



S1: can you uh give your attention to uh, to Dan for a moment?
S2: uh once again i'm your section rep my name is Daniel Cohen, just wanted to remind you uh, what's going on in S-G-A. i'm gonna send out an email, um i was looking to do it today but it might be tomorrow just to let you know, general email but tomorrow, at four-thirty in Hale Auditorium there's gonna be the forty-second annual business leadership awards ceremony, that's four-thirty, in Hale, Sam Zell, of the Sam Zell and Robert Lurie, Institute for en- Entrepreneurial Studies will be presenting, a section on entrepreneuria- entrepreneurialship, one-oh-one, and um, student government just wanted everyone to know about that and uh try to attend that so it's four-thirty tomorrow in Hale Auditorium, and um, go check it out, it should be very interesting. it's the forty-second annual, leadership_ business leadership award. thank you. 
<P :05> 
S1: uh, okay before we get started today, uh, with, a few announcements regarding class and also, um, uh uh the material we're gonna cover, uh you'll notice there's some microphones here at the front of the room, and that's because uh, for today's class we're being, uh, taped for a veri- very special project that's going on here at the University of Michigan, it has nothing to do, with your grades it has nothing to do with what's going on at the Business School, it has to do with a very special daya- database, um, that they're putting together here, and to tell you a little bit about that, uh Janine is going to explain why, uh we've been chosen to do this thing. 
S1: just a few reminders, due dates, today by five P-M, your classified ads are due, um the individual writing assignment is due Friday at five, um, couple of re- uh, responses to some questions i've gotten, you can, respond to the questions as questions or you could write your essay just responding to the three questions or you can put it together as an integrated essay, without saying that this is the, plot for one this is two and this is three. so whichever one enables you, to come up with the best argument, how to make the best case for what you're arguing, please follow that format. whichever works best for you, um the other thing is you can use materials through Wednesday's class. so, um, and all of those topics are listed_ again, you gotta be careful not_ you can't possibly use every single concept we've covered, uh choose a select few that you want to use, um that will enable you to uh, make the best diagnosis and um, and best plan of action. another point of clarification, in terms of, write-ups of case questions, you're given prep questions for every case we cover that's to help you prepare for class. i don't expect those to be handed in, except if i announce in advance that i want them, alright? an- and, then you'll be given your automatic, um, your automatic credit for doing it if you turn them in. we do highly suggest that you write them up, for class it enables you to prepare, you then have a record, of the case, for your notes for later when you go back to do assignments, uh but for example today and Wednesday, i do not expect you to hand in write-ups of the questions. uh for next cla- class we are going to be focusing on (Stripe and) Space, okay? that's the case that i want you to focus on again there're prep questions for that, then, you may, w- wanna just jot this down on your syllabus, pages sixty-nine through seventy-three in the in the, Presiding Motivating Jobs that_ those are the pages you wanna focus on just skim the rest, cuz we're gonna be focusing on the job characteristics model, and also the Lawlor reading Choosing an Involvement Strategy. so that's where you wanna focus your attention is on, pages sixty-nine through seventy-three in the Involvement yeah? 
S3: um as far as the writing assignment's concerned uh if we use, like the, coursepack as sources do you want them documented like? 
S1: no you do not, you do not have to give me um elaborate footnotes or a bibliography for what you use in your individual writing assignment. but if you do use an article, just put like, the author's name in parentheses, say where you're getting it from don't just say, um as the coursepack says, i need to know where you're taking something from, i don't need elaborate footnotes the key is, to focus on, the uh managerial diagnosis. so focus on sixty-nine, through seventy-three... so what are we gonna cover today? today's class, is one of two on motivation we're going to uh look at, motivation in the workplace, uh today we're gonna look in particular at, external sources, of motivation that is, what other than the content of the job, can motivate people to do a good job at work and to, deliver the sort of performance you're looking for, Wednesday we'll look a mor- we'll look more closely at, how you can structure the content of tasks so that they're motivating we'll look at the internal components of the work, for how you motivate, um, and i'm gonna introduce, multiple frameworks many of which yo- you read about for today, and then we'll apply expectancy theory, to the case of Hauser Foods. so, that's where we're going to um, focus attention, where i'd like to start though is on something that i think hits home, which is grades right? if you think about money in the workplace, grades is a little bit, like the equivalent of that, for students in a university, and here are two points of view about the effectiveness of grades as a motivator David Reisman Ford Professor of Social Sciences Emeritus at Harvard University says, <READING> when the freshman seminar program was inaugurated, i was one of its chief defenders and argued successfully, that it should be ungraded. faculty members who opposed this said that without evaluations, students would get by with shoddy work. i didn't think so. the freshman seminar and the senior thesis are the two great opportunities for Harvard students to really get engaged. i sometimes ask an undergraduate, did you take a freshman seminar? quite often the answer is no it's one less chance for an A. </READING> so there's Reisman's point of view, questioning, the impact of grades and here's Robert Cole, what he has to say, um, after attending the University of Michigan <READING> Cole who attended the University of Michigan recalls his choice of a major. in my first literature course in college, i thought i'd written a damn good paper on Homer's Odyssey. i got a C-minus on my sixth paper i got an A-minus, and i was so proud of myself. looking back i realize that the professor could've given me As on all six papers, but if he'd done that i wouldn't've studied literature. i would have felt literature must be for idiots if i can spend three hours on a paper, and get an A-minus. </READING> so there Cole's suggesting right that grades are in fact an effective motivator they get you to focus, on the task at hand they've developed, his, love for literature whereas Reisman says, oh you know grades really displace people's attention to this great opportunity (to) the freshman seminar, so i'm curious, what's your sense of grades? is there too much emphasis on grades here? or do you think that they're a critical motivator for learning? what's your sense? any opinions? any thoughts? Michael? 
S4: um, i think they're a good motivator, i think it uh, brings out competition, in our environment and, um pushes kids to like strive and be the best, [S1: mhm ] you know without 'em, i would probably do like, half as much. 
S1: mhm, jus- other thoughts? Melissa? 
S34: um, i think they're a really good motivator i was in the Residential College my first two years, and i totally slacked off, because we got evaluations and we didn't get grades. 
S1: d- does everybody know what goes on in in the R-C? wh- why don't you explain a little bit. 
S34: you just get pass-fail, and then you get a little written, explanation as to what, you do in the class and then how, you personally perform in there, so i personally like totally slacked off, because i knew i wasn't getting a grade in the course. 
S1: so, [SU-M: (xx) ] (we we) [SU-M: (xx) (xx) ] (good,) like, points of view here that say yeah they're they're a crucial motivator. Emily? 
S34: um, i think it really depen- depends on the individual because i know for me, um, i like to learn just to learn and [S1: uhuh ] i get pleasure out of that, and so when there's grades and, that puts a lot of um, it puts a lot of pressure that i don't need and i think it detracts from learning sometimes, so i think it really depends on whether you're, already a very motivated individual, or whether you need, like external motivation. 
S1: mhm. so, you've just suggested that there are, remember back to the uh, second class? individual differences in how we're going to react to the exact same, type of motivation. other thoughts about this? Dan?
S35: um i think grades are definitely a motivator, but i don't know that they motivate, towards the right behavior 
S1: like what? (Kim) [SU-M: yeah ] any thoughts about? 
S35: well i think there's, um it's definitely possible to m- with so much emphasis on grades you can motivate yourself to do something to get a grade without, actually learning, which is what the grade is supposed to make you do. 
S1: so, [SU-M: focusing (xx) ] it's called_ does anyone, know what that's called? Tariq? 
S5: rewarding A while hoping for B 
S1: yeah so we have the folly going on there and then there's also, there's another term that was used in your reading anyone, have any thoughts about that? there's something that they they talk about goal displacement right? that the grade is there to try and reinforce, try and motivate a certain type of behavior and instead of, learning the stuff what you're really, reinforcing is getting the grade. that the grade is there to motivate a certain type of behavior. other thoughts about this, how you feel? Kelly? 
S6: i think sometimes the grade is too like it may, [S1: just speak up. ] oh, i think [S1: (xx) ] sometimes with grades it may, influence the way you think about a class like, if you're sitting in lecture and you really enjoy the class but you take the first exam and you get a C or a D on it, [S1: uhuh ] all of the sudden you hate the class and you'll never take another class in that subject again. whereas if you didn't have the grade you may be more apt to say well i really enjoy the material, i'll sit and listen, (to some) more 
S1: so, then, there's taking what, Emily said one step further which is it's not just that it distracts you when you're doing it but like if you really love it and then you get a bad grade, [S6: it discourages you. ] your attitude changes. Beth? 
S33: i don't think that, the, grades necessarily reflect, learning, either like i don't think they're a good reflection. in classes where i've gotten you know like a a B-minus or something i feel like i've learned far, more over the course of the class than perhaps something where i went in with, knowledge already and just could ace the exam without even, listening, i don't feel like i learned anything in that class so, i don't know as i should be rewarded, i [S1: mm ] mean yeah i knew the material but did i really learn anything? no. 
S1: mhm so who n- so grade_ it's not clear what grades are necessarily rewarding or even motivating Rich?
S36: i think that a concrete example of this like goal displacement thing is that, like you look at someone's G-P-A, the concept of a G-P-A presupposes that all classes are created equal, but what you have at Michigan especially is that people actively seek out the absolute easiest classes in the school, <SS LAUGH> because they know they'll get an A in those classes, and th- n- and in doing so they they're removing you know the challenges away from their academic experience and i think that's at the sense where, grades just you know, ruin things. 
S1: so wait a second. how'd all of you, end up, here at the Business School where_ how do we treat grades here at the Business School? <SS LAUGH> [SU-M: well ] i'm no, i'm, it's
S4: well if you look_ even if you wanna get into the Business School for example i mean this is a lotta the times the way they do it they padded their G-P-A with, you know 
SU-M: (well)
SS: (xx)
S1: go ahead... go on. Jason?
S37: if you talk to like the admissions people like that's not what they say they say that, they look for the people that take the strong classes and i know for myself that, that's not true cuz i, barely took any, easy classes i took maybe, one easy class that's considered an easy class and, i didn't get all As and, uh like i, did poorly in a lot of classes but, [S1: mhm ] i was still_ i still got in here just because i took, a hard schedule. 
S1: mhm, so it's schedule grades, other things? David? 
S24: uh, mine was, more of the, the improper motivation because all through_ like even for a test, you studied very hard but then like often right after the test, i mean, next coupla days i won't even know the information that (xx) <SS LAUGH> it's totally gone out of my life. 
S1: but that never happens in organizational behavior. [S24: no ] <SS LAUGH> never. other thoughts? Tariq? 
S5: um, just to take a stab at the Business School again, um <SS LAUGH> we already_ <LAUGH> like they say they take the best students alright? you've got the best students, but the first thing they tell you when you come here is that, most of you are gonna get a B-minus or a B-flat. i mean, you're taking the best students, and you're telling them that all of you are gonna get different grades, [S1: uhuh ] where's the question of, me, being rewarded for what i am? [S1: uhuh ] rather than me being placed in one bell curve and say hey you're there, you know? where's the reward factor? i work my_ weekends i work Sundays but i'm not going to get rewarded because i know that, there's a curve that's facing me you know, it's not me [S1: uhuh ] so grades don't really reflect my effort. 
S1: so, it's, suggesting that maybe grades aren't the best motivator especially when you get to the Business School Jessica? 
S7: yeah i was gonna say that, same thing, that he said, when you have like a median that could be a median, you can work your, butt off and you're not gonna g- get_ nine ninety-five could be a B-minus, if everyone knows it so, it takes the emphasis away from like, you knowing it to like you concerned with if everyone else knows it, and it's, [S1: uhuh ] it does the opposite almost it's like [S1: (xx) ] i mean i could study this much i could study this much and i'll still get the same grade. 
S1: so it can have like, some dysfunctional effects after all. other thoughts Mike? 
S3: i also think it depends on, um, how it's graded, like whether it's objective or, subjective, cuz i know that like if something's like cut and dry, you know such as like a- an economics answer like if you n- i i think grades could be a good motivator cuz you're actually learning the information and like, if you put, right answer you're gonna get, the better grade whereas, if you write a paper which is like graded, you know based on your, teacher's interpretation of your paper and you may think it's like really, [S1: mhm ] great and your teacher (may,) not think the same way and i think that that also causes like a little problem, cuz, as far as like, grades are concerned [S1: mm ] cuz if you get the grade you're not expecting on the paper which_ you feel like how_ who is that person to like judge my work, [S1: mhm ] you know based on_ these are my thoughts [S1: mhm ] and like i don't appreciate you 
S1: so there so there's some situational factors that come into play, like whether you're at the Business School, whether it's a subjective, so-called subjective, examination of your abilities, or whether it's an objective test where there's data and a right or wrong answer. so one of the reasons, that, we introduce motivation that way is because, you day to day experience with grades what often happens in the workplace which is, you know there's this one type of motivator_ typically in the workplace it's money_ that we think can deliver all sorts of results that we're after, and it, in fact turns out, that maybe it has some, consequences we didn't expect, so we wanna be, particularly careful, in thinking about motivation, in thinking about, what we use to motivate people, and in thinking about, what sorts of things we wanna motivate and we'll look, carefully at the Hauser Foods case, um, in thinking about those questions but, let me give you just a brief overview, of motivation. the first question you wanna answer when you're a manager, when you're in an organization is you wanna understand, what are people being motivated to do? are people motivated to do the tasks that we seek, them to do? right? so we first wanna be able to detect motivation and there are three questions you wanna ask, when you wanna know, if people are motivated or not. the first one is direction right? where is their effort directed? what tasks are getting done? right? this, basic thing, where is their effort directed? the second, is amplitude right? how much effort are they devoting, to a particular task? how much of a task is getting done? that's the second diagnostic question when we wanna figure out if people are motivated, or not, to do something that we want, that we want them to get done. finally persistence, right? how long does their effort last? how long are they doing a particular task? okay those are the three, questions for, detecting whether in fact, what we want to motivate, is being motivated right? we want a particular task to get done, we wanna ask those questions. now why do you care about motivation right? if a task is getting done or people are performing, why do you really care about motivation? well the reason is, quite simple performance, we tend to believe, is a function, of motivation, and skill. right? people can be equipped to do a task but if they're not motivated, who cares how qualified they are they won't get it done. so on the one hand if we want tasks performed, we wanna know about motivation, but we also care about people right? we also care that people, are satisfied in the jobs that they're doing. and so, the way to make sure that they're satisfied, is to motivate them appropriately. so how do you start to think about motivation? and let me introduce, multiple frameworks, all of which you read about for today, in the chapter overview, and there're, there are three categories of frameworks that i, um, that i talked about. uh the first focus is on needs that is the way you motivate people is you find out what their needs are, and then, you address those needs. and the extent to which you can address those needs, will motivate, their behavior. the second looks at, an implicit calculation that models human behavior, as though there's this implicit calculation going on within people's brains, and the third says, well you need to put certain conditions into place within an organization. and when you put those conditions into place, you'll be able to motivate folks. so the needs, frameworks, um one of them, very popular one, is uh Abraham Maslow's hierarchy of needs the idea is, you need to take care of people's needs, at the lowest level, physiological needs, before you then address, higher-level needs like safety or security's next, then after that there're social needs, right? esteem needs and self-actualization there's this pyramid in your reading, the idea is, people need to have their, most basic needs taken care of you take care of those first, and then you move up the ladder and typically within an organization, it's the higher-level needs that we need to address. right? now, unfortunately though Maslow's hierarchy is incredibly appealing there's been no empirical research supporting it. now, Persberg came along and said, well there's really, two different types of needs. we've got things that are called hygiene factors, and things called motivators. hygiene factors, are the things that have to be in place, for people, not to be dissatisfied. so pay attention there to the double negative right? the idea is, the more of these things you have, doesn't motivate people, but you need a certain threshold level of these hygiene factors, in order for people not to be dissatisfied. right? this will just keep them from being, um upset and disgruntled so, things like, believe it or not, salary, or work policies, certain things have to be in place for people not to be dissatisfied. but then, after that, you can't necessarily motivate people, with more of those hygiene types cuz you then have to rely on the motivators. so motivators include things like the way you design, the job or responsibility the more of them you give people the more you can motivate, the kinds of performance that you want. finally uh, David McClellan, a social psychologist_ and i i talked about his theory when we discussed individual differences but he says, well people differ on their need for achievement their need for affiliation and their need for power. and you should identify what people's different individual needs are, where're they_ who's strong in a need for affiliation? you know what? it might be best to give them a job, where they can, satisfy that need they'll be more of a_ motivated to do it. right? people who are high on the need for achievement, set out really, challenging goals for them. right? need for power you might wanna be able to show somebody, how, the better job that they do the more control the more authority you'll give them. so identify people's individual needs, and then give them the opportunity, to achieve, and to meet those needs now, implicit calculation (in) these theories, and um, i'm gonna give you a handout, at the uh, towards the end of class with, uh models of these theories on them, the idea here is not that people explicitly are systematically making these sorts of calculations, the idea is rather, we can model their behavior, in light of, the calculations that are going on in their minds. so for example there's equity theory. right? the idea with equity theory is that somehow i'm gonna be motivated, by the extent to which, i'm calculating, what i'm getting, in return for my effort compared to what other people are getting in return for their effort. right? so if i'm getting paid a lot of money, for the effort i'm putting in and i see that other people, are getting paid a lot less, for the effort they're putting in, i'm gonna really increase my effort, cuz i wanna see it, as, being somewhat equitable. now, the reverse happens. if i see people, doing the same effort, putting in the same effort i'm putting in, right? the input is the same, and their outcome is a lot bigger they're getting a lot more for it, i'm gonna start to reduce my effort. cuz i wanna even the scales right? i'm calculating somehow in my mind, that, it should be an equitable distribution the outcome, compared to the input, should be the same for me as it is for others. so that's, equity theory there's_ expectancy theory is another sort of way, another sort of, calculation model, that we'll talk about and apply to Hauser Foods we'll talk about that a little later, but the final, framework you might think about, when you consider motivation, is putting in place, the appropriate set of conditions, right? you can either set up, goals, just establish goals doesn't make a difference what people's individual differences are, who cares what the calculations are that are going in their minds, set out, challenging goals, and that can motivate behavior or alternatively there's the idea, that if we set up the right set of reinforcements, the right set of, punishments, and rewards again it doesn't make a difference how people differ, doesn't make a difference what they're calculating, figure out what behavior you want, reinforce it with punishments or rewards. <P :05> so regardless of what framework you use, and the key in thinking, uh about motivation is to use multiple frameworks cuz the more frameworks you have, or if you, rely on a variety of frameworks, it enables you to address more problems. right? and it e- enables you to address problems, in a varieties of ways. cuz no one solution, is going to take care of all problems. and you wanna be able to look at certain managerial problems certain motivational problems, through a variety of lenses, so you can attack a problem, effectively now, when you're thinking about motivation frameworks, a lot of them, concentrate on carrots right? on rewards some of them focus on sticks on using punishments, and you wanna be careful, to make sure you're paying attention to both punishments and rewards. and you wanna, make sure that you diagnose a situation to determine, well, what kind of behavior's being punished? what kind of behavior's being rewarded? and also, pay attention to whether, this is a theory or your approach is cognitive in nature, are you taking stock of the thoughts that are going on in people's minds and how they might, be evaluating the situation? or are you, applying a behavioral theory like reinforcement theory which is, who cares what's going on in people's brains? all you care about is, look for the behavior that you wanna reinforce, set up the appropriate rewards and the appropriate punishments, reinforce the behaviors, and you'll get what you're looking for. and important important important, right? pay attention to individual differences that's why you want multiple frameworks people aren't going to be motivated, by the exact same thing right? they're going to be motivated, by a variety of different things so you want multiple lenses, for trying to approach, motivation, when you have a w- when you have a large workforce, or even a small workforce. you motivate it. now, you're going to get to something called principle agent theory. when you get to business economics and there, the magic bullet is going to be, set up the right incentives. now that's a very powerful theory but what i want you to remember is, it's one of many theories, that exist, for how you motivate behavior. and you never wanna lose track of the variety of ways, of looking at motivation. if you were Brenda Cooper. what are you gonna do in this situation? any thoughts? Cheol? 
S8: i think um, first thing she should do is, is to_ cuz they kept emphasizing that um, Jay, the guy that headed headed the Florida, team was, one of them, so i think she needs to somehow gain their trust, by, either convincing them that, it's not in, you know, to her advantage to, sell them out to the upper management, and therefore get, some information about how the Florida team manages to, keep their sales, and then, do that for the rest of her district [S1: uhuh ] so that, the uh the results can be like, more attributable to her. 
S1: mhm. uh okay anybody here w- wanna play Jay? anybody here from the Florida sales team? anyone? okay. go ahead, Brenda, you're having a conversation with Jay. you gotta get_ you have a plan of action go ahead. you have some ideas let's see the follow-through. 
S8: um, so Jay how do you, keep your sales uh ten percent above the prime, throughout the year? 
S3: good teamwork we work together, [S8: teamwork ] we stay, in contact, that's about it. 
S8: c'mon Jay, you know, <SS LAUGH> i'm one of the guys, <SS LAUGH> (xx) you know, uh, exactly, tell me a little more about how you do that. 
S3: um, i don't know you know we uh, we cover for each other we make sure we get on each other's uh butts per se and you know, make sure everyone's getting the job done, help each other out <BACKGROUND NOISE> (you know) helpful hints 
S8: you don't think i'm gonna sell you out do you? 
S3: sell us out to who? i don't i don't understand what you're saying.
<SS LAUGH> 
S1: (hey,) alright, settle down. so, you know, uh, believe it or not this is probably how the conversation would likely start. and that's, a good line of attack right? try and get their trust now there is somebody who knows, exactly what's going on down in Florida. right? and a lot of you are gonna go off you're gonna become, maybe investment bankers or consultants or you may manage organizations, you may become lawyers, you're gonna have access to confidential information right? confidential information someone's taken you, in, and counted on you, counted on your honesty and your secrecy, and yet you know that if you share that information, a much, larger number of people, are going to benefit from that information. so suppose you're the researcher, hired by Columbia University you're just down there doing research, what are you gonna do with that information? what do you think you'd do in this situation? any thoughts? Danielle?
S30: well since it's confidential you can't, she can't, go to Brenda Cooper but, what she can do, is in talking to the people in Florida, she can kind of convince them that, Brenda Cooper isn't out to do_ to, harm them she just wants to work with them to motivate them to be better salespeople. 
S1: (yell out) again, go ahead, let's let's hear it. hear it 
S30: i'm starting? okay. 
S1: yeah you're you're you're the researcher go ahead [S3: (and who am i?) ] Jay. [S3: (alright) ] 
S1: one more time. how's this gonna go? 
S30: well i know that you have, a very low level of trust for Brenda, and the, senior management but really what they're_ they're not out to punish you or to harm you, they just want Hauser Foods to be one of the better companies in the industry. and so by cheating them and not trusting them, you're slowing down the progress of Hauser Foods so, really there's nothing to fear there. 
S3: yeah but see i'm i'm getting paid with a little bitty salary that i get, rewarded based on my, you know performance here as our little group employment so, why would i jeopardize, you know having our sales get, bumped up next year and not being able to meet our goals and not getting paid while the people in the head office, you know get paid the same regardless of, you know how, we perform so, we're gonna take care of ourselves and, screw the company. <SS LAUGH>
S1: go ahead 
S31: if i, if i were Brenda i think i would, uh push to have their compensation switched instead of having, them compensated based on, um, the amount they exceed their, their sales plan every year, i would have them, compensated like solely on commission, so based on how much, like how many units they sell, [S1: uhuh ] that way they're encouraged some more instead of just selling above, the sales plan. [S1: ah ] and that way the sales plan isn't changed. 
S1: so you might think about starting to tinker with, with how they're compensated so let's start to uh let's start to investigate the roots of this problem right? forget about Brenda, forget about the Florida sales team, for now. let's think about Hauser Foods okay? you're Hauser Foods Company you're the senior management, what are your objectives? what do you want? what is it you're after here? what do you want? Brady?
S9: (xx) increased demand for your product as well as uh diversify into other, lines, besides just baby food 
S1: increase demand what was the second thing? 
S9: um diversify your um, market 
S1: diversify your market. 
S9: with, other products
S1: what other things do you want? Jason? 
S37: uh you wanna be like, the best in your field 
S1: what else do you really want if you're this company, Damon? 
S38: uh they wanted new ideas for selling the products 
S1: what other sorts of things do they want here? John? 
S10: uh it's not explicitly stated but i'm assuming a loyal staff because you depend on them for innovation and product development
S1: other things? Andrew?
SU-27: profits and growth. you're basically you're basically
S1: what other sorts of things do we want? Daniel? 
S2: they want their staff to work a hundred percent, at their hundred percent level. to do everything they can do to, increase sales 
S1: other things that we want here? good Barry? 
S11: are we assuming that the uh, senior management has the same desires and interests as the stockholders? or are we? 
S1: well suppose you did assume that? would that 
S11: that seems to be what we're assuming here, in this case. 
S1: yeah, and what else, what_ i- if that's not the case what else do they want? 
S11: maybe they want job security [S1: ah ] money 
S1: want some job security. other things that they want? (xx) 
S12: they want the employees to work as a group with really good communication. 
S1: ah good Mike? 
S3: they want their staff to meet the plan no matter what. 
S1: meet the plan meet the plan, no matter what. right? go ahead Andrea? 
S39: loyal customer base? 
S1: they want, they don't just want a loyal staff they also want a loyal customer base. Tariq? 
S5: um while they want the staff to, meet the plan- plan and, be_ give hundred percent effort they want perfect paperwork turned in for everything. 
S1: ah where would we be without paperwork right? so okay, (now you've) let's look at Brenda Cooper let's look at her situation, what does she really want? what is it that she wants? Marcy? 
S32: she heard that, that if she meets the sales plan or whatever the chances are good for her being promoted 
S1: she_ maybe promotion Wynn? 
S41: she wants the district managers under her to, communicate more, [S1: hm? ] convey their feelings more to her
S1: Cynthia? 
S42: well this is more of like her own personal goal but she wants to do well in her job 
S1: other things what else is she looking for? go ahead Kurt? 
S13: uh, i think she wants job security because she's not entirely confident, in keeping her position 
S1: so job security other things? Fu Keung? 
S14: large bonus from, business sales 
S1: one more time 
S14: bonus from increase of sales, i mean the bonus from, the (mark) the marks in business strategies.
S1: so. so they increase their sales, [S14: and get bonus ] oh and they get_ and di- what does she feel about that? does she want the bonus? 
S14: yep, potentially large bonus.
S1: so she wants to increase sales, cuz she wants the bonus from it. go ahead Phil? 
S15: she wants innovation and, more motivated salespeople, working under her, [S1: aha ] in other regions, districts
S1: other tthings? good (Aveetra?) 
S29: uh, she wants, the district managers if they have any new idea to share it with others so that, everyone could benefit from it 
S1: hah other things? good Adam?
S26: uh she wants trust with her district managers. 
S1: (tops,) trust, Rebecca? 
S43: um i think she wants to be like an extension of the senior management, because um, they're all in what Atlanta Georgia and the sales team's down in Florida. 
S1: mhm so she wants to feel like she's an extension of the senior managers. okay, other things? Lauren? 
S12: well in accordance with that i feel like she wants power especially over the Florida sales team. she feels like she can't, do anything without them. 
S1: huh 
S5: and i guess in addition to sharing ideas more than anything else in her life i thought she wants to know Florida's secret. 
S1: ah. just (just) checking how are you feeling about giving out the secret (me and them,) <SS LAUGH> okay what does this bunch of guys down in Florida what do they want? i mean what is it they're after? Adam? 
S16: they want to protect themselves 
S1: and and how? how are they gonna be able to protect themselves? what's one_ what're some of the things that 
SU-M: maintaining their secret so they can, maintain their strong performance numbers 
S1: aha, oh so there's something else they want? 
SU-M: they wanna maintain their strong performance numbers (xx) 
S1: oh, okay. other things, that they want? Ron? 
S17: they wanna, like make large bonuses while working in a relaxed environment 
S1: okay so there's two things there. other things? tha- that they want? go ahead Matt? 
S47: um, they really want profit-sharing, when it comes down to like, producing their secret, they only get a thousand dollars if they do that [S1: uhuh ] instead if, they would get a profit, [S1: oh ] they'd make a lot more money. 
S1: other things? (Veraden?) 
S44: they want their freedom, to individually do their job 
S1: and freedom from what in particular? 
S44: freedom from uh like the district manager not telling them exactly what to do. 
S1: uhuh... and is there something in particular? they just wanna be left alone and there's one thing that really bugs_ Pierre? 
S45: i was gonna say they want the need for affiliation. 
S1: okay, and with who? 
S45: uh, just their coworkers, [S1: uhuh ] like, their boss Jay anyway 
S1: other things? what else do they want? Dan? 
S2: they want, to be, a true team. when the new guy came in and tried to, tried to do everything himself they, they wanted to make_ they kinda cut him down until he became, a team player. 
S1: mhm. that's kind of_ that's, the kind of affiliation they want other things? Ron?
S46: for the amount of, money that they gain they wanna keep the, the work load about the same 
S1: aha, so other things? Marcy? 
S32: um they complain about the amount of time they have because they have to fill out so much_ so many papers for those people in Atlanta they say they don't have enough time to actually do the job they're supposed to be doing. 
S1: so, like, you want, time, free alright, they want their freedom and, God this paperwork is an annoyance, other things, Chaitanya? 
S18: they wanna keep their jobs secure because they're not sure that they'd be earning the same kind of money, that their, education 
S1: so, they want some security there, Supriya? 
S19: they care more for the betterment of their team than the company. 
S1: aha, so let's preserve the welfare of the team before the company. Petro? 
S20: i think it's actually they want control over the sales plan because, they're they're you know going crazy over why, over over why they might lose their jobs and, and if they just had some input into the plan, cuz there's a disconnect between what the executives want and what they deliver, [S1: uhuh ] so if they had some sort of a say, in what, you know projections should be maybe, they won't have to worry that much. 
S1: aha. Dror? 
S21: building on what he said they wanna keep the sales, figure, low enough, so as not, so as not to increase the expectations of the senior management, [S1: aha ] so they can, be assured of like, the same, amount of reward next year, just to have a consistent 
S1: so we can kinda control things if we can maintain the sales quota. good Zack? 
S22: i think they all feel like they're, uh somehow beating the system and that gives them a feeling of power [S1: ah ] that they wanna maintain 
S1: Karina? 
S23: um i think they want, to reserve a bigger bonus when their suggested_ suggestion plan works. 
S1: so kind of like, they want a share of profit for the ideas. now, le- let's freeze this for a second. and let's let's see uh, let's see how we're all doing right? um, headquarters are they getting the paperwork they want? are they getting this? [SU-F: mhm ] yeah for the most part yeah they're getting this. so they're getting the paperwork. um, senior managers now, they get job security? how's that looking? Barry? how's that looking? 
S11: it's not so good right now. 
S1: no not so good. are they increasing demand successfully here? 
SS: no. 
S1: no we're not doing so good there. communication a lotta stuff flowing between, we're not doing so good there. are we diversifying products at this company? [SS: no ] not so much. meeting the plan? [SS: no ] [SU-F: yeah ] <SS LAUGH> [SU-M: not (now.) ] well we're beginning to slip, every now and then, are we the best company in the field at this point? it's questionable, we getting lots of new ideas? [SS: no ] o- our staff's loyal, right? <SS LAUGH> um, how about profits and growth? what's happening here? anyone have a figure on that? [SS: decrease in numbers ] how much? say it out? [SU: three percent ] [SU: three percent ] [SU-M: i said it's decreasing by three percent ] [SU-M: decreasing by three percent ] right, going down by three percent. we want it to increase it's going down. and, is our staff working at a hundred percent effort to increase sales? well um, it's interesting. we got a lotta wants, and it's not clear exactly what we're getting. okay <SS LAUGH> now (we) now, (we have) Brenda right? um, she have a motivated staff? [SS: no ] okay, um, does she feel as though she's got the control to be the extension of senior management? is she controlling people in Florida? [SS: no ] okay, how about, promotion? how's she looking for promotion at this_ well let's hold off on that. she get communication? are people sharing ideas amongst her districts? [SS: no ] um, does she, have Florida's secret? Mike? [S3: nope ] no can_ well can't convince you yet. <SS LAUGH> um, does she wanna_ is she doing well in her jo- we'll hold that for a second. job security, well_ is she increasing sales? [S3: no ] is she getting a bonus? [SU-M: no ] is that, is that guaranteed? [SU-M: no ] huh that's, one question, is she getting a lot of innovative ideas from the staff? [SU-M: no ] [SU-M: 'm'm ] hm. and then, she have the trust of everybody? [SU-F: no ] [SU-M: no ] hm. okay so now let's look, what are her chances for promotion is she doing well in her job and does she have a good chance of job security now least on uh, how this looks? hm. <SS LAUGH> alright so the Florida, let's look at the Florida folks. um, are they protecting secrecy? how we doing Mike? [S3: yes ] yeah. okay we got that, security? we got job security at this point? um, are we maintaining perfect numbers? are we hitting our numbers every year? [SU: oh yeah, ] [SU: mhm ] looks good. um are we controlling plan? for the most part? [SU-M: yeah ] [SU-M: (xx) ] well. they're not really giving us control but are we figuring out how to do it? [SU-F: yeah ] i think so. right? bonuses? are we getting our usual bonuses for hitting plan? [SS: yes ] yeah how about for new ideas? how do we feel about getting that? are we sharing in the profits from new ideas? [SS: no ] (no) it doesn't look that way. uh, are we maintaining the sales quota at just about the right level? [SS: yes ] yeah we're doing that, um is this still the same relaxed environment we all came to know and love? [SS: yeah ] okay, um, how about, the freedom and time free of paperwork how's that going? i mean, gosh we're delivering that so we still don't, have that kind of freedom. do we have a nice team environment here? trust affiliation amongst the group? [SS: yeah ] we're sticking together, Zack how we doing? we beating the system? we feeling good about ourselves? so if you looked at some internal warfare here, at Hauser Foods, uh, who's coming out ahead? [SS: Florida ] Florida someone wanna identify the folly for us? Petro you started us down that, that route, what's the folly here? what's going on here? 
S20: uh they wanted to, like if if they help, and the whole company does well then they can keep their jobs but if the don't help the company they_ like the the rewards don't really match what kind of inputs they wanna give out. 
S1: okay and so- and and wha- what's the company rewarding and what's it getting and what does it want? and what_ i mean what's going on here? you read about the folly wha- what's, happening here? anyone know? Jason? 
S37: the company is rewarding for, continued growth but to_ in order to get that continued growth they have to work harder and harder and harder, and these people, don't wanna_ like, the time effort that they would have to put in to work harder and harder and harder isn't worth it to them. 
S1: okay so th- the company wants more and they're not getting the right sort of stuff Mike? 
S4: um the company is rewarding competition within the, company [S1: okay ] instead of competition within com- against competing industries [S1: okay ] or, c- competing companies within the industry. 
S1: alright so that_ so the reward_ they want competition externally and they're getting it internally, Paul? 
S25: so there's reinforcement for the Florida team to do what they're doing right now and keeping a secret that they 
S1: why? 
S25: because if they did_ the al- the alternative is
S1: which is? 
S25: giving the information to the, senior managers would just would, just increase their work level and the same amount of_ with the same amount of pay they're getting right now. 
S1: aha. so if i share my ideas what happens? [SU: (xx) ] what happens if i share my ideas? Beth? 
S33: you_ they lose out they, [S1: they lose out ] don't have their security anymore.
S1: and what does senior management want after all? [SU-M: innovation. ] they want innovation. but if i share my ideas, i lose out. so what's senior management rewarding again? 
S5: paperwork. paperwork. 
S1: they're rewarding paperwork. and they're rewarding what? [SU-M: secrecy ] [SU-M: secrecy ] maintain those numbers, hit plan, deliver the paperwork, but guess what? we need new ideas. right? we need new ideas if we're going to survive. so, let's now take a closer look at, this folly based on, expectancy theory <P :39> everyone have a handout? [SU-M: no ] <P :06> is there one more, extra someplace? 
S15: there's a bunch of extras here. 
S1: oh thanks. so, again this is one of those, implicit calculation models it's saying that, you can model human behavior, based on what's implicitly going on, within people's brains, it's not necessarily the case people are making this kind of a systematic calculation, but this is a way that we can evaluate the way rewards, for motivational schemes are working. and the idea is that, there's some probability, that people believe_ there's some probability people place on, whether or not their effort is gonna produce a given performance, and then they also have some, probabilistic judgment on whether their performance is gonna deliver a certain outcome, and then they place a certain value it's called valence, a certain value, on the outcomes. and the valence can be positive or negative. so there's a probability from zero to one, that people place on, whether or not their effort'll produce a performance, whether performance will lead to an outcome, both of those have probabilities and then you multiply those probabilities, by the valence, the value the attractiveness of the outcome to the person, and then you can determine, what it is people are likely, to be motivated to do. you wanna answer three questions, from people, from the people's point of view right? if i try can i perform? if i perform, will i receive the outcome? how much do i value, or disvalue, a particular outcome? right? so now you're Brenda Cooper right? and you're trying to figure out what am i gonna do to change stuff in Florida? so first i wanna diagnose using expectancy theory, what people are likely, to be motivated to do right now. what are the three key performances, the three key tasks, that we expect the Florida team to get done? what are the three big things? David? 
S24: paperwork 
S1: pardon? 
S24: paperwork. 
S1: can't sleep without the paperwork. other things, Supriya? 
S19: meet the sales plan. 
S1: meet the plan what else do we want? Matt?
S47: i'm not really sure is it innovate?
S1: right. now let's assign probabilities if they put, the effort in Rich? 
S36: i just wanna say i think this, meet the plan concept is really ridiculous i mean, we want them to sell as many things as they possibly can. we want them to do their best we don't want them to, to fix them up with some medio- you know mediocre standard, and say well as long as you get this you're doing a good job when really it's not the best they can do.
S1: right so, let's look at why maybe some of that's happening. it's a great point let's see why that's happening. now, if they put the effort in can they meet the plan? i mean if they do the work, then what probability would you put on that? let's just use, low moderate or high. if they do the, do the work, if they put in the effort, can they meet, the existing sales plan? [SU-M: mhm ] would you say that's low or moderate or high? [SS: high. ] okay... if they put the effort in can they finish the paperwork? i mean, is_ what's the likelihood they can do that if they actually do the work. can they do the paperwork? put in the effort? would you say that's low moderate high? [SS: high. ] okay so if they actually sit down and do it... how about new ideas? what's the likelihood if they put in the effort they can come up with new ideas? i mean they got a good one now, but where would you put that? low moderate high? what do you think? [SS: high ] high? so if they put the effort in, guaranteed they can come out with new ideas? [SU-F: moderate ] [SS: moderate ] and who's_ wh- why why would it be moderate? 
S12: maybe because, i mean they've been in the market for, thirty years and they haven't had so many new ideas. 
S1: so they're sitting on a pretty good one down in Florida, but, you know it's a moderate probability. we can put the effort in, we might get a new idea. <P :07> what happens if we meet plan? if we meet the existing sales plan what happens? Brian?
S48: you get a bonus. 
S1: you get your bonus... anything else happen if we meet plan? Kurt? 
S13: you get the opportunity to meet the bonus next year. 
S1: you get the opportunity to do what? 
S13: to meet the bonus again the next year it's not just a one-time deal it's something that can be recurrent.
S1: okay so, you can make it a recurring bonus here... what else happens if you if you meet plan? Dror? 
S21: it raises expect- uh expectations. 
S1: okay. um, what value do we place on the uh, on the recurring bonus? do we like that? as the Florida sales team is that a positive thing or a negative thing? [SS: positive ] and how about the uh fact that the expectations go up if we meet plan? how do we feel about that? [SS: negative ] uh okay. anything else from meeting plan? that happens? Ron? 
S17: you keep your job (xx) 
S1: ah you keep yo- and, do we put a_ what kind of a value do we put on that? [S17: positive. ] anything else? Tariq?
S5: your level of, income, dollars don't go up they stay the same year after year because, your expectations are going up but your your income is the same. 
S1: aha. so this might be, a little bit more of a_ it might be a double negative cuz of what's happened here. Cheol? 
S8: job security goes down. because it becomes more difficult, to uh, be uh 
S1: right? so we better hope that someone in addition to Albi discovered, the new market. how about paperwork? what's the outcome? if we do the paperwork what happens...? Marcy? 
S32: you keep, you keep Atlanta happy, with your, progress. 
S1: how do we feel about that? do we, wha- what value_ what valence is there to that? 
SU-F: um they like, cuz it gives 'em their freedom, it gets Atlanta 
S1: i know we like that, anything else come from doing the paperwork? Zack? 
S22: um, you have less time to do things like cold calls... uh getting customers and things like that. 
S1: and how do we feel about that? we have less time to do cold calls and sales do we like that? [S22: no (definitely not) ] we don't really like that. okay how about, if we, if we innovate, if we come up with some new ideas whatta we get outta this? what's the outcome if we come up with new ideas? (yeah Phil?) 
S15: you get a, really small thousand dollar bonus. 
S1: and why do they think that's really small? 
S15: because, if you come up a good new idea then, you know the company's gonna raise their sales expectations you know they're gonna they're gonna think with the new idea you'll be able to sell a lot more and, in the long term it's gonna decrease your income and you have to work a lot harder. [S1: mm ] (to meet level) 
S1: and so_ and and why in particular do you think we think this one thousand dollar bonus is like, alright anyone wanna apply anything [S15: (xx) ] from from what [SU-M: cuz, in terms of ] David? 
S24: um, that the theory, that_ i think it was like, equity i think where uh, they're putting in something that's gonna make the company a lotta money [S1: right ] the company's only giving them a small portion of it, so they're like why, put in the effort? if, if nobody, you know, they're gonna reap all the rewards. 
S1: why bother? anything else that we get from innovating or new ideas? something else happen here? Rich? 
S36: well i think that this_ like, our expectations are gonna be raised because, now i mean, you know, th- th- the uh, the plans are gonna are gonna go up and it's gonna get more difficult for us to, to meet the plans and, that's obviously a negative. 
S1: huh. (but you got this) other negative. now. go ahead, Damon? 
S38: also they still have to take time away from their making cold calls and things like that, meaning they would have to work longer hours. [S1: aha ] if they wanted to meet the plan. 
S1: so, there's another thing we don't want. John? 
S10: well if they can keep the new ideas secret like they have been doing then, it's positive because it's like a free ride for them, so 
S1: aha and, what do i want as, what do i want as Brenda Cooper? do i want to keep 'em secret? sorry, do i wanna keep 'em, secret? [S10: no you wanna ] so now if i'm, if i'm Brenda and i'm looking at this and i'm trying to model what's going on down there, why it is that, something phenomenal's going down there, but, whoof, what is it? where is it that_ what do we want right? we want new ideas. and yet, what we're doing is, we're gonna raise expectations we're gonna take away time, and maybe we'll give 'em a small bonus which we know just ma- makes 'em angrier, when they look at that small bonus. hm. so you get a task, to complete right? <P :09> right? he- here's where here's where we stand with this. right? the sales force wants money right? they want they want the bonus they want consistency, they would prefer not to have any paperwork, they'd like a bigger reward for their suggestions and they really like the solidarity right? it's us against the rest of this, company. now Brenda Cooper, remember this is gonna be the position that, many of you will be in you're not gonna be running the company, at least for, you know five to ten years, um, you can control the sales quotas within the region, bonus allocation in the region, you can control the paperwork and you can can control communication in the region, so your challenge is, what are you gonna do? you're not a senior manager yet, it's where you'd like to be, what are you gonna do, so that maybe you can find out what they're doing down in Florida, maybe you could change the reward scheme so this doesn't keep happening in all of your districts, and you can become the hero, do well in your job get job security, become an extension of senior management and get promotion. what's the sort of thing that you can do? now, we're gonna break up into groups, so that as groups you come up with, some uh, brainstorm creative ideas and the way we'll do this we're break up into uh, um nine groups, and let's start counting off with uh Daniel we'll go across the room and i'll just point because some of the rows are out of line. go ahead. 
S1: so does everybody have a group number? okay hold on, and here, is where you can assemble in your groups and remember the idea is you wanna come up, you're Brenda Cooper, what is the bonus system you're going to use? what's the bonus system you're going to use? um, and is it alright? are_ do the group ones_ will you agree, is it okay if they tape you as part of the group discussion for the web? just let them know and you can be over here.
S1: please make sure you introduce yourselves to one another, before you start the task.
<BEGIN SMALL-GROUP CONVERSATION> 
SU-26: i (xx) should go around and say everybody's name
S25: Paul
S27: Andy
S28: i'm Kate
S26: Adam
S2: Dan
S22: Zack
S28: what's your name again? 
S25: Paul Paul 
<INSTRUCTOR ADDRESSES ENTIRE CLASS> 
S1: okay you wanna take about, five to ten minutes in your groups, here's the restatement of the problem, this is a little more explicit than you need to be, the key is, what is the bonus system? what reward system are you gonna come up with, as Brenda Cooper? to try and, achieve the goals, that you're after. okay so be clear, about the specifics, of your program. you can consider, all of the various factors that are gonna influence the effectiveness in your system. but the key is here to focus on the question you started the whole search with, which is if you're Brenda Cooper what are you gonna do to change things? 
<CONTINUE SMALL-GROUP CONVERSATION AT 63:43> 
S25: well i think uh,
S1: come up with some creative ideas and we'll reconvene in a few minutes. 
S25: i think basically, in order to make the company happy Brenda needs to, stimulate sales overall, and, the biggest problem is, that people aren't happy with, compensation, uh regarding their new idea i mean, in order to stimulate sales overall we need to get new idea- ideas, and so, she needs to reallocate, the bonus of the system i think, in some way to get, a lot more, bonus on, on not necessarily, being a plan as much as having new ideas to stimulate sales. because that way, it should just be a downfall. there're n- there should be a, like a waterfall effect. if if everyone understands, the new ideas. 
S22: i think one of the important things they have to do is like, in the following year when they raise expectations they also have to give 'em like a pay raise, too, like [S25: (xx) (salary) ] cuz they're working for the same amount and they have to make more sales it doesn't seem logical that they should give 'em just a flat-out, pay raise, and then, also give 'em a bonus something like (xx) 
S28: see i think there's a bigger issue here though and that's that the sales like, expectations are set from up above and people have no say in um, in what will happen, in what the goals will be for the next term, and i think that they almost need to redirect the attention, and have it st- begin with the um, sales crews that are in the different locations that are_ fall underneath Brenda, have them set goals for themselves and give input, that way they feel, like they'll set goals, that they think will be, um, feasible, and what they think will be um, i don't know what the word is but um [S2: attainable. ] not attainable but, fair for what_ for the amount they're getting paid and so that way they set their goals up accordingly and then Brenda can use that information, to, help set the expectations, or set the goals for the upper level [S2: right ] when she meets with them.
S2: yeah i think that's important we learned about that at the very beginning, if yo- if, if the upper management sets the goals then the lower management's_ i mean the lower people aren't gonna wanna do it (xx) that's entirely (xx) it's true. 
S25: yeah there, there was_ it was_ what was it? it was in the uh, reading. 
S2: it's like on- it was one of the first readings. 
S25: it was one of the 
S28: yeah it was under the sales plan. [S25: it like said it ] oh are you talking about? 
S25: no it was like um, it was just, it was just where, like that, it was one of those uh, ideas of like, if the employee sets, the goal with management [S28: oh that i have it in my notes. ] 
S2: yeah yeah i have it also, it's in the back of my (xx) [S25: you know, you know what i mean? ] 
S28: it's on the same page as the expectancy theory [S2: ye- yes ] (that's what) i'm talking about. [S25: right ] it's on the back side (xx) 
S2: entire- entirely that 
S25: so anyways 
S2: i i was also thinking [S25: okay ] even um, creating a stock option, for the_ in the company cuz that's one thing that, doesn't seem like there is, right now the, the employees are_ don't really feel like they're that much_ like it doesn't matter what happens to the company like they just wanna, like themselves they wanna do well, [S25: especially ] if they're given stocks 
S25: especially for like the new ideas they bring [S2: right ] that would increase the sales and increase profitability of the company 
S2: exactly and if they if they own stock in the company that's gonna want_ they're gonna want the company to do better
S25: and, to go along with um, like setting go- setting goals like at the lower levels they should just like increase the communication and that's [S2: yeah ] like definitely lacking [S2: yeah that goes along with Kate's idea. ] (they're) keeping secrets i mean if she'd have like, talked to them developed some trust you know maybe develop some like, some kind of retreats [S2: yeah ] some team-building you know and just kinda worked together in those kinda like, one-on-one situations. 
S26: i think a- at a company level i mean at a, at a district level with with Brenda and and as a company level at all because if_ everyone in the_ all the salespeople are like_ basically hate the company, you know? [S25: yeah ] so along with stock options which i think is a great idea, i think, you know, some kind of like, the company should_ i mean for_ i guess Brenda is not in control other than uh, you know, re-saying to the company what she thinks is uh_ somehow getting a company, organization or a event together, to increase, employee morale. 
S27: what do you think about the uh, paperwork, also? is that something that we're gonna just_ we would eliminate, or? 
SU-M: at least decrease
SU-27: yeah 
S26: i think we should decrease paperwork. 
S28: well (and then) we don't know what the paperwork is [S2: yeah ] it could be really vital information. what we could do is hire out someone to be support [S2: yeah ] staff and to deal with the sales representatives to take, to take that, part of their job away from them if it's so tedious and they don't like it. i think it would make sense to hire someone who could help them. [S2: yeah, i think that's a good idea ] and eliminate that so they have more time to do, other things i also thought that one of the things that was missing, in the dynamics was um_ Brenda has just hired on she's a recent M-B-A, and, here she is like she's the manager of these people it said have been with the company for like twenty years or and they had only high school, high school education they might feel threatened by, her and that she's like making more than them and she's setting all these goals for them when she has no idea, really what the company is. [S2: she's not like one of the boys just as Jay was (xx) ] right. [SU-25: (xx) ] so along the same lines (then) she really needs to get in touch with people, [S25: mhm ] um, and become part of the staff instead of, being the manager, like... so she takes away that threatening atmosphere.
S2: i think the problem with um, separate from that, with the with the whole bonus system and with uh, increasing sales, were that they were always, they_ if you pushed the maximum they increased the sales it was kinda like, if you had a really really great year one year then, the next year it could be like not such a good year but you still ro- yo- they're_ you're expected to get at least ten percent above that. so in essence not, creating, any expectations of sales based on the previous year but, kinda based on like a, like a moving scale or like, like costs (us) i don't know like something [S25: like average growth ] yeah an average growth like something else [S28: yeah ] in, in, in the environment, [S28: i like that, yeah that's good. ] it's uh, yeah 
S26: yeah, i definitely think, that it's ridiculous that they always increase the plan... um, no matter what [S2: yeah ] they don't take into anything except the fact that, you know sales. 
S2: right cuz you have an incredible year one year because [S26: right ] the_ if the economy's doing really well and then, [S26: yeah ] the next year the economy could be, be doing horribly and sales will go down there's nothing to
S27: what if you just went, entirely on_ based on commission rather than bonus as a, as a percentage of your sales. do you think that would motivate in the same way? 
S25: it would but, in some instances like some markets might be_ have a higher demand than others. so that, i mean if you had better sales manager in one mar- (xx) market, it_ you would maybe get cheated because they don't have the access of more employees but, then yo- s- it might be good to set like, some kind of, commission off of like, okay you're expected maybe this much, and if, after you exceed that [SU-M: exceed ] you exceed from what you're expected you (xx) it's all commission 
S2: that would also, if it's on commission it's gonna, take away from the team effect. and it's gonna make it more of an individual 
S25: well it could be like a team commission, like if your team does, [S2: (oh yeah) that's good ] overall better. 
S2: um 
S28: i also think that bonuses can be spread out to, spend on the more of the (familiar tokens) with, other departments like other_ she said she's got five district managers under her, working with them and to create, both camaraderie and competition between the two like oh well we're the Florida sales team (could do) better, and so that way, it'd_ they aren't gonna get direct money bonus but saying like okay we're gonna take you guys all_ like p- p- (Peterson's) takes everyone to Cedar_ or, Disney World for a week at the end of your internship. and i think that 
S2: it's almost like having like a reward like (xx) 
S28: yeah 
S26: i was gonna s- Cedar Point's a long drive. <SS LAUGH> don't you think?
S28: shut up. yeah. it was Disney World though that's what it was. [S26: yeah ] <LAUGH>
<END SMALL-GROUP CONVERSATION AT 70:30> 
S1: take just another couple minutes to jot down your ideas and then let's, reconvene.
<RESUME SMALL-GROUP CONVERSATION AT 70:36> 
S28: okay did we, touch on the main points (xx)
S25: (i dunno) he just took away (so)
SU-M: <LAUGH>
SU-M: yeah <LAUGH>
S28: our basis of commission is gonna be_ or i mean our basis of reward is what? commission? or...
S2: so, [SU-M: um ] [SU-M: yeah ] let's talk about the average growth, instead of the_ [SU-M: yeah ] instead of like basing it, basing it on (the,) previous increases (i mean) on that (xx) growth from that year like average growth in the in the economy in that year. and then, based on that the bonuses. but i also think bonuses sh- it should, be less important as opposed to like a base salary being more important [S26: base salary (xx) ] 
S28: yeah, i thought of a base salary. 
S2: so, so say increase base salary, and still have bonuses but make them, be dependent on 
S26: should we try to_ should we try to direct bonuses more to innovation, than to just in sales? 
S2: uh, [S26: to stimulate ] do both, i mean (xx) 
S26: we ca- we can we can create more of a like a, sa- salary system, and and extra, well 
S28: i was, i was reading in a magazine about ar- a article about a guy who, um, every year that he increases growth he gets like ten percent of the sales, and the company, the people ask how could you do that that's so expensive you're giving him all this extra money, but, the way the management decided was yeah i give him ten percent b- c- we_ the company keeps ninety percent, (on) the net sales of the profit, [SU-26: right ] um, and the guy has had increasing sales for like the past thirty years and yeah they keep giving him more money and more money but the sales keep going up and up and up and i thought that was a really, not_ and a really innovative idea the way the company was actually showing them, i think that what you're doing is a really good job, and i encourage you to do this in the future and i will pay you accordingly. i just thought it was a really good idea. 
S2: i'll have to jot that down [S28: yeah ] and and concise it. 
S26: so basically (then) it's a commission. 
S28: yeah it is a commission but it's, yeah. but it's based on their profits instead of 
<SMALL GROUP CONVERSATION ENDS AT 72:21> 
S1: alright, can i get your attention please? but i_ so what sorts of ideas have you come up with what sorts of uh, what sorts of things might, might Brenda Cooper do? as the regional manager? to reconfigure the the reward system. whatta you think, whatta you think she might do? Kirk? you wanna stand up? 
S49: um , instead of basing, um your salary, on how you do compared to the plan, they might wanna base it on a percent, of your sales. [S1: uhuh ] so, that gives you more incentive to, to, keep, selling, um, well i mean once you get to_ it's not it's not gonna hurt you to work harder, it's you know there's a positive reinforcement. 
S1: okay so you're not punished for, increasing the quota. but, you're in fact rewarded for it. other ideas? Mike? 
S3: we kind of like thought that in like the short term, and then in the long term like, in the long term there's a lot of like, better alternatives as far as like her going through senior management and getting things like passed but like, something is due to like profit-sharing whereas like, if you increase profits and you're getting some percent of it reflec- reflected in your bonuses as opposed to like a one-time deal, also like you know, stock options or, things that just happen in the short term, where she has little control over what senior management does it just, um, kinda like (managing) the role system (xx) in such a way that it's like um, rewarding the entire region, therefore like they might be like_ they might_ one district might be more prone to like, share their ideas because if someone's slacking in their district then, they're gonna actually be hurt. it has its like, negative side, but like as a whole it might, stimulate 
S1: and how would you do that? any of the groups have thoughts about how you would do that? h- how might you do it? how might you, do that so you get the whole region_ you reward performance in the whole region? any, any thoughts about how you might do that? Kurt? 
S13: you could have little bonuses for the whole region instead of specific districts, say the whole, region meets their sales quota then, everybody in the region gets a bonus but the region doesn't then nobody gets a bonus. 
S1: so therefore, if we find out, that there's an elderly market for baby food, maybe we won't keep it to ourselves because if the whole region increases in sales, we get a bigger bonus other thoughts? what else might you do for the bonus system? good Jessica? 
S7: we said that, um you should take (xx) away from like, the internal company and make it like, just, industry competition, cuz the whole problem is that, like the Florida people don't wanna help the, Chicago people or whatever, and, um, the whole, company, wants to help each other then they'll do better overall [S1: mhm ] so even with like, regional, competition would be in the company. 
S1: so just maybe some_ create some, regional, competition here any other, other thoughts, from any of the groups? good Daniel? 
S2: we're talking for, as far as bonuses instead of each year, your growth, your your sales have to be like ten percent more in order to, to to get a bonus, instead make it, based on, a the average economic growth, in the in_ as a whole i- in the economy and on that you get the bonus not based on like_ so you, you're taking away from like, if you do really well this year, you have to do even better next year this way it's more like you're doing well, and each, it it's independent almost. 
S1: so there's some kind of objective criterion that we're linking, the reward to, right? we're gonna look at general, economic conditions, Adam, wha-? 
S26: um, Daniel mentioned when we were talking, about stock options, i thought that was a really good idea, to increase uh, kind of awareness of the company as a whole.
S1: mhm, so it's a way to to build the corporate spirit, in the long term, if we can get, the attention of senior managepers(sic) Geor-? 
S50: this doesn't really have to do with the, the bonus system it has to do with compen- the role of compensation [S1: uhuh ] we thought that maybe they should uh, increase their base salary cuz right now they don't really feel like they're part of the company they feel like they're hired guns they're just, you know looking out for for themselves they're selling the product but they don't really, i- identify with the company, [S1: uhuh ] behind the product if they raise their base salary maybe, they would feel like they have a, some kind of stake [S1: uhuh ] in the future of the company
S1: so, and and it'll also give 'em that sense of consistent earnings right? that that that they were after, Marcy? 
S32: to increase innovation um, sometimes companies if you, introduce a new idea say they, introduce to the elderly market, and the sales of the whole company go up b- by ten percent, that team would be rewarded a certain percentage of that. 
S1: uhuh, [S32: as a bonus ] so that, hey 
S32: you're thinking more of the company as a whole rather than just yourself. 
S1: so our fate isn't just how we do down here it's how the whole, company does. good. Beth? 
S33: we brainstormed a little bit kinda combining those last two where, um, the increase in base salary would come as a result of, innovation and new ideas so that they would see kind of a long-term effect [S1: ah ] of their innovations 
S1: mhm, David? 
S24: uh, one of the things we came up with, is that if they sort of centralized the paperwork, then they could sell more, without feeling that they were spending more time, selling, because they said oh we have to do the paperwork so we can't sell, well they'd, be working the same amount of time but could still sell more, and we could get a bonus also. 
S1: aha so there's a way we can reconfigure the tasks that they're doing which is a perfect transition to Wednesday's class, we're gonna look at the way jobs are structured to motivate, but you see there's a variety of ways that you can think about motivating people. what i wanna call your attention to is, oftentimes when we think about changing reward schemes, we think a lot about well what new arrows might we add, right? what new, performances do we want what new outcomes could we add? you also wanna think about well how do you get rid of obstacles? what what sorts of arrows might you wanna erase? like, how could you get rid of this right? if you meet plan expectations go up. and remember they're dealing with a mature product here, it's a mature product line so if you keep ratcheting up the quota, you're just not gonna get it. there's no more market for baby food, other than what we found with the elderly so we really do depend on this. so you wanna focus, both on adding, arrows right? adding outcomes and, looking at which arrows that currently exist right? which outcomes related to which performances, are obstructing the sort, the sorts of uh, effort the sorts of uh performances that we're looking for, how do we get rid of the obstructing, arrows? now, this is in a handout that you can pick up, um on your way out there are two piles it's the exact same handout, pick one up on your way out, the the idea is look when you're thinking about rewards as managers, make sure you're linking, the performance you want, to the rewards right? that wasn't happening at Hauser Foods. rewards weren't linked to the performance that they wanted they wanted new ideas, that's wh- that wasn't what was being rewarded, and make sure you're very careful to think about what is it that i want to, reward anyway? is it effort? is it ability? what is it that i wanna reward? or, results i mean grades, tend to, reward results, when in fact a lot of what we get, a lot of what what we might like rewarding sometimes is effort and ability. and there're different times you wanna reward, effort, different times you wanna reward, ability sometimes, you just wanna, reward, results but be very clear about, what it is you're after and therefore what you're going to reward. make sure you pick up a handout i'll be in my office in about ten minutes till seven. um, and see you Wednesday. oh please just_ can i get your attention? if you were asked to fill out a pink form could you make sure that you fill that out before you leave? and drop it off, up front? thanks. 
{END OF TRANSCRIPT}

