Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress

Management, Rewards, Job Design

Individual/Team Behaviour – Stress

Management, Rewards, Job Design
Introduction
Individuals often have some difficulty coping with the demands of their personal and workplace
lives. Most individuals experience some combination of personal and organizational stress. How
individuals cope with stress and effectively manage it helps to explain and better understand
how stress impacts, shapes, and often drives individual behaviour.
Organizations use a variety of rewards to recruit, retain, and motivate employees at the
individual, group, and organizational levels of analysis in organizations. The reward structure is
controlled by the organization.
Each reward relates to a set of specific objectives and carries with it both advantages and
disadvantages. The most common types of reward are organizational membership and seniority
and job status.

The types of rewards used by organizations - and their relevance to individuals - have an impact
on individual behaviour. The type, quality and quantity of rewards dispensed by the organization
have a significant impact on, help explain, motivate, shape, and drive individual behavior.
Behavioural scientists and organizational behaviour theorists both agree that, for most
individuals and groups, individual and group behaviour are driven by performing tasks and work
well, and from the job itself.
One managerial strategy for improving the intrinsic motivation of individuals and groups/teams -
and thereby impact individual and group behaviour - is to design or redesign jobs and work. Job
design is an excellent way of building motivation, or motivators, into each job.
The two most popular and generally accepted ways of building motivation into the work itself is
by re-designing jobs consistent with two motivation theories, namely the (Herzberg) Two Factor
Theory and the Job Characteristics Model (Hackman & Oldham).
The Two Factor Theory emphasizes and suggests that individuals are motivated primarily by
personal and professional growth and self-esteem. The Job Characteristics Model of job design
is aimed at increasing skill variety, task identity, task significance, autonomy, and feedback.
By doing this, individual employees experience more meaningful jobs and a greater sense of
responsibility. By re-designing work and jobs in these ways, individual and group motivation are
enhanced, and individual and group behaviour are altered. Self-motivation and self-leadership
are aimed at motivating oneself to pursue the self-direction needed to perform and complete
tasks.

Learning Outcomes
• Identify the consequences of stress
• Explain strategies managing stress in the workplace
Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress
Management, Rewards, Job Design

• Identify the advantages and disadvantages of the 4 types of organizational rewards

• Describe the characteristics of individual, team, and organization-level performance-
based rewards
• Describe the Herzberg Two Factor theory of motivation
• Explain how job design can motivate employees
• Explain the value of job enlargement, job enrichment, and job rotation in the context of
their impact on employee motivation and commitment
• Describe the impact of core job characteristics on motivation and job satisfaction
• Describe 5 methods of self-motivation

Stress and Individual Behaviour

What is stress?
Although thousands of articles on stress appear in professional journal and popular magazines,
the concept is still poorly understood. Because stress has attracted the attention of researchers
in various disciplines from medicine to management, each using its own jargon, models, and
viewpoints, there are various definitions of stress.

Stress is a complex subject. However, one fairly simple definition of stress is as follows:

Stress is the gap between a person's reality and person's expectations - the bigger the gap is
between reality and expectations, the more stress a person experiences.
The implications of this statement are: if we are to manage our level of stress effectively, we
need to know how to change our reality or change our expectations in order to close the gap.

Also, stress is an individual's adaptive response to a situation that is perceived as challenging or

threatening to the person's well-being.

Occupational stress or stress in the workplace can be defined as: the entire process in which
people perceive and interpret their work environment in relation to their capability to cope with it.

Occupational stress deals with employees' ability to meet the demands of the job.
An employee may be suffering from occupational stress when either or both of two conditions
occur:
• The employee is unable to adequately respond to the demands of the job.
• The employee's expectations about the job markedly differ from the reality.
Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress
Management, Rewards, Job Design

Prototype Model of Workplace Stress

The occupational/job stress model presented identifies three principal components involved in
the cause of stress at work:

Individual Differences
There are a number of individual differences that play an important role in the ways in which
employees experience and respond to stress.

Individual differences in needs, values, attitudes, abilities, and of course, personality traits are
important in that they may increase or reduce the perception of the harmfulness of work
demands.

Thus, to understand whether job incumbents will be stressed, it is critical to understand their
perception about their work and their organization; what one person may consider to be a major
source of stress, another may hardly notice.

Perception of Job Demands

Employees' perception of a situation can influence how (and whether) they will experience
stress.

For example, a manager's request that two subordinates stay an extra hour to finish important
work can be perceived as stressful by one employee and have no effect on the other.

Stress can originate from a single stressor or from a combination of environmental job
demands.

Social Support
Compensatory mechanisms (commonly referred to as "buffers" or "moderators") that may be
present or absent during stressful periods are important mediators of responses to stress.

One such buffer is social support. The support of others in one's social environment includes
co-workers, superiors, family, and friends.
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Management, Rewards, Job Design

The availability of such support increases confidence and strengthens the ability to cope.

Stressors: The Causes of Stress

The causes of stress can be classified according to their origin:
1. Job context (Extrinsic)
2. Job content (Intrinsic)

Some of the typical intrinsic sources include:

• A feeling of lack of control over job tasks and job responsibilities
• Work overload

Some of the typical extrinsic sources include:

• Poor working conditions
• Role conflict and ambiguity
• Feedback that focuses on poor performance
• Rapid changes in pace and content of work
• Harassment and incivility

Other sources of stress may include:

• Time-based conflict
• Organizational stressors
• Physical environment stressors
• Role-related stressors
• Strain-based conflict
• Stress and occupations
• Role behaviour conflict
• Interpersonal stressors
• Work-family stressors.

Individual Differences in Stress

Stress is individual specific, which means that a given stressor to one employee is a satisfier to
another. However, research has shown that certain personality types have a higher probability
of experiencing stress.

People with Type A personality traits tend to create stress for themselves or make stressful
situations worse than they otherwise might be.

Furthermore, particular aspects of the Type A personality (anger, hostility, and aggression) not
only are associated with increased stress, they also may lead to heart attacks.

Are you a person with Type A personality?

Here are some characteristics of type A personality:
• A constant feeling of time urgency and obsession with time notations
• A high level of competitiveness
• Workaholic tendencies
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Management, Rewards, Job Design

• Impatience with anyone who interferes with goal attainment.

Stress can manifest itself physiologically in many ways. One of the manifestations of stress is
the body's response as described in the concept of the fight-flight syndrome.

The Fight-Flight Syndrome results in:

• Increased blood flow to the brain, which increases alertness
• A sharpening of vision, hearing and other sensory processes
• Glucose and other fatty acids being released into the bloodstream
• Enlargement of the pupils of the eye
• Sweating in the palms of the hand and feet
• Digestive processes being reduced (dry mouth)

Dr. Hans Selye, a Montréal-based pioneer in stress research, determined that people have a
fairly consistent physiological response to stress called the general adaptation syndrome. It is
an automatic defense system that the body engages in to help cope with the feeling of stress.

There are three stages to the general adaptation syndrome:

1. The Alarm Reaction
• Stage one is referred to as the alarm reaction, which is characterized by a feeling
of threat. As you would expect with the term "alarm", the first stage triggers the
responses that are present in the second stage called the "resistance stage".
2. The Resistance
• In the second stage, the body responds with coping mechanisms to overcome or
remove the source of stress. These first two stages are similar to the response
outlined in the fight-flight syndrome. During the resistance stage, a person's body
may suppress its immune system, which may explain why people seem to be
more likely to catch illness when they are experiencing prolonged stress. If the
source of stress continues, an individual will likely move into the third stage
called "exhaustion".
3. The Exhaustion
• The third stage is called "exhaustion". When a person reaches the exhaustion
stage, their performance is likely to decline dramatically and there will be more
serious long-term effects.

Consequences of Stress
For some, stress has a positive relationship with performance.
However, research has found that there is an optimal point for the relationship between stress
and performance.

Consequences of stress include:

• burnout (syndrome of physical and emotional exhaustion involving the development of
negative self-concept, negative job attitudes and loss of concern and feelings for
clients)
• health problems (hearth attacks, high blood pressure and others)
• sleep disorders
• depression
• organizational impacts.
Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress
Management, Rewards, Job Design

Individuals can experience two kinds of stress. The first kind is called eustress. The second kind
is called distress.

Eustress
This is a stress level that activates a person's motivation to achieve goals and change their
environment. Eustress can be a positive form of stress.

For example, an athlete in Olympic competition may experience eustress that enables them to
perform and compete at a higher level.

Distress
This is the form of stress that organizations need to focus on. Distress is the unhealthy level of
stress over a long period of time.

The typical costs of distress include:

• higher absenteeism
• lost productivity
• higher turnover rates
• increased medical costs and higher rates of diseases such as cardiovascular disease,
digestive disorders and psychological problems
• increases in accidents

Stress management Techniques

In order to prevent stress and/or effectively deal with stress, there are individual and
organizational interventions that can be done.

Individual
Techniques that individuals can use to manage stress:

• identifying the source of stress and withdrawing from the stressor either temporarily or
permanently
• seeking counseling on the perceptions of stress
• engaging in a relaxation program
• enrolling in physical fitness and life and/or lifestyle programs
• building skills in time management and personal productivity to understand how to gain
more control
• participating in more leisure activities
• improving one's diet

Organizational
In some circumstances, organizational practices have the potential to contribute to employee
stress. A general strategy for addressing these would include: removing the causes of the
Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress
Management, Rewards, Job Design

employee sources of stress, improving human resource management practices, and offering
professional help or encouraging employees to access an Employee Assistance Plan.

Techniques that organizations can employ to help manage issues of employee stress,
particularly in situations where organizational practices may be contributing to the stress:

• reducing role ambiguities and conflicts

• improving performance management systems and ensuring that performance
feedback is provided a regular basis to avoid surprises
• managing the process of change more effectively
• encouraging open channels of communication
• monitoring the physical work environment
• undertaking job design reviews and implementing job rotation programs
• reviewing the impact of work schedules
• developing innovative career management programs
• offering physical fitness programs
• creating family-friendly workplaces

Reward Systems
Organizations reward their employees for their membership and seniority, job status,
competencies, and performance.
Competency-based and performance-based rewards are increasingly popular in Canadian
firms.
Job status-based rewards are becoming less important because they are inconsistent with
flatter organizational structures and the need for a flexible workforce.

There are many types of individual, team, and organizational rewards. However, these
performance-based rewards have also been criticized for doing more damage than good to
employee motivation.

There are 4 types of rewards that employers’ ca n use to motivate employees:

1. Membership and Seniority-Based Rewards
2. Job Status-Based Rewards
3. Competency-Based Rewards
4. Performance-Based Rewards

Membership and Seniority-Based Rewards

The most common membership and seniority-based rewards are fixed wages and seniority
increases.
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Advantages:
• Guaranteed wages may attract job applicants
• Seniority-based rewards reduce turnover
• Consistent with some cultural values

Disadvantages:
• Do not directly link compensation to job performance
• Discourages poor performers from leaving voluntarily

Job Status-Based Rewards

Rewards can be determined through job evaluation, which is measuring the job's required skill,
effort, responsibility, and working conditions to determine its relative value to the organization.

Advantages:
• Maintains a perception of equity
• Motivates employees to compete for promotions
• Provides a framework for ensuring the compensation structure is fair

Disadvantages:
• Job evaluation is subjective
• Can create more resistance to change – employees may be concerned changes will
reduce job worth
• Creates psychological distance from senior management roles
• Reinforces the mentality that status is important

Competency-Based Rewards
These types of rewards are given based on the employee's competencies, pay level and skills.

1. Competencies are defined as the abilities, individual values, personality traits and other
characteristics of people that lead to superior performance.

2. Broadbanding occurs when the number of pay grades is reduced, which widens the pay
ranges and increases flexibility.

3. Skill-based pay is defined as pay that increases with the number of skill modules
learned, even though only one skill area is performed at a time.

Advantages:
• Can result in developing a more flexible, multi-skilled work force
• Will lead to better product/service quality
• It is more consistent with emerging employment relationships

Disadvantages:
• Competencies may become subjective personality assessments
• Increases training costs
• May overcompensate employees with more competencies than their current role
requires

Performance-Based Rewards
Performance-based rewards can include individual, team and/or organizational rewards.
Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress
Management, Rewards, Job Design

Individual Rewards include:

• piece-rate - pay per number of units produced

• commissions - earnings based on sales volume
• merit pay plans - salary increases based on achieving at or above job role standards
• bonuses - lump sums based on achieving specific objectives

Team Rewards include:

• bonuses - team paid compensation for reaching targets

• gainsharing plans - group paid compensation based on cost reductions and increased
labour efficiency

Organizational Rewards include:

• gainsharing - team based bonuses paid to employees across the entire organization
• profit-sharing - employees receive a share of company profits
• employee share ownership plans - employees own company shares and see themselves
as having an "ownership" stake
• balanced scorecard - a goal-oriented performance measurement system that rewards
people (typically members of management) on a series of qualitative and quantitative
goals

Improving the Effectiveness of Rewards

As the nature of work becomes more complex and the need for creativity increases,
organizations will need to review their approach to reward systems.

There will need to be greater recognition for the intrinsic value of jobs while recognizing the
value of linking performance directly to rewards.

Strategies to improve effectiveness of rewards include:

1. Create a direct link between performance and rewards, particularly for mechanistic tasks
where the task is clear and there isn't a lot of need for creative thinking.
2. Make sure that the rewards are valued by recipients and the performance their hard to
achieve to earn the reward is within their control.
3. Create team based rewards for situations where the work is highly interdependent.
4. Monitor outcomes to ensure that rewards are creating the intended consequences. For
example, call centers that incent employees for completing higher number of calls may
be creating a situation where the quality of service delivered on the call is compromised
because of the employees desire to terminate the call quickly.
5. Improve the recruitment and selection process to ensure that incumbent employees are
intrinsically motivated by the work rather than depending on external incentives.

Job Design Strategies

What is Job Design?
Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress
Management, Rewards, Job Design

Job Design is the process of assigning tasks to a job and distributing work throughout the
organization.

It is important to understand the meaning and application of the following terms used in Job
Design:

Job Enrichment: Refers to the activity of redesigning a job so that the employee has increased
decision-making authority, responsibility, and accountability.

Job enrichment programs help the employee to develop new skills, as well as reducing the
boredom associated with repetitive jobs. From an organizational standpoint, such programs
allow employer to reduce the number of managers, since employees are able to work more
independently.

Job Enlargement: Increases task variety by combining into one job two or more tasks which
were previously performed by different workers (sometimes referred to as horizontal loading).
This increases skill variety and lengthens the work cycle.

Job Simplification: Involves standardizing work procedures and employing people in clearly
defined and specialized tasks.

Job Rotation: Allow employees to temporarily or permanently switch jobs with another
employee at the same hierarchical level.

How Job Design and Job Characteristics Impact Individuals and

Teams
As an introduction to the process of job design, it is important to highlight the work of another
motivation theorist, Frederick Herzberg.
Herzberg proposed that employees are primarily motivated by characteristics of the work itself.

Herzberg's Two Factor Theory suggests that motivation for work is composed of two, largely
independent dimensions:

1. Hygiene factors are those aspects of the job that can prevent dissatisfaction but that do
not increase motivation because they do not relate to an employee's growth and
development needs.

Examples: salary, management, working conditions, security, company policies,

interpersonal relations

2. Motivators are those aspects of the job that actually encourage growth.

Examples: opportunity for growth, satisfaction and advancement

A focus on hygiene factors can prevent job dissatisfaction, but for the best performance,
motivators must be built into a job.
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Job Characteristics Model (Hackman and Oldham)

The job characteristics model identifies five factors that can be incorporated into the job design
with the goal of increasing employee motivation and satisfaction. The model identifies five core
job dimensions that produce three psychological states.

Employees who experience these psychological states tend to have higher levels of internal
work motivation (motivation from the work itself), job satisfaction (particularly satisfaction with
the work itself), and work effectiveness.

The five core job characteristics are:

1. Skill Variety
• Skill variety refers to using different skills and talents to complete a variety of
work activities.
2. Task Identity
• Task identity is the degree to which a job requires completion of a whole or
identifiable piece of work, such as doing something from beginning to end, or
where it is easy to see how one's work fits in to the product or service.
3. Task Significance
• Task significance is the degree to which the job has a substantial impact on the
organization and/or larger society.
4. Autonomy
• Autonomy provides employees with freedom, independence, and discretion in
scheduling the work and determining the procedures to be used to complete the
work.
5. Feedback
• Job feedback is the degree to which employees can tell how well they are doing
based on direct sensory information from the job itself.

There are three critical psychological criteria that must be met for people to develop intrinsic
work motivation:
• experience meaningfulness in the work
• experience responsibility for the outcomes of the work
• knowledge of the results of the work

Job Design Issues

In order to effectively manage Job Design, the following issues should be kept in mind:
• recognize that the way in which work is designed for employees is not fixed
• take into account differences among people in their desire for more enriched work
• carefully diagnose the situation prior to implementing group/individual based work
designs
• designing group-based work is more complicated
• seek employee input wherever appropriate
Introduction to Business Management and Organizational Behaviour Individual/Team Behaviour – Stress
Management, Rewards, Job Design

Self-Motivation Techniques
Organizations do not have the sole responsibility of motivating their employees. In fact, the
majority of motivation is by the employee themselves (self-leadership).

There are 5 main elements of the process of self-motivation:

• Personal Goal Setting
• Constructive Thought Patterns - including positive self-talk and mental imagery
• Designing Natural Rewards
• Self-Monitoring
• Self-Reinforcement

Self-leadership and self-motivation are beginning to capture more attention.

In organizations where employees are passionate about the work and have a high level of
intrinsic motivation for the work they do, self-leadership and self-motivation can be very powerful
concepts.

For example, the implementation of ROWES (Results-Oriented Work Environments)

resulted in significant increases in productivity and profitability.

At the heart of the ROWE is the concept that employees control their work environment and are
responsible for managing themselves. There are no rules regarding when an employee shows
up for work - they are simply held responsible for delivering the results expected of them. Giving
employees significant autonomy while at the same time measuring work output is at the heart of
the idea of self-leadership and self-motivation. The ROWE concept is not something that can be
implemented just anywhere, but it demonstrates the value of giving people control and
autonomy.

Summary
Stress is caused by stressors. The effects of these stressors depend upon individual
characteristics, personality, values, motivations, beliefs, attitudes, learning levels, emotions and
perceptions.
Stress impacts individual behaviour; that in turn impacts organizational performance. To be
effective in the long-term, organizations must monitor stress levels and implement strategies to
manage and cope with stress.

Organizations use a wide variety of monetary and non-monetary rewards at the individual and
group or team levels. These rewards are often linked to improvements in individual, group, and
overall organizational performance. Organizations reward employees as individuals or as part of
a group or team as an integral and fundamental part of the employment relationship.

Regardless of the type of reward used and whether or not it is individual or group-based, to be
motivational, rewards need to be clearly linked to enhanced performance and be meaningful to
and valued by the recipients.
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Individual motivation and group or team motivation can be greatly increased by careful job
design or job re-design strategies such as job rotation, job enlargement, and job enrichment.

Self-motivation, or self-leadership, is the process of influencing oneself to provide self-direction

and self-motivation in performing a task or in work overall. This includes personal goal setting,
constructive thought patterns, developing and administering self-rewards, self-monitoring
behaviours, and positive self-reinforcement.

You have now completed this module. You can continue to the next module.