What is the connection between a company’s reward system and the level of ethical behaviors

Talya Bauer and Berrin Erdogan

Learning Objectives

Understand the role of motivation in determining employee performance

Classify the basic needs of employees

Describe how fairness perceptions are determined and consequences of these perceptions

Understand the importance of rewards and punishments

Apply motivation theories to analyze performance problems

Chapter 5 Theories of Motivation

© 2010 Jupiterimages Corporation


Performance at Trader Joe’s

What is Trader Joe’s?

  • Unique shopping experience
  • Located in 22 states
  • Chain food store with a niche market

What’s different?

  • Upbeat, helpful employees
  • Best paid employees in the industry
  • Promotes from within
  • Employees & managers “pitch-in”
  • Quarterly performance evaluation and feedback
  • Employee autonomy
  • Employees are knowledgeable of the store’s products


Maslow Hierarchy of Needs

ERG Theory

Two-Factor Theory

Acquired-Needs Theory

Acquired-Needs Theory

The Thematic Apperception Test (TAT) assesses a person’s dominant needs by presenting subjects with an ambiguous picture and having them write a story about it.

The story you create based on this picture might give away the dominant needs that motivate you.

© 2010 Jupiterimages Corporation

  • Many managers assume that if an employee is not performing well, the reason must be a lack of motivation. Do you think this reasoning is accurate? What is the problem with the assumption?
  • Review Maslow’s hierarchy of needs. Do you agree with the particular ranking of employee needs?
  • How can an organization satisfy employee needs that are included in Maslow’s hierarchy?
  • Which motivation theory have you found to be the most useful in explaining why people behave in a certain way? Why?
  • Review the hygiene and motivators in the two-factor theory of motivation. Do you agree with the distinction between hygiene factors and motivators? Are there any hygiene factors that you would consider to be motivators?
  • A friend of yours demonstrates the traits of achievement motivation: This person is competitive, requires frequent and immediate feedback, and enjoys accomplishing things and doing things better than she did before. She has recently been promoted to a managerial position and seeks your advice. What would you tell her?


Equity Theory

Person Referent Other

Outcomes = Outcomes

Inputs Inputs

Reaction to Unfairness

Differences in Equity Perception



OB Toolbox

Be a Fair Person!

Expectancy Theory




1) Will my effort lead to high performance?

2) Will performance lead to outcomes?

3) Do I find the outcomes desirable?

Influencing Expectancy, Instrumentality, and Valence


Reinforcement Theory

Manager praises the employee

Manager demotes the employee

Manager stops nagging the employee

Manager ignores the behavior

OB Toolbox

Be Effective in Your Use of Discipline

Organizational Behavior Modification (OB Mod)

  • Your manager tells you that the best way of ensuring fairness in reward distribution is to keep the pay a secret. How would you respond to this assertion?
  • When distributing bonuses or pay, how would you ensure perceptions of fairness?
  • What are the differences between procedural, international, and distributive justice? List ways in which you could increase each of these justice perceptions.
  • Using examples, explain the concepts of expectancy, instrumentality, and valence.
  • Some practitioners and researchers consider OB Mod unethical because it may be viewed as a way of manipulation. What would be your reaction to such a criticism?


Motivation and Ethics

Reinforcement theory has been particularly successful in explaining ethical behavior.

Motivation and Culture

Developing Nations

Industrialized Nations

  • What is the connection between a company’s reward system and the level of ethical behaviors?
  • Which of the motivation theories do you think would be more applicable to many different cultures?



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