Intrinsic rewards are psychic and self-granted.

© 2013 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Nine

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Learning Objec2ves

LO.1 Define the term performance management, distinguish between learning goals and performance outcome goals, and explain the three-step goal-setting process.

LO.2 Identify the two basic functions of feedback, and specify at least three practical lessons from feedback research.

LO.3 Define 360-degree feedback, and summarize how to give good feedback in a performance management program.

LO.4 Distinguish between extrinsic and intrinsic rewards, and explain the four building blocks of intrinsic rewards and motivation.

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Learning Objec2ves (cont.)

LO.5 Summarize the reasons why extrinsic rewards often fail to motivate employees.

LO.6 Discuss how managers can generally improve extrinsic reward and pay-for-performance plans.

LO.7 State Thorndike’s law of effect, and explain Skinner’s distinction between respondent and operant behavior.

LO.8 Define positive reinforcement, negative reinforcement, punishment, and extinction, and distinguish between continuous and intermittent schedules of reinforcement.

LO.9 Demonstrate your knowledge of behavior shaping.

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Performance Management

!  Performance management 9  an organization-wide system whereby

managers integrate the activities of goal setting, monitoring and evaluating, providing feedback and coaching, and rewarding employees on a continuous basis

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Improving Individual Job Performance

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Goal SeDng

!  Employees with a clear line of sight understand the organization’s strategic goals and know what actions they need to take, both individually and a team members.

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Two Types of Goals

!  Performance outcome goal 9  targets a specific end result.

!  Learning goal 9  strives to improve

creativity and develop skills

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Goal SeDng

!  Management by objectives 9  management system incorporating participation

in decision making, goal setting, and feedback

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Managing the Goal-­‐SeDng Process

!  Step 1: Set goals 9  Whether goals are imposed or, preferably, set

participatively via a free exchange with one’s manager, they should be “SMART.”

9  specific, measurable, attainable, results oriented, and time bound

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Managing the Goal-­‐SeDng Process

Two additional recommendations: 1. For complex tasks, managers should train

employees in problem-solving techniques and encourage them to develop a performance action plan

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Managing the Goal-­‐SeDng Process

2. Because of individual differences, it may be necessary to establish different goals for employees performing the same job.

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Guidelines for Wri2ng SMART Goals

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Managing the Goal-­‐SeDng Process

!  Step 2: Promote goal commitment 9  Explain why the organization is committed to a

comprehensive goal-setting program. 9  Create clear lines of sight by clarifying the

corporate goals and linking the individual’s goals to them.

9  Let employees participate in setting their own goals

9  Have employees build goal ladders

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Managing the Goal-­‐SeDng Process

!  Step 3: Provide support and feedback 9  Make sure each employee has the necessary

skills and information to reach his goals 9  Pay attention to employees’

effort→performance expectations, perceived self-efficacy, and reward preferences and adjust accordingly

9  Be supportive and helpful

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Feedback

!  Feedback 9  information about

individual or collective performance

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Two Func2ons of Feedback

!  Instructional 9  clarifies roles or teaches new behaviors

!  Motivational 9  serves as a reward or promise of a reward

!  Feedback enhances the effect of specific, difficult goals

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Prac2cal Lessons from Feedback Research

!  Managers can enhance their credibility as sources of feedback by developing their expertise and creating a climate of trust.

!  Negative feedback is typically misperceived or rejected

!  Recipients of feedback perceive it to be more accurate when they actively participate in the feedback session versus passively receiving feedback

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Six Common Trouble Signs for Organiza2onal Feedback Systems

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360-­‐Degree Feedback

!  360-Degree feedback 9  Letting individuals compare their own perceived

performance with behaviorally specific (and usually anonymous) performance information from their manager, subordinates, and peers

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How to Give Feedback for Coaching Purposes and Organiza2onal Effec2veness

!  Focus on performance, not personalities. !  Give specific feedback linked to learning goals

and performance outcome goals. !  Channel feedback toward key result areas for

the organization. !  Give feedback as soon as possible. !  Give feedback to coach improvement, not just

for final results.

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A General Model of Organiza2onal Reward Systems

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Types of Rewards

!  Extrinsic rewards 9  financial, material, or social rewards from the

environment !  Intrinsic rewards

9  self-granted, psychic rewards

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Reward Distribu2on Criteria

!  Performance: results 9  tangible outcomes

!  Performance: actions and behaviors 9  teamwork, cooperation, risk-taking

!  Non-performance considerations 9  contractual

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Thomas’s Building Blocks for Intrinsic Rewards and Mo2va2on

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Why Do Extrinsic Rewards Too OZen Fail to Mo2vate?

1. Too much emphasis on monetary rewards. 2. Rewards lack an “appreciation effect.” 3. Extensive benefits become entitlements. 4. Counterproductive behavior is rewarded. 5. Too long a delay between performance and

rewards. 6. Too many one-size-fits-all rewards.

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Pay for Performance

!  Pay for performance 9  monetary incen2ves linking at least some por2on of the paycheck directly to results or accomplishments

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GeDng the Most out of Extrinsic Rewards and Pay for Performance

!  Tie praise, recognition, and noncash awards to specific results.

!  Make pay for performance an integral part of the organization’s basic strategy

!  Base incentive determinations on objective performance data.

!  Have all employees actively participate in the development of the performance-pay formulas

!  Reward teamwork and cooperation whenever possible

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Thorndike’s Law of Effect

!  Law of effect 9  Behavior with favorable consequences tends to

be repeated; behavior with unfavorable consequences tends to disappear

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Posi2ve Reinforcement

!  Respondent behavior 9  Skinner’s term for unlearned reflexes or

stimulus-response connections !  Operant behavior

9  behavior that is learned when one “operates on” the environment to produce desired consequences.

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Con2ngent Consequences in Operant Condi2oning

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Con2ngent Consequences

!  Positive reinforcement 9  process of strengthening a behavior by con2ngently presen2ng something pleasing

!  Negative reinforcement 9  strengthens a

desired behavior by contingently withdrawing something displeasing

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Con2ngent Consequences

!  Punishment 9  process of weakening behavior through either

the contingent presentation of something displeasing or the contingent withdrawal of something positive

!  Extinction 9  Weakening a behavior by ignoring it or making

sure it is not reinforced

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Schedules of Reinforcement

!  Continuous reinforcement 9  reinforcing every instance of a target behavior

!  Intermittent reinforcement 9  reinforcing some but not all instances of a

target behavior

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Behavior Shaping

!  Shaping 9  reinforcing closer and closer approximations to

a target behavior

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Ten Prac2cal Tips for Shaping Job Behavior