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

POWERPOINT 7-1 I. INTRODUCTION TO LEADERSHIP Chapter Title AND MOTIVATION (Refers to text page 208)

Leadership and employee motivation are key POWERPOINT 7-2 factors in an organization’s success. Learning Objectives (Refers to text page 209) II. MANAGEMENT AND LEADERSHIP TEXT REFERENCE ►LEARNING OBJECTIVE 1 Real World Business Apps Understand the difference between management (Box in text on page 211) and leadership. (Text pages 210-211) Sam Anderson is the owner A. Differences Between Management and of a sporting goods store called Casey’s Sports. The Leadership store’s sales have been 1. Leadership is the process of offering declining, and Sam is concerned about the long- guidance or direction. term survival of the business. He has concluded that the 2. Management is the act, manner, or decline is related to practice of managing, handling, employee motivation. Sam supervision, or control. needs to figure out what he can do to motivate his 3. A leader provides guidance, while a employees. manager oversees and manages the POWERPOINT 7-3 activities that must be done to reach Management and goals. Leadership (Refers to text B. A leader must be able to motivate others to pages 210-211) want to do the things that need to be done. TEXT FIGURE 7.1 1. A leader does not need to have Not Every Manager Is a Leader—Separate and organizational power. Overlapping Roles (Box in LECTURE OUTLINE LECTURE NOTES

2. Anyone can be a leader if they are text on page 211) willing to provide guidance and LECTURE LINK 7-1 motivate others. Best Business Leaders of th C. Not every manager is a leader, and not the 20 Century These are the top executives every leader is a manager. of the 20th century, as chosen 1. It is hard to be an effective manager through a survey of executives. (See complete without also being a leader. lecture link on page 7.Error: Reference source not found 2. But there is no reason that a leader of this manual.) must be a manager. 3. Leadership is a quality found at any level of the organization. TEXT FIGURE 7.2 Typical Characteristics SELF CHECK QUESTIONS (Text page 212) Associated with 1. What are some differences between managers and Management and leaders? Similarities? Leadership (Box in text on page 212)

III. LEADERSHIP QUALITIES POWERPOINT 7-4 ►LEARNING OBJECTIVE 2 Leadership Qualities Describe the qualities of a leader and the (Refers to text pages 212- differing leadership styles. (Text pages 212-217) 217)

A. What Makes Leaders Different From BONUS INTERNET Others? EXERCISE 7-1 Are Leaders Born or Can 1. It is hard to identify one set of distinct They Be Taught? qualities that all leaders have. This Internet exercise explores the research and 2. However, researchers have identified rationale behind this seven sets of qualities that help question. (See complete exercise on page 7.Error: leaders succeed. Reference source not found B. Integrity, Ethics, and Self-Knowledge of this manual.) 1. Effective leaders tend to be highly ethical, trustworthy, and reliable. TEXT REFERENCE 2. Self-knowledge Study Skills: Can You Read This? a. These leaders also know their (Box in text on page 213) strengths and limitations and what An additional exercise and their principles, beliefs, and values discussion is available on LECTURE OUTLINE LECTURE NOTES

are. page 7.Error: Reference source not found of this b. Leaders who identify their manual. limitations can surround themselves with people who bring complementary skills.

3. The text features the example of Yvon CRITICAL THINKING Chouinard, founder of outdoor EXERCISE 7-1 company Patagonia. Traits of Leaders What traits are common to a. Patagonia strives to be a “green” great leaders? (See complete exercise on page 7.Error: business emphasizing Reference source not found environmental sustainability of this manual.) through less waste and recyclable material. b. Chouinard also supports his employees’ outdoor interests through flextime. C. Having Vision, Understanding the Business, and Understanding the Tasks 1. Great leaders have a deep understanding of the business. 2. Successful leaders can visualize the TEXT REFERENCE big picture and see the organization 5- Career Development: 10 years in the future. Communication and Leadership 3. The text uses the example of Ken (Box in text on page 215) Hendricks, founder of ABC Supply. The most important leadership skill is good 4. Ken and Diane Hendricks believe in communication. What are offering quality products and a great some of the things that can cause poor communication? place for their employees to work. An additional exercise and D. Listening Willingly, Accepting discussion is available on page 7.Error: Reference Constructive Criticism, and source not found of this Communicating manual. 1. Great leaders are approachable, accessible, and willing to listen. 2. Often managers, and especially LECTURE OUTLINE LECTURE NOTES

entrepreneurs, believe they have the answers, a formula for disaster. 3. An effective leader listens to others and is willing to accept constructive criticism and act on it. a. The text uses the example of Christine White, owner of Boudoir Baskets. b. A sales rep brought up a complaint about a new product, but White ignored it.

c. Soon other complaints came in, TEXT FIGURE 7.3 and White had to pull the product. Undesirable Leader Qualities (Box in text on 4. Leaders must recognize, accept, page 218) 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 LECTURE OUTLINE LECTURE NOTES

changes. LECTURE LINK 7-2 Three Types of Great 3. The text uses the example of Julie Leaders Rodriguez, owner of Epic Divers & According to one business writer, there are three basic Marines, who faced massive changes types of brilliant bosses. (See after Hurricane Katrina. complete lecture link on page 7.Error: Reference source not a. Her business suffered severe found of this manual.) damage due to the storm. b. She kept her employees on the payroll and dealt with the changes. c. Rodriquez found that a participative management worked CRITICAL THINKING best. EXERCISE 7-2 Crisis Management 4. However, change also brings This exercise explores tremendous challenges. management reaction to rapid, unexpected change. 5. Embracing change and working (See complete exercise on through it brings out the best in a page 7.Error: Reference source not found of this company’s leader and employees. manual.) F. Being Decisive and Committed 1. Decision making is choosing among two or more alternatives. BONUS INTERNET EXERCISE 7-2 2. Great leaders seek opinions and The Most Powerful Women feedback from others but, in the end, in Business Each year Fortune magazine make the decision and are committed lists the most powerful to it. women in business. This exercise directs the students 3. Many managers fail to make decisions to research the listing for the or procrastinate. current year. (See complete exercise on page 7.Error: 4. Amy Rees Lewis, CEO of Reference source not found MediConnect Global, is an example of of this manual.) a decisive leader who is committed to the success of her company. BONUS CASE 7-1 When Failure Is the Norm G. Positive Attitude and Enthusiasm How do you motivate 1. Attitude is contagious. employees when 96% of their projects fail? (See 2. Effective leaders exude positive complete case, discussion LECTURE OUTLINE LECTURE NOTES

attitude and enthusiasm. questions, and suggested answers on page 7.Error: H. Take Care of People and Inspire Them Reference source not found of this manual.) 1. Effective leaders find ways to take care of their employees and inspire them to achieve uncommon goals. BONUS INTERNET 2. Example: Google, named Fortune’s EXERCISE 7-3 Which Are the Best 2007 “Best Company to Work For” Companies to Work For? 3. The text also uses the example of This exercise asks students to use the Internet to research Graham Weston, co-founder of which companies are rated Rackspace, who uses creativity to best places to work. (See inspire employees to perform better on complete exercise on page 7.Error: Reference source not the job. found of this manual.) I. Great leaders make great things happen through: LECTURE LINK 7-3 Smucker’s: Jams and 1. communicating their vision; Thank Yous 2. possessing a willingness to listen and A key motivation philosophy at J. M. Smucker is to say change; “thank you” for a job well 3. exuding ethical actions, a positive done. (See complete lecture link on page 7.Error: attitude, and enthusiasm; Reference source not found 4. committing to always take care of their of this manual.) people. CRITICAL THINKING SELF CHECK QUESTIONS (Text page 218) EXERCISE 7-3 1. What are the different characteristics between managers Managing a Family and leaders? Business 2. What are seven qualities of a good leader? Which do Management and motivation can be difficult in family you have and which do you plan to work on? firms. This exercise presents such a situation. (See complete exercise on page 7.Error: Reference source not found of this manual.)

POWERPOINT 7-5 IV. LEADERSHIP STYLES Leadership Styles A. Formal and Informal Leadership (Refers to text pages 218- 221) 1. In FORMAL LEADERSHIP, someone LECTURE OUTLINE LECTURE NOTES

has been given authority to make TEXT REFERENCE decisions or lead a group. Study Skills: Being a Leader Now 2. In informal leadership someone does (Box in text on page 219) not have “official” authority, but is Here are some ways students can practice leadership skills recognized as a leader by the group. while still in school. An 3. Informal leadership often occurs in a additional exercise and discussion is available on team or group without a designated page 7.Error: Reference leader. source not found of this chapter. 4. According to Shannon Kalvar, two main types of leaders exist in groups: a. A TASK LEADER is a leader who plans activities and helps keep the TEXT REFERENCE group on task. Thinking Critically: b. A SOCIAL LEADER is a leader Leadership Self-Test (Box in text on page 220) who ensures everyone in the group is getting along and agrees with the direction the group is LECTURE LINK 7-4 McClelland’s Acquired going. Needs Theory c. The same person may play both Psychologist David roles, or there may be two McClelland proposed that humans acquire different leaders. needs over time because of life experiences. He 5. Task and social leaders in a group do classified these needs into not need to have specific titles. three categories. (See complete lecture link on page B. Transformational Leadership 7.Error: Reference source not 1. A TRANSFORMATIONAL LEADER is found of this manual.) a leader who can transform the ideas of employees through inspiration, TEXT FIGURE 7.4 charisma, and a shared vision. Transactional Versus Transformational Leaders 2. He or she has lots of energy and (Box in text on page 221) charisma and is able to inspire employees to achieve the organizational vision. LECTURE LINK 7-5 3. Steps in developing a vision: The L Factor a. The vision comes either from the According to one author, likeability, not intimidation, LECTURE OUTLINE LECTURE NOTES

leader or from other employees or is the real key to conquering the workplace. (See complete managers. lecture link on page 7.Error: b. The leader articulates the vision Reference source not found of this manual.) and gets collective buy-in. c. The transformational leader works with employees to develop strategies to make the vision a reality. d. The leader “leads the charge” in executing strategies. 4. Yvon Chouinard of Patagonia is an example of a transformational leader. C. Transactional Leadership 1. A transactional leader is a leader who gets people to do things by providing structure and guidelines based on the exchange process. 2. This leadership style is based on the exchange process. 3. Most managers tend to follow the transactional leadership style.

SELF CHECK QUESTIONS (Text page 222) 1. What are the differences between formal and informal leaders? 2. What are the main differences between transformational and transactional leaders? Which aspects of these leadership characteristics do you plan to work on? Explain.

V. IMPORTANCE OF MOTIVATION ►LEARNING OBJECTIVE 3 Understand the importance of motivation. (Text pages 222-229) POWERPOINT 7-6 A. MOTIVATION is the drive to satisfy a Importance of Motivation need. (Refers to text pages 222- 224) LECTURE OUTLINE LECTURE NOTES

1. People gain motivation in many ways. 2. An INTRINSIC REWARD is the personal satisfaction you feel when

you perform well and complete goals. TEXT FIGURE 7.5 3. An EXTRINSIC REWARD is a reward Extrinsic vs. Intrinsic Rewards (Box in text on given to an employee, such as a page 222) promotion or pay raise. 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 TEXT FIGURE 7.6 Scientific Management was Taylor’s Scientific published in 1911. Management Principles (Box in text on page 223) b. Taylor used TIME AND MOTION STUDIES, studies of the tasks performed to complete the job and the time needed to do each task. 2. As researchers determined the most efficient way of doing tasks, efficiency became the standard for setting goals. 3. SCIENTIFIC MANAGEMENT is TEXT REFERENCE studying the most efficient ways of Career Development: Understanding That doing things and then teaching people Results Matter those techniques. (Box in text on page 225) An additional exercise and 4. Taylor’s philosophy has shortcomings. discussion is available on a. Scientific management viewed page 7.Error: Reference source not found of this people as machines that needed manual. to be properly programmed. b. There was little concern for the LECTURE OUTLINE LECTURE NOTES

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 plant in Cicero, Illinois. a. Begun in 1927, the studies ended six years later. POWERPOINT 7-7 b. The purpose of the studies was to Importance of Motivation determine the effect of (Refers to text pages 224- 225) environmental variables, such as lighting. c. The productivity of the LECTURE OUTLINE LECTURE NOTES

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 respected. c. The workers enjoyed the special atmosphere and additional pay for the increased productivity. 4. The term HAWTHORNE EFFECT refers to the tendency of people to behave differently when they know POWERPOINT 7-8 they are being studied. Importance of Motivation a. The results of this study (Refers to text pages 225- 226) encouraged researchers to study human motivation and the managerial styles that lead to more productivity. b. Mayo’s findings led to new assumptions about employees. TEXT FIGURE 7.7 Maslow’s Hierarchy of c. Money was found to be a Needs (Box in text on page relatively ineffective motivator. 226) D. Maslow’s Hierarchy of Needs LECTURE OUTLINE LECTURE NOTES

1. Psychologist Abraham Maslow believed that motivation arises from need. a. One is motivated to satisfy unmet needs. CRITICAL THINKING b. Satisfied needs no longer EXERCISE 7-4 motivate. Testing Maslow’s Hierarchy of Needs c. Maslow placed needs on a This exercise asks each hierarchy of importance. student to evaluate his or her needs based on Maslow’s 2. MASLOW’S HIERARCHY OF NEEDS hierarchy of needs. (See is a theory of motivation based on complete exercise on page 7.Error: Reference source not unmet needs, from basic physiological found of this manual.) 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 LECTURE LINK 7-6 recognition and acknowledgment Recognition: Making from others, as well as self- Heroes respect and a sense of status or Companies often make the mistake of equating pay with importance rewards. The reward for outstanding performance e. Self-actualization needs: the need should be a special gain for to develop to one’s fullest special achievement. (See potential complete lecture link on page 7.Error: Reference source not 3. When one need is satisfied, the found of this manual.) person is motivated to do something to satisfy a higher-level need. a. A satisfied need is no longer a LECTURE OUTLINE LECTURE NOTES

motivator. b. If lower-level needs are not met, they may reemerge and take

attention away from higher-level TEXT FIGURE 7.8 needs. Herzberg’s Motivators and Hygiene Factors (Box in c. Lower level needs are met and text on page 228) higher level needs dominate in developed countries. POWERPOINT 7-9 E. Herzberg’s Two-Factor Theory Herzberg’s Two-Factor Theory (Refers to text pages 1. Frederick Herzberg tried to identify the 227-229) 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; BONUS CASE 7-2 Hot Topic: Motivation is a c. interest in the work itself; Hot Topic (Video Case) This bonus case ties in with d. opportunity for growth; the video available for use e. opportunity for advancement; with this chapter. Hot Topic stores sell clothing and f. importance of responsibility; accessories that appeal to an alternative culture. This case g. peer and group relationships; highlights the company’s emphasis on employee h. pay; empowerment. (See i. supervisor’s fairness; complete case, discussion questions, and suggested j. company policies and rules; answers on page 7.Error: Reference source not found k. status; of this manual.) l. job security; m. supervisor’s friendliness; BONUS CASE 7-3 n. working conditions. Managing Volunteers 3. Herzberg noted that the highest How does motivating volunteers differ from ranking factors dealt with job content. managing employees? (See complete case, discussion 4. The other factors had to do with job questions, and suggested LECTURE OUTLINE LECTURE NOTES

environment and were not considered answers on page 7.Error: Reference source not found to be motivating. of this manual.) 5. Herzberg’s conclusions a. In Herzberg’s theory of motivating factors, MOTIVATORS are job CRITICAL THINKING factors that cause employees to EXERCISE 7-5 be productive and that give them Motivation Survey This exercise gives the result satisfaction. of a motivation survey for b. HYGIENE FACTORS are job two supervisors and asks students to interpret the factors that can cause results. (See complete dissatisfaction if missing but that exercise on page 7.Error: do not necessarily motivate Reference source not found of this manual.) employees if increased. c. The best way to motivate employees is to: i. make the job interesting; ii. help them achieve their objectives; iii. recognize their achievement through advancement and added responsibility. 6. Managers can use these findings in BONUS CASE 7-4 Using Compensation to several ways Motivate a. Managers can ensure employees This case presents one have a path for promotion and are manager’s motivation incentive: a quarterly bonus challenged by their jobs. for employees if labor costs are kept below 11% of b. JOB ROTATION, is a motivation company sales. (See technique that involves moving complete case, discussion employees from one job to questions, and suggested answers on page 7.Error: another. Reference source not found c. JOB ENLARGEMENT is a of this manual.) motivation technique that involves combining a series of tasks into one challenging and interesting LECTURE OUTLINE LECTURE NOTES

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) LECTURE OUTLINE LECTURE NOTES

1. Define intrinsic and extrinsic rewards. Provide examples of each. 2. How did scientific management set the stage for further research on employee motivation? 3. Describe how Maslow’s hierarchy of needs theory can be used by managers in the workplace.

VI. EMPLOYEE IMPROVEMENT THEORIES ►LEARNING OBJECTIVE 4 Describe the key principles of employee improvement theories. (Text pages 230-232) POWERPOINT 7-10 Employee Improvement A. MBO and Goal Setting Theory Theories (Refers to text 1. GOAL - SETTING THEORY is the idea pages 230-232) that setting ambitious but attainable goals can motivate workers and improve performance. a. In effective goal-setting the goals must be: i. realistic; ii. accepted; 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 LECTURE OUTLINE LECTURE NOTES

objectives among top and middle-level managers, supervisors, and employees. TEXT FIGURE 7.9 3. Steps in the MBO process: The Cycle of Management a. Managers and employees by Objectives (Box in text establish mutually agreed upon on page 230) 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 TEXT FIGURE 7.10 Reinforcement Theory 1. REINFORCEMENT THEORY is the (Box in text on page 231) idea that positive and negative reinforcement motivate a person to behave in certain ways. a. Individuals act to receive rewards and avoid punishment. CRITICAL THINKING EXERCISE 7-6 b. Positive reinforcements are Does Money Motivate? rewards such as praise, This exercise involves a recognition, or a pay raise. debate among small groups as to whether or not money is c. Negative reinforcement includes a motivator. (See complete reprimands, reduced pay, and exercise on page 7.Error: Reference source not found layoff or firing. of this manual.) d. Extinction is trying to stop undesirable behavior by not responding to it. LECTURE OUTLINE LECTURE NOTES

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) 1. Define goal setting theory as it relates to employee performance. 2. Explain the steps in the cycle of management by objectives. 3. Compare and contrast reinforcement and equity theory.

BONUS CASE 7-5 VII. EMPLOYEE EMPOWERMENT Turning Tyco Around ►LEARNING OBJECTIVE 5 After Tyco’s former CEO Explain how employees can be empowered in Dennis Kozlowski’s organizations. (Text pages 232) conviction for looting $600 million from the company, A. Empowerment is allowing employees the Ed Breen was brought in to ability and trust to make decisions. rescue the troubled company. (See complete case, 1. If an employee makes a mistake, it discussion questions, and should be accepted and corrected, but suggested answers on page 7.Error: Reference source not not punished. found of this manual.) 2. Empowerment makes employees feel POWERPOINT 7-11 a sense of ownership within the Employee Empowerment company. (Refers to text page 232) B. Motivation begins with acknowledging a job TEXT REFERENCE well done. Career Spotlight: So, You Want to Be … a Leader? SELF CHECK QUESTIONS (Text page 233) (Box in text on page 233) 1. Define empowerment. Discuss a job you had in which you were not empowered, and a job you had in which TEXT REFERENCE you were empowered. Was your motivation level Real World Business Apps different at the two jobs? (Box in text on page 234) LECTURE OUTLINE LECTURE NOTES

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.