1. Applied Performance Practices Chapter 6

2. 6-2 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Learning Objectives 6.1Discuss the meaning of money and identify several individual-level, team-level and organisation-level performance-based rewards 6.2Describe five ways to improve reward effectiveness 6.3List the advantages and disadvantages of job specialisation 6.4Outline the job characteristics model and describe three ways to improve employee motivation through job design 6.5Define empowerment and identify strategies that support empowerment 6.6Describe the five elements of self-leadership and identify specific personal and work environment influences on self-leadership

3. 6-3 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Applying Performance Practices Through the Excellence Philosophy Mercedes-Benz embraces effective and efficient job design models and empowers staff through creativity and entrepreneurship. The company provides workers with authority to make decisions and encourages self- managed teams >

4. 6-4 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Financial Reward Practices Financial rewards—fundamental part of employment relationship Pay has multiple meanings –Symbol of success –Reinforcer and motivator –Reflection of performance –Can reduce anxiety Men value money more than women do Cultural values influence the meaning and value of money © Corel Corp. With permission.

5. 6-5 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Types of Rewards in the Workplace Membership and seniority Job status Competencies Task performance © Corel Corp. With permission.

6. 6-6 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Membership/Seniority Based Rewards Some benefits increase with seniority Advantages –Attract job applicants –Reduce turnover Disadvantages –Do not motivate high performance –Discourage poor performers from leaving

7. 6-7 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Status-Based Rewards Includes job evaluation and status perks Advantages: –Job evaluation tries to maintain fairness (pay equity) –Motivates competition for promotions Disadvantages: –Encourages bureaucratic hierarchy –Might undermine cost-efficiency and responsiveness –Reinforces status mentality –Encourages competition, not collaboration

8. 6-8 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Competency-Based Rewards Pay increases with acquired and demonstrated competencies Skill-based pay –Pay increases with skill modules learned Advantages –More flexible workforce, better quality, consistent with employability Disadvantages –Potentially subjective, higher training costs

9. 6-9 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Call Centre Employees Engaged Engagement has always been a cultural value for Salmat Salesforce, which was built on the values of ‘fun, focus and fulfilment’. Flexible pay and reward systems are a major factor in employee commitment

10. 6-10 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Organisational rewards Profit sharing Share ownership Stock options Balanced scorecard Team rewards Bonuses Gainsharing Individual rewards Bonuses Commissions Piece rate Performance-Based Rewards

11. 6-11 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Evaluating Organisational Rewards Positive effects –Creates an ‘ownership culture’ –Adjusts pay with firm’s prosperity Concerns with performance pay –Weak connection between individual effort and rewards –Reward amounts affected by external forces

12. 6-12 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e 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.

13. 6-13 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Design Assigning tasks to a job, including the interdependency of those tasks with other jobs Organisation's goal—to create jobs that can be performed efficiently, yet employees are motivated and engaged

14. 6-14 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Design and Work Efficiency Dividing work into separate jobs that include a subset of the tasks required to complete the product or service Scientific management –Frederick Winslow Taylor –Advocated job specialisation –Taylor also emphasised person-job matching, training, goal setting, work incentives

15. 6-15 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Evaluating Job Specialisation Less time changing activities Lower training costs Job mastered quickly Better person-job matching Job boredom Discontentment pay Higher costs Lower quality Lower motivation AdvantagesDisadvantages

16. 6-16 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Design and Work Motivation Motivation is now the central focus of many job design changes Motivator: hygiene theory proposes that employees experience job satisfaction when they fulfil growth and esteem needs (motivators), and experience dissatisfaction when they have poor working conditions (hygienes)

17. 6-17 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Characteristics Model

18. 6-18 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Design Practices that Motivate Job Rotation –Moving from one job to another –Benefits  Minimises repetitive strain injury  Multiskills the workforce  Potentially reduces job boredom Job ‘A’ Job ‘B’ Job ‘C’ Job ‘D’

19. 6-19 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Enlargement Adding tasks to an existing job Example: video journalist

20. 6-20 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Job Enrichment Giving employees more responsibility for scheduling, coordinating and planning their 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

21. 6-21 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Empowerment Practices 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

22. 6-22 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Empowerment at Svenska Handelsbanken Svenska Handelsbanken gives each branch considerable autonomy without centralised controls, resulting in high levels of employee empowerment. ‘Being empowered and having this trust leads to better decisions and higher satisfaction,’ explains a manager at the Swedish financial institution

23. 6-23 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Supporting Empowerment Individual factors –Possess required competencies, able to perform the work Job design factors –Autonomy, task identity, task significance, job feedback Organisational factors –Resources, learning orientation, trust

24. 6-24 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Self-Leadership The process of influencing oneself to establish the self-direction and self- motivation needed to perform a task Includes concepts and practices from: –Goal setting –Social learning theory –Sports psychology

25. 6-25 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Elements of Self-Leadership Personal goal setting –Employees set their own goals –Apply effective goal setting practices Personal goal setting Constructive thought patterns Designing natural rewards Self- monitoring Self- reinforce- ment

26. 6-26 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Personal goal setting Designing natural rewards Self- monitoring Self- reinforce- ment Constructive thought patterns Elements of Self-Leadership continued Positive self-talk –Talking to ourselves about thoughts and actions –Potentially increases self-efficacy Mental imagery –Mentally practising a task –Visualising successful task completion

27. 6-27 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Designing natural rewards Constructive thought patterns Self- monitoring Self- reinforce- ment Personal goal setting Elements of Self-Leadership continued Finding ways to make the job itself more motivating –E.g. altering the way the task is accomplished

28. 6-28 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Constructive thought patterns Designing natural rewards Self- reinforce- ment Personal goal setting Self- monitoring Elements of Self-Leadership continued Keeping track of your progress toward the self- set goal –Looking for naturally-occurring feedback –Designing artificial feedback

29. 6-29 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Self- reinforce- ment Constructive thought patterns Designing natural rewards Self- monitoring Personal goal setting Elements of Self-Leadership continued ‘Taking’ a reinforcer only after completing a self- set goal –E.g. watching a movie after writing two more sections of a report –E.g. starting a fun task after completing a task that you do not like

30. 6-30 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Self-Leadership Contingencies Individual factors –Higher levels of conscientiousness and extroversion –Positive self-evaluation (self-esteem, self-efficacy, internal locus) Organisational factors –Job autonomy –Participative leadership –Measurement-oriented culture

31. 6-31 Copyright © 2013 McGraw-Hill Australia Pty Ltd McShane, Olekalns, Travaglione, Organisational Behaviour, 4e Summary Financial rewards relate to our needs, emotions and self-concepts Organisations reward for membership and seniority, job status, competencies and performance Job design (e.g. job specialisation, enlargement and enrichment) is the process of assigning tasks to a job in ways that can increase performance and motivation Empowered people experience more self- determination, meaning, competence and impact regarding their role in the organisation Self-leadership is the process of influencing oneself to establish the self-direction and self-motivation needed to perform a task

32. Applied Performance Practices Chapter 6