Chapter 6 Applied Performance Practices Canadian OB 7e: McShane/Steen 1 © 2009 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 6

Chapter 6

Applied Performance

Practices

Canadian OB 7e: McShane/Steen 1 © 2009 The McGraw-Hill Companies, Inc. All rights reserved

Applied Performance Practices at Nucor

Nucor has survived and thrived in the turbulent steel

industry through the benefits of performance-based

rewards, job design, and empowerment.

Courtesy Nucor

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

Financial Reward Practices

© 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 (tie people to the job)

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

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 Spruceland Millworks

Spruceland Millworks, an Alberta-based remanufacturer of mouldings, decking, and other niche lumber products, is a high-performance workplace that rewards individual, team, organization-level performance.“

OrganizationalOrganizationalrewardsrewards

• Profit sharing Profit sharing • Share ownershipShare ownership• Share optionsShare options• Balanced scorecardBalanced scorecard

Teamrewards

• BonusesBonuses• GainsharingGainsharing

IndividualIndividualrewardsrewards

• BonusesBonuses• CommissionsCommissions• Piece ratePiece rate

Performance-Based Rewards

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• Frederick Winslow Taylor• advocates job specialization• Taylor also emphasized person-job matching,

training, goal setting, work incentives

AdvantagesAdvantages DisadvantagesDisadvantages

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

WorkWorkmotivationmotivation

GrowthGrowthsatisfactionsatisfaction

GeneralGeneralsatisfactionsatisfaction

WorkWorkeffectivenesseffectiveness

Job Characteristics Model

FeedbackFeedbackfrom jobfrom job

KnowledgeKnowledgeof resultsof results

Skill varietySkill variety

Task identityTask identity

Task significanceTask significanceMeaningfulnessMeaningfulness

AutonomyAutonomy ResponsibilityResponsibility

IndividualIndividualdifferencesdifferences

CriticalCriticalPsychologicalPsychological

StatesStates

Core JobCharacteristics OutcomesOutcomes

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’

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

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

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

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

PersonalGoal Setting

ConstructiveConstructiveThoughtThoughtPatternsPatterns

DesigningDesigningNaturalNatural

RewardsRewards

Self-Self-MonitoringMonitoring

Self-Self-Reinforce-Reinforce-

mentment

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

PersonalGoal Setting

DesigningDesigningNaturalNatural

RewardsRewards

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 practicing a task• Visualizing successful task completion

DesigningDesigningNaturalNatural

RewardsRewards

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

ConstructiveConstructiveThoughtThoughtPatternsPatterns

DesigningDesigningNaturalNatural

RewardsRewards

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

Self-Self-Reinforce-Reinforce-

mentment

ConstructiveConstructiveThoughtThoughtPatternsPatterns

DesigningDesigningNaturalNatural

RewardsRewards

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

Chapter 6

Chapter 6

Applied Performance

Practices

Canadian OB 7e: McShane/Steen 28 © 2009 The McGraw-Hill Companies, Inc. All rights reserved