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Chapter10
InvestinginaBusiness
Usingtheannualreportofthefirminwhichyouwouldliketoinvest,completethefollowing:
Questions
1Doesthefirmappeartorecognizethatitsemployeesarethekeytoitssuccess?
2Doesthefirmempoweritsworkers?Doesitencourageteamwork?Providedetails.
3Explainhowthebusinessusestechnologytomotivateitsemployees.Forexample,doesitusethe
4Internettoprovideinformationaboutitscompensationprograms?DoesitusetheInternetore-mail
toprovidefeedbacktoitsemployees?
5GotoandlocatetheNEWSSEARCH.Typeinthenameofthefirminthespace
provided,andreviewtherecentnewsstoriesaboutthefirm.Summarizeany(atleastone)recentnews
storyaboutthefirmthatappliestooneormoreofthekeyconceptsinthischapter.
Case:UsingMotivationtoEnhancePerformance
TomFryisaplantmanagerforLigonierSteelCorporation,locatedinLigonier,Pennsylvania.Theplantis
small,with250employees.Itsproductivitygrowthratehasstagnatedforthepastyearandahalf.
Tomisconcernedanddecidestomeetwithemployeesinvariousdepartments.Duringthemeeting,em-
ployeesdisclosethattheydonothaveachancetointeractwithoneanotherwhileonthejob.Furthermore,
becausetheydonotreceiveanyrecognitionfortheirsuggestions,theirinputofideasforimprovementhas
stopped.
Afteraweekelapses,Tomcallsameetingtoannounceanewprogram.Heplanstoofferrewardsfor
highperformancesothatemployeeswillbemotivatedtosurpasstheirquotas.Bonuseswillbeawardedto
employeeswhoexceedtheirquotas.Tombelievesthisprogramwillworkbecauseofhisperceptionthat
“moneymotivatescmployees.^^
Afewmonthslater,Tomnoticesthatproductivityhasincreasedandthatemployeesareenjoyingthe
bonusestheyhaveearned.Tomdecidestoprovideanadditionalmeansofmotivation.Hewantsemployeesto
continuetointeractwithoneanothertosolveworkproblemsandshareinformation.Supervisorsnow
recognizeindividualaccomplishments.Theypraiseemployeeswhomakesuggestionsandidentifyan
employeeofthemonthinthecompanynewslettertorecognizeoutstandingperformance.Tomstrongly
supportsthisfeatureoftheprogram.
Thegoalisforemployeestogrowanddeveloptotheirfullestpotential.Individualsmayberetrainedor
gobacktocollegetopermitjobgrowthwithintheplant.Employees9ideasandcontributionsarenow
perceivedasawaytoenhancetheirindividualcareerpaths.Theresultshavebeenoverwhelming.TomFry,
supervisors,andemployeesareallenjoyingthebenefitsthathavemadeLigonierSteelasatisfyingplaceto
work.
Questions
1Describethemotivationtheorythatappliestothiscase.
2WhatneedscanemployeesatLigonierSteelsatisfyinperformingtheirjobs?
3DescribehowbonusesmotivatedtheemployeesatLigonierSteel.
4Describeotherrewardsbesidesbonusesthatcanmotivateworkbehaviorinthiscase.
5Ligonierdoesnotuseanynegativereinforcement.Doesthiscaseillustrateanydisadvantagesofpro-
vidingonlypositivereinforcement?
VideoCase:MotivatingEmployeesatValassisCommunications,Inc.
ValassisCommunications,Inc.,isaleaderinthesalespromotionindustry.Itcreatespromotionalnewspaper
insertscontainingcouponsfromleadingconsumercompaniesfor58millionhouseholdseachSunday.Em-
ployeemotivationisveryimportanttoValassis,soithasdevelopedanemployeecompensationplanthat
includesbasesalary,profitsharing,fringebenefits,championpay,andstockoptions.Inotherwords,itusesa
pay-for-performancesystemthatrewardsemployeesfbrhighperformance.Thecompanyrewardsemployees
forbothindividualandteamachievements.Teamawardsaretiedtotheperformanceofthefirmoverall.In
thisway,employeesbenefitwhenevertheshareholdersofthefirmbenefit.Valassisalsohasanon-site
hairdresser,doctor,andfitnesscentersothatemployeeswillenjoycomingtowork.Onthreeoccasions,ithas
beenincludedinFortunemagazine'slistofthe100bestplacestoworkinAmerica.Formoreinformation,
visithttp://.
Questions
1WhydoesValassisusestockoptionstocompensateemployees?
2WhydoesValassisrewardpeoplefbrbothteamworkandindividualachievement?
3HowdoesValassisusechampionpaytoencourageemployees?
InternetApplications
1./fortunelbestcompanies
Whichcompaniesarethetopcompaniestoworkfor?Whatkindsofbenefitsdotheyprovidefortheiremployees?Whichcompanies
wouldyouliketoworkfor?
2.httpi/
Clickon“ESOPs."Brieflydescribewhatanemployeestockownershipplanis.HowmightanESOPencourageemployeestobe
moremotivated?HowdoESOPSrelatetothetheoriesofmotivationdiscussedinthechapter?Whatisanownershipculture,and
howdoesitcreateanenvironmentwhereemployeesaremoreempowered?
3.
Clickon“ElementsofMotivation.^^Whatarethethreeelementsofmotivation?Whatarethesevenrulesofmotivation?Doyou
thinkmotivationresultsfromanindividuafsowndrive,orisitprimarilydrivenbyexternalfactors?Howcanthesevenrulesof
motivationresultinbetterperformancefbracompany?
Dell'sSecrettoSuccess
GotoandreviewDell'smostrecentannualreport.Also,gotoDell'swebsite(http://www.delI.com)
andinthesection“aboutDcll,^^reviewthebackgroundmaterialaboutDellthatrelatestothischapter.
Questions
1ExplainhowDell'streatmentofitsemployeesmotivatesthemtoperformwell.
2DoyouthinkthattrainingisimportanttoDell?
3Dellsometimespromotessomeofitsemployeesratherthanhiringhigher-levelemployeesfromotherfirms.Whyisthis
beneficial?
TrueorFalse
1.Maslow'shierarchyofneedsidentitiessuperiorcompensationasthekeytoemployee
motivation.
2.AccordingtoFrederickHerzberg,hygienefactorsarework-relatedfactorsthatw川motivateand
pleaseemployees.
3.ThemanagementstrategyofempowermentisfavoredbyTheoryXmanagers.
4.AsupervisorwhobelievesinMcGregor'sTheoryYwilllikelymonitoremployeescloselyto
ensurethattheirworkiscompleted.
5.Equitytheorysuggeststhatanemployee'seffortsareinfluencedbytheexpectedoutcomeof
thoseefforts.
6.Negativereinforcementmotivatesemployeesbyencouragingthemtobehaveinamannerthat
avoidsunfavorableconsequences.
7.Mostcompensationplansthattiepaytoperformanceareintendedtomotivateemployeesto
achievehighperformance.
8.Ameritsystemallocatesraisesforallemployeesaccordingtosalesofthefirm.
9.Anacross-the-boardsystemisappropriatewhenallemployeesdeservethesamerewardfor
theirwork.
10.Open-bookmanagementencouragesemployeestomakedecisionsandconducttasksasifthey
werethefirm'sowners.
11.Thetechniquesofmotivationapplyacrosscountries.
MultipleChoice
12.Byemployeestoproperlyperformthetaskstheyareassigned,managementcan
maximizethefirm'svalue.
a)motivating
b)threatening
c)coercing
d)manipulating
e)harassing
13.OneimplicationoftheHawthornestudiesisthatworkerscanbemotivatedbyreceiving:
a)attention.
b)money.
c)stock.
d)bonuses.
e)profitsharing.
14.Maslow'shierarchyofneedstheorycanbeusefulformotivatingemployeesbecauseitsuggests
that
a)peoplearemotivatedtoachievetheirwork-relatedhygienefactors.
b)managersrespondtotheneedforcorporateprofitability.
c)employeeneedsarestable.
d)employeesaremotivatedbyunsatisfiedneeds.
e)moneyisthemostimportantmotivatingfactor.
15.Socialinteractionandacceptancebyothersareexamplesof:
a)physiologicalneeds.
b)esteemneeds.
c)safetyneeds.
d)socialneeds.
e)self-actualizationneeds.
16.Needsthataresatisfiedwithfood,clothing,and
shelterarecalledneeds.
a)safety
b)social
c)affiliation
d)self-esteem
e)physiological
17.Herzberg'shygienefactorsmostcloselycorrespondwithMaslow's:
a)physiologicalneeds.
b)psychologicalneeds.
c)socialneeds.
d)esteemneeds.
e)self-actualizationneeds.
18.AccordingtoHerzberg,employeesarecommonlymostsatisfiedwhenoffered:
a)adequatesupervision.
b)adequatesalary.
c)recognition.
d)jobsecurity.
e)safeworkingconditions.
19.Allofthefollowingaremethodsusedtoenhancejobsatisfactionexcept
a)employeeinvolvementprograms.
b)TheoryXmanagement.
c)jobsecurity.
d)adequatecompensationprograms.
e)flexibleworkschedules.
20.TheoryZsuggeststhatemployeesaremoresatisfiedwhen:
a)theyreceiveabove-averagepayraises.
b)theircompensationisconsistentwiththeirefforts.
c)managersrestrictthedelegationofauthority.
d)theyareinvolvedindecisionmaking.
e)appropriatehygienefactorsareavailable.
21.Whichofthefollowingtheoriesofmanagementsuggeststhatworkerswillbemotivatedifthey
arecompensatedinaccordancewiththeirperceivedcontributionstothefirm?
a)expectancytheory
b)equitytheory
c)needtheory
d)TheoryY
e)reinforcementtheory
22.Thereinforcementtheorythatmotivatesemployeesbyencouragingthemtobehaveina
mannerthatavoidsunfavorableconsequencesisreinforcement.
a)positive
b)neutral
c)equity
d)negative
e)expectancy
23.Inanacross-the-boardsystem,allemployees
receivesimilar:
a)raises.
b)jobassignments.
c)offices.
d)workschedules.
e)performanceappraisals.
24.Whichofthefollowingprovidesemployeeswithvariousformsofcompensationifspecificperfor-
mancegoalsaremet?
a)flextimeprograms
b)jobenlargement
c)participativemanagement
d)open-bookmanagement
e)incentiveplans
25.Whichofthefollowingisnotaguidelinefordesigningamotivationalcompensationsystem?
a)alignthesystemwithbusinessgoals
b)alignthesystemwithspecificemployeegoals
c)establishsystemsforrewardingemployeeseniority
d)setachievablegoalsforemployees
e)allowemployeeinputonthecompensationsystem
26.Twoormorepersonssharingaparticularworkscheduleiscalled:
a)jobenlargement.
b)jobenrichment.
c)jobsharing.
d)flextime.
e)jobrotation.
27.Evenifthecompanycannotguaranteecontinuingemployment,itcanimproveemployees,
senseofjobsecurityby:
a)empoweringemployees.
b)grantingstocktoemployees.
c)usingopen-bookmanagement.
d)trainingemployeesinvarioustasks.
e)institutingcompressedworkweeks.
28.Aprogramtoexpandthejobsassignedtoemployeesiscalled:
a)hygienetheory.
b)downsizing.
c)positivereinforcement.
d)equitytheoryofmotivation.
e)jobenlargement.
29.Anemployeeinvolvementprogramthatperiodicallymovesindividualsfromonejobassignment
toanotheris:
a)jobenlargement.
b)jobenrichment.
c)jobrotation.
d)jobsharing.
e)flextime.
30.canreduceboredomandprepareemployeesforotherjobsiftheirprimaryjobis
eliminated.
a)Jobevaluation
b)Jobrotation
c)Reengineering
d)Performanceappraisal
e)Reinforcement
31.Whichofthefollowingisanemployeeinvolvementprogramwhereagroupofemployeeswith
differentjobpositionsaregiventheresponsibilityofachievingaspecificgoal?
a)managementbyobjectives(MBO)
b)teamwork
c)jobenlargement
d)jobrotation
e)jobsharing
32
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