The first step of an organizational behavior modification (ob mod) program is

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LEARNING OBJECTIVES  Define the theoretical processes of learning: behavioristic, cognitive, and social/social

cognitive.  Discuss the principle of reinforcement, with special attention given to the law of effect,

positive and negative reinforcers, and punishment.  Analyze organizational reward systems, emphasizing both monetary and nonfinancial

rewards.  Present the steps and results of behavioral performance management, or organizational

behavior modification (O.B. Mod.).

In a sense, this whole text on organizational behavior is concerned with the what and how of managing and leading people for high performance in today’s organizations. Certainly many of the chapters (e.g., Chapter 4 on reward systems, Chapter 6 on motivation, Chapter 7 on positive organizational behavior, and all of the chapters in Part Three) are directly, or at least indirectly, concerned with how to manage oneself and human resources more effec- tively. The same could be said of popular techniques that have strong consulting advocates such as the late Edwards Deming’s “Total Quality Management,” Steven Covey’s “The Seven Habits of Highly Effective People,” or Peter Senge’s “Learning Organizations.” As was pointed out in the Chapter 1 discussion of the evidenced-based approach taken by this text, purely academic approaches may not be directly applied enough, and the popular writ- ers’ techniques tend to be “quick fixes” and “fads” without research backup that come with a splash and then, unfortunately, go. In contrast, this last part of the text again takes an evi- denced-based (theoretical foundation, research supported and sustainable, effective appli- cation techniques) approach to managing and leading for high performance. In particular, this chapter on behavioral management meets the evidence-based criteria. As one behav- ioral management advocate strongly points out:

Behavior Performance Management is not a good idea to be tried for a while and then cast aside for some other good idea. It is a science that explains how people behave. It cannot go away anymore than gravity can go away. In a changing world, the science of behavior must remain the bedrock, the starting place for every decision we make, every new technology we apply, and every initiative we employ in our efforts to bring out the best in people.1

The purpose of this chapter is to provide an overview of learning theory and evidence- based principles and guidelines that serve as a foundation and point of departure for pre- senting the behavioral management approach. The first section summarizes the widely rec- ognized theories of learning: behavioristic, cognitive, and social/social cognitive. Next, the

CHAPTER 12 Behavioral Performance Management

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principles of reinforcement and punishment are given attention, followed by a discussion of both monetary and nonfinancial rewards. The last part of the chapter is devoted specifi- cally to behavioral management. Both the steps of organizational behavior modification, or O.B. Mod., and the results of its basic research and application are given attention.

LEARNING THEORY BACKGROUND

Although learning theory has not been as popular in organizational behavior as motivation or personality theories, both scholars and practitioners would agree on its importance to both the understanding and the effective development and management of human resources. In fact, practically all organizational behavior is either directly or indirectly affected by learning. For example, a worker’s skill, a manager’s attitude, a staff assistant’s motivation, a salesperson’s optimism and confidence, and an accountant’s mode of dress are all learned. With the application of learning processes and principles, employees’ behavior can be analyzed and managed to improve their performance.2

The most basic purpose of any theory is to better understand and explain the phenom- enon in question. When theories become perfected, they have universal application and should enable prediction and control. Thus, a perfected theory of learning would have to be able to explain all aspects of learning (how, when, and why), have universal application (for example, to children, college students, managers, and workers), and predict and con- trol learning situations. To date, no such theory of learning exists. Although there is general agreement on some principles of learning—such as reinforcement—that permit prediction and control, there is still a degree of controversy surrounding the theoretical understanding of learning in general and some of the principles in particular. This does not mean that no attempts have been made to develop a theory of learning. In fact, the opposite is true. The most widely recognized theoretical approaches incorporate the behavioristic and cognitive approaches and the emerging social cognitive theory that Chapter 1 indicated serves as the conceptual framework for this text. An understanding of these learning theories is import- ant to the study of organizational behavior in general and behavioral performance manage- ment in particular.

Behavioristic Theories

The most traditional and researched theory of learning comes out of the behaviorist school of thought in psychology (see Chapter 1). Most of the principles of learning and organizational reward systems, covered in Chapter 4, and the behavioral performance man- agement approach discussed in this chapter are based on behavioristic theories, or behav- iorism.3

The classical behaviorists, such as the Russian pioneer Ivan Pavlov and the American John B. Watson, attributed learning to the association or connection between stimulus and response (S-R). The operant behaviorists, in particular the well-known American psychol- ogist B. F. Skinner, give more attention to the role that consequences play in learning, or the response-stimulus (R-S) connection.4 The emphasis on the connection (S-R or R-S) has led some to label these the connectionist theories of learning. The S-R deals with classical, or respondent, conditioning, and the R-S deals with instrumental, or operant, conditioning. An understanding of these conditioning processes is vital to the study of learning and serves as a point of departure for understanding and modifying organizational behavior.Co

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344 PART 4  MANAGING AND LEADING FOR HIGH PERFORMANCE

Classical Conditioning

Pavlov’s classical conditioning experiment using dogs as subjects is arguably the sin- gle most famous study ever conducted in the behavioral sciences. A simple surgical proce- dure permitted Pavlov to measure accurately the amount of saliva secreted by a dog. When he presented meat powder (unconditioned stimulus) to the dog in the experiment, Pavlov noticed a great deal of salivation (unconditioned response). On the other hand, when he merely rang a bell (neutral stimulus), the dog did not salivate. The next step taken by Pav- lov was to accompany the meat with the ringing of the bell. After doing this a number of times, Pavlov rang the bell without presenting the meat. This time, the dog salivated to the bell alone. The dog had become classically conditioned to salivate (conditioned response) to the sound of the bell (conditioned stimulus). Thus, classical conditioning can be defined as a process in which a formerly neutral stimulus, when paired with an unconditioned stim- ulus, becomes a conditioned stimulus that elicits a conditioned response; in other words, the S-R (i.e., bell-saliva) connection is learned. The Pavlov experiment was a major break- through and has had a lasting impact on the understanding of learning.

Despite the theoretical possibility of the widespread applicability of classical condi- tioning and its continued refinement and application to areas such as modern marketing,5 most contemporary learning theorists agree that it represents only a very small part of total human learning and behavior. Skinner in particular felt that classical conditioning explains only respondent (reflexive) behaviors. These are the involuntary responses that are elicited by a stimulus. Skinner felt that the more complex, but common, human behaviors cannot be explained by classical conditioning alone. When explaining why he was abandoning a stimulus-response psychology, Skinner noted, “The greater part of the behavior of an organism was under the control of stimuli which were effective only because they were correlated with reinforcing consequences.”6 Thus, Skinner, through his extensive research, posited that behavior was a function of consequences, not the classical conditioning elicit- ing stimuli. He felt that most human behavior affects, or operates on, the environment to receive a desirable consequence. This type of behavior is learned through operant condi- tioning.

Operant Conditioning

Operant conditioning is concerned primarily with learning that occurs as a conse- quence of behavior, or R-S. It is not concerned with the eliciting causes of behavior, as classical, or respondent, conditioning is. The specific differences between classical and operant conditioning may be summarized as follows:

1. In classical conditioning, a change in the stimulus (unconditioned stimulus to condi- tioned stimulus) will elicit a particular response. In operant conditioning, one particu- lar response out of many possible ones occurs in a given stimulus situation. The stimulus situation serves as a cue in operant conditioning. It does not elicit the response but serves as a cue for a person to emit the response. The critical aspect of operant conditioning is what happens as a consequence of the response. The strength and frequency of classically conditioned behaviors are determined mainly by the fre- quency of the eliciting stimulus (the environmental event that precedes the behavior). The strength and frequency of operantly conditioned behaviors are determined mainly by the consequences (the environmental event that follows the behavior).Co

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2. During the classical conditioning process, the unconditioned stimulus, serving as a reward, is presented every time. In operant conditioning, the reward is presented only if the organism gives the correct response. The organism must operate on the environ- ment (thus the term operant conditioning) in order to receive a reward. The response is instrumental in obtaining the reward. Table 12.1 gives some simple examples of classical (S-R) and operant (R-S) conditioning.

Operant conditioning has a much greater impact on human learning than classical con- ditioning. Today, even though Skinner died in 1990, he remains somewhat controversial7 and his views are commonly misrepresented,8 the operant theory is still being refined and expanded,9 historical analyses recognize some limitations but also definite contributions,10 and applications are being made in areas such as marketing11 and performance manage- ment.12 Operant conditioning also explains, at least in a very simple sense, much of orga- nizational behavior. For example, it might be said that employees work eight hours a day, five days a week, in order to feed, clothe, and shelter themselves and their families. Work- ing (conditioned response) is instrumental in obtaining the food, clothing, and shelter.

Some significant insights can be gained directly from operant analysis. The conse- quences of organizational behavior can change the environmental situation and greatly affect subsequent employee behaviors.13 Managers can analyze the consequences of orga- nizational behavior to help accomplish the goals of prediction and control. Some organiza- tional behavior researchers are indeed using the operant framework to analyze specific areas such as escalation of commitment (where a tendency of decision makers is to “throw good money after bad”)14 as well as more generally the effectiveness of managers at work.15 In addition, this theory serves as the framework for operationalizing much of behavioral performance management presented in this chapter.

Cognitive Theories

As was covered in Chapter 1 for understanding organizational behavior in general, the cognitive theories can also be used to understand learning and, especially as an input into social and social cognitive theories, to better understand behavioral performance manage-

TABLE 12.1. Examples of Classical and Operant Conditioning

Classical Conditioning

The individual:

(S) Stimulus is stuck by a pin is tapped below the kneecap is shocked by an electric current is surprised by a loud sound

(R) Response flinches flexes lower leg jumps/screams jumps/screams

Operant Conditioning

The individual:

(R) Response works talks to others enters a restaurant enters a library increases productivity completes a difficult assignment

(S) Stimulus is paid meets more people obtains food finds a book receives merit pay receives praise and a promotion

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346 PART 4  MANAGING AND LEADING FOR HIGH PERFORMANCE

ment.16 Edward Tolman is widely recognized as a pioneering cognitive theorist. He felt that cognitive learning consists of a relationship between cognitive environmental cues and expectation. He developed and tested this theory through controlled experimentation. In fact, even though behaviorists are mostly associated with animal subjects in their research, Tolman was one of the first to extensively use the now-famous white rat in psychological experiments. He found that a rat could learn to run through an intricate maze, with purpose and direction, toward a goal (food). Tolman observed that at each choice point in the maze, expectations were established. In other words, the rat learned to expect that certain cogni- tive cues associated with the choice point might eventually lead to food. If the rat actually received the food, the association between the cue and the expectancy was strengthened, and learning occurred. In contrast to the S-R and R-S learning in the classical and operant approaches, Tolman’s approach could be depicted as S-S (stimulus-stimulus), or learning the association between the cue and the expectancy.

In another early, classic study to demonstrate cognitive learning, Wolfgang Kohler used chimps presented with a problem of obtaining an out-of-reach suspended banana. At first the chimps attempted to jump for it, but soon gave up and seized a box that had been placed in another part of the room, dragged it under the object, mounted it, and took down the fruit. Kohler called this more complex learning “insight.” The solution to the problem appeared as a whole, not as a series, gradual shaping of new responses as the operant approach would suggest. At the time (1927), famous social philosopher/critic Bertrand Russell concluded, “there are two ways of learning, one by experience, and the other by what Kohler calls ‘insight.’”17

Besides being the forerunner of modern cognitive theory, Tolman’s S-S connection and Kohler’s insightful learning also had a great impact on the early human relations move- ment. Industrial training programs starting after World War II (and in many respects still today) drew heavily on their ideas. Programs were designed to strengthen the relationship between cognitive cues (supervisory, organizational, and job procedures) and worker expectations (incentive payments for good performance). The theory was that the worker would learn to be more productive by building an association between taking orders or fol- lowing directions and expectancies of monetary reward for this effort. The same is true for the creativity, problem-solving groups that have been so popular over the years; they have drawn heavily from the notion of insightful learning.

Today, the cognitive sciences focus more on the structures and processes of human competence (for example, the role of memory and information processing) rather than on the acquisition and transition processes that have dominated learning theory explana- tions.18 In organizational behavior, the cognitive approach has been applied mainly to motivation theories. Expectations, attributions and locus of control, and goal setting (which are in the forefront of modern work motivation) are all cognitive concepts and represent the purposefulness of organizational behavior. Many researchers are currently concerned about the relationship or connection between cognitions and organizational behavior.19

Social Learning and Social Cognitive Theory

As brought out in Chapter 1, social learning theory served as the conceptual frame- work for the past several editions of this text. However, similar to the theory building in social psychology, primarily from the extensive work of widely recognized psychologist Albert Bandura,20 this edition of the text and this overview of learning recognizes the evo- lution to the more comprehensive social cognition. After first recognizing social learning, the discussion turns to social cognition and its derivatives of modeling and self-efficacy.Co

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Social Learning

This theoretical approach to learning was the first to combine and integrate both behav- iorist and cognitive concepts and emphasized the interactive, reciprocal nature of cognitive, behavioral, and environmental determinants. It is important to recognize that social learning theory recognizes and draws from the principles of classical and operant conditioning. But equally important is the fact that social learning theory went beyond classical and operant theory by recognizing that there is more to learning than direct learning via antecedent stim- uli and contingent consequences. Social learning theory posits that learning can also take place via vicarious, or modeling, and self-control processes (see Chapter 1). Thus, social learning theory agrees with classical and operant conditioning processes, but says they are too limiting and adds vicarious, modeling, and self-control processes.

Social Cognition

This theory has emerged in recent years to go beyond social learning theory. Social cognitive theory extends learning and/or modifying behavior by giving more attention to the self-regulatory mechanisms. Specifically, as was presented in Chapter 1, social cogni- tive theory identifies five capabilities that people use to initiate, regulate, and sustain their behavior: (1) symbolizing, (2) forethought, (3) vicarious/modeling learning, (4) self-regu- lation, and (5) self-reflection.21 These human capabilities recognize cognitive processes, social learning, and self-efficacy. A closer look at social learning through the social cogni- tive derivatives of modeling and self-efficacy can lead to the better understanding of learn- ing and contribute to the theoretical underpinning of behavioral performance management.

Modeling Processes

The vicarious, or modeling, processes essentially involve observational learning. “Modeling in accordance with social learning theory can account for certain behavior acquisition phenomena that cannot be easily fitted into either operant or respondent condi- tioning.”22

Many years ago, Miller and Dollard suggested that learning need not result from dis- crete stimulus-response or response-consequence connections. Instead, learning can take place through imitating (i.e., modeling) others. Bandura states:

Although behavior can be shaped into new patterns to some extent by rewarding and punishing consequences, learning would be exceedingly laborious and hazardous if it proceeded solely on this basis.… [It] is difficult to imagine a socialization process in which the language, mores, vocational activities, familial customs and educational, reli- gious and political practices of a culture are taught to each new member by selective reinforcement of fortuitous behavior, without benefit of models who exemplify the cul- tural patterns in their own behavior. Most of the behaviors that people display are learned either deliberately or inadvertently, through the influence of example.23

Bandura has done considerable research demonstrating that people can indeed learn from others.24 This learning takes place in two steps. First, the person observes how others act and then acquires a mental picture of the act and its consequences (rewards and punish- ers). Second, the person acts out the acquired image, and if the consequences are positive, he or she will tend to do it again. If the consequences are negative, the person will tend not to do it again. These positive and negative consequences, of course, are where there is a tie-Co

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348 PART 4  MANAGING AND LEADING FOR HIGH PERFORMANCE

in with operant theory. But because there is cognitive, symbolic representation of the mod- eled activities instead of discrete response-consequence connections in the acquisition of new behavior or modifying existing behavior, modeling goes beyond the operant explana- tion. In particular, Bandura concludes that modeling involves interrelated subprocesses, such as attention, retention, and motoric reproduction, as well as reinforcement.

Self-Efficacy

Although given detailed attention in Chapter 7 as a key positive construct in psycho- logical capital, self-efficacy has also been recognized as a construct in behavioral perfor- mance management.25 Bandura has defined self-efficacy as the “beliefs in one’s capabilities to organize and execute the courses of action required to produce given attain- ments.”26 In particular, when faced with a specific task or job, an employee’s efficacy will determine whether the necessary behavior will be initiated, how much effort will be expended and sustained, and how much persistence and resilience there will be when there are obstacles or even failure.27 In other words, people who believe they can perform well on a task (high self-efficacy) do better than those who think they will fail (low self-effi- cacy). Importantly for the field of organizational behavior, a stream of research studies meta-analyzed has found a strong relationship between self-efficacy and work-related per- formance.28 Also, those with high self-efficacy have the tendency to remain calm in a stressful situation.29 In other words, there is considerable evidence that those employees with high self-efficacy tend to persevere and end up doing a good job without suffering stress or burnout. Unlike predisposed personality traits, efficacy is a state that can be trained and developed. As discussed in detail in Chapter 7, the input into efficacy is recog- nized to be mastery experiences, vicarious/modeling learning, social persuasion, and phys- iological/psychological arousal.30 Both managers and their employees who experience success, are trained through modeling, and are encouraged and aroused on a given task or job, will have their efficacy enhanced and will perform well. There seems to be consider- able practical implications for understanding and developing self-efficacy in managers and employees for performance improvement.31

PRINCIPLES OF LEARNING: REINFORCEMENT AND PUNISHMENT

Reinforcement and punishment play a central role in the learning process and provide evidence-based principles for behavioral performance management. Most learning experts agree that reinforcement is more important than punishment and is the single most import- ant concept and application principle. Yet there is still some controversy over its theoretical explanation. The first theoretical treatment given to reinforcement in learning and the framework that still dominates today is pioneering psychologist Edward Thorndike’s clas- sic law of effect.

Laws of Behavior

In Thorndike’s own words, the law of effect is simply stated as follows: “Of several responses made to the same situation, those which are accompanied or closely followed by satisfaction [reinforcement] … will be more likely to recur; those which are accompanied Co

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or closely followed by discomfort [punishment] … will be less likely to occur.” From a strictly empirical standpoint, most behavioral scientists, even those with a strict cognitive orientation, generally accept the validity of this law. It has been demonstrated time after time in highly controlled learning experiments and is directly observable in everyday learn- ing experiences. Sometimes called the laws of behavior, desirable, or reinforcing, conse- quences will increase the strength of the preceding behavior and increase its probability of being repeated in the future. Undesirable, or punishing, consequences will decrease the strength of the preceding behavior and decrease its probability of being repeated in the future. Sometimes a third law is added: If the behavior is followed by no consequence (nei- ther a positive nor a negative contingent consequence) the behavior will extinguish over time (thus this is called the extinction principle or law).32

Critique of Reinforcement Theory

Although there is wide acceptance of the laws of behavior, there may be some occa- sions when a person’s cognitive rationalizations might neutralize them. For example, peo- ple with inaccurate self-efficacy beliefs may not be affected by the consequences of their actions. In the workplace, this is a real problem for managers. Those with inaccurate or false self-efficacy beliefs who experience performance failures time after time will not learn from their mistakes or respond to the manager’s comments on how to correct the problem. They have high self-efficacy (they believe that their behaviors are appropriate to successfully accomplish the task), but they are wrong.33 In addition to this type of cogni- tive processing that may neutralize the law of effect, there is some disagreement when it is carried a step further and used as an overall theory or an absolute requirement for learning.

Both Tolman’s and Kohler’s classic studies providing initial support for cognitive the- ories, presented earlier, discounted the need for incremental reinforcement as necessary for learning to occur. For example, Tolman conducted place learning, latent learning, and transposition experiments in an attempt to demonstrate that reinforcement was not a pre- condition for learning to occur. Specifically, in the place learning he trained a rat to turn right in a T maze in order to obtain the reward of food. Then he started the rat from the opposite part of the maze. According to operant theory, the rat should have turned right because of past conditioning. However, the rat turned toward where the food had been placed. Tolman concluded that the behavior was purposive; the rat had formed a cognitive map to figure out how to get to the food. Over time, the behaviorists were able to counteract Tolman’s studies with more controlled (e.g., sterile mazes, etc.) experiments, and Kohler’s conclusions about insight were also explained away by a reinforcement history alternative explanation.34

More recently, Deci35 and Deci and Ryan,36 through their cognitive evaluation theory and laboratory research studies, have posited that external consequences (i.e., rewards) have a negative impact on intrinsically motivated (see Chapter 6) behavior dealing with task persistence and creativity. These findings generated considerable follow-up research with mixed findings. One review of about 100 studies found some rewards may have a det- rimental effect, but an equal number found no effect or a positive effect.37 The conclusion from this extensive review was that (1) the detrimental effects of rewards occur under highly restricted, easily avoidable conditions; (2) mechanisms of classical and operant con- ditioning are basic for understanding incremental and detrimental effects of reward on task motivation; and (3) positive effects of rewards on performance are easily attainable using procedures derived from behavioral theory.38Co

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350 PART 4  MANAGING AND LEADING FOR HIGH PERFORMANCE

Finally, a meta-analysis of 96 studies found that the only detrimental effect of rewards was the time spent carrying out laboratory activity following a performance-independent (i.e., a noncontingent) reward.39 There is also systematic analysis that discounts cognitive evaluation theory when compared to operant theory explanations.40 Yet, despite this con- siderable empirical and theoretical counterevidence, an unconvinced few such as popular author Alfie Kohn continue to write (not do research) with titles such as Punished by Rewards and “Why Incentive Plans Cannot Work.”41 Based on his own assumptions and the now-countered Deci and Ryan theory and research, and in stark contrast to the large body of reinforcement theory and research, he makes unequivocal statements such as: “The bottom line is that any approach that offers a reward for better performance is destined to be ineffective.”42

Unfortunately, Kohn’s largely unsupported statements do not fall on deaf ears in the real world. This is because practicing managers have indeed experienced some implemen- tation problems with pay-for-performance programs.43 For example, after an extensive review of the relevant literature, Lawler concluded that process/design problems, not the underlying theory of reinforcement or the supporting basic research, limit the effectiveness of pay for performance.44 There is also a research study that found that highly dispersed reward systems (i.e., very large differences between highest and lowest payouts) may have a negative effect on both individual and organizational performance, especially when col- laborative efforts (such as in teams) are important.45 Yet, once again, it is not that the the- ory/research on reinforcement is wrong, but rather it is the implementation that can cause problems. As Bandura points out, “To say that [only] thought guides action is an abbrevi- ated statement of convenience rather than a conferral of agency of thought,”46 because “if people acted … on the basis of informative cues but remained unaffected by the results of their actions, they would be insensible to survive very long.”47 As a final summary state- ment, it can be said that the theory of reinforcement, like learning in general, is not perfect and still needs development. However, it can also be said that reinforcement does serve as an excellent theoretical foundation and evidence-based guiding principle, and the imple- mentation issues need to be overcome by effective behavioral performance management.

Reinforcement as Used in Behavioral Management

The terms rewards and reinforcers are often used interchangeably and loosely, but in behavioral performance management have very precise definitions and usage. An often cited circular definition of reinforcement says that it is anything the person finds reward- ing. This definition is of little value because the words reinforcing and rewarding are used interchangeably, but neither one is operationally defined. A more operational definition can be arrived at by reverting to the laws of behavior. Specifically, reinforcement in behav- ioral management is defined as anything that both increases the strength and tends to induce repetitions of the behavior that preceded the reinforcement. A reward, on the other hand, is simply something that the person who presents it deems to be desirable.

Reinforcement is functionally defined. Something is reinforcing only if it strengthens the behavior preceding it and induces repetitions. For example, a manager may ostensibly reward an employee who found an error in a report by publicly praising the employee. Yet on examination it is found that the employee is embarrassed and chided by coworkers, and the error-finding behavior of this employee decreases in the future. In this example, the “reward” of public praise is not reinforcing. Besides clearing up differences between rein- forcers and rewards, behavioral management also requires making the distinction between positive and negative reinforcers.Co