Techniques for Changing Employee Attitudes
By Devon Kirchner, Christian Brugger, Monica Rivera, and Natalie Bartman
Organizational Behaviour
Lloyd Michaels
Oct 17, 2011
Table of Contents
Purpose Statement/Introduction ……………………………………………………….pg.1
Part I: Extrinsic Motivators
-Monetary…………………………………………………………………………………....pg.2
-Benefits……………………………………………………………………………………pg.3-4
-Promotions………………………………………………………………………………pg.5-6
-Stock Options……………………………………………………………………………pg.6-7
Part II: Intrinsic Motivators
-Progress……………………………………………………………………………………pg.8-9
-Challenges………………………………………………………………………………pg.9-10
-Recognition/Achievement………………………………………………………pg.10-11
-Perceived Justice……………………………………………………………………pg.11-12
Conclusion…………………………………………………………………………………………pg13
Bibliography/References/Footnotes……………………………………………pg.14-15
Introduction
Purpose Statement: The purpose of this research is to investigate how employee attitudes can be affected or changed with the prospect of rewards.
Through our research we have discovered 8 primary rewards that have the potential to change employee behaviour for both the positive and negative; for example, the prospect of a monetary reward can be immediately effective but should be used carefully due to the power it has in altering behaviours. Benefits can offer lucrative prospects for workers who may be focused on outside factors such as healthcare or transportation, therefore leaving more room for them to make work their main focus point. Promotions, on the other hand, create a competition between employees, instilling a drive towards excellence and innovation that some find crucial to their own personal motivation. Progress, an important intrinsic factor, gives people a reason to continue a certain task when they are aware of its development and their own addition to that development. Challenges --not unlike promotions and progress—are used to motivate employees by giving them the option to excel at something that plays to their strengths, and therefore have a greater chance of staying relevant and productive. Finally, Perceived Justice is the idea of equality in the work place and how to reward in relation to effort. All of the above are analyzed in an effort to discover the potential impacts of rewards on employee behaviours. These rewards, both intrinsic and extrinsic, focus in on what really motivates people to perform tasks efficiently and with little resistance.
Part I: Extrinsic Rewards
Monetary:
“Money is probably the most emotionally meaningful object in contemporary life; only food and sex are its close competitors as common carriers of such strong and diverse feelings, significance, and strivings”[1]
According to Maslow's “Hierarchy of needs” the most basic and important of human needs --“Physiological” and “Safety”-- must be fulfilled before a person can focus on the secondary needs; because money is the means to satisfy a person’s primary needs, its importance as a reward cannot be understated as a motivating factor in altering employee behavior. Managers often underestimate the significance of money which can potentially lead to employee’s poor job satisfaction. In a recent study, “54% of employees rated direct financial compensation as 'very important' or 'extremely important' to motivation”[2] another study showed “45% of employers thought money was not a large factor in losing their talented employees but 71% of those top employees felt it was the primary factor in their disaffection”[3]. The above statistics indicate the importance of money to employees and how it cannot be overlooked when trying to alter employee behavior. When proper payment scales and methods are implemented a positive employee attitude can emerge which can lead to higher performance. In fact, when companies used specific techniques such as gain sharing, bonuses, and profit sharing those companies saw a 66-89% increase in positive feedback[4]. If an employee enjoys working hard, and being paid on his own merit of organizational achievement then a pay system such as “Merit-Based Pay” would help increase the employee’s perception of relationship between the rewards and their performance which can lead to a desirable change in behavior. Managers must also stay mindful of the potentially unintended and undesired effects that pay system can cause in employee behavior. For example, the “unexpected behaviors that may arise when employees try to ensure they will receive bonuses.”[5] The idea of a bonus can be twisted into an expectation for some employees; when a fiscal year is poor and bonuses cannot be given undesirable behavior may emerge. Money, as a reward, can be a very helpful instrument in altering employee’s behaviors to better suit organizations needs but managers should be aware of the unintended behavioral effects of money.
Benefits
A main element in extrinsic motivation is work benefits. One of the most effective rewards within organizations is benefit plans. Benefit plans are used by managers to attract the right people, and retain the valuable employees it already has. They must be strategic, up to date, and must meet the demands of the employee receiving them. “According to Herzberg’s two-factor theory (motivation and hygiene), an employee benefit program is a necessary and sufficient working condition.”[6] Something that can concern managers about benefit plans is the fact that these have a bigger effect on work motivation that in employee productivity. The amount and value of employee benefit plans depends on the size of the corporation; bigger, private corporations have a stronger demand for benefit plans than smaller businesses. Another difference between benefit plans is the person receiving them and their daily lives. It has been shown that “Single employees perceive more employee benefit impact on job performance than married ones.”[7] Also, employees with higher educational levels will expect different, and perhaps higher, benefits than those with less education. Throughout this same research, it has been found that younger employees are more affected by benefit plans than older ones.
Benefits such as having flexible work times are something that draws people’s attention a job. For example, if someone was trouble balancing work and family time in a previous job and our business offers to give them flexible hours the employee would be most likely to want to work for this certain company. Other kinds of job benefits are group insurance, disability income protection, paid vacations, sick leave and many more. Another name given to these benefits is Bonus Plans. Bonus Plans are a great way to motivate one’s employees and “boost [employee] performance.”[8] One way managers put this into action is by giving employees a set percent rate for their sales. For example, a big store like Wal-Mart could decide that for every $25,000 over a period of time, employees get a bonus of 5%. This would make Wal-Mart’s employees more motivated to sell more because they can, in return for their hard work, take home more money than what their paycheck would usually be.
Even though we see benefit plans as being really good motivators, it has its consequences too. For example, a number of companies that offer health care and or insurance do not pay the full price with the company’s money; what some employees do is take a certain percentage of the cost from the worker’s paycheck, leaving him or her short of money. Although these benefits provide the employee with discounts, most of these benefits, such as health care and insurance, have some additional cost to the employee.
Promotions
Promotions can be an excellent and effective way to increase employee enthusiasm in the workplace. Susan David, co-director of the Harvard/Maclean Institute of Coaching, feels that "who an organization promotes is a very strong index of their core culture"[9]. With this in mind, they must be properly approached, because when somebody gets promoted, it inevitably sends a strong signal of entitlement to the rest of the organization. Primarily, it is exceedingly important to remember that the way in which an employee is promoted holds explicit implications for that individual’s achievement. For example, it is common for businesses to lose some of their best workers because there is only one pathway to success. One way isn't good enough. "Organizations who create multiple, flexible pathways to success will keep their best people, keep them engaged, and keep them for longer"[10] says Susan David. Make sure that all the necessary research about the employee’s performance, attitude and level of commitment is done. In the rare case that an employee is expressing a want or need for a new challenge, that is a sure indication that a promotion is a possibility. On the flip side, the better half of employees do not want to be promoted, because with a promotion comes added responsibility. Promotions are extremely subjective, and whether or not it is a good idea depends solely on the person at hand. They are the foundation that can potentially make or break the stability of a company's staff.
Stock Options
Although money has always been a motivator when it comes to employee performance, it is not only the idea of benefits such as bonuses and raises that can entice employees, but also that of stock options. This applies mostly to larger corporations, although some smaller companies offer it as well. If a business is thriving, stocks can be a vital way of accumulating more money, especially if the employee in question has knowledge of the stock market. Many companies like to reward good performance with higher amounts of stock in the company. “The idea is that employees will be more likely to think about the consequences of their behaviour on the bottom line if they own part of the company.”[11] This could end up making the employee feel like a key contributor and stakeholder in the business, expanding his or her feeling of control over what is going on. Knowing that you own a part of the company is a good incentive for performance, because the better the company does, the better you do as well. One example of how the use of stock options has been an effective motivator is Nucor Corp., a steel manufacturing facility. “Nucor gave out more than $220 million in profit sharing and bonuses to the rank and file in 2005”[12]. These benefits that Nucor rewards its employees with are the reason it is successful today. “Nucor's performance, propelled by a red-hot steel market, has been nothing less than sensational. It has grown into a company with 2005 sales of $12.7 billion, up from $4.6 billion when DiMicco took over in 2000”[13]. They rely on high wages, innovative ideas, and healthy competition between employees to keep them working at their best. It is these stock options that make the workers feel like they have a real stake in how the company prospers, and gives them the tools to take control of their earning power. At the base of all workers is not only a need to gain a larger wealth, but also to have a greater feeling of domination in their job, giving them an overall sense of security. It is this security that enables them to perform at a higher level than those who operate with a level of uncertainty, and in the end alters their behaviour.
Part II: Intrinsic Rewards
Progress
For many people in the workforce today, one of the most intrinsically important factors in the success of their performance relies not only on the ability to “climb the ladder” in their career and the achievement that comes with that, but also a sense of progress. “Children tend to have an obvious and touching hunger for immediate gratification…As people grow into adults, they generally learn to take on longer tasks and develop patience. But the need for reinforcement doesn’t go away, it simply changes form.”[14] Even those who are not so driven by “moving up” and who are comfortable in their position need to feel a sense of things moving along. When you start a task with excitement and hope, it can make it easier to complete. However, without evidence that progress is being made, it could end up making it more difficult. To see that something is on its way to completion is a main intrinsic motivator for people in all fields. Although the thrill of finishing is the ultimate goal for many people, it can be noted that it is often the “Little Wins”[15] as Tom Jones describes that are most important to people. As important as the finish line is, something has to motivate you to get there, especially if it is a long-drawn out task over many months or years. The speed at which a task is being done is also important to a worker’s outlook. If it is being done quickly and efficiently, the more likely the worker will be motivated to keep moving. However, if it comes to a standstill, the worker might begin to lose faith in the project and begin to lag. “Jack Welch, CEO of General Electric, speaks vividly of the energy that he and his employees get from moving forward quickly on work tasks.”Speed," he says simply, "is exhilarating!”[16] This is a good real world example of an employer who sees an obvious difference in his workers when a task is moving forward. In the end, people will always feel more persuaded to finish a job when they are visibly aware of how that job is positively progressing.
Challenges
One of the many ways employees are motivated intrinsically is by giving them challenging tasks. Many studies have found that the most successful motivators are those which are nonmonetary. It has been shown in many cases, that employee’s work harder when the outcome is tied to a personal goal, or when the task at hand is challenging. When giving employees a challenge we need to make sure it is not too hard or too easy. If employees are faced with a task they believe is too hard for them to carry out, they are likely to lose focus and motivation quickly. The main reason some employees do not find motivation at the workplace is because they are rarely presented with challenging tasks. If employers take the time to come up with more challenging tasks, employee motivation has the potential to improve. As human beings, when we are presented with a challenge, we are motivated to overcome it. According to writer, researcher and Editor NeenaDayal, “All [we] need to do is to feel the challenge of the situation and [we] feel motivated to do something about it.”[17]
One thing we should take into consideration when looking at employee motivation through challenge is, what the business itself looks like. Recent research has found that executives are more motivated by challenge than managers are by almost 30%. This research also showed that employee motivation between large and small businesses. Around 77% of employees are motivated by challenge in businesses with less than 1,000 employees; however, this was only true for 43% of employees in larger businesses.
If we look at Herzberg’s theory of motivation, he talks about job enrichment which can be defined as, “a deliberate, planned process to improve the responsibility and challenge of a job.”[18] By giving employees job enrichment they may be motivated to come to work every morning prepared to work hard and take on any challenge he/she is given. A few ways this can be done is by; giving more freedom to the employee to decide what the right decision is, variety, and providing continuous feedback. Another technique he talks about is job rotation. Job rotation “is the planned rotating of staff between jobs to alleviate monotony and provide a fresh job challenge.”[19] When employees are faced with different challenging tasks, rotating from time to time, they are more likely to be motivated and work harder and harder every time.
Recognition
Recognition is a key intrinsic motivator for the simple reason that all people have a need to be addressed for a job well done. This can be achieved by a pat on the back, a simple “Good Job!” or even a thank you note. Canadian firms were surveyed in 2004 by Hewitt Associates, and found that 34 percent of companies recognized individual or group achievements with cash or merchandise. [20]. The amount of recognition an employee receives can have a direct correlation to his or her job performance and whether or not they want to stay at that job. “..When asked why employees left for jobs at other companies, 34 percent said it was due to lack of recognition and praise…”[21] By making sure employees get the right amount of recognition, companies can greatly reduce the amount of hiring and firing that has to be done and can keep a more consistent employee base. However, too much recognition could make some employees accustomed to gratification, and they may expect rewards for every little good thing they do. Therefore, it is important for managers and business owners to be specific with their recognition and rewards, to make it have a lasting effect on employee behaviours.
Perceived Justice
Justice can alter employee behaviour by linking the values of a culture to the rewards they feel entitled to. If an employees behaviour is perceived to be poor, then other workers have a need for –their perception of-- justice to be upheld. If action is not taken to rectify the discrepancy then a negative shift in employee behaviour may emerge.
“Recent scandals and CEO indiscretions, however, illustrate that employees have their limits. Thus, a precipitating event, such as a large pay increase or bonus for a CEO when employees are facing layoffs, may call attention to the gap and create injustice perceptions with regard to the distribution of organizational rewards...such a reaction by employees may lead to counterproductive workplace behaviors that may be detrimental to organizational effectiveness”[22]