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Wednesday, October 24, 2012

6 B Maslow’s Theory of Needs Continued

Self-actualization- Achieving an organization with 80 percent or more of the workers need for self-actualization fulfilled is the objective effective leaders strive for. The result is hard working and happy workers. The manager has to spend very little time on discipline problems, suppressing false rumors and similar non value added work. One key to satisfying the self-actualization need is, first, ensure that all subordinate needs are satisfied (Maslow’s first argument) and then empower workers to have control over the processes involved in their job. This is not as simple as it sounds. If a manager just says to workers that they are empowered they have far different definitions of what this means than the manager intends.
Effective empowerment required that workers be trained in process improvement techniques because otherwise empowered workers make changes in their work processes that are likely to be counterproductive, as is discussed in later lectures on process improvement. Effective empowerment also requires careful definition and effective communication of the boundaries of the empowerment. These boundaries are likely to be process and perhaps even worker dependent. It takes some experience to get them right and it is better to start with tighter than necessary boundaries and loosen them as time and results indicate that looser boundaries are warranted. The objective is to provide sufficient empowerment that the workers feel they have adequate control to implement changes that make their jobs easier, improve the quality of their work products, reduce costs or otherwise improve the processes they control. The later lectures on process improvement will help students understand more of the issues involved in defining boundaries for empowerment.
Assuming workers are empowered and functioning as intended they make significant improvements in their job processes over time. They naturally expect to be rewarded for this good work. Ataboy’s are necessary and sufficient up to a point but eventually workers expect and deserve more. In today’s flat and lean organizations there are not many promotions available to reward good work. The effective leader must be creative in developing career paths that are rewarding for workers and beneficial for the organization. Expanding job scope and lateral moves are positive for both the organization and worker as long as proper training is provided to prepare the worker for new responsibilities.
Empowerment, effective career planning and fair pay increases are necessary for self-actualization but not quite sufficient. Workers need to feel that their work is important and that their organization’s mission is worthy of their efforts. Workers understand that most organizations have a goal of making profits but they expect broader and more meaningful missions. Defining an organization’s mission is a strategic issue and therefore typically not within the job description of the people studying this course. Low and mid-level managers can make sure they understand the organization’s mission and communicate it to their workers.
There are a variety of worthy missions that inspire most workers. For example, it’s easy for space and defense organizations or health care because most people are inspired by being part of a major space project, supporting the defense of their country or improving health care. Consumer goods and service organizations need to provide their workers with the opportunity to participate in a meaningful way in worthy missions such as environmental improvements, social issues or community services. This is becoming easier as awareness grows that business organizations can contribute in ways that are win-win, i.e. win for the organization and win for society. An article by Tim Simmons of the Raleigh News & Observer quotes Rich Leimsides, director of the Center for Business Education in New York. Leimsides says that there is a noticeable increase in the number of executives who see a link between environmental practices, social issues and bigger profits. Obvious examples include saving energy and thereby reducing costs while helping with global warming; reducing wastes saves money and helps the environment. Major manufactures like Ford and GM are now investing in buildings that meet green standards and save money.
If you are unfortunate enough to work for an organization that does not have a mission that is inspiring then you need to define objectives for your group that are compatible with the overall organization’s mission and offer inspiration to your group. Remember that you need to involve the group in defining new objectives. Otherwise they are not likely to feel the inspiration you expect. You need your management’s approval for any budget or company time that is to be invested for environmental, community or social issues. You should be ready to defend why you think it is important to have your organization involved in a broader mission and why it makes sense to the overall enterprise. Make sure you introduce your plan in a way that the workers feel you are giving them an opportunity not an obligation. Single working parents are likely fully committed and may lose their feeling of belongingness if they feel they are being coerced to join in some volunteer activity that they don’t have time for.
An important thing for managers is to “walk their talk” with respect to missions. It is demotivating to employees to listen to their boss say great things about the organization’s commitment to the environment or to a social issue and then watch the boss ignore obvious opportunities to act on the commitment.
Pay as it relates to Maslow
Pay increases impact several needs ranging from safety to self-actualization and therefore require significant management attention. Few low and mid-level managers have control over the budgets available for pay increases. However, these managers do influence the relative increases given to their subordinates. This task is one that can have negative or neutral results. It isn’t likely to result in all workers being happier no matter how hard the manager works on achieving fairness. The best way to avoid negative motivation and achieve at least neutral results is to be as fair as possible. This isn’t easy because the manager simply doesn’t have enough information to be absolutely fair. This is because work performance is the convolution of the workers’ efforts and skills with the quality of the work processes, which can be good or bad independent of the skills or efforts of the workers.
I’ll discuss three approaches but I can’t claim any of these are completely fair or provide sound arguments for one over the other. A good source of further study is chapter 14 of Brian Joiner’s book Fourth Generation Management.
Two principles to follow in planning pay increases for workers are avoid de-motivators and avoid judgments based on only one year’s work or one job assignment. Brian Joiner calls rankings, ratings and forced distributions great demoralizers. People don’t believe these actions, which always have winners and losers, are fair, especially if their personal ranking, rating or distribution results in their receiving a smaller pay increase than coworkers they know.
If you work in a large enterprise your human resources department likely has curves of pay vs. time (years of experience or time in grade) for the enterprise’s various salary grades. An approach I have used in such cases is to give pay increases that keep people on the appropriate curve as best you can with the budget you are allocated. This approach avoids ratings, rankings and forced distributions and it keeps pay close to the prevailing market assuming the enterprise’s curves are based on the market. The primary flaw in this approach is that each person receives an arbitrary increase, which the manager perceives as fair but the fairness is not always apparent to workers that receive smaller increases than their coworkers. If your enterprise does not have such curves you can develop them yourself, a difficult task, or use an alternate approach to allocating pay increases.
An approach recommended by some management experts is to divide the workers into three groups. Admittedly this is a forced distribution but minimally arbitrary. One group contains the few workers who have consistently demonstrated outstanding work in their last three or four assignments, typically over more than one year. Another group contains the few who have consistently demonstrated unsatisfactory work in their last three or four assignments. The idea is that over sufficient time the quality of the work of an individual can be separated from the effects of the system influencing the worker. One assignment or even one year is usually not enough for a manager to be able to make a fair assessment of a workers performance independent of the system.
The remaining workers, which should be most of the workers in the organization being evaluated, are in a middle group. The group consistently demonstrating outstanding work receive promotions, increases in pay grade and/or a larger than average share of the available budget for increases in pay. The group consistently demonstrating less than satisfactory performance receives no or less than an average share of the available budget for increases in pay. The middle group shares the remaining budget equally by percentage increases with the objective being to keep workers’ pay competitive with the market for their education and experience. The belief is that those consistently demonstrating unsatisfactory work know their performance is less than desired and understand why they receive little or no pay increases.
The three group method is reasonably fair but has flaws in addition to being a forced distribution. First it does not address pay discrepancies that exist from history. It is not unusual to be managing an organization made up of individuals of different ages, different education, different years of experience and different job experience as well as different job performance. These collective differences often lead to people with similar backgrounds and capabilities receiving quite different pay. This obviously isn’t fair and eventually people learn of such unfair situations and are demotivated. The effective leader does the analysis to reveal such situations and works with the personnel department to eliminate them. Sometimes this can take a few years but it is necessary to prevent workers being demotivated due to unfair pay discrepancies.
A second flaw is it does not address the senior person who has been in the same job for a long time and has reached the maximum market rate for that position. If the person does not warrant a promotion or desire a transfer to a higher paying position then that person should receive less pay than most others in order to keep within the bounds of competitive pay for the position. These cases must be dealt with on an individual basis.
A third flaw is that the few individuals receiving less pay due to unsatisfactory work over several assignments are demotivated, which is likely to lead to even less satisfactory performance. Some would argue that it is better to give the same increases to the unsatisfactory workers as to most other workers to avoid demotivating the unsatisfactory workers. This is the third approach and it isn’t a perfect solution either as workers that are performing satisfactorily are likely to see it as unfair to them. I do not have the data or experience to argue which approach is best

Exercise 1

1.     How is need fulfillment correlated with effectiveness?
2.     Which needs are satisfied with money?
3.     What are the effects of individual rewards? Team rewards?
4.     What is the effect of excessive job stress?
5.     Define the likely problems experienced by a worker that is not moving forward in Maslow’s hierarchy for each stage of the hierarchy.
6.     Define a management strategy or action that is likely to help a worker move from each stage to the stage on its right.

Exercise 2

1.   Pick at random four of your direct reports or peers that are typical of your organization. Assess each one against Maslow’s hierarchy of needs by determining the highest need that you believe is fulfilled for that individual. This gives you another measure of the health of your organization. If three or four have achieved self-actualization then your organization is most likely nearly as productive as it can be except for improving work processes. If two or more have safety or belongingness needs unfulfilled then your organization is not healthy and is most likely not nearly as productive as it could be.
2.   If your results show less than three out of four with self-actualization needs fulfilled then write down a draft plan on what you need to do to improve the motivation of your organization. Reread the lecture if you don’t have ideas on what to do. You don’t need to start working on your plan yet but keep the plan handy so that you can review it later as part of developing a more comprehensive action plan.

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