not violating labor law. For example, the Fair Labor Standards Act in 2004
established guidelines that employees must make more than $455 a week to
be ineligible for overtime pay, a sharp increase over the previous benchmark
of $250 a week. As a result, 1.3 million workers suddenly qualified for extra
pay. The number of overtime lawsuits has exploded over the last few years.
This means employers can get caught off guard during slow times by pushing
employees to work overtimeHwithout pay.
With escalating gas prices,
I some companies try to help employees save
money by allowing them to work
G four 10-hour days instead of five 8-hour days.
A flexible schedule that helps
G to eliminate one day of commuting improves
the environment and improves morale. Some employers try to help workers
S
cope with higher gas prices by telecommuting (working from their home).
, can do to appreciate and help employees durAnything that an organization
ing a slow time in the economy can pay results in the long run.1
A
N
G
E
Introduction
L such loyal and motivated employees, but these
Of course, most firms do not recruit
are vital tasks in any organization.
A If a business is to achieve success, it must have
sufficient numbers of employees who are qualified and motivated to perform the
required duties. Thus, managing the quantity (from hiring to firing) and quality
(through training, compensating,
1 and so on) of employees is an important business
function. Meeting the challenge of managing increasingly diverse human resources
effectively can give a company a0competitive edge in a global marketplace.
This chapter focuses on the 3
quantity and quality of human resources. First we
look at how human resources managers plan for, recruit, and select qualified employ8
ees. Next we look at training, appraising, and compensating employees, aspects of
2
human resources management designed
to retain valued employees. Along the way,
we’ll also consider the challenges of managing unionized and diverse employees.
human resources
management (HRM)
all the activities
involved in determining
an organization’s human
resources needs, as
well as acquiring,
training, and
compensating people to
fill those needs
The Nature of Human Resources
Management
Chapter 1 defined human resources as labor, the physical and mental abilities that
people use to produce goods and services. Human resources management
(HRM) refers to all the activities involved in determining an organization’s human
resources needs, as well as acquiring, training, and compensating people to fill those
needs. Human resources managers are concerned with maximizing the satisfaction
322
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CHAPTER 11
Managing Human Resources
323
of employees and motivating them to meet organizational objectives productively.
In some companies, this function is called personnel management.
HRM has increased in importance over the last few decades, in part because
managers have developed a better understanding of human relations through the
work of Maslow, Herzberg, and others. Moreover, the human resources themselves
are changing. Employees today are concerned not only about how much a job
pays; they are concerned also with job satisfaction, personal performance, leisure,
the environment, and their opportunities for advancement. Once dominated by
white men, today’s workforce includes significantly more women, African Americans, Hispanics, and other minorities, as well as disabled and older workers. Human
resources managers must be aware of these changes and leverage them to increase
the productivity of their employees. Every manager practices some of the functions
of human resources management at all times.
H
I
Planning for Human Resources
Needs
G
When planning and developing strategies for reaching the organization’s overall objecGhuman resources necessary to
tives, a company must consider whether it will have the
carry out its plans. After determining how many employees
S and what skills are needed
to satisfy the overall plans, the human resources department (which may range from
, a large corporation) ascertains
the owner in a small business to hundreds of people in
how many employees the company currently has and how many will be retiring or
otherwise leaving the organization during the planning period. With this informaA
tion, the human resources manager can then forecast how many more employees the
company will need to hire and what qualifications they
N must have, or determine it
layoffs are required to meet demand more efficiently. HRM planning also requires
G
forecasting the availability of people in the workforce who will have the necessary
qualifications to meet the organization’s future needs.EThe human resources manager
then develops a strategy for satisfying the organization’s
L human resources needs.
Next, managers analyze the jobs within the organization so that they can match
A Job analysis determines,
the human resources to the available assignments.
through observation and study, pertinent information about a job—the specific
tasks that comprise it; the knowledge, skills, and abilities necessary to perform if;
and the environment in which it will be performed.1Managers use the information
obtained through a job analysis to develop job descriptions
and job specifications.
0
A job description is a formal, written explanation of a specific job that usually
3 waiting on customers), relaincludes job title, tasks to be performed (for instance,
tionship with other jobs, physical and mental skills8required (such as lifting heavy
boxes or calculating data), duties, responsibilities, and working conditions. A job
2 for a specific job, in terms of
specification describes the qualifications necessary
education (some jobs require a college degree), experience, personal characteristics
(ads frequently request outgoing, hardworking persons), and physical characteristics. Both the job description and job specification are used to develop recruiting
materials such as newspaper, trade publications, and online advertisements.
Recruiting and Selecting New Employees
job analysis
the determination,
through observation
and study, of pertinent
information about a
job—including specific
tasks and necessary
abilities, knowledge,
and skills
job description
a formal, written
explanation of a
specific job, usually
including job title, tasks,
relationship with other
jobs, physical and
mental skills required,
duties, responsibilities,
and working conditions
job specification
a description of
the qualifications
necessary for a
specific job, in terms of
education, experience,
and personal and
physical characteristics
After forecasting the firm’s human resources needs and comparing them to existing human resources, the human resources manager should have a general idea
of how many new employees the firm needs to hire. With the aid of job analyses,
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PART 4
Creating the Human Resource Advantage
management can then recruit and select employees
who are qualified to fill specific job openings.
Recruiting
Recruiting means forming a pool of qualified applicants from which management can select employees.
There are two sources from which to develop this
pool of applicants—internal and external.
Internal sources of applicants include the organization’s current employees. Many firms have a policy of
giving first consideration to their own employees—or
promoting from within. The cost of hiring current
employees
to fill job openings is inexpensive when
H
compared with the cost of hiring from external sources,
I it is good for employee morale. However, hiring
and
from
G within creates another job vacancy to be filled.
External sources consist of advertisements in
G
newspapers
and professional journals, employment
agencies,
colleges, vocational schools, recomS
mendations from current employees, competing
, unsolicited applications, and online. There
firms,
are hundreds of Web sites where employers can
post job openings and job seekers can post their
A
résumés,
including Monster.com, Hotjobs.com,
CareerBuilder.com.,
and Theladders.com. EmployN
For more than 50 years, the U.S. Army has recruited soldiers from
American colleges around the country. In fact, the Army generates
ers looking for employees for specialized jobs can
G
more officers through its Reserve Officers Training Corps (ROTC)
use more focused sites such as computerwork.com.
college program than the U.S. Military Academy.
E
Increasingly,
companies can turn to their own Web
sites for potential candidates: Nearly
all
of
the Fortune 500 firms provide career
L
Web sites where they recruit, provide employment information, and take applicarecruiting
A
forming a pool of
tions. Using these sources of applicants
is generally more expensive than hiring
qualified applicants
from within, but it may be necessary if there are no current employees who meet
from which
the job specifications or there are better-qualified people outside of the organimanagement can select zation. Recruiting for entry-level
1 managerial and professional positions is often
employees
carried out on college and university
campuses. For managerial or professional
0
positions above the entry level, companies sometimes depend on employment
3 sometimes called headhunters, which specialize
agencies or executive search firms,
in luring qualified people away 8
from other companies.
Selection
selection
the process of
collecting information
about applicants and
using that information
to make hiring
decisions
fer11722_ch11_320-358.indd 324
2
Selection is the process of collecting information about applicants and using that
information to decide which ones to hire. It includes the application itself, as well
as interviewing, testing, and reference checking. This process can be quite lengthy
and expensive. Procter & Gamble, for example, offers a recruiting process that gives
a realistic picture of skills, as well as strengths and interests. The process often starts
with completing an online application tied to a matching process with open jobs. If
your application does match an open position, then you are invited to complete an
online questionnaire and a problem-solving test. If the results are positive, you then
have an interview. P&G provides practice tests online for applicants.2 Such rigorous
scrutiny is necessary to find those applicants who can do the work exp...
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