The Economics of Motivation and Organization
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The Economics of Motivation and Organization

An Introduction

Peter-J. Jost

In this unique book, Peter-J. Jost provides a comprehensive economic-psychological approach for successfully managing employees. Based on the analysis of the employee’s individual work behavior, he illustrates that instead of treating employees as input elements of production, and managing and controlling their work, organizations need to motivate their employees to act in the interest of the firm and in accordance with its goals.
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Chapter 6: Managing the Work Behavior

An Introduction

Peter-J. Jost


ìThe artificial quality of organizations, their high concern with performance, their tendency to be far more complex than natural units, all make informal control inadequate and reliance on identification with the job impossible. Most organizations most of the time cannot rely on most of their participants to internalize their obligations, to carry out their assignments voluntarily, without additional incentives.î (Etzioni, 1963) In 1975, Herb Kelleher founded the company Southwest Airlines in Dallas, Texas.1 The first years did not seem to be very promising. Other airlines perceived the newly founded company as an undesired competitor and used all means in order to push Southwest Airlines out of the market again. As a matter of fact, not a single plane left the airport in the first three years. When the first planes could depart in the fourth year, Southwest Airlines was only allowed to operate at Love Field airport, located far off from the city. The company was not granted access to the new international airport Dallas-Fort Worth. Departing from Love Field, Southwest Airlines could only approach four cities in the south west of the US. Having a return on equity of 11.7% in 1992, Southwest Airlines was elected as the most successful firm of the past twenty years in the US in that year. As compared to other American airlines, the company had less staff per aircraft (79 employees as compared to 131) and operated more passengers per employee (2319 passengers as compared to 848). 80% of Southwest aircrafts were ready to take off again in less than fifteen minutes after the arrival, whereas competitors needed on average 45 minutes. Southwest Airlines had an extraordinary service, for which the company won the so-called triple crown nine times. The company had the best ontime performance, best baggage handling and the highest customer satisfaction in the same month.

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