ISBN: 3540424016
TITLE: Successfuul Management by Motivation
AUTHOR: Frey, Osterloh
TOC:

Foreword V
Preface VII
Part One
Motivation as a Function of Management 1
I. Motivation - A Dual-Edged Factor of Production 3
Bruno S. Frey and Margit Osterloh
1. What Motivates People to Perform? 7
2. Extrinsic and Intrinsic Motivation 8
2.1 The Crowding-Out Effect 9
3. The Importance of Intrinsic Motivation 19
3.1 Firm-Specific Pool Resources 19
3.2 Multi-Tasking 19
3.3 Fuzzy Tasking 20
3.4 The Transfer of Tacit Knowledge 20
3.5 Creativity and Innovation 21
4. Why Extrinsic Motivation Is Nevertheless Indispensable 21
5. The Art of Creating the "Right" Motivation 23
6. Further Reading 23
II. Motivation and Knowledge as Strategic Resources 27
Margit Osterloh and Jetta Frost
1. The Latest Developments in Strategy Research: From a Market-Based to a Resource-Based View 31
2. What Characterizes Corporate Resources That Are Relevant to Sustainable Competitive Advantage? 36
2.1 Why Do Firms Exist? 36
2.2 Why Are the Resources of Some Companies Superior to Those of Their Competitors? 41
3. Knowledge and Motivation as Sources of Sustainable Resources Crucial to Competitive Advantage 42
3.1 Explicit and Tacit Knowledge 44
3.2 Disseminating Tacit Knowledge 45
4. Summary 49
5. Further Reading 50
Part Two
Motivation and Compensation 53
III. How Does Pay Influence Motivation? 55
Bruno S. Frey
1. Contrasting Views 59
2. When Do Wages Crowd Out Motivation and Reduce Performance? 68
3. Different Types of People 73
3.1 Extrinsically Motivated Employees 73
3.2 Intrinsically Motivated Employees 75
4. Performance-Related Pay Increases Performance 76
5. Performance-Related Pay Reduces Performance 79
6. Motivation Beyond Wages 81
7. Outlook 86
8. Further Reading 87
IV. Stock Options for Top Managers - The Possibilities and Limitations of a Motivational Tool 89
Matthias Benz, Marcel Kucher and Alois Stutzer
1. Extrinsic Incentives and Management Motivation 93
2. The Structure and Level of Managers' Salaries 94
3. The Relationship Between Management Compensation and a Company's Success 97
4. Managers' Interest in Stock Options 99
5. How Many Stock Options Per Manager? The Influence of the Management Environment 100
5.1 The Role of the Board of Directors 100
5.2 The Influence of Shareholder Concentration 102
5.3 Competitive Pressure in the Main Product Market 104
6. A Concrete Test: The S&P 500 Top Managers 106
6.1 Descriptive Analysis 106
6.2 Statistical Analysis 112
6.3 Interpretation of the Results 114
7. Summary 116
8. Further Reading 117
V. Pay for Performance: Motivation and Selection Effects 119
Iris Bohnet and Felix Oberholzer-Gee
1. Introduction 123
2. Performance-Related Pay - The Perfect Solution? 125
2.1 Drawbacks of Pay for Performance 125
2.2 Different Abilities 125
2.3 Incentives and Suggestion Systems 126
2.4 Consequences for the Company 129
3. Testing the Selection Effect 129
3.1 The Data 131
3.2 Empirical Analysis 131
4. More Effective Compensation Systems 134
5. The Effectiveness of Performance Incentives 136
6. Further Reading 137
7. Statistical Appendix 138
Part III
Motivation and Work Organization 141
VI. Motivation and Organizational Forms 143
Jetta Frost and Margit Osterloh
1. Organization and Extrinsic Motivation: Taylorism 147
2. Organization and Intrinsic Motivation: Likert's Group Organization 150
3. Can a Balance Be Achieved Between Extrinsic and Intrinsic Motivation Through the Profit Center Organization? 156
3.1 The Typical Profit Center Organization 156
3.2 The Conflict Between Motivation and Coordination Via Transfer Prices 159
3.3 The Conflict Between Motivation and Knowledge Transfer 163
4. Concluding Remarks 168
5. Further Reading 170
VII. Fairness as a Motivator 171
Antoinette Weibel and Sandra Rota
1. Distributive and Procedural Justice 175
1.1 Distributive Justice 176
1.2 Procedural Justice 177
2. Fairness, Attitudes and Behavior 180
2.1 Fairness Alters Employee Attitudes 181
2.2 Fairness Alters Employee Behavior 182
3. Concluding Remarks 187
4. Further Reading 188
VIII. Management of the Unwritten - How You Can Improve Employment Relationships Through Participation and Communication 191
Matthias Benz
1. The Problem: Why Are Employment Contracts Incomplete? 195
1.1 The Reason Why Companies Exist 195
1.2 The Importance of Implicit Employment Contracts 196
2. The Answer: Participation and Communication as Motivators 197
2.1 Participation 197
2.2 Communication 199
3. A Concrete Application: Worker Representation and Participation Survey 201
3.1 Can the Quality of Implicit Employment Contracts Be Measured? 202
3.2 Operationalizing Participation and Communication 203
3.3 Empirical Analysis 203
4. Conclusion 209
5. Further Reading 210
6. Appendix 211
6.1 Survey Questionnaire and Variables 211
6.2 Detailed Presentation of the Results 213
Part IV
Case Studies 217
IX. Managing Motivation in the Banking Industry: The ING Barings Case Study
Jetta Frost and Leo Boos 219
1. Investment Banking in the Early 1990s: From Gold Digger to Grave Digger 223
1.1 Barings Brothers: Bankers and Brokers 224
1.2 What Banks Do 225
1.3 Information Technology is Changing Banks 225
2. ING Barings 227
3. ING Barings' Motivation Management Tools 230
3.1 First Motivational Tool: The Compensation Structure 232
3.2 Second Motivational Tool: The SMART Objectives 234
3.3 Third Motivational Tool: Professional Development and Training 236
3.4 Fourth Motivational Tool: The Internal Communication System 237
3.5 Fifth Motivational Tool: Discussion Groups and Internal Suggestion Systems 238
3.6 Sixth Motivational Tool: The Synergy Award 240
3.7 Seventh Motivational Tool: The Spotlight Award 246
3.8 Eighth Motivational Tool: Community Investment Programs 246
4. Motivation Management and the Battle for Talent 247
5. Further Reading 250
X. Managing Motivation in Software Development - A Case Study at SAP AG 251
Ralph Trittmann, Dirk Stelzer, Andreas Hierholzer and Werner Mellis
1. Motivation and Software Development 255
2. The Nature of Employee Motivation at SAP 257
2.1 Method of Study 257
2.2 Motivation Factors 259
2.3 Categorization of Motivation Factors 260
3. Improvements in Software Development at SAP AG 261
3.1 Method of Study 261
3.2 General Characteristics of the Improvement Projects Studied 263
3.3 Factors Contributing to the Success of Improvement Projects 265
4. Relationship Between Motivation Factors and Factors Contributing to the Success of Improvement Projects 268
5. Conclusion 271
6. Further Reading 272
Part V
Conclusion 275
XI. Managing Motivation to Achieve a Sustainable Competitive Advantage 277
Margit Osterloh and Bruno S. Frey
1. The Problems of Performance-Based Compensation 279
1.1 Measurement Problem 279
1.2 Team Problem 280
1.3 Selection Problem 280
1.4 Manipulation Problem 281
1.5 Crowding Out Problem 281
2. Basic Principles of Management by Motivation 282
2.1 Tailoring the Incentive System to the Type of Activity 282
2.2 Variety of Motivational Instruments 282
2.3 Workflow 283
2.4 Fairness 283
3. Managing Motivation to Achieve a Sustainable Competitive Advantage 284
Authors 285
References 289
Index 297
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