Organizational Behaviour, emerging knowledge and practice for the real world, by S. McShane, M. Von Glinow (fifth edition) – Summary chapter 6

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The meaning and effect of money differ between men and women. Men attach more value to money than women. Women see money in terms of things they can do with it and men see it as a symbol of power and autonomy. People in countries with high power distance have a high priority for money.

There are four types of objectives of rewards:

1. Membership- and seniority-based rewards
   These are monetary rewards for being a member somewhere and for working somewhere for a long time. These rewards can reduce turnover, but do not directly motivate job performance.
2. Job status-based rewards
   These are rewards on the basis of the status or worth of the jobs they occupy. Job worth can be measured through job evaluation, which measures the required skill, effort, responsibility and working conditions. It can improve fairness, but also competitiveness within a company.
3. Competency-based rewards
   These are rewards based on how well people perform on certain competencies (e.g: skill-based pay gives rewards based on the mastery of measurable skills).
4. Performance-based rewards
   These are rewards based on an individual’s performance.

There are several types of performance-based rewards:

1. Individual rewards
   These rewards are given to an individual for individual accomplishments.
2. Team rewards
   These rewards are given to a team for team accomplishments. The gainsharing plan is a team-based reward that calculates bonuses from the work unit’s cost savings and productivity improvement (e.g: reward employees for cost reduction).
3. Organizational rewards
   These rewards are given to the entire organization for organizational accomplishments. Employee stock ownership plans (ESOPs) are a reward system that encourages employees to buy company stock (e.g: employee discount). Stock options are a reward system that gives employees the right to purchase company stock at a future date at a predetermined price. A profit-sharing plan is a reward system that pays bonuses to employees on the basis of the previous year’s level of corporate profits.

Very large rewards can result in lower performance. Reward systems motivate most employees, but only under the right conditions. There are several strategies for improving reward effectiveness:

1. Link rewards to performance
   By linking rewards to performance and making that known to the employees, performance can improve. This can be achieved by using objective performance measures.
2. Ensure that rewards are relevant
   The rewards have to be relevant to the performance in order to improve performance.
3. Use team rewards for interdependent jobs
   Team rewards are better for interdependent jobs because it is difficult to measure individual performance in these situations. Highly productive individuals prefer individual rewards.
4. Ensure that rewards are valued
   The rewards have to be valued by employees in order to improve performance.
5. Watch out for unintended consequences
   Unintended consequences of rewards should be avoided in order to improve performance (e.g: employees creating problems in order to solve them for rewards).

Performance improves most when the motivation of employees is intrinsic rather than extrinsic. Intrinsic motivation improves when the job is properly designed. Job design is the process of assigning tasks to a job, including the interdependency of those tasks with other jobs. A job is a set of tasks performed by one person. Job specialization is the result of a division of labour in which work is subdivided into separate jobs assigned to different people (e.g: a highly specialized job). Job specialization can improve work efficiency. Scientific management is systematically partitioning work into its smallest elements and standardizing tasks to achieve maximum efficiency. 

One of the problems of job specialization is that it can become so specialized that they soon become tedious, trivial and socially isolating. Specialization can improve quality, but can also decrease quality if it is too tedious. Also, by performing one small part of the overall work, employees have difficulty striving for better quality or even noticing flaws with that overall output.

The motivator-hygiene theory states that employees are primarily motivated by growth and esteem needs, not by lower-level needs. This theory argues that only characteristic of the job itself motivate employees. The job characteristics model relates the motivational properties of jobs to specific personal and organizational consequences of those properties.

There are five core job dimensions that produce three psychological states. The core job characteristics are the following:

1. Skill variety
   The extent to which employees must use different skills and talents to perform tasks within their jobs.
2. Task identity
   This is the degree to which a job requires completion of a whole or an identifiable piece of work.
3. Task significance
   The degree to which a job has a substantial impact on the organization and society.
4. Autonomy
   The degree to which a job gives employees autonomy.
5. Job feedback
   This is the degree to which people can tell how well they are doing from direct sensory information from the job itself.

These core job characteristics lead to three psychological states, experienced meaningfulness (1), the belief that one’s working is important, experienced responsibility (2), a sense of being personally accountable for the work outcomes and knowledge of results (3), an awareness of the work outcomes based on information from the job itself.

The job characteristics model overlooks social characteristics and information processing demands. There are three main strategies that can increase the motivational potential of jobs:

1. Job rotation
   This has three benefits. It increases skill variety, it minimizes health risks from repetition and it supports multiskilling, which increases workforce flexibility.
2. Job enlargement
   This is adding more tasks to an existing job. This increases skill variety and it improves work efficiency and flexibility. Skill variety should be combined with more autonomy and job knowledge.
3. Job enrichment
   This is the practice of giving employees more responsibility for scheduling, coordinating and planning their own work. Job enrichment can be achieved by combining highly interdependent tasks in one job.

Empowerment is a psychological concept in which people experience more self-determination, meaning, competence and impact regarding their role in the organization. Job characteristics influence the degree to which people feel empowered. In order to support empowerment, corporate leaders need to trust employees and be willing to take risks. Organizational and cultural conditions can influence the extent to which people feel empowered.

Self-leadership refers to specific cognitive and behavioural strategies to achieve personal goals and standards through self-direction and self-motivation. There are five main activities of self-leadership which follow each other in a sequence:

1. Personal goal setting
   This is setting a goal for oneself. The goals are self-determined. This requires a high degree of self-awareness.
2. Constructive thought strategies
   This consists of positive self-talk and mental imagery. Self-talk is talking to oneself and mental imagery is mentally practising a task and visualizing its successful completion.
3. Designing natural rewards
   This is actively crafting jobs and altering the tasks and work relationships by the employee to make the work more motivation.
4. Self-monitoring
   This is the process of keeping track at regular intervals of one’s progress toward a goal by using naturally occurring feedback.
5. Self-reinforcement
   This includes administering a reinforcer to oneself at a specified time after achieving something.

Self-leadership strategies are relevant across cultures. Self-leadership behaviours are more frequently found in people with higher levels of conscientiousness and extroversion. The work environment influences the extent to which employees engage in self-leadership.