ORGANIZATION

BEHAVIOR PART 1

CHAPTERS:
1. What is organization behavior
2. Individual Behavior
3. Personality
4. Emotions
5. Motivation








INSTRUCTIONS:
The following books have been covered for Management:
• Organization Behavior and Theory by T N CHHABRA; L M PRASAD
• Principles and Practices of Management by T N CHHABRA
• Organization Behavior by S P ROBBINS

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CHAPTER 1: What is Organization Behavior?

Organization Behavior is the study of
• How people act in Organizations,
• Why do they act as they do and
• What can we do to predict and manage their behavior.

OB investigates the impact that individuals, groups and structure have on behavior within
organizations, for the purpose of applying such knowledge towards improving an
organization’s effectiveness.

Contribution of Behavioral Sciences to Organization Behavior study:

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• Psychology analyses behavior of Individuals in an organization by studying areas like

“personality, attitudes, values, motivation, work stress, job satisfaction” etc
• Sociology analyses group behavior in an organization by studying areas like
“leadership, communication, conflict, status” etc
• Anthropology analyses behavior at organization system level by studying “culture
systems in an organization, stress management, organizational change” etc
• Political science also analyses behavior at organization system level by studying
variables like organizational power, politics and conflicts.


We will study Organization Behavior at 3 levels:
1. Intra-individual level
a. Individual behavior and personality
b. Perception
c. Values and attitudes
d. Motivation
e. OB Mod
f. Learning
2. Inter-personal and group level
a. Communication
b. Leadership
c. Authority, Power and Politics
d. Conflict
e. Stress Management
f. Transactional Analysis and Johari Window
g. Control
h. Group dynamics
i. Work team and decision making
3. Organization Change and Development
a. Dynamics of Change
b. Organization development

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c. Organization climate and culture

d. Morale and QWL

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CHAPTER 2: INDIVIDUAL BEHAVIOR:

A person’s behavior is influenced by a multitude of factors, both internal and external. It is
also influenced by how other people behave with him or her.
Some of the factors influencing individual behavior are:
1. Personality- personality refers to personal traits like dominance, aggressiveness,
persistence, physical features like height, weight, color etc. an individual’s behavior
is directly affected by her personality traits.
2. Ability- An individual’s behavior towards a particular task is directly affected by her
ability to perform a task effectively. A nurse is required to be humble with patients
and have empathy towards them to be able to perform her tasks effectively. Her
ability to perform the task effectively will define her behavior.
3. Perception- perception is defined as a person’s viewpoint towards things around her.
An individual’s behavior is influenced not by organization’s actual expectation of her,
but by how these are perceived by the person.
4. Motivation- the level of motivation of a person defines her behavior towards her
tasks. A highly motivated person would be positive towards her objectives whereas a
demotivated person would be apathetic towards her tasks.
5. Organizational factors- factors like organization structure, culture, hierarchy,
leadership, facilities etc define a person’s behavior towards the organization and its
people.
6. Socio cultural factors- the social environment of an individual includes family
relations, friends, co workers, subordinates, societal relations etc. all of these have a
long term and permanent impact on a person’s behavior towards the society as well
as her work.

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CHAPTER 3: PERSONALITY-
• Personality of an individual is unique, personal and a major determinant of her
behavior.
• Personality means how a person affects others and how he understands and views
himself. How a person affects others depends upon his physical appearance and
behavior. Thus, personality represents the whole person concept.
• A comprehensive definition of personality is given by Fred Luthans- “personality
means how a person affects others and how he understands and views himself as
well as the pattern of inner and outer measurable traits, and the person situation
interaction.”

Determinants of Personality-
Personality is determined by both Heredity and Environment.
1. Biological Factors:
a. Heredity-It means transmission of qualities from ancestor to descendant
through biological channels. Physical stature, sex, facial attractiveness,
reflexes etc are inherited from one’s parents.
b. Physical features- An Individual’s external appearance may have a
tremendous effect on his personality.
2. Family and social factors:
a. An infant also acquires behavior patterns of the family and society.
b. The status of the family in the society influences individual’s perception
about self, others, money etc.
3. Situational or Environmental factors:
a. An individual’s personality may change in different situations. The demands
of different situations may call for different aspects of one’s personality.
Therefore, we should not look at personality in isolation.
4. Temperament- the degree to which one responds emotionally to the environment
defines her personality
5. Schema- schema refers to an individual’s belief, frame of reference, perception and
attitude which the individual possesses towards the management, job, working
conditions, pay, fringe benefits etc. All of them together influence and drive a

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person’s behavior.
6. Motives- motives are inner drives of an individual. Behavior of an individual to
accomplish a goal varies because of his inner drives. The behavior of an individual to
accomplish the goal varies because of her inner drives.



Development of personality:
There are two approaches to development of personality. First approach to development of
personality attempts to identify specific physiological and psychological stages that occur in
development of human personality. Second approach tends to identify important
determinants of personality. First approach is theoretical while second approach is empirical
in nature.


Freudian stages:

Sigmund Freud propounded psychoanalytic theory of personality, which is based on the
notion that man is motivated more by unseen forces than by rational thought. He gave 3
aspects to measure the unconscious framework that defines a person’s personality.

• The id- id is the source of psychic energy and seeks immediate gratification for
biological or mental needs. life and death instincts like hunger, thirst move an
individual according to freud. ID proceeds unchecked to satisfy human motives.
• The EGO- the conscious and logical part of human personality that keeps ID under
check. It is associated with the reality principle. Edo keeps id under check through
intellect and reason.
• The SUPER EGO- super ego represents societal and personal norms and serves as an
ethical constraint on behavior. It can best be described as conscience. Super ego
provides norms to ego to determine what is right or wrong.

According to Freud, there are 4 stages of psycho-sexual development which define a

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person’s personality. These are:

• The Oral Stage- it extends from birth to first year of life. In this stage, the mouth is
used to satisfy biological drives.
• The Anal Stage- the anal stage takes over during second and third years of life. In
this stage, the focus shifts from mouth to the anal region. Young children derive
considerable pleasure from both retention and expulsion of faeces.
• The phallic stage- At about 4 years of age, focus on sexual gratification shifts to
another erogenous body zone, the sex organs. During this stage, children can be
observed obtaining gratification by examining and fondling their genitalia.
• The Genital stage- this stage runs from adolescence to adulthood. There is an
increased awareness of an interest in opposite sex. There is generation of aggressive
sexual impulses.

The Psychoanalytic theory of freud is based on a theoretical conception, rather than a
measurable item for scientific verification.


Erikson Stages:
Erikson focused more on social factors in his explanation on personality stages. He criticized
Freud for his over focus on sexual and biological factors in development of a personality.
Erikson identified 8 stages of life. According to Erikson, each stage is confronted by a conflict
that needs to be resolved successfully before a person can move to the next stage.
The stages are:
1. Infancy- the crisis resolved in infancy is trust vs. mistrust. An infant who is loved and
cared for learns to trust other people. Lack of love and affection results in mistrust.
Impact on an infant in this stage affects his development for the remaining life.
2. Early childhood- the crisis resolved in early childhood is independence vs. self doubt
and shame. When a child is given control over aspects that he is capable of
controlling, he develops confident and autonomous. Lack of control results in self
doubt.
3. Play age- the four and five year old child comes under play age. Here, a child likes to

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experiment and discover what she can do. The crisis resolved in this stage is initiative
or capability vs. guilt and lack of self confidence.
4. School age- from age 6 to 12. The crisis resolved in this age is enterprise vs.
inferiority. In this stage, if a child is allowed to develop his social and physical
abilities, she will develop a sense of enterprise. Control over her actions results in a
feeling of inferiority.
5. Adolescence- the crisis resolved in this stage is independent identity vs. confusion.
The above 4 developments- trust, autonomy, capability and enterprise help an
individual to resolve the crisis faced in adolescence by developing a separate
identity.
6. Early Adulthood- during twenties, the crisis faced is intimacy vs. isolation. Deep
relationships are developed after adolescence with creation of an independent
identity.
7. Adulthood- the crisis faced in this stage is generativity vs. self absorption.
Generative people are the ones who see the world as much bigger than themselves.
Productivity and societal advancement hold more importance to them. On the other
hand, self absorbed people are the ones who do not develop the ability to look
beyond themselves. They become absorbed in career advancement and
maintenance.
8. Mature adulthood- in this stage, a person develops as a highly mature personality
and guides others. The crisis resolved here is integrity vs. despair.

Chris Argyris’ immaturity maturity theory-

According to Chris Argyris, Personality of an individual develops along a continuum from

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immaturity as an infant to maturity as an adult. There are 7 basic characteristics in the

continuum:



IMMATURITY CHARACTERISTICS MATURITY CHARACTERISTICS
Passivity Activity
Dependence Independence
Few ways of behaving Diverse behaviour
Shallow interests Deep interests
Short time perspective Long time perspective
Subordinate position Superordinate position
Lack of self awareness Self awareness is present

Models of Personality:

MYERS-BRIGGS TYPE INDICATOR: It is a 100-question personality test that asks people how
they usually feel or act in particular situations. On the basis of answers, individuals are
classified differently. There are a total of 16 personality types according to this
classification.

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• Extraverted or introverted- extraverts are outgoing, sociable. Introverts are quiet

and shy
• Sensing or intuitive- sensing types are practical and prefer routine and order.
Intuitives rely on unconscious processes and look at the big picture.
• Thinking or feeling- thinking types use reason and logic to handle problems. feeling
type rely on their personal values and emotions.
• Judging or perceiving- judging types want control and order and a structured world.
Perceiving are flexible and spontaneous.

Other Questionnaires-
• Minnesota Multiphasic Personality Inventory (MMPI)
• Sixteen Personality Factor Questionnaire (16 PFQ)


BIG FIVE PERSONALITY MODEL:
According to Big Five Model, five basic dimensions underlie all others and encompass most
of the significant variation in human personality. The following are the Big Five Factors:

• Extraversion- It captures a person’s comfort level with relationships. Extraverts tend
to be Gregarious, Sociable and Assertive. Extraversion brings enhanced leadership.
• Agreeableness- An individual’s propensity to defer to others describes the level of
agreeableness. Highly agreeable people are cooperative, warm and trusting. People
who score low on agreeableness are cold, disagreeable and antagonistic. Agreeable
people show lower level of deviant behaviour.
• Conscientiousness- It is a measure of reliability. A highly conscientious person is
responsible, organized and dependable. Conscientiousness brings longevity and
higher performance.
• Emotional stability- The ability to withstand stress and remain calm, self-confident
defines an individual’s emotional stability. ES brings higher job and life satisfaction.
• Openness to Experience- Openness to experience addresses range of interests and
Fascination with novelty. Open people are Creative, curious and artistically sensitive.

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They are also more adaptable to change.

SELF CONCEPT THEORY:
The theory was given by Carl Rogers and Henry P. self concept has been defined as
perceptions and understanding of an individual about “I” and “ME”. I is described as
“personal self or one’s belief in oneself” and ME is described as “social self”. “I” is how an
individual appears to others and “ME” is the mirror image of what I believe others expect
from me.

According to the theory, the relationship between I and ME develops one’s personality. A
person who performs his duties without attachment gets strength and is able to perform
more efficiently. On the other hand, attachment reduces performance.



SOCIALISATION THEORY: Person-Situation Interaction

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• Each situation is different and employees act or behave differently according to the
dominating situation. The differences may seem to be very small on the surface but
when filtered by the person’s cognitive process, they can lead to quite large
subjective differences and diverse behavioral outcomes.
• According the socialization theory, people are not static. They behave differently in
different situations. Therefore, social situation has an important impact on
personality.
• In organizations, it has been realized that socialization impacts behavior of
employees to a large extent. Therefore, specific techniques of socialization of new
employees is used by organizations. Some of these techniques are- use of mentors
or role models, orientation, training and development programs, career planning
etc.


OTHER PERSONALITY TRAITS THAT INFLUENCE BEHAVIOR:

• Core self evaluation/ self esteem- Core self-evaluation means how people think
about themselves. People with positive core self evaluation like themselves and see
themselves as effective, capable and in control of their environment. They also
perform better. Positive core self evaluation has a positive impact on job satisfaction
as well as job performance.
• Machiavellianism- An individual high in Machiavellianism is pragmatic, maintains
emotional distance, and believes that ends justify means. Machiavellists are high
performers in the following situations-
o When they get to interact face to face with others, they are able to impress
with their aggressive personality.
o When there are minimal number of rules and regulations
o When emotional involvement distracts low machs.
• Locus of control- It refers to an individual’s belief that events are either within one’s
control (internal) or are determined by forces beyond one’s control (external).
People who believe that they control their destinies are called internal and those

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who believe that their lives are being controlled by outside forces are called
externals. Internals are found to be more satisfied with their job, have lower
absenteeism, and are more socially active.
• Narcissism- Narcissism is an exaggerated sense of self-importance, excessive self
admiration, and arrogance. Narcissism is derived from greek myth of narcissus, who
was so proud of himself that he fell in love with his own image. Narcissists want to
gain admiration of others and receive affirmation of their superiority. They treat
others as inferior to themselves. They are also selfish and exploitative.
• Authoritarianism- An authoritarian personality believes in legitimacy of formal
authority, views obedience to authority as necessary and holds negative views about
people. He is also intellectually rigid. Authoritarian personalities are also oriented
towards rules and regulations.
• Type A and Type B personality- People who are aggressive, highly competitive are
called type A personalities. Laid back, non-competitive are considered type B. type B
do better on complex tasks and tasks requiring accuracy.

• Introverts and Extroverts- A person’s sociability and interpersonal orientation define
his or her being introvert or extrovert. Extroverts are gregarious and sociable
individuals while introverts are shy and quiet. Extroverts are more suitable in
environment requiring regular interaction while introverts are more suitable in
analytical and thinking tasks.

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CHAPTER 4: EMOTIONS-
Emotions have traditionally been defined as an instinct, which should be subdued or
suppressed. But modern theorists have defined emotions as expression of self personality
which result in development and enrichment of a person. Emotional expression is a
powerful tool of communication.
It is understood that emotions are generated from the heart and rational thinking comes
from the head.
Emotions can be both positive and negative.

Emotional Intelligence:
Emotional intelligence is the ability to build relationships with people and get along in
different situations and thus command respect in the group. For example, Mahatma Gandhi
had emotional intelligence, which enabled him to connect with the masses like no one else.
People looked up to him for direction and awareness. He took many unpopular and tough
decisions against his own people in his lifetime but his ability to justify his decisions and
convince his people gave him a leadership position.
Similar examples are Nelson Mandela and Martin Luther King Jr.
It is said that effective leaders are alike in critical way; they all have a high degree of
emotional intelligence. Emotional intelligence is necessary or the sine qua non of leadership.
Till 1970s, Intelligence quotient (IQ) was taken as the sole determinant of success. The term

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“emotional intelligence” was developed to identify a person’s social and personal abilities. It
was realized that intelligence alone does not define a person’s success. EI was thus
combined with IQ to form a new term called EQ or emotional quotient.
(IQ = mental age *100/ chronological age)

How to manage Emotions:
1. Self awareness- ability to evaluate oneself in light of emotions and feelings.
2. Control over emotions- control does not mean suppression. It means identifying the
right emotion and expressing it at the right time.
3. Empathy- empathy means putting one’s legs in another’s shoes.
4. Cooperation- collective action
5. Resolving conflicts- people who interact on a regular basis often find themselves in a
spiral of emotions where conflict is natural. By managing emotional issues, these
conflicts can be managed and resolved.

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CHAPTER 5: MOTIVATION-

An individual’s Intensity, Direction and Persistence of effort to attain a goal is called
motivation.
• Intensity refers to how hard a person tries
• Direction means effort directed in the right way
• Persistence is how long the effort lasts. Persistence plays an important role in
lengthy goals and where there is failure in first instance.


Theories of motivation:

Traditional theories:

• Maslow’s Need hierarchy theory:
o Maslow hypothesized that within every human being, there exists a hierarchy
of 5 needs- physiological needs, safety needs, social needs, esteem needs
and self actualization needs.
(CHART)

o Physiological Needs- These include Hunger, Thirst, Shelter, Sex and other
bodily needs.

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o Safety Needs- These include physical and emotional security and protection.
o Social Needs- the need to feel a sense of affection, belongingness,
acceptance and friendship determines social needs.
o Esteem Needs- Esteem needs can be divided into internal factors and
external factors. Internal factors are those generated from one’s within like
self-respect, achievement etc and external factors are those received from
outside like status, recognition and attention.
o Self-actualization needs- the need to become what we are capable of
becoming, achieving our potential and self-fulfillment is called self-
actualization need.


o According to Maslow, though no need is ever fully gratified, a substantially
satisfied need no longer motivates. Therefore, as each of these needs
becomes substantially satisfied, the next one becomes dominant.
o Physiological and safety needs are considered lower order needs and social,
esteem, self-actualization needs are higher order needs.
o Lower order needs are satisfied externally (pay, fixed tenure, union contract)
whereas higher order needs are satisfied internally.
o One major criticism of Maslow’s theory is that there is No empirical evidence
behind the theory, no evidence that needs are organised in such a manner.


• Douglas McGregor- theory X and theory Y
o McGregor proposed 2 distinct views of human beings- one negative, labeled as
theory X and the other positive, labeled as theory Y. Manager’s deal with employees
on a grouping of assumptions and they mold their behavior towards employees
according to these assumptions.
o Under Negative view, managers believe that employees inherently dislike work, and
must be coerced or directed to perform it (Theory X). Under positive view, managers
believe that employees view work as natural as play or rest and people can be given
responsibility to work (Theory Y)

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o Theory Y also assumes that higher order needs dominate individuals. “Participative
decision making, responsible and challenging jobs, good group relations” are
approaches to maximise employee’s job motivation, as they all satisfy higher order
needs.
o Theory X assumes that lower order needs dominate individuals and they are
motivated by Pay and social security.

Theory X Theory Y
Average human being has an inherent dislike Average human being does not inherently
of work and will avoid it, if possible dislike work.
Average human being is lazy and avoids Average human being is committed to work
responsibility and he is self directed and self controlled. He
seeks responsibility
Average human being is indifferent to Average human being is committed to
organizational goals organizational objectives
Average human being prefers to be directed They have a higher degree of imagination
and wants security above all and creativity in the solution of
organizational problems.
Theory X is more applicable to unskilled, Theory Y is more applicable to educated,
uneducated, lower level workers who work skilled and professional employees.
for their basic needs of food, clothing etc.


• Frederick Herzberg- Two factor theory or motivation hygiene theory
o Herzberg tried to answer the question- “what do people want from their jobs?”
o Herzberg concluded that the replies people gave when they felt good about their
jobs differed significantly from the replies given when they felt bad.
o Respondents feeling good about a job tend to attach intrinsic factors to motivation
such as recognition, responsibility and achievement.
o Respondents feeling bad about a job tend to attach extrinsic factors to
dissatisfaction such as physical working conditions, company policy etc.

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(CHART)

o According to Herzberg, hygiene factors are external factors that remove
dissatisfaction but fail to provide satisfaction. Motivators are internal factors that
bring satisfaction.
o It was inferred by Herzberg that opposite of satisfaction is not dissatisfaction. A
person may not be dissatisfied and at the same time not motivated in an
organization.
o If we link Herzberg’s theory with Maslow’s theory of needs, we get the following as
motivators and hygiene factors:
§ Maintenance or hygiene factors- physiological, safety, social and external
esteem needs
§ Motivators- internal esteem and self actualization needs


• McClelland- Theory of Needs
o David McClelland gave a model of motivation which is based on three types of
needs, namely
§ Need for achievement,
§ Need for power and
§ Need for affiliation
o Need for achievement- Some people have a compelling drive to succeed and they
strive personal achievement rather than rewards of success that accompany it. They
have a desire to do something better or more efficiently than it has been done

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before. It is the drive to excel and to achieve in relation to a set of standards. High
achievers perform best when they have 50-50 chance of success. They dislike
gambling as well as low odds because in gambling there is no sense of achievement
and in low odds there is no challenge to their skills.
o Need for power is the need to make others behave in a way in which they would not
have behaved otherwise. It is the drive to influence others. Individuals high in need
for power enjoy being “in charge”.
o Need for affiliation is the desire for friendly and close interpersonal relationships. It
is the desire to be liked and accepted by others. Individuals with a high affiliation
motive strive for friendship, cooperation and mutual understanding.
McClelland’s research revealed that managers generally score high in the need for
achievement.


• Clayton Alderfer- Existence, Relatedness Growth (ERG) model- Maslow’s theory of 5
distinct needs has certain unexplained overlaps like overlapping between Security, social
and physiological needs. Also, lines between esteem, social and self-actualization needs
are not entirely clear. With these points in mind, Clayton Alderfer condensed Maslow’s 5
need categories into 3 sets:
o Existence needs- These include all forms of physiological and safety needs i.e
Maslow’s first two levels of needs.
o Relatedness needs- These include all needs that involve relationships with other
people we care about. Relatedness needs cover Maslow’s social needs and
esteem needs derived from other people.
o Growth needs- These needs involve persons making creative efforts to achieve
full potential in the existing environment. Maslow’s last level need of self
actualization is covered under growth needs.

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Contemporary theories:

• Self-determination theory- People prefer to feel that they have control over their actions.
So anything that makes a previously enjoyed task feel more like an obligation than a
freely chosen activity will undermine motivation.
o Self-determined goals are more rewarding intrinsically than goals determined
under an obligatory environment.
o Extrinsic rewards reduce intrinsic interest in a task. When people are paid for
work, it feels less like something they want to do and more like something they
have to do. Recent studies have stated that extrinsic rewards like monetary raise,
verbal praise etc can be motivating if rewards and deadlines are not coercive.

• Victor Vroom’s expectancy theory- According to Vroom’s theory, a person’s motivation
towards an action is determined by his perception that a certain type of action would
lead to a specific outcome and his personal preference for this outcome.
o Motivation= EXPECTANCY *INSTRUMENTALITY * VALENCE
o If any of the variable approaches zero, the probability of motivated performance
approaches zero.
o Expectancy (effort-performance) is the probability that a particular action will
lead to a desired performance. Since it is the probability of an outcome from an
action, its value ranges from 0 to 1. If the individual feels that chances of
achieving an outcome are zero, he will not even try. On the other hand, if
expectancy is higher, the individual would put higher efforts to achieve the
desired outcome.
o Instrumentality (performance- reward) is the individual’s estimate that
performance would result in achieving the reward. For example, an individual
wants promotion and feels that superior performance is very important in
achieving promotion. Superior performance is first level outcome and promotion
is second level outcome. Superior performance will be instrumental in obtaining
promotion. The value of instrumentality also ranges from 0 to 1.
o Valence (reward preference) is the strength of an individual’s preference for a
reward. It is the value placed on reward. The valence of a person for a goal may

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be positive or negative depending upon his positive or negative preference for

this goal. If a person is indifferent to an outcome, his valence is 0. Thus, the
range of valence is from -1 to 1.
(CHART)

• Porter and Lawler’s Expectancy model- Improvement over vroom’s model.
o Porter and Lawler’s expectancy model is similar to Vroom’s theory. Porter and
Lawler concluded that an individual’s motivation to complete a task is affected
by the reward they expect to receive for completing the task. However Porter
and Lawler introduced additional aspects to the expectancy theory:
o Intrinsic and Extrinsic Rewards
§ Porter and Lawler categorized the reward as intrinsic and extrinsic
§ Intrinsic rewards are the positive feelings that the individual experiences
from completing the task e.g. satisfaction, sense of achievement.
§ Extrinsic rewards are rewards emanating from outside the individual such
as bonus, commission and pay increases.
§ Porter and Lawler’s model suggested that an individual’s view regarding
the attractiveness and fairness of the rewards will affect motivation and
satisfaction.

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o Ability & Perception

§ Porter and Lawler said that motivation is also affected by
• The individual’s ability to perform the task and
• Their perception of the task

Assumptions behind the Expectancy Model:
• It is a multi variate model which means that individual behavior is determined by a
combination of factors in the individual and in the environment
• Individuals are assumed to be rational human beings who make conscious decisions
• Individuals have different needs, desires and goals
• Individuals decide between alternate behaviors based on their expectations and
such behavior will lead to a desired outcome



• Equity theory (by Stacy Adams)-
o Equity theory is based on the assumption that members of an organization
experience strong expectations of justice, balance and fairness in treatment by
an organization. When a person feels that he is being treated unfairly by the
organization, it can have adverse effects on the person’s motivation and
performance on the job. Equity theory helps in understanding causes as well as

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consequences of feelings of inequitable treatment among organization

members.
o Two variables are important to study Equity: Inputs and Outcomes.
§ Inputs are efforts put by an individual in his job and outcomes are
rewards, which the member receives from the organization.
§ Inputs and outcomes are compared to find out state of equity or inequity
among the members/ individuals.
§ Individuals compare their Outcome-Input ratio with relevant others. A
state of equity exists if there is equivalence between outcome-input ratio
of self and others. When there is any form of inequity, there is equity
tension or guilt. Under-rewards create tension and anger and over-
rewards create guilt.
§ Formula used ~~ person’s outcome/person’s inputs = other’s outcomes/
other’s inputs
o This negative state of tension and guilt provides motivation to do something to
correct it. There are four referent comparisons made by an employee:
§ Self Inside- An employee may compare his present position to a different
position inside the same organization
§ Self outside- An employee may compare his present situation to a
situation or position outside the employee’s organization
§ Other inside- comparison with another individual inside the organization
§ Other outside- comparison with another individual outside the
organization
o Based on these comparisons, 6 references are drawn and corrective action is
taken by the employee. 6 choices made in reference to any of the 4 situations
are:
§ Change input- The employee may choose to increase or decrease his
inputs to the organization. A change in input will result in less or more
effort towards performance.
§ Change outcome- The employee may change his outcome by requesting a
salary raise or asking for a bigger office etc. He may also produce more of
the same product with lesser quality.

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§ Distort perception of self- Rather than actually changing inputs and

outcomes, a person may change his perceptions of these factors. For
example, “I worked a lot harder than I thought”
§ Distort perception of others- A person can try to restore equity by
attempting to change perception of the comparison group. For example,
“X’s job isn’t as good as I thought.”
§ Choose a different referent for comparison i.e. find out another person as
a comparison.
§ Quitting the job- If a person perceives that he cannot get justice, he may
seek transfer to another department or may leave the organization
altogether.
o A corrective action brings back the employee to a state of Equity and provides
him motivation to contribute to the organization.
o Equity theory is used by managers to determine wage and salary structure in an
organization.


• Goal setting theory- Goals provide targets to be achieved in future. They influence
behavior of employees and also their motivation. When employees participate in goal
setting, they know how their efforts will lead to performance, rewards and personal
satisfaction. Thus, goals provide a sense of
direction to employees. Specific goals are also able to tell an employee what needs to be
done and how much effort will need to be expended.

There are Four elements of goal-setting model:
o Goal acceptance- In order to motivate employees to pursue organization goals,
they should be made to understand the implications of goals for them and also
accept them. If difficult goals are assigned, they may not feel attached to the
goals. Therefore, a participative approach towards goals should be followed.
o Goal specificity- A specific goal identifies the target in quantitative or measurable
terms. This enables the worker to evaluate his performance. Meeting a goal
provides a sense of achievement. Specific goals also provide direction and clarity

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to the employees.
o Goal challenge- difficult but feasible goals provide more challenge than easy goals.
Reaching an easy target is not competitive and unexciting.
o Performance feedback- proper feedback on achievement of goals provides
motivation to employees. Performance feedback tends to encourage employees
towards better job performance.

According to goal setting theory, specific and challenging goals are more likely to motivate.
Goal setting can be implemented by “management by objectives” approach.

Along with the above 4 elements of goal setting, two other elements also have influence
over goal-performance relationship-
o Goal commitment- commitment towards goals increases when goals are made
public, when there is internal locus of control and when goals are self set rather
than assigned.
o Self efficacy- an individual’s belief that he is capable of performing a task



• Management By Objectives:
o The concept of MBO was given by PETER DRUCKER.
o MBO is a process where superior and subordinate managers of an organization
jointly identify common goals, define areas of responsibility in terms of expected
results and use these measures as guides for performance and contribution.
o As the name suggests, MBO is a way of managing an enterprise by focusing on
objectives decided through participative decision making of employees as well as
management.
o MBO results in the following advantages:
§ Higher productivity of employees due to focused attention on specific
goals
§ Greater sense of identification by the management team due to
participative goal setting

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§ Improved communication within the enterprise which helps locating

weak points
§ Serving as a device for better organizational control

Ends means chain in MBO:
o There is a set of objectives at each level in an organization. Objectives at the top
level provide the basis for setting objectives at the second level which in turn
becomes the basis for objectives at the third level and so on. This implies that
ENDS flow downward from top to bottom.
o Objectives at the top can be achieved when objectives below it are fulfilled.
Objectives at the lowest level are fulfilled first and there is an upward movement
in accomplishment of objectives. Thus, MEANS flow upward from bottom to top.
Goals at the lowest level are a means to goals at a level above it.
(CHART)

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o SMART technique of GOAL SETTING:

Specific- A specific goal has a much greater chance of being accomplished than a general
goal. A general goal would be, “Get in shape.” But a specific goal would say, “Join a health
club and workout 3 days a week.”

Measurable- Establish concrete criteria for measuring progress toward the attainment of
each goal you set. When you measure your progress, you stay on track, reach your target
dates, and experience the exhilaration of achievement that spurs you on to continued effort
required to reach your goal.

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Attainable- When you identify goals that are most important to you, you begin to figure out
ways you can make them come true. You can attain almost any goal you set when you plan
your steps wisely and establish a time frame that allows you to carry out those steps.

Realistic- To be realistic, a goal must represent an objective toward which you are
both willing and able to work. A goal can be both high and realistic; you are the only one
who can decide just how high your goal should be.

Timely – A goal should be grounded within a time frame. With no time frame tied to it
there’s no sense of urgency. If you want to lose 10 lbs, when do you want to lose it by?
“Someday” won’t work. But if you anchor it within a timeframe, “by May 1st”, then you’ve
set your unconscious mind into motion to begin working on the goal.


• Reinforcement theory- Developed by B F Skinner, reinforcement theory argues that
behavior of people is largely determined by its consequences. Those actions that tend to
have positive or pleasant consequences tend to be repeated more often in the future,
while actions with negative consequences are less likely to be repeated.
o According to Reinforcement theory, managers should try to structure rewards
and punishments in such a way that consequences of effective job behavior
are positive while consequences of ineffective work behavior are negative or
unpleasant.
o The focus of this approach is upon changing or modifying behavior of people
on the job.
o Reinforcement theory is based on the idea that behavior is a result of expected
consequences. It is based on “Law of Effect” i.e individual’s behavior with
positive consequences tends to be repeated, but individual’s behavior with
negative consequences tends not to be repeated.

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In order to reinforce desirable behavior, 4 strategies can be followed:

o Positive reinforcement- Use of rewards that stimulate desired behavior and
strengthen probability of repeating such behavior. Positive reinforcement can
be money, promotion, recognition etc.
o Negative reinforcement- it is also called avoidance learning. It entails use of
unpleasant consequences to condition individuals to avoid behaving in
undesirable ways. Avoidance learning is not a strategy of punishment. For
example, we learn to watch for traffic when crossing streets to avoid
accidents.
o Extinction- Extinction implies withdrawal of all forms of reinforcement to
remove undesirable behavior. For example, a disruptive employee who is
punished by his supervisor for his undesirable behavior may continue the
disruption because of attention they bring. By ignoring and isolating the
employee, attention is withdrawn and the motivation for disruption is also
possibly withheld.
o Punishment- punishment is followed when an undesirable behaviour needs to
be eliminated. For example, wages may be reduced if a worker is not
producing good quality products.


Social learning theory:
Social learning is a build up over reinforcement theory. Reinforcement theory focuses on
only external factors and ignores internal drives. A blend of internal and external
approaches is obtained through social learning theory.
This theory suggests that employees gain substantial information about how to perform, by
observing and imitating others in the organization. This means that employees do not react
only based on consequences, but carefully observe people and symbols around them. Thus,
individual behavior is a result of continuous reciprocal interaction between cognitive
(mental) and environmental (external) determinants.

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Job enrichment versus Job enlargement:

Job enrichment is also called vertical loading.
• It implies increasing contents of the job, upgrading of responsibility, scope and challenge
in work.
• The Purpose of Job Enrichment is to make the work more challenging
• It requires acquisition of higher level skills
• Herzberg gave emphasis on job enrichment to motivate employees. He found that
enriched jobs were more satisfying, more productive and enrichment resulted in a
broader range of skills and talents.

Job enlargement is also called horizontal loading.
• It attempts to make the job more varied by removing dullness associated with performing
repetitive operations.
• It involves expansion of activities for the employee at the same level or position.
• The purpose of job enlargement is to reduce monotony from work.
• Job enlargement does not necessarily require acquiring higher level skills.


Miscellaneous:

Incentives and Motivation-

1. Carrot and Stick approach- carrot and stick approach relies on economic rewards for
performance (carrot) and punishment for non performance (stick). It was used
widely in the early days of industrial revolution. Management takes the role of
autocratic leader under carrot and stick approach. The assumption in this approach
is that people would work if they are driven by fear of punishment. In recent times,
this approach has become less effective because people are driven by things other
than money and employee unions have made it difficult for management to fire
employees at will.

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2. Financial and Non financial incentives- Incentive can be defined as inducement

which stimulates one to action in a desired direction. A large variety of incentives are
used to motivate people in modern organizations-
a. Pecuniary or financial incentives
b. Non financial incentives

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