INDIVIDUAL DIFFERENCESINDIVIDUAL DIFFERENCES

PERSONALITY

UniqueUnique set of traits and characteristics that set of traits and characteristics that are relatively are relatively stablestable over time and over time and determine a person’s preferences and determine a person’s preferences and behavior.behavior.

Does personality matter?Does personality matter? Implication?Implication?

Adjust styles/practices to the personalityAdjust styles/practices to the personality Consider personality when assigning jobs/teamsConsider personality when assigning jobs/teams

Which dimensions of personality? Which dimensions of personality?

SELF-ESTEEM (SELF CONCEPT)SELF-ESTEEM (SELF CONCEPT)

How we perceive ourselves in terms of our How we perceive ourselves in terms of our abilities, competencies, and effectivenessabilities, competencies, and effectiveness Global, role-specific, job-based, organization-basedGlobal, role-specific, job-based, organization-based

High self esteem is related to higher performance, High self esteem is related to higher performance, commitment, loyalty, and longevity.commitment, loyalty, and longevity.

What can managers do to foster high self esteem?What can managers do to foster high self esteem?

LOCUS OF CONTROLLOCUS OF CONTROL

The extent to which people believe their The extent to which people believe their actions determine what happens to them in life.actions determine what happens to them in life. InternalInternal ExternalExternal

Why is locus of control important?Why is locus of control important? Performance?Performance? Incentive Systems?Incentive Systems?

JUNGS TYPOLOGYJUNGS TYPOLOGY

16 personality types based on 4 sets of preferences16 personality types based on 4 sets of preferences Extraversion vs. IntroversionExtraversion vs. Introversion Sensation vs. Intuition (N)—PerceptionSensation vs. Intuition (N)—Perception

How a person becomes aware of ideas, factsHow a person becomes aware of ideas, facts Sensation: practical, orderly, precise, unambiguousSensation: practical, orderly, precise, unambiguous Intuition: future oriented, dislike precision--jump to conclusions, Intuition: future oriented, dislike precision--jump to conclusions,

inspiration inspiration

Thinking vs. Feeling—JudgmentThinking vs. Feeling—Judgment Making judgments about perceptionsMaking judgments about perceptions Thinking: Analytic and logical, impersonal; principles over peopleThinking: Analytic and logical, impersonal; principles over people Feeling: Subjective on the basis of values; Feeling: Subjective on the basis of values;

Perception vs. JudgmentPerception vs. Judgment

SELF-PERCEPTIONSELF-PERCEPTION

Group member 2 and group member 3 attempt to identify group Group member 2 and group member 3 attempt to identify group member #1’s typemember #1’s type

Group member #1 then reports their results to the group. Also Group member #1 then reports their results to the group. Also indicate if you have you taken the assessment before and if so, indicate if you have you taken the assessment before and if so, whether the results were the same. whether the results were the same.

Group member #1: Do you agree with the results? Why or why Group member #1: Do you agree with the results? Why or why not?not?

Group members #2 and 3: Do you agree with #1’s results?Group members #2 and 3: Do you agree with #1’s results? As a group: As a group:

Were there any differences between #1’s self perceptions and the way 2 Were there any differences between #1’s self perceptions and the way 2 and 3 perceive #1?and 3 perceive #1?

What do the results suggest #1’s strengths and weaknesses are?What do the results suggest #1’s strengths and weaknesses are? Repeat the process for Group members #2 and #3 Repeat the process for Group members #2 and #3

IMPLICATIONS FOR THE GROUPIMPLICATIONS FOR THE GROUP

Based on these results, what are some potential Based on these results, what are some potential strengths and weaknesses of the group?strengths and weaknesses of the group?

Where might there be potential areas of synergy?Where might there be potential areas of synergy? Where might there be potential areas for conflict?Where might there be potential areas for conflict?

THE “BIG FIVE”:Conscientiousness

The degree to which a person is The degree to which a person is dependable, organized, thorough, dependable, organized, thorough, perseverant, honestperseverant, honest

Most consistent personality predictor of Most consistent personality predictor of performanceperformance

Also predicts lack of problem behaviorAlso predicts lack of problem behavior

THE “BIG FIVE”:Emotional Stability

The degree to which a person is NOT The degree to which a person is NOT anxious, depressed, moody, emotionally anxious, depressed, moody, emotionally unstable, temperamental.unstable, temperamental.

May predict job performance in what type May predict job performance in what type of jobs?of jobs?

THE “BIG FIVE”:Emotional Stability

The degree to which a person is NOT The degree to which a person is NOT anxious, depressed, moody, emotionally anxious, depressed, moody, emotionally unstable, temperamental.unstable, temperamental.

May predict job performance in what type May predict job performance in what type of jobs? of jobs? High stress (e.g., customer relations)High stress (e.g., customer relations)

THE “BIG FIVE”: Agreeableness

The extent to which a person is polite, good The extent to which a person is polite, good natured, flexible, cooperative, trusting.natured, flexible, cooperative, trusting.

May predict job performance in jobs…May predict job performance in jobs…

THE “BIG FIVE”: Agreeableness

The extent to which a person is polite, good The extent to which a person is polite, good natured, flexible, cooperative, trusting.natured, flexible, cooperative, trusting.

May predict job performance in jobs…May predict job performance in jobs… Teamwork; customer relationsTeamwork; customer relations

THE “BIG FIVE”: Extraversion

The degree to which a person is sociable, The degree to which a person is sociable, talkative, assertive, active, ambitious.talkative, assertive, active, ambitious.

May predict job performance in what type May predict job performance in what type of jobs?of jobs?

THE “BIG FIVE”: Extraversion

The degree to which a person is sociable, The degree to which a person is sociable, talkative, assertive, active, ambitious.talkative, assertive, active, ambitious.

May predict job performance in what type May predict job performance in what type of jobs?of jobs? Extensive interaction (management, sales)Extensive interaction (management, sales)

MOTIVATION MOTIVATION

MOTIVATION DEFINEDMOTIVATION DEFINED

Willingness to exert high levels of effort to Willingness to exert high levels of effort to reach organizational goals.reach organizational goals.

Good to Great (by Jim Collins)

““Motivating people is the greatest waste of Motivating people is the greatest waste of time managers engage in. If you have the time managers engage in. If you have the right people on the bus, you don’t need to right people on the bus, you don’t need to worry about them being motivated.” worry about them being motivated.”

BASIC ASSUMPTIONS

Everyone is motivatedEveryone is motivated Key?Key?

Two types of motivationTwo types of motivation IntrinsicIntrinsic ExtrinsicExtrinsic

TYPES OF MOTIVATION

Extrinsic Motivation:Extrinsic Motivation: "What gets rewarded gets done""What gets rewarded gets done" Based on extrinsic/tangible rewards an/or Based on extrinsic/tangible rewards an/or

punishmentpunishment Intrinsic Motivation:Intrinsic Motivation:

"What is rewarding gets done""What is rewarding gets done" Based on intrinsic/intangible rewardsBased on intrinsic/intangible rewards

HERZBERGHERZBERG

Movement vs. MotivationMovement vs. Motivation KITAKITA What’s wrong with KITA? With movement?What’s wrong with KITA? With movement?

Motivation TheoriesMotivation Theories

Need (Maslow & ERG)Need (Maslow & ERG) EquityEquity ReinforcementReinforcement Expectancy TheoryExpectancy Theory Goal-Setting TheoryGoal-Setting Theory

Needs (stage of development)

MaslowMaslow Self actualizationSelf actualization Self esteemSelf esteem Social (love)Social (love) SafetySafety PhysiologicalPhysiological

Alderfer (ERG)Alderfer (ERG) GrowthGrowth RelatednessRelatedness ExistenceExistence

NEED THEORIES OF MOTIVATIONNEED THEORIES OF MOTIVATION

What are the implications of need-based What are the implications of need-based theories for managers?theories for managers?

NEED THEORIES OF MOTIVATIONNEED THEORIES OF MOTIVATION

What are the implications of need-based What are the implications of need-based theories for managers?theories for managers?

Identify employee needsIdentify employee needs First satisfy lower level needsFirst satisfy lower level needs Then focus on higher levelThen focus on higher level Individualized HR practicesIndividualized HR practices

TODAY’S TOPICTODAY’S TOPIC

MotivationMotivation

EQUITY THEORYEQUITY THEORY

People compare their People compare their outcome/input ratio to outcome/input ratio to that of othersthat of others

ConclusionsConclusions Ratios are equal Ratios are equal

(equity exists)(equity exists) Ratios are unequal Ratios are unequal

(inequity exists)(inequity exists)

RESPONSES TO EQUITY/INEQUITYRESPONSES TO EQUITY/INEQUITY

Equity: MaintenanceEquity: Maintenance Inequity:Inequity:

Change InputsChange Inputs Change OutcomesChange Outcomes QuitQuit

REINFORCEMENT THEORYREINFORCEMENT THEORY

Behavior is a function Behavior is a function of consequencesof consequences

Behavior that is Behavior that is rewarded persistsrewarded persists

To increase behaviorTo increase behavior Positive reinforcementPositive reinforcement negative reinforcementnegative reinforcement

REINFORCEMENT THEORYREINFORCEMENT THEORY

To reduce behaviorTo reduce behavior ExtinctionExtinction PunishmentPunishment

Immediacy is crucialImmediacy is crucial Implications?Implications?

EXPECTANCY THEORYEXPECTANCY THEORY

People are motivated to do that which they People are motivated to do that which they believe is believe is possiblepossible and and valuablevaluable

Expectancy: Belief that you can performExpectancy: Belief that you can perform Instrumentality: Belief that performance Instrumentality: Belief that performance

will lead to an outcomewill lead to an outcome Valence: Value of the outcomeValence: Value of the outcome

EXPECTANCY THEORYEXPECTANCY THEORY

According to expectancy theory, what must According to expectancy theory, what must managers do to motivate their employees?managers do to motivate their employees? Clarify expectationsClarify expectations Utilize realistic standardsUtilize realistic standards Link valued rewards to performanceLink valued rewards to performance Individualize rewardsIndividualize rewards

GOAL SETTING THEORYGOAL SETTING THEORY

People naturally set goalsPeople naturally set goals Benefits of Goals:Benefits of Goals:

Increase effortIncrease effort Direct effortDirect effort Increase persistenceIncrease persistence

Most effective goals are:Most effective goals are:

Goal setting (MBO) works...

specific (time, targets, measurements) specific (time, targets, measurements) difficult (“stretch targets”) but...difficult (“stretch targets”) but... attainable (expectancy theory)attainable (expectancy theory) participative (must accept goal)participative (must accept goal) prioritize, and then:prioritize, and then: provide feedbackprovide feedback create explicit, valent rewardscreate explicit, valent rewards

Motivation TheoriesMotivation Theories

Need (Maslow & ERG)Need (Maslow & ERG) EquityEquity ReinforcementReinforcement Expectancy TheoryExpectancy Theory Goal-Setting TheoryGoal-Setting Theory

Effective Incentives:Effective Incentives:

Clearly linked to key desired behaviorsClearly linked to key desired behaviors (Reinforcement, Expectancy)(Reinforcement, Expectancy) Those that fulfill strategic objectivesThose that fulfill strategic objectives Avoid rewarding undesirable behaviorsAvoid rewarding undesirable behaviors

REWARDING B

BUT WE REWARD:BUT WE REWARD: Quarterly earningsQuarterly earnings Making the numbersMaking the numbers Shipping on timeShipping on time Reporting good Reporting good

news; agreeing with news; agreeing with the bossthe boss

Individual effortIndividual effort

WE HOPE FOR:WE HOPE FOR: Long-term growthLong-term growth Setting challenging Setting challenging

goalsgoals Total QualityTotal Quality CandorCandor

TeamworkTeamwork

Effective Rewards:Effective Rewards:

Clearly linked to specific key desired behaviorsClearly linked to specific key desired behaviors (Reinforcement, Expectancy)(Reinforcement, Expectancy) Those that fulfill strategic objectivesThose that fulfill strategic objectives

Clearly defined targets and expectations Clearly defined targets and expectations Goal setting, ExpectancyGoal setting, Expectancy

MeasurableMeasurable Goal SettingGoal Setting

Fair/equitable (Be consistent)Fair/equitable (Be consistent) (Equity Theory)(Equity Theory)

Reward proportional to behaviorReward proportional to behavior Equity theoryEquity theory

Effective Rewards:Effective Rewards:

Reward ASAP after behaviorReward ASAP after behavior Reinforcement TheoryReinforcement Theory

Challenging yet realistic (Challenging yet realistic (under employees’ controlunder employees’ control)) Goal Setting, ExpectancyGoal Setting, Expectancy Intrinsic Motivation Intrinsic Motivation

Valued RewardsValued Rewards ExpectancyExpectancy Individualized (Need Theories; Individual differences)Individualized (Need Theories; Individual differences)

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys to Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive effective incentive systems, evaluate the Incentive system in place at Nordstroms.system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths? Any concerns/questions regarding the system? Any concerns/questions regarding the system?

Are Nordstrom employees pressured Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By inappropriately by the sales-per-hour system? By management?management?

What (if any) changes would you recommend? What (if any) changes would you recommend?

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys Using theories of motivation & related keys to effective incentive systems, evaluate the to effective incentive systems, evaluate the Incentive system in place at Nordstroms.Incentive system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths?

NORDSTROMS

““This is Your Business. Treat This is Your Business. Treat it Like Your Own Business.”it Like Your Own Business.”

Highest sales productivity Earnings > $80,000 Compound growth in sales,

earnings, stores sq. ft. Highly, educated workforce

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys Using theories of motivation & related keys to effective incentive systems, evaluate the to effective incentive systems, evaluate the Incentive system in place at Nordstroms.Incentive system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths? Any potential concerns? Any potential concerns?

NORDSTROMS

“It’s fear that Provides Great Customer Service”

Local 1001 publicity campaign Union complaint with

Washington Dept. L & I NLRB charges $15 million reserve against

earnings shareholder class action suit employee class action suit Wall Street Journal story 60 Minutes TV story

““This is Your Business. Treat This is Your Business. Treat it Like Your Own Business.”it Like Your Own Business.”

Highest sales productivity Earnings > $80,000 Compound growth in sales,

earnings, stores sq. ft. Highly, educated workforce

NORDSTROMSNORDSTROMS

Are Nordstrom employees pressured Are Nordstrom employees pressured inappropriately by the sales-per-hour inappropriately by the sales-per-hour system? By management?system? By management?

NORDSTROMS

ACTIVITY SELL NONSELL Drive to another store to pick up merchandise for a customer

Home delivery

Obtain merchandise from another department for a customer

Thank you notes

Merchandise stocking

Store displays

Sales meetings

Inventory count

Record keeping

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys to Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive effective incentive systems, evaluate the Incentive system in place at Nordstroms.system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths? Any concerns/questions regarding the system? Any concerns/questions regarding the system?

Are Nordstrom employees pressured Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By inappropriately by the sales-per-hour system? By management?management?

What (if any) changes would you recommend? What (if any) changes would you recommend?

CONCLUSIONS

Effective incentive systems can be powerful motivators Effective incentive systems can be powerful motivators & focus attention on critical behaviors. & focus attention on critical behaviors.

However, performance pressures can cause participants However, performance pressures can cause participants to engage in undesirable behaviors. to engage in undesirable behaviors. maximize the statistic in counter-productive ways maximize the statistic in counter-productive ways willful distortionwillful distortion

Strong internal controls must be present to prevent Strong internal controls must be present to prevent manipulation.manipulation.

Systems must clearly communicate that explicit Systems must clearly communicate that explicit pressure and gaming behavior is unacceptable and pressure and gaming behavior is unacceptable and subject to detection and punishment.subject to detection and punishment.