Applied Performance Practices

Applied Performance Practices at Nucor Courtesy Nucor Nucor has survived and thrived in the turbulent steel industry through the benefits of performance-based rewards, job design, and empowerment.

Financial Reward Practices Money has multiple meanings Symbol of success Reinforcer and motivator Source of reduced anxiety Meaning of money varies Higher value to men than to women Cross-cultural differences © Corel Corp. With permission.

Types of Rewards in the Workplace Membership and seniority Job status Competencies Performance-based © Corel Corp. With permission.

Membership/Seniority Based Rewards Fixed wages, seniority increases Advantages Guaranteed wages may attract job applicants Seniority-based rewards reduce turnover Disadvantages Doesn’t motivate job performance Discourages poor performers from leaving May act as golden handcuffs

Job Status-Based Rewards Includes job evaluation and status perks Advantages: Job evaluation tries to maintain pay equity Motivates competition for promotions Disadvantages: Employees exaggerate duties, hoard resources Focuses employees on own jobs, not customers Inconsistent with workplace flexibility

Competency-Based Rewards Pay increases with competencies acquired and demonstrated Skill-based pay Pay increases with skill modules learned Advantages More flexible work force, better quality, consistent with employability Disadvantages Potentially subjective, higher training costs

Performance Pay at Hugo Boss Hugo Boss Industries (HBI) attributes relies on a balanced scorecard that captures diverse performance measures across the Swiss company’s various product groups. “The scorecard serves a very important purpose in focussing attention on the things that are being measured and where we are trying to go,” explains Werner Lackas, HBI’s head of operations.

Performance-Based Rewards Organizational rewards Profit sharing Stock ownership Stock options Balanced scorecard Team rewards Bonuses Gainsharing Individual rewards Bonuses Commissions Piece rate

Evaluating Organizational Rewards Positive effects Creates an “ownership culture” Adjusts pay with firm's prosperity Scorecards align rewards with several specific organizational outcomes Concerns with performance pay Weak connection between individual effort and rewards Reward amounts affected by external forces

Improving Reward Effectiveness Link rewards to performance Ensure rewards are relevant Team rewards for interdependent jobs Ensure rewards are valued Watch out for unintended consequences © Corel Corp. With permission.

Job Design Assigning tasks to a job, including the interdependency of those tasks with other jobs Organization's goal -- to create jobs that allow work to be performed efficiently yet employees are motivated and engaged

Job Specialization Dividing work into separate jobs that include a subset of the tasks required to complete the product or service Scientific management advocates job specialization also emphasized person-job matching, training, goal setting, work incentives

Evaluating Job Specialization Advantages Disadvantages Less time changing activities Lower training costs Job mastered quickly Better person-job matching Job boredom Discontentment pay Higher costs Lower quality Lower motivation

Job Characteristics Model Core Job Characteristics Critical Psychological States Outcomes Skill variety Task identity Task significance Meaningfulness Work motivation Growth satisfaction General effectiveness Autonomy Responsibility Feedback from job Knowledge of results Individual differences

Job Rotation Moving from one job to another Benefits Minimizes repetitive strain injury Multiskills the workforce Potentially reduces job boredom Job ‘A’ Job ‘B’ Job ‘D’ Job ‘C’

Job Enlargement Adding tasks to an existing job Example: video journalist Video journalist • Operates camera • Operates sound • Reports story Employee 1 Operates camera Employee 2 Operates sound Employee 3 Reports story Traditional news team

Job Enrichment Given more responsibility for scheduling, coordinating, and planning one’s own work 1. Clustering tasks into natural groups Stitching highly interdependent tasks into one job e.g., video journalist, assembling entire product 2. Establishing client relationships Directly responsible for specific clients Communicate directly with those clients

Kambuku Empowerment Pretoria Portland Cement introduced “Kambuku”, a companywide initiative that made the South African company more performance-oriented through employee empowerment. Courtesy Pretoria Portland Cement

Dimensions of Empowerment Self-determination Employees feel they have freedom and discretion Meaning Employees believe their work is important Competence Employees have feelings of self-efficacy Impact Employees feel their actions influence success

Supporting Empowerment Individual factors Possess required competencies, able to perform the work Job design factors Autonomy, task identity, task significance, job feedback Organizational factors Resources, learning orientation, trust Courtesy Pretoria Portland Cement

Self-Leadership The process of influencing oneself to establish the self-direction and self-motivation needed to perform a task Includes concepts/practices from: Goal setting Social learning theory Sports psychology

Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Personal goal setting Employees set their own goals Apply effective goal setting practices

Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Positive self-talk Talking to ourselves about thoughts/actions Potentially increases self-efficacy Mental imagery Mentally practicing a task Visualizing successful task completion

Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Finding ways to make the job itself more motivating eg. altering the way the task is accomplished

Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Keeping track of your progress toward the self-set goal Looking for naturally-occurring feedback Designing artificial feedback

Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment “Taking” a reinforcer only after completing a self-set goal eg. Watching a movie after writing two more sections of a report eg. Starting a fun task after completing a task that you don’t like

Applied Performance Practices