Organisational Behaviour: Reinforcement Theory Used at Nucor - Assignment Example

Running Head: ORGANISATIONAL BEHAVIOUR Organisational Behaviour s Organisational Behaviour Q How isthe reinforcement theory used at Nucor Nucor has used the reinforcement theory in order to motivate its employees . First let me explain a little what the reinforcement theory is this theory is dependent upon the rewards offered for tasks. It is based on the fact that the degree of achievement is directly related to the reward which is given. The reinforcement theory relies on positive reinforcement and recognizing the impact of different schedules of reinforcement on behavior. Nucor realizes that rewarding a behavior with recognition immediately following that behavior is likely to encourage its repetition. The recognition can take many forms, whether it is a pay raise, an award, or simply a pat on the back. They also know that Rewarding desirable behavior is important to a business to keep the motivation of the employees high that is why they do not use a control and command model with their employees, instead they trust their people and share the corporate wealth We can analyze Nucor by Robbins (2001), reinforcement theory ignores the inner state of the individual and concentrates solely on what happens to a person when he or she takes some action. Significant research indicates people will exert more effort on tasks that are reinforced than on tasks that are not this statement is definitely proven by Nucor as pay day is always a time to celebrate for the employees in 2005 they distributed $220 million and this made the employees work even more hard for them. Thus as Robison pointed they exert more efforts in their takes. Nucor realizes this shares its profit with its employees so that they can get the maximum from them Reinforcement theory will work well for Nucor's employees because they thrive on individual recognition and with little time and effort will become comfortable with being recognized as part of a team. Reinforcement theory works well for Nucor because employees are likely to put forth more effort if they know that same effort will be rewarded when the task is finally completed. The reward itself is not as important as knowing that there will be a reward. Q2).What Role Does Equity Theory Play In The Case Let us starts by explaining exactly what this theory is all about the equity theory states: employees weigh what they put into a job situation (input) against what they get from it (outcome) and then compare their input-outcome ratio with the input-outcome ratio of relevant others (Robbins, 2001 p115). It can also be said that Equity theory gives complete attention to on the feelings of employees of how fairly they have been treated in contrast with the treatment which other employees get " (Laurie 2007 p.435). Equity does play a huge role in the case , as Nucor knows that Equity plays an important role for employees. If an employee feels equally treated, he or she will sense fairness. If an employee feels they are treated unfairly, they may feel they are not being treated well enough. Thus when the company does not make enough profit or a bad batch of steel goes into market every one looses out on the bonus and profit sharing. By everyone I even mean the CEO and top management what more equity could the employee ask for Since each employee is an individual, equality is an important aspect of maintaining an effective. When there are individual differences among employees, there are also potential workgroup conflicts but Nucor solves this problem by making sure that bonuses are calculated every week so that every employee gets a bit of the cash. Robbins (2001) states that there are five different choices an individual might make if faced with inequity. They are as follows: distort either their own or others' inputs or outcomes, behave so as to induce others to change their inputs or outcomes, behave so as to change their own inputs or outcomes, and/or choose a different comparison referent or quit their job (p. 116). This too fits perfectly for Nucor because this induces healthy competition each employees gives his share of ideas in order to improve the work process , this brings about a change and thus the active employees induce other employees to also get active as they all are involved in healthy competition. Nucor probably this theory as when people perceive an imbalance in their input-outcome ratio relative to others, tension is created. This tension provides the basis for motivation, because people strive for what they perceive as equity and fairness Employees make comparisons of their job inputs (such as effort, experience and education) and outcomes (such as salary levels, speed of promotion and recognition) to relative to those of others . Equity theory based on exchange theory. People expect certain outcomes in exchange for certain inputs. Nucor is most defiantly using this theory as their employees always expect a significant pay rise as a contribution for his effort, which helped to achieve important organizational goal. The employee will also compare him or herself to other similar employees in the company this raises healthy competition, they know that " it gives you something to shoot for". A good example of this is that plant managers at Nucor regularly set up contests for shifts to try to out do one another generally related to out put (Kreitner & Kinicki 2007 pp. 238-239). Nucor knows that if the performance-related pay scheme will not leave-up to his or her expectations, it will create a feeling of unfairness, which may affect employee's future performance. Nucor also uses the equity theory as a ratio analysis, as a combination of inputs and outputs. According to equity theory people give different weightings to each of variables in the ratio". "while the ratio of a person's totality outcomes to total inputs equals the apparent ratio of other people's total outcomes to total inputs equity occurs " (Laurie 2007 p.435). Therefore, one can argue that if the ratio of total inputs and total outcomes of each employee at Nucor in the form of pay increase of one person equals to that of another person the employee in question will feel like he is fairly treated. And thus Performance-related pay has in this way also proven to be effective for Nucor Due to the natural difficulty of the task performance at Nucor is always measured appropriately, which may result in a good estimation or of the person's real effort put into accomplishment of the task. Nucor realizes that People are more tolerant to overpayment than underpayment inequities. Therefore, pay-related schemes are more effective at Nucor then other companies and this is why other companies have a hard time setting aside their control and command model. This theory is for sure used in Nucor 's case study as the entire process of equity is exhibited in it employee will get a conclusion after comparing the relative reward, which equals to O/I (Outcome/Job input) ratio, of his own against that of the referent. Outcome here can be referred to as money motivator such as salary. The referent comparison can be made with his own experience in or out the current organization or another person's experience in or out the current organization. When the conclusion obtained is inequity, either over rewarded or under rewarded, the employee will be differently motivated and adjust his behavior Obviously, the measure of the inputs and the outcome is critical to the application of Equity Theory. But this case proves that Nucor is equipped with a sound and fair system for the measuring, and the managers take all their responsibilities to monitor the process of measuring, the Equity Theory has resulted in a profound effect. Even though a total equity is difficult to achieve. Q3). To What Extent Is Nucor's Approach to Employee Motivation Consistent with Expectancy Theory Discuss. If we consider the Expectancy theory as a theory used by Nucor then we can see that its defiantly has a strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. Nucor basically used the motivation to improve performance depending on three factors: whether employee believes that greater performance will lead to better performance, whether higher performance will lead to reward and whether the reward is valuable to that person. In other words motivation will exist if three conditions called: expectancy, instrumentality and valence are present. For example, employee X works hard to improve his performance. Nucor has used the most important factor of all in Victor Vroom's expectancy theory is the idea of valence. Valence is the expected degree of satisfaction associated with the reward (notes) this is what the employees expect at the end of every week when their bonuses are calculated. Nucor knows that some people may derive satisfaction from the actual accumulation of wealth, whereas such as "high achievers can be more motivated by the prospects of promotion. Therefore, management can find it difficult to motivate people with low valence to money by performance pay. Expectancy theory is used by Nucor for development which creates the environments that foster motivation and responsibility. In such an environment, communication is open and safe; employees know the work they do is meaningful; they know how their specific contribution supports other teams (www.businesstown.com); and they know why it's critical for them to produce quality work. Also in this environment, risk taking is encouraged, goal setting is ongoing, and both Nucor's managements and 'its employees are involved in problem solving and decision making. In addition, Nucor provide resources, and growth opportunities; communicate encouragement and acknowledgement; and provide recognition, rewards, increased levels of responsibility, and job advancement. Employees get a good payback for taking full responsibility for their performance References Laurie J. Mullins 2007; Management and Organisational Behaviour, Financial Times/ Prentice Hall; 8 edition p435 Robbins, S. P. (2001). Organizational Behavior (9th ed.). Upper Saddle River, New Jersey: Pearson Custom Publishing p115-116 www.businesstown.com retrieved on July 22 2008 Kinicki Angelo and Kreitner Robert (2007); Organizational Behavior (8th ed) , Irwin Professional Pub. pp. 238-239. Read More