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ETM5221 Engineering Teaming: Application and Execution Nicholas C. Romano, Jr. Paul E. Rossler

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Presentation on theme: "ETM5221 Engineering Teaming: Application and Execution Nicholas C. Romano, Jr. Paul E. Rossler"— Presentation transcript:

1 ETM5221 Engineering Teaming: Application and Execution Nicholas C. Romano, Jr. Paul E. Rossler

2 Week 5 April 30, 2002 Motivation and Reward

3 Team Development The skills of effective team-work 1. Forming Establishing purpose Sharing goals Building trust 2. Storming Dealing with criticism Handling confrontations Avoiding rejection 3. Norming Accepting individual differences Giving feed-back Setting ground rules 4. Performing Solving problems Achieving results Celebrating successes Goals Effective Teamwork REF: ‘Team Handbook’

4 Some basic premises underlying work motivation and reward Managers often get what they assume about employeesManagers often get what they assume about employees –The way out often leads back in Most people are rational, acting in ways that they find rewarding and avoiding those they don’tMost people are rational, acting in ways that they find rewarding and avoiding those they don’t The good (and bad) news is that reward systems workThe good (and bad) news is that reward systems work

5 Some basic difficulties with rewards People aren’t pigeonsPeople aren’t pigeons Can have a punitive effectCan have a punitive effect Powerful forces can run counter to management’s intentionsPowerful forces can run counter to management’s intentions Provide a poor substitute for better managementProvide a poor substitute for better management Motivate people to get rewardsMotivate people to get rewards Can undermine interest in task itselfCan undermine interest in task itself

6 An overall reward strategy Intrinsic Extrinsic Indirect Financial - Benefits - Awards - Support programs Direct Financial - Base Salary -Variable pay - short-term/long-term - Support programs Career - Growth - Development - Opportunities - Security Job Content - “Buy in” of results - Level of responsibility - Meaningful work - Feedback Environment - Culture - Balance work/life - Relationships

7 Incentives for knowledge sharing Rewards Soft Hard Financial rewards Career advancement/security as reward Access to information and knowledge as reward

8 Incentives for knowledge sharing Rewards Soft Hard Personal satisfaction as reward Enhanced reputation as rewardGratitude Flattery Recognition Cross-hierarchy alliances Positive results of altruism

9 Merit pay incentives for professionals Traditional Merit Pay CharacteristicsTraditional Merit Pay Characteristics –merit pay granted as higher base salary (a raise) –usually based on individual performance only New Merit Pay CharacteristicsNew Merit Pay Characteristics –merit pay awarded as lump sum once per year (NOT a raise) –merit pay tied to both individual and organizational performance

10 Team Incentive Plan Compensation plan where all team members receive an incentive bonus payment when production or service standards are met or exceeded

11 Gainsharing Plans Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity that reflects improved productivity and profitability

12 ‘Type’ of Monetary Rewards ‘Type’ of Monetary Rewards Team-Based Individual- Based Variable Programs Base Programs IndividualIncentives Market Based Reward Platform Profit Sharing Success Sharing Gainsharing MBO Lump Sum Payments Commissions & Piece Rates Perf. Based Skill Based Competency Based Time Based COLA General Increase Venture Systems Team Incentives Market Based Individual Incentives

13 Why do rewards (sometimes) fail to motivate? Too much emphasis on monetary rewardsToo much emphasis on monetary rewards Rewards lack an “appreciation effect”Rewards lack an “appreciation effect” Extensive benefits become entitlementsExtensive benefits become entitlements Counterproductive behavior is rewardedCounterproductive behavior is rewarded Too long a delay between performance and rewardsToo long a delay between performance and rewards

14 Why do rewards (sometimes) fail to motivate? (cont’d.) Too many one-size-fits-all rewardsToo many one-size-fits-all rewards Use of one-shot rewards with a short-lived motivational impactUse of one-shot rewards with a short-lived motivational impact Continued use of de-motivating practices such as layoffs, across-the-board raises and cuts, and excessive executive compensationContinued use of de-motivating practices such as layoffs, across-the-board raises and cuts, and excessive executive compensation

15 “ Yet when what management does is seen to some degree as dishonest, as forcing people to make difficult choices in favor of company goals, and as the creation of games which must be played to get one ’ s reward, what is going on probably captures many of the meanings of manipulation. It seems likely that there exists a significant group of people who resent being “ motivated, ” resent being put “ on incentive. ” and resent what they see as treatment for laboratory rats in a maze. ” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 127

16 Two primary theories Behaviors occur due to experience in reinforcement and objective measurement of value of past rewards Adjusts behaviors due to anticipation and subjective weighing of future rewards ReinforcementExpectancy

17 Motivation Theory in a nutshell PerformanceOutcomeEffort My Outcomes My Inputs Other’s Outcomes Other’s Inputs ExpectancyInstrumentalityValence Behaviorism = Force to perform = f(VIE or Needs or Inequity or Consequence)

18 Value Exchange Theory suggests a balance is needed Employee or Team Member Gives Value Add Energy Effort Commitment Loyalty Time Opportunity Career Benefits Compensation Job Employer or Team Gives

19 Performance vs. Payout Performance vs. Payout Performance HighLow Overpaying Who designed this?! Ideal Worth the investment Underachieving Something is not working Unstable Value Exchange Issue High Low Payout

20 Motivation theory recap Satisfaction with a reward is a function of both how much is received and how much the individual feels should be receivedSatisfaction with a reward is a function of both how much is received and how much the individual feels should be received An individual’s feelings of satisfaction are influenced by comparisons of what happens to othersAn individual’s feelings of satisfaction are influenced by comparisons of what happens to others Satisfaction is influenced by how satisfied employees are with both intrinsic and extrinsic rewardsSatisfaction is influenced by how satisfied employees are with both intrinsic and extrinsic rewards

21 Motivation theory recap (cont’d.) People differ in the reward they desire and in the relative importance different rewards have for themPeople differ in the reward they desire and in the relative importance different rewards have for them Some extrinsic rewards are satisfying because they lead to other rewardsSome extrinsic rewards are satisfying because they lead to other rewards Rewards must be valued and must be related to a specific level of job performanceRewards must be valued and must be related to a specific level of job performance

22 People looking at people working Many managers consider themselves to be already working to their full potentialMany managers consider themselves to be already working to their full potential Working people are seen as bored with and alienated from work, not working to their full potential, not caring...Working people are seen as bored with and alienated from work, not working to their full potential, not caring... This leads to a searching for ways to get working people to work harder and smarterThis leads to a searching for ways to get working people to work harder and smarter Popular approaches include job enrichment, involvement, training, rewardPopular approaches include job enrichment, involvement, training, reward

23 Some questionable assumptions Job satisfaction drives productivity and performanceJob satisfaction drives productivity and performance Most people want job enrichment, involvementMost people want job enrichment, involvement People can readily and easily change their attitudes and behaviorsPeople can readily and easily change their attitudes and behaviors People are alike in their wants, needs, and responsesPeople are alike in their wants, needs, and responses Work is a central dimensionWork is a central dimension Management’s job is to motivateManagement’s job is to motivate

24 Job satisfaction drives productivity? “... the relationship is vague, ambiguous, and too weak to be useful. ” Participation’s correlation with performance and satisfaction ranges from.08 to.25 (about 6% variance explained Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 129 Source: John Wagner III, Participations effects on performance and satisfaction: A reconsideration of research evidence, Academy of Management Review, Vol. 19, No. 2,

25 All knotted up and intertwined “ The behavior of working people... is an extremely complex phenomenon. It depends on a great many things which vary from the physical design of the task to the ideals and aspirations of the individual... Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p

26 Most people want job enrichment, involvement If most working people wanted their jobs enriched, they would be asking for it, and unions would be negotiating for itIf most working people wanted their jobs enriched, they would be asking for it, and unions would be negotiating for it –Experience suggests only 15% of the work force responds well to this strategy

27 Most people want job enrichment, involvement (cont’d.) Some workers clearly prefer the simplicity of a repetitive taskSome workers clearly prefer the simplicity of a repetitive task –Many more people exist than we may care to acknowledge who are well-motivated, highly productive, and satisfied in a regimented, autocratic setting.

28 Most people want job enrichment, involvement (cont’d.) Most job enrichment programs create enlarged jobs, not enriched onesMost job enrichment programs create enlarged jobs, not enriched ones –Base pay oftentimes remains unchanged Technology limits many jobs’ enrichment or involvement potentialTechnology limits many jobs’ enrichment or involvement potential If involvement is situational, many managers seem unable to easily shift from one management style to anotherIf involvement is situational, many managers seem unable to easily shift from one management style to another

29 Most people want job enrichment, involvement (cont’d.) Involvement might take more energy than most people are willing to spend, at least in their work environments.Involvement might take more energy than most people are willing to spend, at least in their work environments. Unanswered question is whether a significant percentage of the work force wants to participate long-termUnanswered question is whether a significant percentage of the work force wants to participate long-term –Past the novelty of doing so

30 As for the Japanese… In its broad definition participation, is not practiced in Japan because Japanese culture itself precludes it Source: Richard Mazzini, Unexpected lessons from visiting a Japanese company, Journal of Management Inquiry, Vol. 1, No. 3,

31 What about the experiments, the Greenfield plants? Employee involvement experiments seem to follow the Hawthorne experienceEmployee involvement experiments seem to follow the Hawthorne experience –They rarely involve the majority of working people throughout their life cycle. Greenfield plants appear to be a possible exceptionGreenfield plants appear to be a possible exception –But their selection and placement processes screen out a great many. –And, many who do fit find their new working arrangement far from utopian.

32 People are alike in their wants, needs, and responses “ We are a very long way from freeing ourselves from this systematic ignoring of individual differences. It is a model of working behavior which has a powerful appeal — so powerful in fact that we tend to ignore the unhappy result. It simply doesn ’ t work very well. ” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 109

33 “…they assumed that, unlike the rest of the human race, working people were fairly clear in knowing what they wanted, would be willing to make an effort to get what they said they wanted, and would be happier if they succeeded.” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 111

34 The cultural background or context influences responses “The cultural background of working people, the type of environment in which they live, the size of the work group in which they are a part – all are clearly useful in predicting their response to work restructuring.” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 111

35 People easily and readily change attitudes and behaviors “ It is sufficiently difficult...to interest people in working harder, but it has often been done. It is much more difficult to interest people in working smarter, and this has seldom been done. ” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 148

36 Work is the central dimension of most people ’ s lives “ There is little evidence that working people, beyond the special few, find fulfillment in their work. Indeed, it has been suggested that they are able to remain mentally healthy only because they refuse to get overly involved in work which simply cannot be rewarding intrinsically, or self- actualizing. They are willing to work for other reasons, but letting work become a central aspect of their mental well-being just doesn ’ t make sense to them. ” “ There is little evidence that working people, beyond the special few, find fulfillment in their work. Indeed, it has been suggested that they are able to remain mentally healthy only because they refuse to get overly involved in work which simply cannot be rewarding intrinsically, or self- actualizing. They are willing to work for other reasons, but letting work become a central aspect of their mental well-being just doesn ’ t make sense to them. ” (Source: William Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 114)

37 “The belief that we can get people interested in improving their own productivity is a very dubious one indeed, at least below the supervisory level…From the working person’s point of view, increasing productivity…is simply inconsistent with the adversary relationship…” (Source: William Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 126)

38 Management’s job is to motivate “ We have told ourselves for so long that one of the basic functions of management is to motivate people [that]... if it became clear that the reason some working people respond in the wrong way to management strategies [is] because they do not want to be motivated... [by] whatever system of rewards... managers decide to invent. ” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 128

39 The cultural basis of teams Information must be used for self-control and improvement, not punishment or micro- managementInformation must be used for self-control and improvement, not punishment or micro- management Authority must be equal to responsibilityAuthority must be equal to responsibility Equitable compensation and equitable rewards for results must be availableEquitable compensation and equitable rewards for results must be available Adapted from Sashkin, M. and K.J. Kiser, Putting Total Quality Management to Work. 1993, San Francisco: Berrett-Kohler.

40 Cultural basis (cont’d.) Cooperation, not competition, must be the basis for working togetherCooperation, not competition, must be the basis for working together Team members must know their jobs are secure, not easily or readily discarded at a moment’s noticeTeam members must know their jobs are secure, not easily or readily discarded at a moment’s notice A climate of fairness as demonstrated by such things as trust, respect, integrity, and clear expectations must existA climate of fairness as demonstrated by such things as trust, respect, integrity, and clear expectations must exist

41 Unfortunately, many teams operate in or under… Individual appraisal and reward systems that foster competitivenessIndividual appraisal and reward systems that foster competitiveness Decision processes that undermine authorityDecision processes that undermine authority Lean and mean staffing strategies that erode a sense of security, ownership, and create a sense of inequityLean and mean staffing strategies that erode a sense of security, ownership, and create a sense of inequity Intense cost and time pressure that encourages making minimal commitments and cutting cornersIntense cost and time pressure that encourages making minimal commitments and cutting corners

42 In other words, management rewards A and hopes for B

43 Common problems with feedback Feedback is used to punish, embarrass, or put someone downFeedback is used to punish, embarrass, or put someone down Those receiving the feedback see it as irrelevant to their workThose receiving the feedback see it as irrelevant to their work Feedback information is provided too late to do any goodFeedback information is provided too late to do any good

44 Six common problems with feedback (cont’d.) People receiving feedback believe it relates to matters beyond their controlPeople receiving feedback believe it relates to matters beyond their control Employees complain about wasting too much time collecting and recording the dataEmployees complain about wasting too much time collecting and recording the data Recipients complain about feedback being too complex or difficult to understandRecipients complain about feedback being too complex or difficult to understand

45 Some tips for giving good feedback Relate feedback to existing performance goals and clear expectationsRelate feedback to existing performance goals and clear expectations Give specific feedback tied to observable behavior or measurable resultsGive specific feedback tied to observable behavior or measurable results Channel feedback toward key result areasChannel feedback toward key result areas Give feedback as soon as possibleGive feedback as soon as possible

46 Some tips for giving good feedback (cont’d.) Give positive feedback for improvement, not just final resultsGive positive feedback for improvement, not just final results Focus feedback on performance, not personalitiesFocus feedback on performance, not personalities Base feedback on accurate and credible informationBase feedback on accurate and credible information

47 Individual appraisal or team appraisal or both? Individual level appraisal helps reduce social loafingIndividual level appraisal helps reduce social loafing –But ignores interaction and synergy that characterize excellent team performance Team performance assessment provides information helps to identify problems, develop capabilities, and create joint accountabilityTeam performance assessment provides information helps to identify problems, develop capabilities, and create joint accountability

48 Other key questions What is rated?What is rated? –Behavior, competency, outcome, or all three? Who provides the rating?Who provides the rating? –Manager, project leaders, team leader, other team members, customers, self, coworkers How is the rating used?How is the rating used? –Development, evaluation, self-regulation (self- control)

49 Performance appraisal methods for types of teams

50 Evaluation alternatives 1.Forced distribution - 10% receive an A, 40% B, 40% C, 10% D Norm-basedNorm-based Criterion-basedCriterion-based Benchmark-basedBenchmark-based

51 Evaluation Alternatives (continued) 2.Negotiated- Establish goals that, if accomplished, earn a high rating 3.Team-based - Each team member receives rating assigned to team 4.Individual-based in team environment – Each team member receives rating based on individual performance

52 Evaluation Alternatives (cont’d.) 5.Trait-based – Rating based on exhibiting certain traits such as “hard working” 6.Non-judgmental - Everyone receives a high (or medium or low) rating 7.Participative – Team members determine other team members ratings 8.Open – Individual ratings and pay are publicly posted

53 Increasing the probability that pay for performance works Make pay for performance an integral part of the organization’s basic strategyMake pay for performance an integral part of the organization’s basic strategy Base incentive determinations on objective performance dataBase incentive determinations on objective performance data Have all employees actively participate in the development, implementation, and revision of the performance-pay formulasHave all employees actively participate in the development, implementation, and revision of the performance-pay formulas

54 Increasing the probability that pay for performance works (cont’d.) Encourage two-way communication so problems with the pay-for-performance plan will be detected earlyEncourage two-way communication so problems with the pay-for-performance plan will be detected early Build the pay-for-performance plan around participative structuresBuild the pay-for-performance plan around participative structures

55 Increasing the probability that pay for performance works (cont’d.) Reward teamwork and cooperation whenever possibleReward teamwork and cooperation whenever possible Actively sell the plan to supervisors and middle managers who may view employee participation as a threat to their traditional notion of authorityActively sell the plan to supervisors and middle managers who may view employee participation as a threat to their traditional notion of authority If annual cash bonuses are granted, pay them in a lump sum to maximize their motivational impactIf annual cash bonuses are granted, pay them in a lump sum to maximize their motivational impact

56 Increasing the probability that pay for performance works (cont’d.) Remember that money motivates when it comes in significant amounts, not occasional nickels and dimesRemember that money motivates when it comes in significant amounts, not occasional nickels and dimes

57 How to increase the probability that team-based pay works Prepare employees with interpersonal skills trainingPrepare employees with interpersonal skills training Don’t introduce team-pay until teams are running smoothly.Don’t introduce team-pay until teams are running smoothly. Blend individual and team incentivesBlend individual and team incentives Start by rewarding teamwork behaviors and then evolve to incentives for team resultsStart by rewarding teamwork behaviors and then evolve to incentives for team results Make sure each team member has a clear line of sight to key team resultsMake sure each team member has a clear line of sight to key team results

58 Link rewards to incentives What gets rewarded gets measuredWhat gets rewarded gets measured Rewards & incentives systems focus on company goals & objectivesRewards & incentives systems focus on company goals & objectives –Eg., Customer satisfaction, Improved quality Employees encouraged to excel when rewards/incentives consistent w/measuresEmployees encouraged to excel when rewards/incentives consistent w/measures Quantify performance before implementing rewards/incentives programQuantify performance before implementing rewards/incentives program

59 A warning The weakness of simple explanations and the general failure of simplistic strategies for increasing productivity present an overwhelming array of data to which it is time we attended... The simple, effective, easily formulated approach is not a very likely prospect, and the related data says this quite strongly. Human behavior in work situations is an extremely involved affair, and the best strategy is to be highly suspicious of the simple strategy. ” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p

60 A delicate matter and difficult challenge “…excepting in rare instances, the difficulties of securing the means of offering incentives, of avoiding conflicts of incentives, and of making effective persuasive efforts, are inherently great; and that the determination of the precise combination of incentives and of persuasion that will be both effective and feasible is a matter of great delicacy. Indeed, it is so delicate and complex that rarely, if ever, is the scheme of incentives determinable in advance of application, It can only evolve…(Chester Barnard, The Functions of the Executive, p. 158)


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