B202 - B
introduction to Human Resource Management
Chapters 6, 7
Chapter 6: Motivating Employees pages 122-140
Q: What are the two types of theories regarding motivation?
1. Content theories they seek to explain what motivates employees
2. Process theories explain how to motivate employees
Q: What are the three content theories of motivation?
1. Described Maslow's hierarchy of needs.
2. McClelland's three basic needs.
3. Herzberg's motivators and hygiene factors
Q: What are the four Process theories of motivation?
1. Latham and Locke's goal theory.
2. Porter and Lawler's expectancy theory.
3. Bandura's self-efficacy theory.
4. Hackman and Oldham's research on job design.
Content Theories: What Motivates Employees?
Q: What are the characteristics of the content theories?
1. All of them are 'need' theories, which mean that they assume that individuals' motivation is driven by com-mon and fundamental needs.
2. Content theories of motivation identify what motivates human beings.
3. Maslow's and Herzberg's assume:
a. that needs can be subdivided into higher- and lower-order needs
b. The healthy and well- adjusted individuals will aspire to the fulfillment of higher-order needs once low-er-order needs have been adequately satisfied.
4. They discussed maintain an individualist conception of motivation and subordinate social contribution and belonging to individual achievement and 'self-actualization'.
5. They have been criticized for propounding a male-dominant perspective on motivation.
6. They have been described as being too specific to the national culture in which they were developed and for promoting a gender-specific view of reality that favors men by prioritizing motivation in the workplace above motivation in other contexts, such as home and family.
Q: What are the five basic needs in Maslow's Hierarchy of Needs?
1. physiological needs (food, water, sleep, oxygen, warmth)
3. social belonging
5. Self-actualization comprises.
Q: what are the claims of Maslow theory?
1. Each level of need is gratified.
2. We start by seeking to satisfy our physiological needs and when those are satiated, safety needs emerge, and so on.
3. Social belonging, esteem, and self- actualization are growth needs.
4. The two lower-order needs, physiological needs and safety, are deficiency needs. This means this means that they more important than fulfilling the higher-order needs.
5. When all of the deficiency needs are again satisfied, the individual can again be motivated by growth needs.
Q: What are the characteristics of Maslow's theory?
1. It has long had appeal partly because it appears to be so readily applicable to most situations.
2. On close inspection the attractiveness of the theory is its vagueness and difficulty to disprove.
3. The distinction it makes between lower-order needs and higher-order needs (social, esteem, self-actualization) is one that has had intuitive appeal to students and business practitioners from different back-grounds and cultures partly because it is imprecise and open to a wide variety of interpretations.
4. The hierarchy retains significance for business and management students by drawing attention to the prom-inent role of intrinsic motivation in ensuring that work is satisfying for employees.
Q: What are McClelland's research results?
1. High achievers who sought situations in which they gain personal responsibility, get feedback, and undertake moderate risks were people who tend to be successful in entrepreneurial activities; however, they are not always the best general managers.
2. It is the needs for power and affiliation that are related to managerial success, particularly in large organiza-tions, the best general managers having a high need for power and a relatively low need for affiliation.
Q: What does McClelland's theory of need motivation focuses on?
A: It focuses on the needs of achievement, power, and affiliation.
Q: What do people with a high need for achievement seek for?
A: They seek for jobs and tasks in which they have personal responsibility and can obtain quick feedback on their progress and attainment.
Q: What are the characteristics of High achievers?
1. The achievement need is the drive to excel according to standards set by both others and oneself.
2. They are moderate risk takers they prefer the odds of success to be even or in their favor.
3. They are not motivated by success that can be put down to good luck they prefer outcomes that they be-lieve are a consequence of their own achievements.
Q: What do people with a high need for power seek for?
A: They seek for situations where they can have power and influence over others.
Q: What are the characteristics of people with a high need for power?
1. The need for power is the need to make others behave in ways they otherwise would not behave.
2. They like to be in positions of status and authority and frequently will aim to increase their influence over others in preference to concentrating on effective work performance.
Q: How people with a high need for affiliation are motivated?
A: By being liked and accepted by others.
Q: What are the characteristics of people with a high need for affiliation?
1. The need for affiliation is the desire for friendly interpersonal relationships.
2. They are most motivated in work situations where there is a high degree of cooperation and where greater priority is given to attaining mutual understanding among the group rather than to competition between in-dividuals.
Q: How Do You Motivate Employees according to Herzberg?
A: Herzberg proposes that the key to motivating employees lies in job design and job enrichment.
Q: What is the argument of Herzberg?
1. His work was based on twelve different research investigations. In these studies, the employees were asked to describe positive and negative job events. Motivating factors (motivators) were found to be those that contributed to job satisfaction, and hygiene factors were those that, at best, meant employees would not be dissatisfied.
2. Herzberg criticized previous work on job design and enrichment for concentrating too greatly on horizontal job loading loading employees with more tasks and more variety in their work yet not including in the job any motivating factors that lead to an improved sense of achievement, recognition, responsibility, advance-ment, or growth over the longer term.
3. Herzberg advises that organizations redesign their jobs so that they are more enriched with motivators.
4. He said that jobs need to have vertical loading to be motivating (that is, any new component added to the job should build upward toward job satisfaction) and should be designed to make employees feel they have more responsibility and opportunity for growth.
Q: Why the past personnel initiatives have been unsuccessful according to Herzberg?
1. Because they do not reorganize the job.
2. Herzberg said that reducing the time spent at work will not motivate employees because motivated people seek more hours of work, not fewer.
3. Increasing wages, or reducing them in an economic depression, does not motivate people because fringe benefits have become an expectation and are unlikely to motivate.
4. Herzberg criticizes human-relations teaching in the business schools and companies of his time, implying that managers have become soft and employees more awkward, so that they have to be told to do something three times rather than doing it after being asked only once, as they would have done in the past.
5. He suggests that sensitivity training, improving two-way communication between managers and employees, job participation, and employee counseling are all failed attempts at motivation.
6. Only by doing this, Herzberg claims, will employees gain more of a sense of achievement, recognition, intrin-sic satisfaction from work, responsibility, advancement, and personal learning and growth.
Q: What are the individuals' two sets of basic needs?
1. One set stems from the in-built drive to avoid pain and to satiate biological needs.
2. The other set of needs is unique to human beings and is concerned with achievement, recognition for achievement, the work itself, responsibility, growth, and advancement.
Q: What are the characteristics of the first of set needs?
A: It needs hygiene factors, which are extrinsic to the work the employee does and include company policy and ad-ministration, supervision, interpersonal relationships, working conditions, salary, status, and security.
Q: What are the characteristics of the second set of needs?
A: The second set of needs comprise growth needs or motivating factors and are intrinsic to the work.
Q: What is Herzberg model of job enrichment that is consistent with the recent focus on serving the customer and that highlights the contribution of learning and feeling in business performance?
1. Employees work closely together in serving clients and understanding and developing the product.
2. Five ingredients are proposed as contributing to client- and product-focused learning and feeling:
a. Control over resources.
c. Personal accountability.
d. Direct communication with authority.
e. Direct feedback.
Process Theories "How to Motivate Employees"?
1- Latham and Locke's "Goal-Directed Theory"
Q: What is the advantage of goal theory?
A: It is that it has clear practical applications for managing and motivating people.
Q: What are Latham and Locke's observations?
1. They observe that most managers are not in a position to change people's personalities and the best they can do is to use incentives to direct employees' energies towards the goals of the organization.
2. Money, they say, is the primary incentive, but there are many others, such as participation in decision mak-ing, job enrichment, behavior modification (using structured systems of incentives to modify employees' be-havior), and organization development.
3. They observe that individuals who were given specific, challenging goals out- performed those who were given vague goals.
4. Giving employees specific production goals was found to increase productivity when it was combined with a supervisory presence on site.
5. The pay and performance feedback resulted in improved performance only where the feedback led the indi-viduals to set themselves higher goals than they had before.
6. When there was an atmosphere of trust between managers and subordinates, employees will give the most demanding goals were found to out-perform others, having higher rates of productivity and lower rates of absenteeism, injury, and employee turnover.
7. The authors' finding was that goal setting works best when it is combined with good managerial judgment and when both production goals and employee-development goals are attended to.
Q: What are the three steps should be followed to obtain the best results in goal setting?
1. Goals must be;
a. Specific rather than vague.
b. Clear time-limits must be set for goal accomplishment.
c. Goals should be challenging and reachable.
2. Managers must ensure that employees accept and remain committed to the goals. This is best achieved when there is an atmosphere of trust between managers and subordinates and when a supportive supervi-sory style is used. Non-supportive supervisory styles were found not to motivate employees towards goal commitment.
3. To give employees support in the form of adequate resources, money, equipment, time, and help.
2- Porter and Lawler's Expectancy Theory
Q: What is the assumption if Victor Vroom's theory?
A: It assumes that human behavior is goal-directed and that work will be more motivating when it provides the op-portunity for goal attainment and needs satisfaction.
Q: What are the characteristics of Victor Vroom's expectancy theory?
1. Expectancy theory is in which motivation is a function of each individual's expectation that his or her behav-ior will result in outcomes that have psychological value.
2. It is predicted that individuals will behave in ways they think are likely to lead to rewards they value.
3. Expectancy theory was developed to explain how individuals can be motivated when they have different val-ues and priorities for rewards.
4. The theory's recommendation for managers is that work should be designed so that effective performance leads to outcomes desired by employees.
5. People will work hard if their labors achieve things they want, which can vary from extrinsic rewards such as a productivity bonus to intrinsic rewards such as the pleasure obtained purely from doing the task.
Q: What is the Porter and Lawler motivation model that has been based on Vroom's expectancy theory?
A: The model describes a person's motivation as a function of three things:
1. The attractiveness of the rewards.
2. Performance- to-reward expectancy.
3. Effort-to-performance expectancy.
Q: What are the characteristics of "the perceived attractiveness of the rewards"?
1. Motivation to exert effort is stimulated by the prospect of desired rewards.
2. People must value the rewards in order to be motivated to perform.
3. Rewards can be either intrinsic or extrinsic.
4. Those who are motivated by intrinsic rewards, such as challenging job assignments, will be motivated by the work itself more than will people who are primarily motivated by extrinsic rewards, such as money.
Q: What is meant by "performance-to-reward expectancy"?
A: This is the employee's expectation that if the desired performance is achieved, then desired rewards will be ob-tained. For example, if the employee's pay is linked to the financial performance of the organization through a profit-sharing system and if the organization consistently makes low profits, then the profit-sharing element of the reward system will not be very motivating.
Q: What is meant by "effort-to-performance expectancy?"
A: Employees will make the necessary effort only when they believe there is a reasonable probability of achieving the target performance. For example, when working in a small team, the individual may believe his effort is likely to have a direct effect on the group. However, when the same individual is asked to help improve the overall profits of the whole company, which employs many thousands, this person may feel that his contribution won't make a significant difference to the company results. The larger the group, the less any one person feels that individual effort will affect overall performance.
Q: What does influence the Effort-to-performance expectancies?
A: The ability and perception of role: any individual must be adequately educated and trained to accomplish the nec-essary tasks and should have a perception of his or her role that is sufficiently consistent with the performance actually required.
Q: What is Porter and Lawler's revised version of Vroom's expectancy theory model?
1. The model recognizes that the perceived attractiveness of the extrinsic and intrinsic rewards offered by the organization will depend on how much employees value them.
2. It says that effort-to-performance expectancies will be moderated by ability, traits, and perceptions of role, and the level of effort applied will depend on individuals' ability, training, and role perceptions.
3. Performance-to-reward expectancies will in turn be moderated by a sense of equity and a perception that the rewards are allocated fairly.
4. If employees believe some individuals or groups have obtained an unfair proportion of the rewards, then the aggrieved will be less satisfied and less motivated to perform to the level required in the future.
5. Motivation is a function of the performance-reward relationship.
6. Two of the feedback loops depicted represent the reinforcement and increase of motivation:
a. Achieving the performance and obtaining the reward strengthen an individual's belief that a similar outcome will recur in future.
b. The satisfaction from the reward strengthens motivation by increasing the individual's valuation of the reward.
Q: What are factors that organizations must influence in order to motivate employees but The expectancy model does not include?
1. The relationship between management and employees.
2. The development opportunities for employees.
3. The meaningful work goals.
4. Problematic for organizations has been sustaining a motivational link between rewards and performance.
5. Organizations frequently have difficulties in linking pay to performance.
3- Bandura's Self-Efficacy Theory
Q: What is the proposal of Bandura's self-efficacy theory?
A: It proposes that the main influence over behavioral change and motivation is self-efficacy, which is the strength of belief an individual has in his ability to achieve outcomes through behavior. Bandura says that mastery and effec-tive performance are more influenced by high self-efficacy than they are by previous track record.
Q: what are the statements of Bandura's self-efficacy theory?
1. People have the capacity to exceed their previous performance or to perform worse than they did before by holding different expectations of their own efficacy.
2. Expectations of what degree of personal mastery they can achieve will influence both the point at which they start relying on coping behaviors and how long they will persist with them.
3. The individuals' expectations of their own efficacy are a major determinant of what activity they will choose to work at, the amount of effort they will expend, and the length of time they will spend dealing with stress-ful situations.
4. Efficacy expectations differ from task to task and, of course, from individual to individual.
5. Generality is the sense of being able to master a range of situations.
6. Strength is the degree to which individuals will cope with setbacks and failure.
Q: Why Bandura's self-efficacy theory is a theory of social learning?
1. Because it is concerned primarily with how individual learning is affected by social factors such as maintain-ing self-confidence and making comparisons between oneself and other people.
2. Bandura's theory of social learning helps to explain why some company training programmers spend consid-erable time motivating employees to hold a high sense of self-efficacy.
3. Perhaps the most surprising and important assertion of self-efficacy theory is that perceived self-efficacy proves to be a better predictor of behavior than does past performance.
Q: What are the 4 major sources of information used by individuals in creating their sense of personal efficacy?
1. Performance accomplishment:
a. It raises expectations of mastery, whilst repeated failure lowers them.
b. Once self-efficacy has been established, it tends to generalize to other situations.
c. If the sense of self-efficacy is low, the individual's performances may be debilitated by preoccupa-tions with personal inadequacies.
d. Improved self-efficacy enables the individual to transfer effective behaviors to a wider range of situ-ations and tasks
2. Vicarious experience:
a. It includes the experiences people have of seeing others perform well, sometimes under adverse conditions. By comparing themselves with others, people gain a heightened sense of self-efficacy. By seeing that others can do it, they believe they can too.
b. Bandura says that efficacy expectations created solely by modeling them on other people's behavior, however, are weaker and more vulnerable to change than is the experience of successful perform-ance by oneself.
3. Verbal persuasion:
a. It is known to have an important influence on people's sense of self-efficacy.
b. Individuals can be encouraged to believe they will succeed through suggestion and coaching.
c. This persuasion must take place in conditions that allow improvement and effective performance to occur; otherwise, the persuaders will be discredited in the eyes of the individuals learning to achieve mastery if they fail to perform effectively due to unfavorable conditions.
4. Physiological states.
a. The physiological state that affects self-efficacy is emotional arousal, high arousal usually debilitating performance.
b. Increased levels of anxiety and fear will negatively influence individuals' sense of self-efficacy by pro-voking imagined threats that far exceed the actual threat of the situation.
c. Self-efficacy is much more likely to improve where the individual feels that the successful perform-ance was the result of skill rather than luck.
4- Hackman and Oldham on Job Design
Q: What are the characteristics of Hackman and Oldham's research on job design?
1. It follows in the tradition of expectancy theory with its assumption that individuals are motivated by out-comes that they value.
2. It extends Porter and Lawler's work by identifying job characteristics likely to motivate individuals, although to different degrees according to their individual psychology and values.
3. They argued similar to Herzberg on job enrichment, that motivation is concerned with effective design of jobs and matching the correct people to the work required.
Q: What are the three conditions for internal motivation according to Hackman and Oldham's theory?
A: Hackman and Oldham say that when all three factors are present, strong internal work motivation will develop and is likely to persist. Their view is that motivation at work has more to do with the design of tasks and jobs than it has to do with individual dispositions. The conditions are:
1. The individual must have knowledge of the results of his or her work; otherwise, it will be difficult to be emo-tionally influenced by the outcomes.
2. The individual must experience responsibility for the results of work. People must be allowed to take initia-tive and feel pride in the results when they do well, and feel concern when goals are not achieved.
3. The individual must experience work as being meaningful.
Q: What are the five job characteristics that lead individuals to experience their work as being meaningful, possess-ing responsibility, and enabling knowledge of results?
1. Skill variety leads to experiencing work as meaningful.
2. Task identity leads to experiencing work as meaningful.
3. Task significance leads to experiencing work as meaningful.
4. Autonomy leads to experiencing responsibility for outcomes of the work.
5. Feedback from the job leads to knowing the actual results of the work.
Q: What is the difference between skill variety, task identity and task significance?
1. Skill variety is the number of different skills required to do the work.
2. Task identity is the extent to which the job has an identifiable beginning and end with a visible outcome.
3. Task significance is the degree to which the job is felt to affect other people's lives.
Q: What is meant by autonomy?
A: It is 'the degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out'.
Q: What are the three characteristics of Individual differences that determine how to motivate people?
1. The level of knowledge and skill.
2. The psychological need for growth and personal learning (some have stronger growth needs than others).
3. The degree to which the individual is satisfied with the work context.
Q: What are the three theories of the role played in motivation by the social group?
1. Equity theory considers how an individual's motivation is influenced by his or her perception of the group.
2. Agency theory considers what motivates groups, particularly management.
3. Stewardship considers what motivates groups, particularly management.
1- Equity Theory
Q: What is the aim of the equity theory of motivation?
A: It aims to explain the way that employees agree a 'fair rate for the job'.
Q: What are the characteristics of equity theory?
1. Equity theory is a theory of individual motivation that predicts individuals will make different assessments about the equity of their rewards at work.
2. Adams says that individuals compare what they contribute to the employment relationship and what they receive from it in return.
a. Contributions include effort, skills, training, and seniority.
b. Returns include pay, fringe benefits, recognition, status, and promotion.
3. Equity theory demonstrates that individuals are concerned not only with the total reward package they get but how this compares with what others who are in a similar position receive.
4. Employees compare their contributions and returns with those of other employees and, if dissatisfied by the comparison, will reduce their effort, seek a pay rise or promotion, or attempt to reconcile their dissatisfac-tion either by rationalizing the differences in contributions and returns between themselves and others as being fair or by selecting another reference group to compare themselves against.
5. Empirical research on equity theory shows that employees are motivated by a sense of distributive justice; that is, employees are more motivated where they perceive rewards to be fairly distributed between people.
Q: How people responded to others' being paid more or less than themselves?
A: By doing one of six things:
1. People will maximize returns that they value (because these are what are most important).
2. They will minimize contributions that require effort and change.
3. They will resist changes that are a strong challenge to their self-concept and self-esteem.
4. They will resist changing themselves more than they will resist reconsidering the equity of others' contribu-tions and returns.
5. They will quit their jobs only when they perceive there to be a very high level of inequity and when they can find no other means of reducing the sense of unfairness. If the inequity is felt less strongly, absenteeism re-sults.
6. Once the individual has established a sense of what is fair, this viewpoint becomes stable over time and part of the individual's sense of security.
Q: Why pay should pass the 'felt fair' principle?
A: Because employees have standards for what constitutes fair payment that are shared unconsciously among the work population of any given country. When an individual assesses his pay against that of another employee, that employee's pay must be in line with what is thought to be a fair rate for the job, and the individual must be per-ceived by others as capable of performing the job.
Q: Why 'felt fair' principle is one of the most common methods used for determining employee rewards?
1. The principle is applied in collective agreements, where they still exist, between management and trade un-ions at national, regional, and local levels of bargaining.
2. It is also applied in negotiating an individual's rewards.
3. The same basic principle applies in employment contracts, whatever the size of the business, although what is felt to be fair by employers and employees in a large organization can be very different from what is felt to be fair in a small local business.
4. What is felt fair will also differ by region and by country.
5. It is common for employers to offer higher rates of pay in more prosperous areas.
For example, In Thailand, large domestic companies automatically increase pay annually to match the rate of inflation.
Q: What is the difference between Equity theory and expectancy theory?
• Equity theory
1. Equity theory predicts an employee is motivated or demotivated by judgements about the distributive jus-tice of rewards. It is a more altruistic theory of human nature than expectancy theory.
2. Equity theory predicts that individuals will seek to maximize equity so that a higher piece-rate worker would feel motivated to produce less output and higher-quality work than workers on the lower rate would.
3. In this way, the individual hopes to restore equity in the group by personally achieving a lower rate com-bined with high-quality work that requires a high degree of effort.
• Expectancy theory,
1. It is a hedonistic theory predicting that the individual rewarded with a higher piece rate would seek to max-imize satisfaction by greater output and do so without additional attention to the quality of the work.
2. Research on equity theory has found that employees can be subdivided into two groups, those who are rela-tively altruistic and behave consistently with the theory and those who are relatively less altruistic and be-have more hedonistically.
2- Two Theories of Management Motivation
Q: Why agency and stewardship theories are two contrasting views of what motivates management?
1. Agency theory has hard HRM's emphasis on control and rewarding required behavior. Because it is based on the philosophy that human beings are rational, calculating, and self-interested beings.
2. Stewardship theory has soft HRM's attention to employee commitment and influence. Because it assumes that managers will be highly committed to owners' interests whenever importance is attached to the collec-tive interest and steps are taken to engender trust.
Q: What are the characteristics of agency theory?
1. It is an economic theory that has been widely used in management education and training within business schools.
2. Agency theory predicts that owners (or 'principals') and managers (or 'agents') will behave differently in serv-ing their own interests and that these will differ from each other: principals seek to maximize their wealth and managers follow their own interests, which will not always be consistent with principals' interests.
3. The theory advises owners to 'incentivize' managers to serve the interests of owners' capital by rewarding and controlling the managers to pursue the owners' interests.
4. It reasonably effective in explaining the differential reward systems found in the UK and USA for senior man-agers and other employees
Q: What are the disadvantages of agency theory?
1. It is too managerialist and for recommending that managers treat employees as objects.
2. It is highly instrumentalist in that it views employees as a means to management's ends rather than as hav-ing legitimate ends of their own.
Q: What is the assumption of agency theory?
1. It assumes that owners' and managers' interests are in conflict but that they can be aligned more closely through appropriate controls and incentives
2. In most organizations, managers receive higher pay than other employees do, and better fringe benefits, of-ten enjoying privileged access to more company shares, larger profit-related payments, and higher perform-ance bonuses.
3. These differences in the reward system are in response to a range of factors; nevertheless they can be seen as empirical evidence supporting agency theory's proposition that principals (owners) seek to ensure that their agents (managers) identify with principals' needs.
4. Agency theory assumes principals and agents have divergent interests that must be curbed by controls.
5. It assumes that agents are highly competitive, individualistic, opportunistic, and self-serving.
6. Davis, Schoorman, and Donaldson propose that those assumptions can be reversed to depict subordinates as collectivist, pro-organizational, and worthy of trust. They argue that while agency theory provides a useful way of explaining how divergent interests can be better aligned through proper monitoring and a well-planned reward system, further theory is needed that takes a broader view than this restrictive economic perspective.
Q: What is Stewardship theory?
A: It is the reverse of agency theory, saying that top management, as stewards, or custodians, are motivated in the best interests of their principals.
Q: What are the characteristics of stewardship theory?
1. Stewards place a higher value on co-operation than they do on independently seeking their own interests.
2. They prefer co-operation to conflict and are rational, usually thinking sensibly and judiciously about what is ex-pected of them.
3. They are collectivist in orientation rather than individualist and therefore work towards the best interests of the group rather than selfishly seeking to satisfy their own needs in preference to those of other people.
4. Stewardship theory warns against too much control over managers (acting as stewards) by principals because it reduces motivation and can hinder pro-organizational behavior by the stewards.
5. Managers' autonomy, it proposes, should be extended because they can be trusted.
6. The theory predicts that through the appropriate controls and cultural context, owners will maximize managers' capability to look after owners' interests. In short, it is based on the assumption that shared interests are already managers' natural inclination.
Q: What is the difference in motivational terms between agency theory and Stewardship theory?
1. agency theory:
• It focuses on extrinsic rewards, which have a measurable market value, and stewardship theory focuses on intrinsic rewards, which are less easily quantified.
2. Stewardship theory:
• It recalls Maslow and McClelland, is particularly interested in the higher-order needs of growth, achievement, affiliation, and self-actualization.
• In stewardship theory, people who are motivated by higher-order needs are more likely to become ste-wards.
• Stewards are motivated by intrinsic factors more than by extrinsic factors; identify highly with the or-ganization; have high value commitments, being sincere about their ethical responsibility and work du-ties; will use their personal power rather than institutional power when influencing others; will try to in-volve employees rather than simply control them; survive better in collectivist cultures than in individu-alist cultures; and prefer to use lower power distance rather than high power distance (in managing others.
• Davis et al. propose that management following the principles of stewardship theory will maximize the performance of the firm and minimize costs.
Q: What are the limitations of equity and agency theory?
1. They less to say about motivation of non-managerial employees, who form the bulk of the workforce in most organizations.
2. They are e difficult to generalize into guidelines for HR policy and practice.
3. Limited application to the broader external political environment and lack substantive historical justification.
4. Motivation is determined by rational processes of decision making, even though there is considerable evi-dence that people often are constrained as to the options open to them in the social environment and do not habitually make decisions by a rational consideration of alternatives.
Chapter 7: Financial Rewards and Performance Management pages 122-140
Q: Why reward strategy has to be consistent with human resource (or personnel) strategy?
A: because it should be in line with business strategy.
Q: What we will gain from implementing a reward strategy?
A: It will feed modifications back to the human resource strategy, which in turn should lead to some modification of the business strategy.
Q: What are the three basic components of reward strategy implementation?
1. Financial rewards.
2. Performance management.
3. Non-financial rewards.
Q: How can the non-financial reward processes motivate employees?
A: Through recognition, responsibility, achievement, development, and growth.
Q: What are Armstrong subdivisions of financial reward processes?
1. Base pay
2. Employee benefits
3. Variable pay
Base pay is determined through job evaluation studies and pay surveys that inform the pay structure.
Employee benefits (such as company pensions and healthcare schemes) and variable pay (for example, profit sharing and bonus payments) are determined according to minimum standards set by national legislation and influenced by the requirements of the Inland Revenue and by custom and practice within the organiza-tion. All three taken together make up the total remuneration received by the individual. Where the financial reward system is motivating, improved individual and team performance should result.