1. Applied Performance Practices McGraw-Hill/Irwin McShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2. SvenskaHandelsbanken SvenskaHandelsbanken relies on prudent reward systems, offers employee jobs with high motivation potential, expects staff to manage themselves, and delegates power to branches, resulting in high levels of employee empowerment and performance. 6-2

3. 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  Cultural values influence the meaning and value of money © Corel Corp. With permission. 6-3

4. Types of Rewards in the Workplace  Membership and seniority  Job status  Competencies  Performance-based © Corel Corp. With permission. 6-4

5. 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 (tie people to the job) 6-5

6. 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 Reinforces status, hierarchy Inconsistent with workplace flexibility 6-6

7. 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 6-7

8. Reward Practices at Nucor Nucor has survived and thrived in the turbulent steel industry by motivating employees with team-based and organizational-based rewards. Courtesy Nucor 6-8

9. Organizationalrewards Profit sharingProfit sharing Share ownershipShare ownership Stock optionsStock options Balanced scorecardBalanced scorecard Team rewards BonusesBonuses GainsharingGainsharing Individualrewards BonusesBonuses CommissionsCommissions Piece ratePiece rate Performance-Based Rewards 6-9

10. 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 6-10

11. 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. 6-11

12. Job Design  Assigning tasks to a job, including the interdependency of those tasks with other jobs  Organization's goal -- to create jobs that can be performed efficiently yet employees are motivated and engaged 6-12

13. Job Specialization  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 specialization Taylor also emphasized person-job matching, training, goal setting, work incentives 6-13

14. 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 6-14

15. Job Characteristics Model WorkmotivationGrowthsatisfactionGeneralsatisfactionWorkeffectiveness Feedback from job Knowledge of results Skill variety Task identity Task significance Meaningfulness AutonomyResponsibility Individualdifferences CriticalPsychologicalStates Core Job CharacteristicsOutcomes 6-15

16. Improving Task Significance Through the Voice of the Customer Rolls Royce Engine Services in California introduced “Voice of the Customer,” an initiative in which customers talk to production staff about how the quality of these engines are important to them. “It gives employees with relatively repetitive jobs the sense that they're not just working on a part but rather are key in keeping people safe,”explains a Rolls Royce executive. 6-16

17. 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 ‘C’ Job ‘D’ 6-17

18. Job Enlargement  Adding tasks to an existing job  Example: video journalist Employee 1 Operates camera Employee 2 Operates sound Employee 3 Reports story Traditional news team Video journalist Operates camera Operates sound Reports story 6-18

19. 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 6-19

20. 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 6-20

21. 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 21 6-21

22. 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 6-22

23. Elements of Self-Leadership Personal Goal Setting ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-MonitoringSelf-Reinforce-ment  Personal goal setting Employees set their own goals Apply effective goal setting practices 6-23

24. Personal Goal SettingDesigningNaturalRewardsSelf-MonitoringSelf-Reinforce-mentConstructiveThoughtPatterns Elements of Self-Leadership  Positive self-talk Talking to ourselves about thoughts/actions Potentially increases self-efficacy  Mental imagery Mentally practicing a task Visualizing successful task completion 6-24

25. DesigningNaturalRewardsConstructiveThoughtPatternsSelf-MonitoringSelf-Reinforce-ment Personal Goal Setting Elements of Self-Leadership  Finding ways to make the job itself more motivating eg. altering the way the task is accomplished 6-25

26. ConstructiveThoughtPatternsDesigningNaturalRewardsSelf-Reinforce-ment Personal Goal SettingSelf-Monitoring Elements of Self-Leadership  Keeping track of your progress toward the self- set goal Looking for naturally-occurring feedback Designing artificial feedback 6-26

27. Self-Reinforce-mentConstructiveThoughtPatternsDesigningNaturalRewardsSelf-Monitoring Personal Goal Setting Elements of Self-Leadership  “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 6-27

28. Self-Leadership Contingencies  Individual factors Higher levels of conscientiousness and extroversion Positive self-evaluation (self-esteem, self-efficacy, internal locus)  Organizational factors Job autonomy Participative leadership Measurement-oriented culture 6-28

29. Applied Performance Practices 6-29 McGraw-Hill/Irwin McShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.