WHAT IS MANAGEMENT
Leadership
and Motivation
Other Teaching Tools 7.3
Video Notes 7.4
Brief Chapter Outline and Learning Goals 7.5
Lecture Outline and Lecture Notes 7.7
Career and Study Skills Notes 7.25
Career Development: Understanding that Results Matter 7.25
study skills: Can You Read This? 7.33
Lecture Links 7.34
lecture link 7-1 Best Business Leaders of the 20th Century 7.34
lecture link 7-2 Three Types of Great Leaders 7.34
LectURE LINK 7-3 Smucker’s: Jams and Thank-Yous 7.35
LectURE LINK 7-4 McClelland’s Acquired Needs Theory 7.36
LectURE LINK 7-5 The L Factor 7.37
LectURE LINK 7-6 Recognition: Making Heroes 7.37
Bonus Internet Exercises 7.39
Bonus INternet Exercise 7-1 Are Leaders Born or Can They be 7.39
Taught?
Bonus INternet Exercise 7-2 The Most Powerful Women in Business 7.40
Bonus INternet Exercise 7-3 Which are the Best Companies to 7.41
Work For?
Critical Thinking Exercises 7.42
critical thinking exercise 7-1 Traits of Leaders 7.42
Critical thinking Exercise 7-2 Crisis Management 7.43
critical thinking exercise 7-3 Managing a Family Business 7.44
critical thinking exercise 7-4 Testing Maslow’s Hierarchy of Needs 7.45
critical thinking exercise 7-5 Motivation Survey 7.47
critical thinking exercise 7-6 Does Money Motivate? 7.49
Bonus Cases 7.50
Bonus case 7-1 When Failure is the Norm 7.50
Bonus case 7-2 Hot Topic: Motivation is a Hot Topic (Video Case) 7.52
Bonus case 7-3 Managing Volunteers 7.54
Bonus case 7-4 Using Compensation to Motivate 7.56
Bonus case 7-5 Turning Tyco Around 7.58
Other Teaching Tools
FOR A DESCRIPTION OF EACH OF THESE VALUABLE TEACHING TOOLS, PLEASE SEE THE PREFACE IN THIS MANUAL.
Student Learning Tools
Student Online Learning Center (OLC) diasbusiness
Student Study Guide
Spanish Translation Glossary (OLC)
Spanish Translation Quizzes (OLC)
Instructor Teaching Tools
Annotated Instructor’s Resource Manual
IRCD (Instructor’s Resource Manual, Test Bank, PowerPoints, EZtest)
Asset Map
Online Learning Center (OLC) diasbusiness
PageOut
PowerPoint Presentations (on IRCD and OLC)
Test Bank
Business Videos on DVD
Enhanced Cartridge option
Spanish Translation Glossary (OLC)
video NOTES
TWENTY VIDEOS ARE AVAILABLE, GEARED TO INDIVIDUAL CHAPTER TOPICS. THE TEACHING NOTES FOR THESE VIDEOS ARE ALSO INCLUDED IN THE VIDEO NOTES SECTION OF THIS INSTRUCTOR’S RESOURCE MANUAL, BEGINNING ON PAGE V.1.
Video 7: “Hot Topic: Motivation is a Hot Topic”
This video features Betsy McLaughlin and the two clothing stores she has created. Both Torrid and Hot Topic are designed to appeal to niche markets. Hot Topic appeals to modern music lovers, and Torrid is aimed at mature, plus sized women. McLaughlin has created a unique corporate culture designed to engender fierce loyalty from its employees.
(Bonus Case 7-2, “Hot Topic: Motivation is a Hot Topic” on page 7.52 of this manual relates to this video.)
alternative video: “One Smooth Stone”
One Smooth Stone is an entrepreneurial start-up that hosts and manages customized meetings and events for its corporate clients. The video shows how the company’s decentralized, nimble, team-oriented structure helps it to succeed.
BRIEF CHAPTER OUTLINE AND LEARNING GOALS
CHAPTER 7
Leadership and Motivation
I. Introduction to Leadership and Motivation
II. MANAGEMENT AND LEADERSHIP
LEARNING OBJECTIVE 1
Understand the difference between management and leadership.
III. Leadership Qualities
LEARNING OBJECTIVE 2
Describe the qualities of a leader and the differing leadership styles.
A. Integrity, Ethics, and Self-Knowledge
B. Having Vision, Understanding the Business, and Understanding the Tasks
C. Listening Willingly, Accepting Constructive Criticism, and Communicating
D. Openness to Change
E. Being Decisive and Committed
F. Positive Attitude and Enthusiasm
G. Take Care of People and Inspire Them
IV. Leadership Styles
A. FORMAL AND INFORMAL LEADERSHIP
B. Transformational Leadership
C. Transactional Leadership
V. IMportance of Motivation
LEARNING OBJECTIVE 3
Understand the importance of motivation.
A. Taylor’s Scientific Management
B. Mayo’s Hawthorne Studies
C. Maslow’s Hierarchy of Needs
D. Herzberg’s Two-Factor Theory
VI. Employee Improvement tHEORIES
LEARNING OBJECTIVE 4
Describe the key principles of employee improvement theories.
A. MBO and Goal Setting Theory
B. Reinforcement and Equity Theory
VII. Employee Empowerment
LEARNING OBJECTIVE 5
Explain how employees can be empowered in organizations.
VIII. SUMMARY
LECTURE OUTLINE AND LECTURE NOTES
CHAPTER OPENING PROFILE
NUCOR CORPORATION AND MOTIVATION (TEXT PAGES 208-209)
The opening profile focuses on Nucor Corporation. The company has nurtured one of the most engaged workforces in existence. Nucor has a flattened hierarchy and emphasizes pushing power to the front line. The company’s mission statement clearly defines the focus on employees. Management talk to employees, listens to them, take risks on their ideas, and accepts the occasional failure. Money can be a motivating factor, and Nucor uses a bonus program tied to the production of defect-free steel by an employee’s entire shift.
|Lecture outline lecture notes |
| I. Introduction to Leadership and MOtivation |PowerPoint 7-1 |
|Leadership and employee motivation are key factors in an organization’s success. |Chapter Title |
| |(Refers to text page 208) |
| | |
| |PowerPoint 7-2 |
| |Learning Objectives |
| |(Refers to text page 209) |
| II. Management and Leadership | |
|Learning objective 1 |TEXT REFERENCE |
|Understand the difference between management and leadership. (Text pages 210-211) |Real World Business Apps |
|A. Differences Between Management and Leadership |(Box in text on page 211) |
|1. Leadership is the process of offering guidance or direction. |Sam Anderson is the owner of a |
|2. Management is the act, manner, or practice of managing, handling, supervision, or control. |sporting goods store called Casey’s |
|3. A leader provides guidance, while a manager oversees and manages the activities that must be done |Sports. The store’s sales have been |
|to reach goals. |declining, and Sam is concerned about |
|B. A leader must be able to motivate others to want to do the things that need to be done. |the long-term survival of the |
|1. A leader does not need to have organizational power. |business. He has concluded that the |
|2. Anyone can be a leader if they are willing to provide guidance and motivate others. |decline is related to employee |
|C. Not every manager is a leader, and not every leader is a manager. |motivation. Sam needs to figure out |
|1. It is hard to be an effective manager without also being a leader. |what he can do to motivate his |
|2. But there is no reason that a leader must be a manager. |employees. |
|3. Leadership is a quality found at any level of the organization. | |
|SELF Check Questions (Text page 212) |PowerPoint 7-3 |
|What are some differences between managers and leaders? Similarities? |Management and Leadership (Refers to |
| |text pages 210-211) |
| | |
| |TEXT FIGURE 7.1 |
| |Not Every Manager Is a Leader—Separate|
| |and Overlapping Roles (Box in text on |
| |page 211) |
| | |
| |Lecture link 7-1 |
| |Best Business Leaders of the 20th |
| |Century |
| |These are the top executives of the |
| |20th century, as chosen through a |
| |survey of executives. (See complete |
| |lecture link on page 7.34 of this |
| |manual.) |
| | |
| | |
| | |
| |TEXT FIGURE 7.2 |
| |Typical Characteristics Associated |
| |with Management and Leadership (Box in|
| |text on page 212) |
| III. Leadership Qualities | |
|Learning objective 2 |PowerPoint 7-4 |
|DESCRIBE THE QUALITIES OF A LEADER AND THE DIFFERING LEADERSHIP STYLES. (TEXT PAGES 212-217) |Leadership Qualities |
|A. What Makes Leaders Different From Others? |(Refers to text pages 212-217) |
|1. It is hard to identify one set of distinct qualities that all leaders have. | |
|2. However, researchers have identified seven sets of qualities that help leaders succeed. |bonus internet |
|B. Integrity, Ethics, and Self-Knowledge |exercise 7-1 |
|1. Effective leaders tend to be highly ethical, trustworthy, and reliable. |Are Leaders Born or Can They Be |
|2. Self-knowledge |Taught? |
|a. These leaders also know their strengths and limitations and what their principles, beliefs, and |This Internet exercise explores the |
|values are. |research and rationale behind this |
|b. Leaders who identify their limitations can surround themselves with people who bring complementary|question. (See complete exercise on |
|skills. |page 7.39 of this manual.) |
|3. The text features the example of Yvon Chouinard, founder of outdoor company Patagonia. | |
|a. Patagonia strives to be a “green” business emphasizing environmental sustainability through less | |
|waste and recyclable material. | |
|b. Chouinard also supports his employees’ outdoor interests through flextime. |TEXT REFERENCE |
|C. Having Vision, Understanding the Business, and Understanding the Tasks |Study Skills: Can You Read This? |
|1. Great leaders have a deep understanding of the business. |(Box in text on page 213) |
|2. Successful leaders can visualize the big picture and see the organization 5-10 years in the |An additional exercise and discussion |
|future. |is available on page 7.33 of this |
|3. The text uses the example of Ken Hendricks, founder of ABC Supply. |manual. |
|4. Ken and Diane Hendricks believe in offering quality products and a great place for their employees| |
|to work. | |
|D. Listening Willingly, Accepting Constructive Criticism, and Communicating | |
|1. Great leaders are approachable, accessible, and willing to listen. | |
|2. Often managers, and especially entrepreneurs, believe they have the answers, a formula for | |
|disaster. |critical thinking |
|3. An effective leader listens to others and is willing to accept constructive criticism and act on |exercise 7-1 |
|it. |Traits of Leaders |
|a. The text uses the example of Christine White, owner of Boudoir Baskets. |What traits are common to great |
|b. A sales rep brought up a complaint about a new product, but White ignored it. |leaders? (See complete exercise on |
|c. Soon other complaints came in, and White had to pull the product. |page 7.42 of this manual.) |
|4. Leaders must recognize, accept, admit, and act upon mistakes. | |
|5. Effective leaders are also great communicators, articulating the vision in a simple, yet inspiring| |
|way. | |
|6. A 2007 BusinessWeek article lists the most desirable traits that top organizations look for in new| |
|hires: | |
|a. college degrees; | |
|b. leadership skills; | |
|c. communication skills. | |
|E. Openness to Change | |
|1. Many managers do not like change. | |
|2. However, leaders must be willing to stay open to change. | |
|a. Great leaders figure out a way to change, innovate, and adapt. | |
|b. Instead of making drastic changes, leaders can make continuous, small, incremental changes. | |
|3. The text uses the example of Julie Rodriguez, owner of Epic Divers & Marines, who faced massive | |
|changes after Hurricane Katrina. |TEXT REFERENCE |
|a. Her business suffered severe damage due to the storm. |Career Development: Communication and |
|b. She kept her employees on the payroll and dealt with the changes. |Leadership |
|c. Rodriquez found that a participative management worked best. |(Box in text on page 215) |
|4. However, change also brings tremendous challenges. |The most important leadership skill is|
|5. Embracing change and working through it brings out the best in a company’s leader and employees. |good communication. What are some of |
|F. Being Decisive and Committed |the things that can cause poor |
|1. Decision making is choosing among two or more alternatives. |communication? An additional exercise |
|2. Great leaders seek opinions and feedback from others but, in the end, make the decision and are |and discussion is available on page |
|committed to it. |7.25 of this manual. |
|3. Many managers fail to make decisions or procrastinate. | |
|4. Amy Rees Lewis, CEO of MediConnect Global, is an example of a decisive leader who is committed to | |
|the success of her company. | |
|G. Positive Attitude and Enthusiasm | |
|1. Attitude is contagious. | |
|2. Effective leaders exude positive attitude and enthusiasm. | |
|H. Take Care of People and Inspire Them | |
|1. Effective leaders find ways to take care of their employees and inspire them to achieve uncommon | |
|goals. | |
|2. Example: Google, named Fortune’s 2007 “Best Company to Work For” | |
|3. The text also uses the example of Graham Weston, co-founder of Rackspace, who uses creativity to | |
|inspire employees to perform better on the job. | |
|I. Great leaders make great things happen through: | |
|1. communicating their vision; | |
|2. possessing a willingness to listen and change; | |
|3. exuding ethical actions, a positive attitude, and enthusiasm; | |
|4. committing to always take care of their people. | |
|SELF Check Questions (Text page 218) | |
|What are the different characteristics between managers and leaders? | |
|What are seven qualities of a good leader? Which do you have and which do you plan to work on? | |
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| |TEXT FIGURE 7.3 |
| |Undesirable Leader Qualities (Box in |
| |text on page 218) |
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| |lecture link 7-2 |
| |Three Types of Great Leaders |
| |According to one business writer, |
| |there are three basic types of |
| |brilliant bosses. (See complete |
| |lecture link on page 7.34 of this |
| |manual.) |
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| |critical thinking |
| |exercise 7-2 |
| |Crisis Management |
| |This exercise explores management |
| |reaction to rapid, unexpected change. |
| |(See complete exercise on page 7.43 of|
| |this manual.) |
| | |
| | |
| | |
| |bonus internet |
| |exercise 7-2 |
| |The Most Powerful Women in Business |
| |Each year Fortune magazine lists the |
| |most powerful women in business. This |
| |exercise directs the students to |
| |research the listing for the current |
| |year. (See complete exercise on page |
| |7.40 of this manual.) |
| | |
| | |
| |Bonus Case 7-1 |
| |When Failure Is the Norm |
| |How do you motivate employees when 96%|
| |of their projects fail? (See complete |
| |case, discussion questions, and |
| |suggested answers on page 7.50 of this|
| |manual.) |
| | |
| | |
| | |
| |bonus internet |
| |exercise 7-3 |
| |Which Are the Best Companies to Work |
| |For? |
| |This exercise asks students to use the|
| |Internet to research which companies |
| |are rated best places to work. (See |
| |complete exercise on page 7.41 of this|
| |manual.) |
| | |
| | |
| |lecture link 7-3 |
| |Smucker’s: Jams and Thank Yous |
| |A key motivation philosophy at J. M. |
| |Smucker is to say “thank you” for a |
| |job well done. (See complete lecture |
| |link on page 7.35 of this manual.) |
| | |
| | |
| |critical thinking |
| |exercise 7-3 |
| |Managing a Family |
| |Business |
| |Management and motivation can be |
| |difficult in family firms. This |
| |exercise presents such a situation. |
| |(See complete exercise on page 7.44 of|
| |this manual.) |
| IV. Leadership Styles |PowerPoint 7-5 |
|A. Formal and Informal Leadership |Leadership Styles |
|1. In formal leadership, someone has been given authority to make decisions or lead a group. |(Refers to text pages 218-221) |
|2. In informal leadership someone does not have “official” authority, but is recognized as a leader | |
|by the group. | |
|3. Informal leadership often occurs in a team or group without a designated leader. |TEXT REFERENCE |
|4. According to Shannon Kalvar, two main types of leaders exist in groups: |Study Skills: Being a Leader Now |
|a. A task leader is a leader who plans activities and helps keep the group on task. |(Box in text on page 219) |
|b. A social leader is a leader who ensures everyone in the group is getting along and agrees with the|Here are some ways students can |
|direction the group is going. |practice leadership skills while still|
|c. The same person may play both roles, or there may be two leaders. |in school. An additional exercise and |
|5. Task and social leaders in a group do not need to have specific titles. |discussion is available on page 7.33 |
|B. Transformational Leadership |of this chapter. |
|1. A transformational leader is a leader who can transform the ideas of employees through | |
|inspiration, charisma, and a shared vision. | |
|2. He or she has lots of energy and charisma and is able to inspire employees to achieve the | |
|organizational vision. | |
|3. Steps in developing a vision: |TEXT REFERENCE |
|a. The vision comes either from the leader or from other employees or managers. |Thinking Critically: |
|b. The leader articulates the vision and gets collective buy-in. |Leadership Self-Test |
|c. The transformational leader works with employees to develop strategies to make the vision a |(Box in text on page 220) |
|reality. | |
|d. The leader “leads the charge” in executing strategies. | |
|4. Yvon Chouinard of Patagonia is an example of a transformational leader. |lecture link 7-4 |
|C. Transactional Leadership |McClelland’s Acquired Needs Theory |
|1. A transactional leader is a leader who gets people to do things by providing structure and |Psychologist David McClelland proposed|
|guidelines based on the exchange process. |that humans acquire different needs |
|2. This leadership style is based on the exchange process. |over time because of life experiences.|
|3. Most managers tend to follow the transactional leadership style. |He classified these needs into three |
|SELF Check Questions (Text page 222) |categories. (See complete lecture link|
|What are the differences between formal and informal leaders? |on page 7.36 of this manual.) |
|What are the main differences between transformational and transactional leaders? Which aspects of | |
|these leadership characteristics do you plan to work on? Explain. | |
| |TEXT FIGURE 7.4 |
| |Transactional Versus Transformational |
| |Leaders (Box in text on page 221) |
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| |lecture link 7-5 |
| |The L Factor |
| |According to one author, likeability, |
| |not intimidation, is the real key to |
| |conquering the workplace. (See |
| |complete lecture link on page 7.37 of |
| |this manual.) |
| | |
| | |
| V. Importance of Motivation | |
|Learning objective 3 | |
|UNDERSTAND THE IMPORTANCE OF MOTIVATION. (TEXT PAGES 222-229) | |
|A. Motivation is the drive to satisfy a need. | |
|1. People gain motivation in many ways. | |
|2. An INTRINSIC REWARD is the personal satisfaction you feel when you perform well and complete |PowerPoint 7-6 |
|goals. |Importance of Motivation |
|3. An EXTRINSIC REWARD is a reward given to an employee, such as a promotion or pay raise. |(Refers to text pages 222-224) |
|4. Although motivation, the drive to satisfy a need, ultimately comes from within an individual, | |
|there are ways to stimulate people to do a good job. | |
|B. Taylor’s Scientific Management | |
|1. Very little attention was paid to motivation until Fredrick Taylor’s work the early 20th century. | |
|a. His book The Principles of Scientific Management was published in 1911. | |
|b. Taylor used TIME and MOTION STUDIES, studies of the tasks performed to complete the job and the |TEXT FIGURE 7.5 |
|time needed to do each task. |Extrinsic vs. Intrinsic Rewards (Box |
|2. As researchers determined the most efficient way of doing tasks, efficiency became the standard |in text on page 222) |
|for setting goals. | |
|3. SCIENTIFIC MANAGEMENT is studying the most efficient ways of doing things and then teaching people| |
|those techniques. | |
|4. Taylor’s philosophy has shortcomings. | |
|a. Scientific management viewed people as machines that needed to be properly programmed. | |
|b. There was little concern for the psychological or human aspects of work. | |
|5. Some of Taylor’s ideas are still being used. | |
|a. Many hospitals and restaurants use scientific management principles to increase efficiency. | |
|b. UPS uses scientific management to increase efficiency and productivity. | |
|6. Frank and Lillian Gilbreth used Frederick Taylor’s ideas in a study of brick laying. | |
|a. The PRINCIPLE OF MOTION ECONOMY theory, developed by Frank and Lillian Gilbreth, states that every| |
|job can be broken down into a series of elementary motions. | |
|b. They analyzed every motion (“therblig”) to make it more efficient. | |
|C. Mayo’s Hawthorne Studies | |
|1. The Hawthorne Studies were conducted by Elton Mayo at the Western Electric Company’s Hawthorne |TEXT FIGURE 7.6 |
|plant in Cicero, Illinois. |Taylor’s Scientific Management |
|a. Begun in 1927, the studies ended six years later. |Principles (Box in text on page 223) |
|b. The purpose of the studies was to determine the effect of environmental variables, such as | |
|lighting. | |
|c. The productivity of the experimental group increased compared to the control group—whether the | |
|lighting was bright or dim. | |
|2. Productivity increased during each of the 13 experimental periods. | |
|3. When conditions were returned to their original status (before the studies were started), | |
|productivity continued to go up. Why? | |
|a. The workers in the test room thought of themselves as a social group—they felt special and worked | |
|hard to stay in the group. | |
|b. The workers were involved in the planning of the experiments—they felt that their ideas were |TEXT REFERENCE |
|respected. |Career Development: |
|c. The workers enjoyed the special atmosphere and additional pay for the increased productivity. |Understanding That Results Matter |
|4. The term HAWTHORNE EFFECT refers to the tendency of people to behave differently when they know |(Box in text on page 225) |
|they are being studied. |An additional exercise and discussion |
|a. The results of this study encouraged researchers to study human motivation and the managerial |is available on page 7.25 of this |
|styles that lead to more productivity. |manual. |
|b. Mayo’s findings led to new assumptions about employees. | |
|c. Money was found to be a relatively ineffective motivator. | |
|D. Maslow’s Hierarchy of Needs | |
|1. Psychologist Abraham Maslow believed that motivation arises from need. | |
|a. One is motivated to satisfy unmet needs. | |
|b. Satisfied needs no longer motivate. | |
|c. Maslow placed needs on a hierarchy of importance. | |
|2. Maslow’s hierarchy of needs is a theory of motivation based on unmet needs, from basic | |
|physiological needs to safety, social, esteem, and self-actualization needs. | |
|a. Physiological needs: basic survival needs including the need for food, water, and shelter | |
|b. Safety needs: the need to feel secure at work and at home | |
|c. Social needs: the need to feel loved, accepted, and part of the group | |
|d. Esteem needs: the need for recognition and acknowledgment from others, as well as self-respect and| |
|a sense of status or importance | |
|e. Self-actualization needs: the need to develop to one’s fullest potential | |
|3. When one need is satisfied, the person is motivated to do something to satisfy a higher-level | |
|need. | |
|a. A satisfied need is no longer a motivator. | |
|b. If lower-level needs are not met, they may reemerge and take attention away from higher-level | |
|needs. | |
|c. Lower level needs are met and higher level needs dominate in developed countries. | |
|E. Herzberg’s Two-Factor Theory | |
|1. Frederick Herzberg tried to identify the factors that are most effective in generating | |
|enthusiastic work effort. | |
|2. Herzberg surveyed workers to find out how they rank job-related factors. The motivating factors | |
|were: | |
|a. sense of achievement; | |
|b. earned recognition; | |
|c. interest in the work itself; | |
|d. opportunity for growth; | |
|e. opportunity for advancement; | |
|f. importance of responsibility; | |
|g. peer and group relationships; | |
|h. pay; | |
|i. supervisor’s fairness; | |
|j. company policies and rules; | |
|k. status; | |
|l. job security; | |
|m. supervisor’s friendliness; | |
|n. working conditions. | |
|3. Herzberg noted that the highest ranking factors dealt with job content. | |
|4. The other factors had to do with job environment and were not considered to be motivating. | |
|5. Herzberg’s conclusions | |
|a. In Herzberg’s theory of motivating factors, MOTIVATORS are job factors that cause employees to be | |
|productive and that give them satisfaction. | |
|b. HYGIENE FACTORS are job factors that can cause dissatisfaction if missing but that do not | |
|necessarily motivate employees if increased. |PowerPoint 7-7 |
|c. The best way to motivate employees is to: |Importance of Motivation |
|i. make the job interesting; |(Refers to text pages 224-225) |
|ii. help them achieve their objectives; | |
|iii. recognize their achievement through advancement and added responsibility. | |
|6. Managers can use these findings in several ways | |
|a. Managers can ensure employees have a path for promotion and are challenged by their jobs. | |
|b. JOB ROTATION, is a motivation technique that involves moving employees from one job to another. | |
|c. JOB ENLARGEMENT is a motivation technique that involves combining a series of tasks into one | |
|challenging and interesting assignment. | |
|d. JOB ENRICHMENT is a motivational strategy that involves making the job more interesting in order | |
|to motivate employees. | |
|7. The five characteristics of work that affect motivation and performance are: | |
|a. Skill variety, the extent to which a job demands different skills of the person; | |
|b. Task identity, the degree to which the job requires doing a task with a visible outcome from | |
|beginning to end; | |
|c. Task significance, the degree to which the job has a substantial impact on the lives of others in | |
|the company; | |
|d. Autonomy, the degree of freedom, independence, and discretion in scheduling work and determining | |
|procedures; | |
|e. Feedback, the amount of direct, clear information received about job performance. | |
|8. Job enrichment is what makes work fun. | |
|a. The text uses the example of Google, ranked as one of the best places to work. | |
|b. Employees enjoy their jobs and are fully engaged in working toward organizational goals. | |
|SELF Check Questions (Text page 229) | |
|Define intrinsic and extrinsic rewards. Provide examples of each. | |
|How did scientific management set the stage for further research on employee motivation? | |
|Describe how Maslow’s hierarchy of needs theory can be used by managers in the workplace. | |
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| |Importance of Motivation |
| |(Refers to text pages 225-226) |
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| |TEXT FIGURE 7.7 |
| |Maslow’s Hierarchy of Needs (Box in |
| |text on page 226) |
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| |critical thinking |
| |exercise 7-4 |
| |Testing Maslow’s Hierarchy of Needs |
| |This exercise asks each student to |
| |evaluate his or her needs based on |
| |Maslow’s hierarchy of needs. (See |
| |complete exercise on page 7.45 of this|
| |manual.) |
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| |lecture link 7-6 |
| |Recognition: Making |
| |Heroes |
| |Companies often make the mistake of |
| |equating pay with rewards. The reward |
| |for outstanding performance should be |
| |a special gain for special |
| |achievement. (See complete lecture |
| |link on page 7.37 of this manual.) |
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| |TEXT FIGURE 7.8 |
| |Herzberg’s Motivators and Hygiene |
| |Factors (Box in text on page 228) |
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| |PowerPoint 7-9 |
| |Herzberg’s Two-Factor Theory (Refers |
| |to text pages 227-229) |
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| |Bonus Case 7-2 |
| |Hot Topic: Motivation is a Hot Topic |
| |(Video Case) |
| |This bonus case ties in with the video|
| |available for use with this chapter. |
| |Hot Topic stores sell clothing and |
| |accessories that appeal to an |
| |alternative culture. This case |
| |highlights the company’s emphasis on |
| |employee empowerment. (See complete |
| |case, discussion questions, and |
| |suggested answers on page 7.52 of this|
| |manual.) |
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| |Bonus Case 7-3 |
| |Managing Volunteers |
| |How does motivating volunteers differ |
| |from managing employees? (See complete|
| |case, discussion questions, and |
| |suggested answers on page 7.54 of this|
| |manual.) |
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| |critical thinking |
| |exercise 7-5 |
| |Motivation Survey |
| |This exercise gives the result of a |
| |motivation survey for two supervisors |
| |and asks students to interpret the |
| |results. (See complete exercise on |
| |page 7.47 of this manual.) |
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| |Bonus Case 7-4 |
| |Using Compensation to Motivate |
| |This case presents one manager’s |
| |motivation incentive: a quarterly |
| |bonus for employees if labor costs are|
| |kept below 11% of company sales. (See |
| |complete case, discussion questions, |
| |and suggested answers on page 7.56 of |
| |this manual.) |
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| VI. Employee Improvement Theories | |
|Learning objective 4 | |
|DESCRIBE THE KEY PRINCIPLES OF EMPLOYEE IMPROVEMENT THEORIES. (TEXT PAGES 230-232) | |
|A. MBO and Goal Setting Theory | |
|1. GOAL-SETTING THEORY is the idea that setting ambitious but attainable goals can motivate workers | |
|and improve performance. | |
|a. In effective goal-setting the goals must be: |PowerPoint 7-10 |
|i. realistic; |Employee Improvement Theories (Refers |
|ii. accepted; |to text pages 230-232) |
|iii. accompanied by feedback; | |
|iv. facilitated by organizational conditions. | |
|b. All organization members should have basic agreement about the organization’s goals and the | |
|specific objectives of each unit. | |
|c. Peter Drucker developed one system in the 1960s called management by objectives (MBO.) | |
|2. MANAGEMENT BY OBJECTIVES (MBO) is a system of goal setting and implementation that involves a | |
|cycle of discussion, review, and evaluation of objectives among top and middle-level managers, | |
|supervisors, and employees. | |
|3. Steps in the MBO process: | |
|a. Managers and employees establish mutually agreed upon goals. | |
|b. Criteria for assessing work performance are determined. | |
|c. Employees develop action plans to achieve their goals. | |
|d. Managers provide intermittent feedback. | |
|e. At the end of the period, employee performance is measured and compared to established goals. | |
|f. Appropriate rewards are tied to goal accomplishment. | |
|B. Reinforcement and Equity Theory | |
|1. REINFORCEMENT THEORY is the idea that positive and negative reinforcement motivate a person to | |
|behave in certain ways. | |
|a. Individuals act to receive rewards and avoid punishment. | |
|b. Positive reinforcements are rewards such as praise, recognition, or a pay raise. | |
|c. Negative reinforcement includes reprimands, reduced pay, and layoff or firing. | |
|d. Extinction is trying to stop undesirable behavior by not responding to it. | |
|2. EQUITY THEORY is the idea that employees try to maintain equity between inputs and outputs | |
|compared to people in similar positions. | |
|a. When workers do perceive inequity, they will try to reestablish equitable exchanges. | |
|b. Equity judgments are based on perceptions, and are therefore subject to errors in perception. | |
|SELF Check Questions (Text page 232) | |
|Define goal setting theory as it relates to employee performance. | |
|Explain the steps in the cycle of management by objectives. | |
|Compare and contrast reinforcement and equity theory. | |
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| |TEXT FIGURE 7.9 |
| |The Cycle of Management by Objectives |
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| |TEXT FIGURE 7.10 |
| |Reinforcement Theory (Box in text on |
| |page 231) |
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| |critical thinking |
| |exercise 7-6 |
| |Does Money Motivate? |
| |This exercise involves a debate among |
| |small groups as to whether or not |
| |money is a motivator. (See complete |
| |exercise on page 7.49 of this manual.)|
| | |
| VII. Employee Empowerment |Bonus Case 7-5 |
|Learning objective 5 |Turning Tyco Around |
|EXPLAIN HOW EMPLOYEES CAN BE EMPOWERED IN ORGANIZATIONS. (TEXT PAGES 232) |After Tyco’s former CEO Dennis |
|A. Empowerment is allowing employees the ability and trust to make decisions. |Kozlowski’s conviction for looting |
|1. If an employee makes a mistake, it should be accepted and corrected, but not punished. |$600 million from the company, Ed |
|2. Empowerment makes employees feel a sense of ownership within the company. |Breen was brought in to rescue the |
|B. Motivation begins with acknowledging a job well done. |troubled company. (See complete case, |
|SELF Check Questions (Text page 233) |discussion questions, and suggested |
|Define empowerment. Discuss a job you had in which you were not empowered, and a job you had in which|answers on page 7.58 of this manual.) |
|you were empowered. Was your motivation level different at the two jobs? | |
| |PowerPoint 7-11 |
|VIII. SUMMARY |Employee Empowerment |
| |(Refers to text page 232) |
| | |
| |TEXT REFERENCE |
| |Career Spotlight: So, You Want to Be …|
| |a Leader? |
| |(Box in text on page 233) |
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| |TEXT REFERENCE |
| |Real World Business Apps |
| |(Box in text on page 234) Steve |
| |Anderson, the small business owner, |
| |now recognizes that he needs to work |
| |on his leadership style. He has |
| |decided to involve employees in goal |
| |setting and employ participative |
| |management. He is also using Maslow’s |
| |hierarchy of needs in employee |
| |motivation plans. |
career and study skills notes
Career Development Box:
UNDERSTANDING THAT RESULTS MATTER (TEXT PAGE 225)
Instructor’s Notes on Text Box Seven:(Objectives to consider and implement to increase students’ knowledge, usage, and understanding of the concepts).
Getting good grades, having a successful job and healthy relationships are the results of good habits and doing things the right way. Through good habits, positive results usually follow. In this following PLEO, you will have an opportunity to look at your current lifestyle and incorporate new and better habits that can help you achieve better results.
Student Exercise:
COMPLETE THE FOLLOWING TEN EXERCISES REGARDING JOB SKILLS ATTAINMENT AND HOW YOU CAN IMPROVE THE STEPS TO JOB/CAREER POSITIONING NECESSARY TO MEET YOUR JOB/CAREER GOALS.
Job Application
Job applications come in all shapes and sizes. Your information is essential to making the outcome a successful one.
Step One:
If you have ever filled out a job application, there are basic questions that will be asked each time you fill a new one out. Make sure you are prepared for these types of questions.
Step Two:
Get a sample job application and look it over. What are the basic questions that you should be able to answer? Highlight them in a yellow highlighter.
Step Three:
With the same job application, what are questions that might be a bit more difficult to answer? Highlight them with an orange highlighter.
Step Four:
With the same job application, what are questions that might need additional information that you should bring along to better answer and complete the application (questions like job/career goals, your personal strengths/weaknesses, pay level history, a copy of your resume, etc.)? Identify these questions and highlight them with a blue highlighter.
Step Five:
Now look at the job application. Glance at the highlighted colors on the application. Notice the flow of the application in terms of questions that you should be prepared to answer. Make sure you do so neatly and accurately. Finally, go out a get a few more job applications and continue the same process. Becoming familiar with this process will impress the potential hiring company and show that you are interested in working there. At the same time, this also conveys to them that you are experienced and serious about the job application process.
Proper Dress
You can always make an assumption about a person’s outward appearance. How we present ourselves is important as it relates to our company dress policies, our overall look to our customers, suppliers, and the general public. Often, the way we dress makes a connection to our company with the public, vendors, and customers.
Step One:
Find out the dress requirements that may or may not apply to your job. Some job duties require a company uniform (maintenance, fast food employees, etc.). Discuss any questions that you might have with your immediate supervisor regarding the dress policy.
Step Two:
If you have some latitude regarding how you can dress for your position, a good rule of thumb is to look at other individuals that do similar work to determine the unofficial level of dress for the corresponding job classification. If you are in a sales position, an outward appearance of professional dress will be important. Likewise, working in an office might require more dress clothes that working outside, in a warehouse, etc.
Step Three:
After assessing the dress situation, what might be the dress code for your job duties/title? Can you dress accordingly or will you need to make changes?
Step Four:
If dress changes are necessary, make them. Your dress on the job is in most cases important and can be discussed at a time of job review, etc. Dressing to suit your job is an important matter whether you are just starting your career or progressing through the ranks in your organization.
Step Five:
Remember, job dress is an outward message about your overall job classification. Professionalism, personal grooming habits, and the way you act are a reflection to everyone about how you view your job and its importance. Make sure you make the correct statement. It could matter when being considered for a raise or promotion and move you past others in the process. What personal grooming habits could you improve? Look at your dress, grooming habits and how you conduct yourself in the workplace.
Follow-Up
Job duties/assignments have a lot of completion points and when this occurs, most often, some degree of follow-up is necessary.
Step One:
Define what follow-up means to your job. What are the typical assignments and what are the defined levels of success for them?
Step Two:
Write a list of jobs/assignments in which you have been involved during the past month and the outcome of each. Now make notes as to the amount or level of follow-up that was done in each case.
Step Three:
Is there a pattern in the outcomes and the level of follow-up? Are there reports missing or people who have not been contacted? Are the missing reports and lack of contact hurting the expected outcome of the jobs? Try to look at the follow-up procedures and 1) note the level of work you have invested in the assignment, 2) write the outcome you expected at the time of completion. Make sure you notes are kept accurate and timely.
Step Four:
In cases of less-than-expected outcomes, note the person or department that the work or project was intended for. Keep notes as to how the project was not completed as anticipated or expected and what might be the cause or causes for the breakdowns, if breakdowns occurred.
Step Five:
Begin a follow-up log that can be used in your current job and can also be adapted to a new job or new position with a new company. Use the same criteria and format and allow for good note taking and a personal evaluation of the expected outcome of each assignment/project.
Networking
In the business world, a system of networking can take place that facilitates many things: job contacts, business opportunities, etc. A good networking process often leads to good outcomes.
Step One:
Record keeping is essential to networking. In business, many contacts are made. In most cases, it is worth keeping a business card or other means of contact as situations allow.
Step Two:
Develop a system that you can use to input names, business cards, phone numbers, etc. as a reference place for your developed contacts. Keep the system in place and up-to-date to be most effective.
Step Three:
Monitor your system for old and outdated information. If you have moved, chances are certain names and associations are not of much value. Likewise, if you have been active in certain charities and you relocate, you can pick up new associations by joining a new chapter of the same organization.
Step Four:
Look for ways to enhance your networking system. Have you been active in the local community? Have you been involved in local political situations where you can find new contacts or friendships?
Step Five:
Write down five new ways of finding new contacts over the next twelve months. Keep a list of what you intend to do and the results. If you fall short of the goal, reset you goals again after the twelve month period. Setting networking goals has many benefits, especially as you continue along your career. Who you know can be an asset, especially when you look at ways to advance your own career as well as being an asset to others doing the same. A system of helping others and being helped can take you a long way in your career.
Personal Qualities
What you bring to a job is a direct reflection of your own personal qualities. Your individuality has some value in the eyes of the company that hired you.
Step One:
By now, you should have a pattern of how you view things and how you work toward getting assignments accomplished within the general guidelines of your employer. List the general qualities that define you as an adult person.
Step Two:
Once you have formed this list, what are your real strengths? Likewise, what are your weaknesses? What does the overall picture look like?
Step Three:
Begin now to accentuate your strengths. Are you good at leading others but not utilizing this skill? Are you good at details? Could you be an asset to your job/department by helping with organization because of your keen eye for details? Are you good at communication skills and could you become more vocal or a spokesperson because of the skills that you have?
Step Four:
From your list, what are the main areas or weaknesses that you have identified? What can be done to reduce the weak areas of your personality/performance to make you a better performer and overall asset to your company?
Step Five:
Putting it all together has tremendous value for your personal job and responsibilities and for the overall benefit to the company. Having identified your strengths and weaknesses can help your career tremendously in that you now have a sense of what you do well and what you can improve upon to make yourself a better employee. Having identified these areas is a big step. Doing something to use this information and put it in practice is even a bigger step. A wise man knows his strengths and limitations and can look wiser when he handles himself accordingly.
Attitude
Your willingness to do what is asked and ability to get along with co-workers is an asset worth developing. Your attitude is your overall ability to see the benefit of being a good employee and the potential it can lead to over the length of your career.
Step One:
By definition, attitude is how you view things that happen to you, both good and bad. How you respond to a bad situation in your department for example will ultimately define you as a person within the organization. Do you use excuses and blame others, or do you take a share in the outcome and work toward the necessary changes needed to improve the overall situation? As well, when your department performs well, do you look for all the credit and overlook the entire team effort that it took for a successful outcome?
Step Two:
Given two possible outcomes, how are you likely to respond in each situation? How have you handled these types of situations in the past? What have you learned from them?
Step Three:
Write down specific actions you have taken regarding less favorable and successful outcomes of your job/department over your working career. Is there a consistent pattern? If so, what is this pattern like? Where are you in how your attitude might be and where you would like it to be?
Step Four:
Next, how did you feel in each situation you have described? What emotions might you use to define your overall feelings? Based on these emotions, how well did you handle each situation? Explain what was handled well and what could have been handled better.
Step Five:
Finally, how did you react or respond to the mentioned situations you have experienced in the past? Going forward, use this same format to keep track of your own attitude regarding the outcomes of your own job and the department you might be associated with. Keeping in touch with how you deal with success and failure has great value. Knowing this can only be a tremendous asset to your own career. If you have a handle on how you might react, you can move forward given the possible outcomes you know in advance might take place.
Skill Development & Usage
Your skills are always in use. Sometime they are up to speed and sometimes they are not. Furthermore, your skills can be a true asset if used.
Step One:
If you were to think about yourself as a one-person contractor, what types of jobs/duties could you perform without much guidance or supervision? In effect, what are you really good at? What are things that come easy to you that might be difficult for others? Are you technically inclined or are you good at verbal and written communications? Are you detail-oriented or look at things in a much more general way?
Step Two:
Identify the traits that would fit you currently. Make a list and look for a real definition of your skills as they have accumulated to date.
Step Three:
What might be the best way to define what you are really good at? Are you currently doing work that fits your skills and personality?
Step Four:
Given the assessment you have made, what can you do to further enhance your skills? Do you need more training or more time on the job/assignments to further advance your identified skill set?
Step Five:
Is your current job utilizing your skill set to its best advantage? What could you be doing that would be a better use of your talents and skills? What new job or assignment might be a better fit for you based on this skills analysis? What can you do to move closer to your ideal job based on your best skills?
Job Dedication & Completion
How well you perform on your job has many variables. Ultimately, you are better served to be dedicated to your job/craft.
Step One:
How do you personally define dedication? Are you always looking for ways to improve your job performance or department to make it more productive and better positioned within the company?
Step Two:
What do you do to make sure you have completed your job and duties? Do you stay over your normal work time and make sure your work is done? Are you willing to pitch in and help a co-worker when he is struggling or falling behind in his job duties?
Step Three:
Make a list of what you do and how you are dedicated to your job. What does this list look like? How do you feel about this list?
Step Four:
What are the strengths of the job dedication profile you have created? What are areas that you could improve upon? Are you a dedicated worker overall? If not, can you work at becoming one?
Step Five:
Keep notes as to how you have been able to work harder at your job and how it has affected the outcome. Also, make notes as to how your job or department might need to be changed, better staffed, duties added or eliminated, tools or equipment needed to make the job/department better, etc. In practice, you are not only working at your job to make the outcome successful but you are becoming a better agent for the company in terms of how the entire process could be changed and/or improved for the benefit of your area and the entire company in the process. Remember, before you make suggestions and identify problem areas, consider your attitude as was identified in this chapter. How do these same rules apply to your assessment and recommendations for improvement the overall process?
Life Planning & Balance
Life planning is your own ability to balance your career, family, and personal goals.
Step One:
By now, you should have been able to identify what you consider your own career, family and personal goals. Each are individually important. However, all three areas affect your entire life; sometimes one at a time, and sometimes simultaneously.
Step Two:
In a brief listing, what are your current career goals? What are your current family goals? What are your current personal goals?
Step Three:
How can you achieve your career goals based on your current situation? What must you consider to effectively achieve your career goals? Likewise, to reach your family goals and your own personal goals?
Step Four:
Have you written your family positioning statement? If so, what is it? If not, revisit page in Chapter Two and learn more about writing your family positioning statement.
Step Five:
How has this process helped you in being more realistic about your job and how well you now adjust and fit your family and personal goals into the equation? Likewise, how well does your family life operate as you consider its importance in relation to your job and personal goals? Finally, how have you adjusted your personal goals in this entire process? Do you see the balance that you should have in your life? Does this level of understanding help you become less frustrated and more realistic in each area of your life? Has the process helped to improve your outlook and allow you the ability to make changes and adjustments that you might find necessary along the way?
Education & Additional Training
A career that gives you the most success will not be had without a solid base of training and education. Education is training that fits your career plans.
Step One:
What is your current level of education? Which parts are formal (having attended a college or technical school) and which parts are informal (self-taught skills such as computer technician, mechanic, etc.)?
Step Two:
What can you do to improve your current performance and job status with regard to formal training? Informal training?
Step Three:
How will you go about getting more formal and/or informal training? Will your company pay for all or part of the additional training that your think would help your career? If not all, how much? What obligation will you need to make to repay the company (years of service or repayment plan)?
Step Four:
Identify local and national schools that could be attractive to you for formal training. List ways that could be used to help you improve your skills regarding informal training? What does this list look like?
Step Five:
Based on your list above, map out timelines to improve both your formal and informal training. Who needs to be involved in the approval process? Where are the policies regarding continuing training in your organization (in almost all cases, they can be found in the human resource department)? Finally, what can more training and learning do for your career? What short-term and long-term goals do you have that involve more training for you to achieve these goals?
Study Skills Box:
Can You Read This? (Text page 213)
Instructor’s Notes on Text Box Seven:(Objectives to consider and implement to increase students’ knowledge, usage, and understanding of the concepts).
The most time spent in the learning process is reading; from text books, to in class notes, to additional research where evaluating large amounts of information occurs on a regular basis. College success largely hinges on the student’s ability to cover a variety of materials at various levels of difficulty, all with the objective of the student being able to interpret the information and use it accurately on tests, quizzes, and written papers that determines the student’s grades. The other variable is the instructor’s knowledge and views of the subject that come to the student in the form of class notes. Ultimately the student’s ability to read and interpret subject matter comes from reading skills. Poor reading skills might make getting passing grades difficult over the course of a semester. Average reading will also have limitations in consistently achieving high grades. However, superior reading skills will in most cases help a student become more efficient in learning the subject matter. In most cases, superior reading skills are the bridge to converting attained knowledge into a successful level of applied knowledge that usually equates to excellent grades during a student’s academic career.
What are your reading skills and what can be done to improve them? It might be worth the student’s time to evaluate reading skills, considering the potential payoff for this important function. The time is now to investigate how to improve your reading skills; the risk for this evaluation is low and the payoff in doing an honest self evaluation is enormous.
Student Exercise:
WHAT MIGHT BE THE STUDENT’S MOST DIFFICULTY REGARDING READING? IS IT WORD IDENTIFICATION, COMPREHENSION OF THE CONTENT, LACK OF INTEREST? IS IT LACK OF TRAINING OR A TREMENDOUSLY POOR UNDERSTANDING OF THE SUBJECT MATTER? HAVE AN IN-CLASS DISCUSSION REGARDING WHAT TROUBLES STUDENTS ABOUT READING, AND LET OTHER STUDENTS HELP MAKE SUGGESTIONS AS TO HOW TO MAKE THE READING EXPERIENCE BETTER. SUGGEST THAT STUDENTS DO ADDITIONAL OUTSIDE READING TO IMPROVE READING KNOWLEDGE AND COMPREHENSION.
lecture links
lecture link 7-1
BEST BUSINESS LEADERS OF THE 20TH CENTURY
Fast Company magazine recently published a listing of the greatest business leaders of the 20th century, based on a survey of 7,000 executives by Harvard Business School. Classic entrepreneurs who built companies from scratch dominate the list of the best. Only one woman—Estee Lauder—made the top 25.[i]
1. Samuel M. Walton (Wal-Mart)
2. Walter E. Disney (Walt Disney)
3. William H. Gates III (Microsoft)
4. Henry Ford (Ford Motor)
5. John P. Morgan (J. P. Morgan Chase)
6. Alfred P. Sloan Jr. (General Motors)
7. John F. Welch Jr. (General Electric)
8. Raymond A. Kroc (McDonald’s)
9. William R. Hewlett (Hewlett-Packard)
10. David Packard (Hewlett-Packard)
11. Andrew S. Grove (Intel)
12. Milton S. Hershey (The Hershey Co.)
13. John D. Rockefeller Sr. (Standard Oil)
14. Thomas J. Watson Jr. (IBM)
15. Henry R. Luce (Time-Life Publications)
16. Will K. Kellogg (Kellogg)
17. Warren E. Buffett (Berkshire Hathaway)
18. Harland Sanders (Kentucky Fried Chicken)
19. William C. Procter (Procter & Gamble)
20. Thomas J. Watson Sr. (IBM)
21. Asa G. Candler (Coca-Cola)
22. Estee Lauder (Estee Lauder)
23. Henry J. Heinz (H. J. Heinz)
24. Daniel F. Gerber Jr. (Gerber Products)
25. James L. Kraft (Kraft Foods)
lecture link 7-2
THREE TYPES OF GREAT LEADERS
Harvard Business School professors Anthony J. Mayo and Nitin Nohria set out to identify history’s greatest business leaders. In their book In Their Time: The Greatest Business Leaders of the 20th Century, they identified 1,000 great chief executives and company founders of the 20th century. They then asked business leaders to evaluate and rank their candidates. Finally, they produced a ranking of the top 100 business leaders of the 20th century. (See Lecture Link 7-1 “Best Business Leaders of the 20th Century” above.)
Nohria and Mayo also identified three leadership types—the entrepreneurial leader, the leader as manager, and the charismatic leader. They found that all three types exhibited what they called “contextual intelligence,” the acute sensitivity to the social, political, technological, and demographic contexts that defined their eras.
The entrepreneurial leader’s genius lies in bringing things together in a combination that no one has ever seen before. As an example of the entrepreneurial leader, they selected C. W. Post, who created Post Cereals. Post began as an itinerant salesman until he developed a caffeine-free health drink, Postum. Post differentiated his product by offering free samples to customers in general stores. He then developed a breakfast cereal and pioneered one of the first major cereal companies. But Post’s real genius lay in his ability to sense that a new, national consumer was emerging in America. He saw that in the developing industrialized economy, time itself was becoming increasingly valuable. People were willing to pay for convenience. He was also one of the first leaders to recognize the power of a national brand.
Whereas entrepreneurs were company creators and agents of change, managerial leaders are value-maximizers. They make the most out of something that already exists. Nohria and Mayo use Louis B. Neumiller as an example. Neumiller rose through the ranks of Caterpillar and became its chief executive in 1941, two months before Japan attacked Pearl Harbor. He seized on the massive global event that was World War II to build Caterpillar into a global organization. When the U.S. military approached Neumiller about converting Caterpillar’s operation to artillery production, he convinced the Army that it was better served by letting Caterpillar continue to manufacture bulldozers and tractors. It turned out that the bulldozer was critical to clearing roads and building landing strips throughout the Pacific Islands. Neumiller really didn’t build anything new. What he did was capitalize on the war effort to transform Caterpillar into a global giant.
America’s fascination with the charismatic leader dates back to Lee Iacocca. When the 1970s OPEC oil embargo and the energy crisis sent shock waves through the automotive industry, Japanese automobile producers seized the opportunity to introduce smaller, fuel-efficient cars into the American market, eroding Detroit’s dominance. The biggest loser was Chrysler, which posted a record loss of $1.7 billion. Iacocca then stepped in as a larger-than-life figure that successfully turned the auto company around through the force of his personality. Iacocca persuaded the government to authorize a $1.5 billion loan guarantee using taxpayers’ dollars. Then he reinvented the automobile company by changing its technology, responding to changing demographics, and reinventing the union/labor relationship. Ultimately Iacocca succeeded in turning Chrysler around and established the mold for the charismatic leader.[ii]
lecture link 7-3
SMUCKER’S: JAMS AND THANK-YOUS
Each year Fortune magazine publishes a listing of the best places to work.
J. M. Smucker, located in Orrville, Ohio, was named by the magazine as America’s best place to work in 2004. Employees don’t get any fancy perks—no pet insurance, no sushi bars, none of that. It’s a 107-year-old, family-controlled business that is run by two brothers who tend to quote the New Testament and Ben Franklin. J. M. Smucker is a throwback to a simpler time.
Smucker’s gimmick-free management starts with the co-CEOs, Tim and Richard Smucker, who took the reins in 2001. Tim and Richard are popular with their 2,930 employees—they’re affectionately known as the “boys.” The boys have made sure Smucker adheres to an extremely simple code of conduct set forth by their father and former CEO, Paul Smucker: Listen with your full attention, look for the good in others, have a sense of humor, and say thank you for a job well done.
If nothing else, Smucker management takes that last directive seriously. Plant supervisors have been known to serve celebratory barbecues after hitting new records; managers routinely thank teams with lunches and gift certificates. There’s also the annual commemorative Christmas plate, holiday turkeys, and screenings of films in which Smucker’s has a tie-in, like The Cat in the Hat. Tonie Williams, director of marketing for peanut butter, says she’s been thanked more in her two years at Smucker than she was in her nine years at Nestle, Kraft, and P&G combined.
Plus, not every company has Smucker’s ace in the hole for employee morale: the smell. On a windy day you can smell what’s cooking at Smucker’s throughout Orrville—jams, chocolate fillings, the works.[iii]
lecture link 7-4
MCCLELLAND’S ACQUIRED NEEDS THEORY
Psychologist David McClelland proposed that humans acquire different needs over time as a result of life experiences. He classified these needs that affect motivation in both individuals and organizations:
1) Need for Achievement
2) Need for Affiliation
3) Need for Power
Persons with a high need for achievement, according to McClelland’s theory, like to work for challenging, but not risky, goals. They like concrete feedback about their work. Rewards, such as salary, are important only as a measure of achievement. They prefer to work alone or with others with a need for achievement. People with a high need for achievement are frequently found in engineering and technical fields; they are generally frustrated in management positions.
People with a need for affiliation need harmonious relationships; they desire to form and maintain friendships. They tend to conform to the norms of their group. These individuals prefer work that provides significant personal interactions. They perform well in customer service and client interaction situations.
Persons with a need for power are of two types: personal power and institutional power. Those with a need for personal power want to direct others, which can be seen as undesirable. People with a need for institutional power want to organize others to achieve the goals of the organization. Managers with a high need for institutional power are generally more successful that those with a need for personal power.
Just as a manager can use Herzberg’s motivating factors to enhance employee performance, recognizing employees’ needs can suggest the right types of jobs for individuals. Authors of Organizational Behavior, John Schermmerhorn, James Hunt, and Richard Osborn believe that McClelland’s findings are useful when each need is linked with a combination of Herzberg’s work preferences such as individual responsibility, challenging but achievable goals, interpersonal relationships, influence over others, and attention and recognition.
lecture link 7-5
THE L FACTOR
According to Tim Sanders, a Yahoo executive and author of The Likeability Factor, likeability, not intimidation, is the real key to conquering the workplace. Sanders sets forth a how-to plan for an employee trying to get ahead. His philosophy builds on the Dale Carnegie approach, outlined in Carnegie’s 1936 classic How to Win Friends and Influence People. “Men are the worst at this,” Sanders reports. “They won’t smile.”
In business, likeability matters. A person who gives others “a sense of joy, happiness, relaxation, or rejuvenation,” says Sanders, is more likely to be hired and promoted. He believes that likeable bosses, rather than feared bosses, get the best work out of employees. Nastiness translates into less productivity, higher turnover, and a culture of unhappiness.
Sanders calls this element the “L-Factor.” Raising your L-Factor is like improving your physical fitness. The L-Factor involves four qualities that aspiring managers need to practice.
1) The first is friendliness. “If you are not friendly, you will have to work exponentially harder to be likeable.”
2) Relevance. A person who has a skill that will help someone else complete a task is relevant.
3) Empathy. “Walk a mile in your colleagues’ wingtips.”
4) Keep it real. Colleagues can spot a phony.
Sanders uses the chairman of Sony, Howard Stringer, as a prime example of the success of likeability. Stringer, an American, is funny, irreverent, and playful. His positive attitude won over Sony’s Japanese executives. That’s why they gave him the top leadership at Sony, much to the surprise of the world.
Sanders realizes that many people will have difficulty with implementing the likeability principles. For them, Sanders has some basic advice. Strive to be polite, at the very least. No screaming, hanging up phones, slamming doors, and expressing biting sarcasm. The bottom line: “Just be quiet and stop being so unfriendly.”[iv]
lecture link 7-6
RECOGNITION: MAKING HEROES
Rosabeth Moss Kanter, author of the book The Change Masters, concluded that companies often make the mistake of equating pay with rewards. Pay is not a reward for outstanding performance; it is compensation for doing the job in the first place. A reward should be a special gain for special achievements. Compensation is a right; recognition is a gift.
Recognition—saying “thank you” in public and perhaps giving a tangible gift along with the words–has multiple functions beyond simple courtesy. To the employee, recognition signifies that someone noticed and someone cares. To the rest of the organization, recognition creates role models—heroes—and communicates the standards: these are the kinds of things that constitute great performance. Kanter’s management consulting firm also found a remarkable correlation between recognition and innovation.
Some basic rules should be followed in handing out praise and recognition:
1) Deliver recognition and reward in an open and publicized way. If not made public, recognition loses much of its impact and defeats much of the purpose for which it is provided.
2) Timing is crucial. Recognize contribution throughout a project. Reward contribution close to the time an achievement is realized. Time delays weaken the impact of most rewards.
3) Tailor recognition and reward to the unique needs of the people involved. Have several recognition and reward options to let managers acknowledge accomplishment in ways appropriate to the particulars of a given situation.
4) Deliver recognition in a personal and honest manner. Avoid providing recognition that is too “slick” or overproduced.
5) Strive for clear, unambiguous, and well-communicated connection between accomplishments and rewards. Be sure people understand why they receive awards and the criteria used to determine rewards.
6) Recognize recognition. That is, recognize people who recognize others for doing what is best for the company.
Celebrating and publicizing employee achievements need not be expensive. Kanter’s research suggests some simple, low-cost ways to make employees “heroes,” such as having coffee with an employee or group of employees that you do not normally see, or letting employees attend important meetings in your place when you’re not available.
Others:
1) Send a letter to every team member at the conclusion of their work, thanking them for their contribution.
2) Mention an employee’s outstanding work or ideas during your staff meetings or at meetings with your peers and management.
3) Create a “Best Accomplishments of the Year” booklet, and include everyone’s picture, name, and statement of their best achievement.
4) Show a personal interest in employees’ development and career after a special achievement, asking them how you can help them take the next step.
5) Invite employees to your home for special celebrations, and recognize them in front of their colleagues and spouses.
Bonus Internet exercises[v]
Bonus Internet Exercise 7-1
ARE LEADERS BORN OR CAN THEY BE TAUGHT?
There does exist this debate about leadership that asks the question “are individuals born to be leaders or can they be taught?” How you might answer this question initially and what the research tells us about this subject will be explored.
There are enormous amounts of information about leadership as this topic continues to be evaluated because of how important the need is for leaders in all walks of life; from leaders in government, in schools, in churches and in profit and non-profit companies in our local community. How we define leaders and how leaders evolve is an interesting study because much can be learned about leaders from our past, present, and those who will be leaders of the future.
To better understand the leadership equation, answer the questions below and be prepared to discuss the basic concepts that define leadership:
1. Think about your initial reaction to the question “are leaders born or can they be taught?” How would you answer this question?
2. Now, use the internet and find at least three articles/sites that discuss leadership. Based on your work, how is leadership defined? What are some of the historical perspectives of leadership? What are some of the best practices of leaders?
3. Using the internet, define successful leaders from the past 100 years; the past 50 years; the past 25 years; and finally, who are the leaders today?
4. Based on your research, what are the general characteristics of leaders? What motivates individuals to become successful leaders?
5. With the help of the internet, explain how you think leaders are born (i.e., they exhibit certain traits)? Explain how individuals are taught to become good leaders. Finally, are individuals mostly born or are they taught to become successful leaders? Explain.
Bonus Internet Exercise 7-2
THE MOST POWERFUL WOMEN IN BUSINESS
Each year Fortune magazine ranks the 50 most powerful women in business. Visit the Fortune website () and use the listing for the current year to answer the questions below. (Sometimes the web address for a location changes. You might need to search to find the exact location mentioned.)
1. List the top five most powerful women in business for the latest year. Also give the company for which they work.
Name Company
(1) ________________________________ _________________________________
(2) ________________________________ _________________________________
(3) ________________________________ _________________________________
(4) ________________________________ _________________________________
(5) ________________________________ _________________________________
2. Which of the women earns the highest pay? How much?
3. Choose one of the women in the top 10 to further research. Give a brief biography.
Bonus Internet Exercise 7-3
WHICH ARE THE BEST COMPANIES TO WORK FOR?
Despite stories of bad bosses and unmotivating bureaucracy, some companies are able to come up with creative ways to keep employees engaged. Each year the Great Place to Work Institute ranks America’s top employers in the annual “Best Companies to Work For” list. Go to the institute’s website (best.). (Sometimes the web address for a location changes. You might need to search to find the exact location mentioned.)
1. List the top five companies.
2. Choose one company from the list and use an Internet search engine (such as , , or ) to research the company. Summarize the company’s background and mission.
3. Follow the links to the Institute’s listing for the previous year. Are there any companies in common for the past two years?
Critical thinking exercises
critical thinking exercise 7-1
TRAITS OF LEADERS
Leaders possess traits and skills that make them successful. They are effective communicators, skillful planners, and successful motivators. Leaders can be villains or heroes. This exercise examines the skills displayed by famous leaders and gives students the opportunity to use this knowledge to improve their leadership skills.
Groups of five to six people brainstorm a list of famous leaders, and then pick two leaders to compare and contrast. Then the groups should profile them in terms of their skills and traits.
Questions for Discussion:
1. WHAT CRITERIA DID YOUR GROUP USE TO DETERMINE WHICH TWO LEADERS YOU WOULD PROFILE? DESCRIBE.
2. In what ways are the leadership styles of these leaders similar? In what ways are they different? Explain.
3. Were you surprised at the similarity or dissimilarity between these leaders? Discuss.
4. Which one of these leaders would you want to work for? Explain your rationale.
critical thinking exercise 7-2
CRISIS MANAGEMENT
This exercise explores management reaction to rapid, unexpected change. Divide the class into groups of 5 to 6. Each group will act as a management team for a large national company faced with a crisis. Have the groups quickly analyze the situation (5-6 minutes,) decide on an appropriate strategy for coping with the situation, and prepare a brief statement outlining how the company should manage the crisis.
A. A national consumer foods company has discovered that several batches of their salad dressing have been contaminated with toxic industrial solvent. One person has died and the media is demanding a statement.
B. At the construction site for a new corporate headquarters, the top floors of the building have collapsed, killing 16 people, including the head of the local union. The cause of the collapse has not been determined, but a local television station has reported that substandard materials have been used in construction.
C. A hurricane has come ashore near your largest distribution facility days before your marketing department is scheduled to launch the new fall line of clothing. Communications have been cut off to the area and you have not been able to contact anyone at the facility. News media are reporting large-scale damage and loss of life. Your retail managers across the country are worried that the loss of this distribution facility will disrupt deliveries at this critical point.
D. There has been a massive explosion at a chemical plant, centered in the storage area. The resulting fire is threatening a building where dozens of workers have taken refuge. There are rumors that a terrorist bomb was involved. Casualties are unknown. Extent of damage is unknown.
E. A gunman has invaded a large metropolitan bank, killing four people and taking 20 employees hostage. He has demanded that bank executives publicly apologize for “crimes against African-Americans” or he will blow up the bank. No one knows what weapons he has.
critical thinking exercise 7-3
MANAGING A FAMILY BUSINESS
Nicholas Stavros opened his first restaurant in Cedar City twenty-five years ago. Stavros’s family-style Greek food and atmosphere proved popular, and three additional restaurants were opened in outlying suburbs. One of Papa Nick’s children now runs each: Maria’s Stavros, Peter’s Stavros, and Eric’s Stavros. Nick Junior runs the original Nick’s Stavros.
The menu is consistent across all four restaurants, but each restaurant features a daily special prepared by the local chef. Customer comment cards consistently rank the quality of food as very high.
Papa Nick now divides his time between the restaurants and the family’s real estate holdings. Major decisions are made by Papa Nick. All employees at each restaurant report to the restaurant’s Stavros manager, providing some degree of decentralization.
Customer comment cards have begun to show some problem areas at Peter’s Stavros Restaurant. Service ratings have fallen to “fair,” and many customers have written specific comments about slow service and poor wait staff attitude.
Because it is the newest restaurant, Eric’s Stavros has received more resources for advertising and promotion. The equipment is also significantly newer than that at the other three restaurants. Over time Maria, Peter, and Nick Junior have come to resent the attention Eric has received. The tension has become so high that the staff at Peter’s Stavros does not speak to the staff at Eric’s Stavros.
Papa Nick is reviewing two pieces of information. One, the profit margin from restaurant operations has declined over the past year. And second, several employees have mentioned their desire to join a union.
Papa Nick has asked your advice for improving the performance of his restaurants. What advice would you give him? Outline a plan of action, with goals and timelines.
critical thinking exercise 7-4
TESTING MASLOW’S HIERARCHY OF NEEDS
According to Abraham Maslow, we all have certain needs ranging from physical needs to self-actualization. Maslow believed that when needs are unmet, they motivate us to behave a certain way. When the needs are met, they no longer motivate us. He also said that when lower order needs remain unmet, we give them our attention and don’t attend to the higher needs.
Let’s test Maslow’s theory to see if it holds true. Which needs are you giving your attention to right now (not for the day, not for the future, but for this minute)? Mark the need getting the most attention right now with an “X”. Look at each of the other needs; place a check mark next to those that have been met. Each person should do this in private; no need for names on papers.
________ Self-actualization needs (accomplish goals and develop to potential)
________ Esteem (or ego) needs (recognition, acknowledgment, and status)
________ Social needs (feeling loved and part of the group)
________ Safety needs (security at work and at home)
________ Physiological needs (food, drink, warmth, etc.)
notes for critical thinking exercise 7-4
TALLY THE RESULTS ON THE BLACKBOARD. HOW MANY CLASS MEMBERS ARE FOCUSING ON EACH NEED? HAVE ALL THE LOWER LEVEL NEEDS FOR EACH PERSON BEEN MET (CHECKED OFF)?
What does this information tell you? Are some classmates hungry and concentrating on physical needs? Others may be threatened by this exercise and may be sitting quietly tending to their safety needs. Others may be quite loud and eagerly participating, meeting their social needs. Others are claiming that their ideas are best, searching for recognition. Still others are calmly going about their business knowing that they are doing all they can do and are happy with themselves.
The point is that different things motivate individuals. In order to effectively motivate their employees, managers must listen to their employees, learn what their needs are, and design motivators to meet those needs. For example, if employees are physically uncomfortable or feel unsafe at work, they will pay little attention to meeting company goals unless they perceive that meeting those goals will make them feel comfortable or safe.
critical thinking exercise 7-5
MOTIVATION SURVEY
Recently Jacobs Construction Company conducted a survey of its supervisors asking them to complete the following form. They were asked to rank each factor from 1 (low) to 10 (high) as to how important each would be in increasing their motivation. The survey results for two of the supervisors are given below.
|Factors |Hal Barrington |Frank Ramone |You |
|Higher wages |2 |6 | |
|Better job security |1 |8 | |
|Improved benefits |3 |9 | |
|Better chance for advancement |8 |4 | |
|More challenging work |10 |3 | |
|Better supervision |5 |1 | |
|More pleasant physical surroundings |6 |10 | |
|Better chance to grow and develop job skills |4 |5 | |
|More responsibility |9 |2 | |
|Better interpersonal relationships |7 |7 | |
1. Which factors are hygiene factors and which are motivating factors?
2. Using Maslow’s hierarchy of needs theory, explain how you would use this information to motivate Hal Barrington.
3. Using Maslow’s hierarchy of needs theory, explain how you would use this information to motivate Frank Ramone.
4. In the final column, rank each factor as to how it would motivate you.
notes for critical thinking exercise 7-5
1. WHICH FACTORS ARE HYGIENE FACTORS AND WHICH ARE MOTIVATING FACTORS?
Motivating factors here are better chance for advancement, work that is more challenging, better chance to grow and develop job skills, and more responsibility. These factors cause employees to be productive—they are related to job content. The other factors are hygiene factors—those that have to do with job environment. These factors can cause dissatisfaction if missing, but do not necessarily motivate if increased.
2. Using Maslow’s hierarchy of needs theory, explain how you would use this information to motivate Hal Barrington.
Barrington is probably trying to satisfy higher-level needs such as esteem and self-actualization. The factor rated highest is more challenging work. “Higher wages” only ranks 2. Money would be an ineffective motivator. Instead, the manager should offer the challenge Barrington desires—maybe give him responsibility for a key new project or for developing a new product.
3. Using Maslow’s hierarchy of needs theory, explain how you would use this information to motivate Frank Ramone.
Ramone probably still has some unmet lower level needs. His highest ranking is for more pleasant physical surroundings and improved benefits—a need for security. He also ranks “better personal relationships” high on the survey—a need for belonging. To motivate Ramone, these lower level needs must be met. Only then can the manager use motivating factors, like more responsibility and challenging work, to improve his productivity.
4. In the final column, rank each factor as to how it would motivate you.
Probably most students will rank higher wages near the top. (There are always those student loans to be repaid.) Probably job security and benefits will also be ranked high.
critical thinking exercise 7-6
DOES MONEY MOTIVATE?
Divide the class into groups of 5 to 6 students. Assign half the groups one of the following hypotheses:
A. Money is an effective motivator.
B. Money does not motivate.
Have each group develop a detailed argument pro or con. After ten minutes, each group should nominate a debate leader. Give each debate leader five minutes to present their arguments to the class. (For large classes, you may have to limit the number of presentations.)
At the end of the presentations, have the entire class vote on which argument they now endorse.
Bonus cases
Bonus case 7-1
WHEN FAILURE IS THE NORM
Few companies would accept a 96% failure rate. But in the pharmaceutical industry, a one-digit success rate is the norm. One such company is Pfizer Inc. To find the next big drug, Pfizer spends $152 million a week funding over 400 early-stage drug development projects. Ninety-six percent of those efforts will ultimately bomb. Most compounds prove to be unstable, unsafe, or unsuitable for human use.
Pfizer may have the biggest R&D operation of any company in the world. An army of 13,000 research scientists works out of sixteen facilities from California to France to Japan. Pfizer’s research budget of $7.9 billion is nearly five times that of the world’s largest consumer-products company, Procter & Gamble.
Nancy Hutson is senior vice president of worldwide R&D at Pfizer and the director of Groton Labs, the largest drug-discovery facility on earth. Hutson joined Pfizer as a research scientist in 1981. She spent the next fifteen years in drug discovery at Groton Laboratories, spending billions of dollars putting 35 medicines into development. Despite all the time and money, not one of Hutson’s drug projects ever made it to market.
How does she manage a workforce that routinely fails? Instead of focusing on the big successes, she encourages the scientists to live for small victories, the small steps that may provide the foundations for an ultimate star drug. When a researcher publishes a paper, or when a lab gets some positive results on a new therapy, it is trumpeted throughout the organization. “Science folks don’t live for the big day when a drug makes it to market,” she says. “They live for the small moments when you see exciting results in the journals. Small victories help them to deal with the reality that, in all likelihood, there will be no big victory.”
In 2000, Pfizer top management launched an effort to reduce the alarming number of failed R&D projects. The company dispatched 600 of its top scientists to find out why so many compounds flunked in clinical trials. The Attrition Task Force visited all Pfizer’s worldwide labs, interviewing researchers and compiling a database of doomed projects. The task force eventually helped R&D managers rebalance the company’s research projects between high-risk efforts and safer bets. The goal— to cut the research labs’ failure rate to 92%. While still a stunning failure rate, this would actually double Pfizer’s R&D current success rate, from 4% to 8%.[vi]
discussion questions for BONUS case 7-1
1. DOES THE 4% SUCCESS RATE APPEAR TO BE A GOOD RETURN ON THE COMPANY’S INVESTMENT? WHAT ADDITIONAL INFORMATION MIGHT YOU NEED TO BETTER ANSWER THIS QUESTION?
2. With such a high failure of idea-to-market environment, how does this affect the culture of the company? Could you work in such an environment?
3. From you own perspective, how has the drug industry changed in types of products they offer? How has this affected its advertising?
4. Would Pfizer be a good investment? Why or why not?
answers to discussion questions for BONUS case 7-1
1. DOES THE 4% SUCCESS RATE APPEAR TO BE A GOOD RETURN ON THE COMPANY’S INVESTMENT? WHAT ADDITIONAL INFORMATION MIGHT YOU NEED TO BETTER ANSWER THIS QUESTION?
Four percent success rate is considerably higher than the industry norm and appears to be a very good return for the money spent. However, if we looked at the amount spent ($7.9 billion) as a percentage to sales, this would be a better gauge as to how Pfizer compares to other drug companies.
2. With such a high failure of idea-to-market environment, how does this affect the culture of the company? Could you work in such an environment?
The high failure rate is a by-product of the industry approval process and is an example of the risk/reward system that is not seen by many companies. Without question, research and development is very exhausting, and many individuals are not compatible with this process. Perseverance and self confidence are needed to work successfully in this industry.
3. From your own perspective, how has the drug industry changed in types of products they offer? How has this affected its advertising?
The drug industry has evolved over the years and has created many more options for consumers—for both serious and not-so-serious illnesses and conditions. Marketing dollars spent by drug companies have steadily risen. The return on this investment appears to be very favorable as more consumers are exposed to drug availability. (This would be a good time for students to name the top two or three drugs that they can easily remember seeing advertised.)
4. Would Pfizer be a good investment? Why or why not?
Pfizer is working to improve its product success rate. While all investments are subject to company performances in the competitive marketplace, it does appear that Pfizer has leadership qualities and market success to be considered a good company to look at for investment purposes.
Bonus case 7-2
HOT TOPIC: MOTIVATION IS A HOT TOPIC (VIDEO CASE)
(NOTE: This case can be used with the Video on DVD for this chapter.)
We all have witnessed retail employees who seem indifferent at best to customer satisfaction. They are as likely to be talking to one another as to customers—sometimes on the phone. It doesn’t take a retailing expert to know that such employees do not contribute to the success of the firm. So, how do you get retail employees to be passionate about their work? To find that answer, consider to a company that has won the Best Small Companies and Best Small Companies to Work for lists often. That company is Hot Topic.
Hot Topic stores sell clothing and accessories that appeal to the alternative culture. Emphasis is on the latest music trends and the fashions that go with them. Employees, therefore, need to be familiar with the newest bands and the latest music. That means going to concerts and observing what the people wear and becoming very familiar with the cultural trends within those groups.
Torrid is another store run by the same company. It caters to an entirely different audience: more mature women who are looking for fashionable plus sizes. Hot Topic Incorporated runs both stores. The CEO of the company is Betsy McLaughlin. She has learned how to motivate the employees at both stores using well-established managerial techniques that are outlined in this chapter.
There is much emphasis in this text on employee empowerment. At Hot Topic, that means that employees are paid to attend music concerts where they not only have a good time, but learn more about the culture of the people they will be serving. Since promotions come from within, that culture carries over into headquarters. There are not the usual offices that designate hierarchy. Instead, all employees are encouraged to make decisions on their own, within reason, and to be responsive to customer needs. As you read in this chapter, Herzberg says that employees have certain needs which are not motivating, but result in dissatisfaction (and possible poor performance) if not present. They include salary and other benefits. Thus the salary and benefits at both stores have to be competitive.
Employees feel good about their work when they are empowered to do what it takes to please customers. Empowerment often demands some in-house training to teach employees the skills they need to be responsive to customer demands. All of this falls under the concepts of Theory Y that says that people are willing to work hard if given the freedom and opportunity to do so. Such freedom is what Hot Topic Incorporated is all about.
One way to see these principles in action is to visit a Hot Topic or Torrid store for yourself and watch the employees in action. What is the atmosphere like? The store may not reflect your values or your culture, but does it seem to reflect the values and culture of the people being served? Are the clothes at Torrid attractive for plus-sized women? Is every effort being made to help women find what they want?
discussion questions for BONUS case 7-2
1. WHAT MOTIVATORS IDENTIFIED BY HERZBERG ARE USED AT HOT TOPIC?
2. How do you think Hot Topic employees would react if the company gave them each a small raise, but stopped paying them to attend music concerts? Would they be more or less motivated to please customers? Why?
3. How well would a Theory X manager perform at Hot Topic? Why?
answers to discussion questions for BONUS case 7-2
1. WHAT MOTIVATORS IDENTIFIED BY HERZBERG ARE USED AT HOT TOPIC?
The work itself is fun and challenging—and rewarding beyond pay. Employees are given responsibility and are able to achieve as a result.
2. How well would a Theory X manager perform at Hot Topic? Why?
A Theory X manager would not be as effective because the employees who self-select themselves to work at Hot Topic tend to follow the alternative culture. That is, they don’t like to take orders and follow rules as much as others might. They are free thinkers and can do a great job dealing with other free thinkers who are their customers.
3. How do you think Hot Topic employees would react if the company gave them each a small raise, but stopped paying them to attend music concerts? Would they be more or less motivated to please customers? Why?
Not all employees would react the same. It is assumed that most would prefer to go to the free concerts rather than accept a small raise because the concerts are fun and help them do a better job at work. They would probably be less motivated to please customers if they didn’t know as much about the music and culture of the customers.
Bonus case 7-3
MANAGING VOLUNTEERS
The executive director of the Oakview Humane Society, Jordan Webster, sometimes wishes he could fire his volunteers. The Society has few paid workers and depends on volunteers to handle the day-to-day activities of the shelter.
Lucy is a full-time mother of two toddlers who does volunteer work for the Society. She is organized and energetic. Her people skills help maintain positive relationships with local veterinary clinics, which treat the Society’s resident animals. Lucy spends much of her day running Society errands, answering phone calls, and arranging foster homes for animals in need, all while refereeing her two children.
Alice is a thirty-something entrepreneur who owns and manages a dinner theater with her husband. She has no children, just three dogs. The theater is open on Thursday, Friday, and Saturday nights. Because of this schedule, she has considerable flexibility and uses her free time to care for animals at the shelter. Alice is also the Society adoption coordinator, doing an excellent job of matching pets with prospective adopters. Her manner is a little blunt, and people frequently complain that she is “bossy.” Her e-mails to Society officers and volunteers are frequently one-line commands to do something.
The two women are jokingly referred to as the “alpha females,” because each is strong-willed and outspoken. Unfortunately, they frequently clash over issues, resulting in daily phone calls and e-mails to the director and other Society officers. Alice complains that Lucy does not spend enough time at the shelter doing the “dirty work,” cleaning pens and changing water. Alice has frequently commented on Lucy’s carefree life without a job. Lucy complains that Alice is rude and insensitive and observes that Alice has an easy life with lots of money and free time.
Today Webster ran into Alice at lunch. She was furious because Lucy had accepted a stray dog to the Society when the pens were already full. “Lucy doesn’t help take care of the animals she accepts. She doesn’t understand our limitations.” Alice has offered to resign for the good of the Society.
Webster just got off the phone with Lucy who is threatening to quit because she feels Alice insulted her in an e-mail.
discussion questions for BONUS case 7-3
1. HOW DOES MANAGING VOLUNTEERS DIFFER FROM MANAGING PAID EMPLOYEES?
2. What incentives can Webster use to motivate volunteers?
3. What should the director do next, if anything?
answers to discussion questions for BONUS case 7-3
1. HOW DOES MANAGING VOLUNTEERS DIFFER FROM MANAGING PAID EMPLOYEES?
Volunteers cannot be motivated by money because they don’t earn any. They can’t be bossed around because they can easily quit. In short, volunteers are a real challenge to managers. Conflicts such as those presented in the case are not infrequent. The class may want to introduce some personal experiences or make some up. The idea is to think about management in a nonprofit setting.
2. What incentives can Webster use to motivate volunteers?
The highest level motivational tool is the job itself. People volunteer at animal shelters and the like because they love being around animals. The second highest motivational tool is recognition for a job well done. This case also brings out “hygiene factors” that cause dissatisfaction if not present, but not motivation if done right. That includes supervision and working conditions and interpersonal relations. For example, a new and nicer boss wouldn’t do anything to relieve the problem. Neither would better working conditions.
3. What should the director do next, if anything?
Interpersonal relations are often the most difficult things to manage. The class may enjoy talking about their experiences and what they might do to solve the problem. Would someone have to be “let go?”
Bonus case 7-4
USING COMPENSATION TO MOTIVATE
Jon Wehrenberg is a businessperson always up to a challenge. Three years ago, a friend called and told Jon he knew of a large building-products company that was looking for a domestic supplier of plumbing assemblies. The firm was currently importing products from Korea and was hoping to improve its turnaround time and quality. The deal was worth about $1 million a year to Jon’s firm, Jamestown Advanced Products, if he could commit to producing and delivering the specified quantity of custom-order metal products every week. There was also one other stipulation: Jon’s company would have to do the work at the same price the Korean supplier was currently charging.
The challenge inspired Jon, and he carefully compiled the important financial information that was needed. He discovered that a pretax profit margin of 12% was possible, but only if he could keep direct labor expenses down to 11% of company sales. The problem he faced was obvious. The output per worker estimated was realistic but only if he had a work force that wanted to meet and sustain a high level of quality and productivity. The problem was many workers tend to be cynical about management and often lose their motivation if they see productivity increasing and they don’t see any benefit to the gain. He decided the solution was logical and simple. In addition to a competitive base wage, he would pay the workers a quarterly bonus if workers could get the labor costs of the firm under 11%.
Wehrenberg also agreed that at the end of each week he would provide information concerning sales totals, gross payroll numbers, or any other information workers needed to verify the efficiency of the system. He believed that it was possible over a period of time to get labor costs down to 9%, which would mean a quarterly bonus of $1,500 to each worker.
Workers liked the idea and accepted the challenge. Jamestown Advanced Products agreed to a three-year contract to supply the building-products company.
discussion questions for BONUS case 7-4
1. WHAT DOES JAMESTOWN ADVANCED PRODUCTS DO TO MOTIVATE PEOPLE USING MONEY THAT OTHER FIRMS DO NOT DO? CAN YOU SEE HOW MONEY CAN BE A MOTIVATOR?
2. Do you think Wehrenberg actually wanted the workers to get the labor costs under 11%?
3. What kind of workers would enjoy working at Jamestown Advanced Products, and what kind would not? Can you see how productivity at Jamestown would increase as certain kinds of employees would self-select themselves out of the company and others would come who fit the system better?
4. Would such a revenue-sharing system work at most companies? For what kinds of companies would it work best?
answers to discussion questions for BONUS case 7-4
1. WHAT DOES JAMESTOWN ADVANCED PRODUCTS DO TO MOTIVATE PEOPLE USING MONEY THAT OTHER FIRMS DO NOT DO? CAN YOU SEE HOW MONEY CAN BE A MOTIVATOR?
It sounds as if money is the motivator, but it may not be the true motivator. Workers like to feel part of a team (you learned that from the Hawthorne studies). Sharing the goals of the firm with workers and then letting them share in any profits motivates them to work harder. That is what MBO is all about. The fact that the workers make more money as well is just icing on the cake.
2. Do you think Wehrenberg actually wanted the workers to get the labor costs under 11%?
Absolutely. The best work arrangement is win/win. The company wins when workers keep costs down, and workers win by getting bonuses. The only concern of workers is that the game is not rigged. Giving them appropriate information makes employees surer of the honesty of the program.
3. What kind of workers would enjoy working at Jamestown Advanced Products, and what kind would not? Can you see how productivity at Jamestown would increase as certain kinds of employees would self-select themselves out of the company and others would come who fit the system better?
Workers who like a challenge would prosper as would workers who like to make decisions for themselves. Workers who are relatively lazy and like to have others make all the decisions are not likely to do well in this situation. As the lazier workers leave, the rest of the workers could form a self-motivated team that is likely to be very productive.
4. Would such a revenue-sharing system work at most companies? For what kinds of companies would it work best?
It would work at many companies. In some companies, employees are too far from customers to be paid on the basis of sales. This may be the case in large companies in general. For example, such a system would not work at most colleges. But companies that repair things and service companies in general—such as airlines, auto repair places, and painters—would prosper under such a system.
Bonus case 7-5
TURNING TYCO AROUND
Former Tyco CEO Dennis Kozlowski and a former Tyco chief financial officer went to prison after being convicted of looting the company of $600 million through extravagant overspending and diverting company funds for personal uses. After Kozlowski’s resignation in 2002, the $37 billion conglomerate was left with $24 billion debt and an image as the poster child of corporate greed. To turn the company around the board of directors looked to former Motorola president Ed Breen.
Breen faced a monumental challenge—turning around a company on the verge of bankruptcy and restoring investor faith. He started with a whole lot of firing. In his first six months he replaced Tyco’s board of directors wholesale, fired the entire top corporate team, and hired 80 executives to fill their spots. He set about restructuring the company’s debt and moved the corporate headquarters from an expensive Manhattan office to a nondescript commercial complex in Princeton, New Jersey.
From the beginning, Breen took the long view of what would be required to resuscitate Tyco. Breen inherited more than 2,000 individual businesses involved in everything from health care to plastics to fire alarms. He determined which units needed rebuilding and which just needed a little push. Breen introduced a new system of financial checks and balances and drew up long-term plans for each division, something completely new to some Tyco units.
Rich Meelia, president of Tyco Healthcare, met with Breen six weeks after Breen arrived. Meelia told the CEO that the health-case group would need to take $50 million from earnings and plow it back into the business. Because he knew the company was strapped for cash, he expected resistance. To Meelia’s surprise, Breen gave the go ahead. Meelia recalls that this was an “attitudinal switch—from ‘How’s the quarter looking?’ to ‘How are you going to continue to grow this business?’” Meelia used the money for marketing new products. By 2003 health care generated 23% of Tyco’s revenue and almost 60% of its operating income.
Breen didn’t just want to turn Tyco into a stronger, more ethical version of its old self. He wanted to make Tyco a “world-class operating company” instead of the holding company it had been under Kozlowski. To do so, he pumped up R&D spending to produce organic growth, in contrast to Tyco’s old pursuit of growth through relentless acquisitions.
Tyco’s restructuring was not without pain. Breen closed 227 facilities, fired 8,100 people, and sold 27 segments. The company made decisions based on meeting the business’s long-term strategy. In considering which businesses fell into the strategic definition, Breen identified businesses that fit in one of the four core segments that Tyco wanted to grow long term. “Our core segments are fire and security; health care; electronics; and what I would call engineered products or infrastructure services. They are great industries to be in; they have great growth dynamics,” explains Breen.[vii]
discussion questions for BONUS case 7-5
1. WHAT DOES THIS CASE TELL YOU ABOUT THE ISSUE OF EXECUTIVE PAY? HOW MUCH IS A NEW LEADER, LIKE BREEN, WORTH?
2. What evidence does this case present for the fact that Breen has a long-term leadership perspective rather than a shorter-term managerial perspective?
3. What steps can the company take now to restore its image among the general population?
answers to discussion questions for BONUS case 7-5:
1. WHAT DOES THIS CASE TELL YOU ABOUT THE ISSUE OF EXECUTIVE PAY? HOW MUCH IS A NEW LEADER, LIKE BREEN, WORTH?
There are very few people available and willing to accept a leadership position in a firm that appears to be sinking. Furthermore, the scandals associated with the firm are likely to carry over to the new leader. Therefore, the compensation package to win a new leader from industry would have to be quite generous. Would the leader be worth the pay? The proof is in the results. Executive pay needs to be more closely aligned with results. And stock options should not be the only way to do that. Bonuses tied to results might be better. This case is a great opening for discussing executive pay and the difficulty of running a major corporation.
2. What evidence does this case present for the fact that Breen has a long-term leadership perspective rather than a shorter-term managerial perspective?
The evidence shows in the fact that Breen kept the health-care group even though it was in need of more money. Also, his statement that he was no longer interested in quarterly results, but the long-term growth of the company. The subsequent results proved him right. Students may be interested in seeing how the stock has done over time. Was it a good investment when the transition took place?
3. What steps can the company take now to restore its image among the general population?
The best way to prove a company’s worth is to build up sales and profits and let the numbers speak for themselves. Too much publicity would only remind the public of the company’s past.
Breen’s team also considered changing the company’s name to distance it even more from the bad old days, but discarded the idea for the time being. “You can’t hide from a problem,” he says. “We wanted to prove that we can be a model of a company that works its way out of a crisis.”
Endnotes
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[i] Source: Bill Breen, “The Three Ways of Great Leaders,” Fast Company, September 2005.
[ii] ibid.
[iii] Sources: Julia Boorstin, “100 Best Companies To Work For: J.M. Smucker,” Fortune, January 12, 2004; “Smucker Family Preserves Legacy,” Akron Beacon Journal, August 12, 2007; and “Smucker Co. Seeks to Expand Traditional Product Line, Keep Old-Fashioned Image,” Knight Ridder/Tribune Business News, April 18, 2004.
[iv] Source: Andrea Sachs, “Animals Behave,” Time Inside Business, May 2005.
[v] The Internet is a dynamic, changing information source. Web links noted in this manual were checked at the time of publication, but content may change over time. Please review the website before recommending it to your students.
[vi] Sources: Gladys Alcedo, “Prospects for Growth Look Promising for Pfizer, Navy Work in Groton, Conn.” Knight-Ridder/Tribune Business News, December 4, 2003; Bill Breen, “The Thrill of Defeat,” Fast Company, June 2004, pp. 77-81; Andrew Dietderick, “Pfizer Expanding Site Despite $4B Cutback,” Crain’s Detroit Business, April 11, 2005; and John M. Moral, “Pfizer Researcher Wins Innovation Award,” Harford Courant, March 19, 2006.
[vii] Sources: Scott Kirsner, “One Tough Assignment,” Fast Company, September 2004 pp. 76-77; Jyoti Thottam, “Can This Man Save Tyco?” Time, February 9, 2004, pp. 48-50; John S. McClenahen, “Restoring Credibility: Ed Breen, Tyco International’s Chairman and CEO, Works to Gain the Trust of Investors, Customers, Government Regulators and Employees,” Penton Industry Week, February 1, 2005; Rachel Layne and Matthew Keenan, “Expecting a Revival, Firm Buys Tyco Marketplace by Bloomberg,” International Herald Tribune, May 15, 2006; and “Tyco Reports Second Quarter Earnings from Continuing Operations of $0.52 per share,” PR Newswire, May 4, 2006.
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