1 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition. 6 S I X Applied Performance Practices C H A P T E R

2 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition WestJet Motivates Employees WestJet employees are highly motivated through profit sharing and stock options, empowerment, job design, and self- leadership Canadian Press

3 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Money and employee needs –affects existence, drive to acquire, growth needs, as well as need for achievement Money attitudes and values –Money ethic -- not evil, represents success, should be budgeted carefully Money and social-identity –Partly defines who we are The Meaning of Money © Corel Corp. With permission

4 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Types of Rewards in the Workplace Membership and seniority Job status Competencies Performance-based © Corel Corp. With permission

5 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition 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

6 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition 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 –creates psychological distance across hierarchy –inconsistent with flatter organizations

7 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition 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

8 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Organizationalrewards Stock optionsStock options Profit sharingProfit sharing Share ownershipShare ownership Balanced ScorecardBalanced Scorecard Teamrewards BonusesBonuses GainsharingGainsharing Open bookOpen book Individualrewards BonusesBonuses CommissionsCommissions Piece ratePiece rate Performance-Based Rewards

9 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Performance Reward Effectiveness Positive effects Create an “ownership culture” Adjusts pay with firm's prosperity Negative effects Rewards undermine intrinsic motivation Rewards cause relationship problems Rewards are quick fixes Rewards discourage creativity

10 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition 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

11 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Job Design Assigning tasks to a job, including the interdependency of those tasks with other jobs Technology influences, but does not determine job scope Employability affects job design

12 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition AdvantagesDisadvantages Evaluating Job Specialization Less time changing activities Lower training costs Job mastered quickly Better person-job matching Job boredom Discontentment pay Higher costs Lower quality Lower motivation

13 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition WorkmotivationGrowthsatisfactionGeneralsatisfactionWorkeffectiveness Job Characteristics Model Feedback from job Knowledge of results Skill variety Task identity Task significance Meaningfulness AutonomyResponsibility Individualdifferences CriticalPsychologicalStates Core Job CharacteristicsOutcomes

14 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Job Enrichment in Wine Making Mike Just has an enriched job as wine maker at Lawson’s Dry Hills Winery in New Zealand. “[W]e plant vines here, we pick them, we make the wine on site and bottle it, then sell them to customers who come in,” explains Just, who also enjoys jousting. © Marlborough Express (N.Z.).

15 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Job Design Strategies Job rotation –Moving to different jobs Job enlargement –Adding more tasks to a job Job enrichment –Giving employees more autonomy over their job © Marlborough Express (N.Z.).

16 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Job Enlargement Job Rotation Job 1 Operate Camera Job 2 Operate Sound Job 3 Report Story Job 1 Operate Camera Operate Sound Report Story Job 2 Operate Camera Operate Sound Report Story Job 3 Operate Camera Operate Sound Report Story Job Rotation vs. Job Enlargement

17 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Dimensions of Empowerment Meaning Competence Employees believe their work is important Employees have feelings of self- efficacy Impact Employees feel their actions influence success Self- determination Employees feel they have freedom and discretion

18 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Self-LeadershipSelf-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

19 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Elements of Self-Leadership Personal Goal Setting ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-MonitoringSelf-Reinforce-ment Personal goal setting –Employees set their own goals –Apply effective goal setting practices

20 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Personal Goal Setting Elements of Self-Leadership DesigningNaturalRewardsSelf-MonitoringSelf-Reinforce-mentConstructiveThoughtPatterns Positive self-talk –Talking to ourselves about thoughts/actions –Potentially increases self-efficacy Mental imagery –Mentally practising a task –Visualizing successful task completion

21 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition DesigningNaturalRewards Elements of Self-Leadership ConstructiveThoughtPatternsSelf-MonitoringSelf-Reinforce-ment Finding ways to make the job itself more motivating –eg. altering the way the task is accomplished Personal Goal Setting

22 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Elements of Self-Leadership ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-Reinforce-mentPersonal Goal Setting Self-Monitoring Keeping track of your progress toward the self-set goal –Looking for naturally-occurring feedback –Designing artifical feedback

23 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition Self-Reinforce-ment Elements of Self-Leadership ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-Monitoring “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 Personal Goal Setting

24 Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.McShane 5th Canadian Edition. 6 S I X Applied Performance Practices C H A P T E R