Applied Performance Practices McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill Companies, Inc. All rights reserved 1.

Applied Performance Practices

McShane-Olekalns-Travaglione OB Pacific Rim 3e

© 2010 The McGraw-Hill Companies, Inc. All rights reserved

1

Factory Work in China

Most factory workers in China’s Pearl River Delta are paid for the number of units they produce. The work is usually repetitive, cycling several thousand times each day.

McShane-Olekalns-Travaglione OB Pacific Rim 3e

© 2010 The McGraw-Hill Companies, Inc. All rights reserved

2

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.

McShane-Olekalns-Travaglione OB Pacific Rim 3e

3 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Types of Rewards in the Workplace

Membership and seniority

Job status

Competencies

Performance-based

© Corel Corp. With permission.

McShane-Olekalns-Travaglione OB Pacific Rim 3e

4 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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)

McShane-Olekalns-Travaglione OB Pacific Rim 3e

5 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Job Status-Based Rewards

Includes job evaluation and status perks

Advantages:• Job evaluation tries to maintain fairness (pay

equity)• Motivates competition for promotions

Disadvantages:• Employees exaggerate duties, hoard resources• Reinforces status• Encourages hierarchy, might undermine cost-

efficiency and responsiveness

McShane-Olekalns-Travaglione OB Pacific Rim 3e

6 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

7 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Reward Practices at Nucor

Nucor has survived and thrived in the turbulent steel industry by motivating employees with team-based and organisational-based rewards.

Courtesy Nucor

McShane-Olekalns-Travaglione OB Pacific Rim 3e

8 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

OrganisationalOrganisationalrewardsrewards

• Profit sharing Profit sharing • Share ownershipShare ownership• Stock optionsStock options• Balanced scorecardBalanced scorecard

Teamrewards

• BonusesBonuses• GainsharingGainsharing

IndividualIndividualrewardsrewards

• BonusesBonuses• CommissionsCommissions• Piece ratePiece rate

Performance-Based Rewards

McShane-Olekalns-Travaglione OB Pacific Rim 3e

9 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

10 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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.

McShane-Olekalns-Travaglione OB Pacific Rim 3e

11 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

12 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Job Specialisation

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

13 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

© 2010 The McGraw-Hill Companies, Inc. All rights reserved

14

AdvantagesAdvantages DisadvantagesDisadvantages

Job Characteristics Model

WorkWorkmotivationmotivation

GrowthGrowthsatisfactionsatisfaction

GeneralGeneralsatisfactionsatisfaction

WorkWorkeffectivenesseffectiveness

FeedbackFeedbackfrom jobfrom job

KnowledgeKnowledgeof resultsof results

Skill varietySkill varietyTask identityTask identity

Task significanceTask significanceMeaningfulnessMeaningfulness

AutonomyAutonomy ResponsibilityResponsibility

IndividualIndividualdifferencesdifferences

CriticalCriticalpsychologicalpsychological

statesstatesCore jobCore job

characteristicscharacteristics OutcomesOutcomes

McShane-Olekalns-Travaglione OB Pacific Rim 3e

15 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Job Rotation

Moving from one job to another

Benefits1. Minimises repetitive

strain injury

2. Multiskills the workforce

3. Potentially reduces job boredom

Job ‘A’

Job ‘B’

Job ‘C’

Job ‘D’

McShane-Olekalns-Travaglione OB Pacific Rim 3e

16 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Job Enlargement

Adding tasks to an existing job Example: video journalist

Employee 1Employee 1Operates cameraOperates camera

Employee 2Employee 2Operates soundOperates sound

Employee 3Employee 3Reports storyReports story

Traditional news team

Video journalist

• Operates camera• Operates sound• Reports story

© 2010 The McGraw-Hill Companies, Inc. All rights reserved

McShane-Olekalns-Travaglione OB Pacific Rim 3e

17

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• eg. video journalist, assembling entire product

2. Establishing client relationships• Directly responsible for specific clients• Communicate directly with those clients

McShane-Olekalns-Travaglione OB Pacific Rim 3e

18 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Empowerment atSvenska 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.

McShane-Olekalns-Travaglione OB Pacific Rim 3e© 2010 The McGraw-Hill Companies, Inc. All rights

reserved19

Dimensions of Empowerment

MeaningMeaning

CompetenceCompetence

Employees believe their work is important

Employees have feelings of self-efficacy

ImpactImpactEmployees feel their actions influence success

Self-Self-determinationdetermination

Employees feel they have freedom and discretion

McShane-Olekalns-Travaglione OB Pacific Rim 3e

20 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

© 2010 The McGraw-Hill Companies, Inc. All rights reserved

21

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

22 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Elements of Self-Leadership

Personalgoal setting

ConstructiveConstructivethoughtthoughtpatternspatterns

DesigningDesigningnaturalnaturalrewardsrewards

Self-Self-monitoringmonitoring

Self-Self-reinforce-reinforce-

mentment

Personal goal setting• Employees set their own goals• Apply effective goal setting practices

McShane-Olekalns-Travaglione OB Pacific Rim 3e

23 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Personalgoal setting

DesigningDesigningnaturalnaturalrewardsrewards

Self-Self-monitoringmonitoring

Self-Self-reinforce-reinforce-

mentment

ConstructiveConstructivethoughtthoughtpatternspatterns

Elements of Self-Leadership

Positive self-talk• Talking to ourselves about thoughts/actions• Potentially increases self-efficacy

Mental imagery• Mentally practising a task• Visualising successful task completion

McShane-Olekalns-Travaglione OB Pacific Rim 3e

24 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

DesigningDesigningnaturalnaturalrewardsrewards

ConstructiveConstructivethoughtthoughtpatternspatterns

Self-Self-monitoringmonitoring

Self-Self-reinforce-reinforce-

mentment

Personalgoal setting

Elements of Self-Leadership

Finding ways to make the job itself more motivating• eg. altering the way the task is accomplished

McShane-Olekalns-Travaglione OB Pacific Rim 3e

25 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

ConstructiveConstructivethoughtthoughtpatternspatterns

DesigningDesigningnaturalnaturalrewardsrewards

Self-Self-reinforce-reinforce-

mentment

Personalgoal setting

Self-Self-monitoringmonitoring

Elements of Self-Leadership

Keeping track of your progress toward the self-set goal• Looking for naturally-occurring feedback• Designing artificial feedback

McShane-Olekalns-Travaglione OB Pacific Rim 3e

26 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Self-Self-reinforce-reinforce-

mentment

ConstructiveConstructivethoughtthoughtpatternspatterns

DesigningDesigningnaturalnaturalrewardsrewards

Self-Self-monitoringmonitoring

Personalgoal 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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

27 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

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

McShane-Olekalns-Travaglione OB Pacific Rim 3e

28 © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Applied Performance Practices

McShane-Olekalns-Travaglione OB Pacific Rim 3e

© 2010 The McGraw-Hill Companies, Inc. All rights reserved

29