Rewards by wuyunqing


									Organizational Behavior

                               Chapter Seven

                          Organizational Behavior
Organizational Behavior

                          • Why do organizations have rewards?
                          • Should organizations have rewards?
                          • How do you want to be rewarded at work?
                          • What should your rewards be based on?
                          • How does motivation, behavior, individual
                            differences, culture affect rewards?
                          • How does feedback play into the reward?
Organizational Behavior

                          Feedback: “Objective information about
                          individual or collective performance.”

                                  Functions of Feedback:
                                     - Instructional
                                     - Motivational
                          Feedback and Rewards Are Important Links In the
                                      Job Performance Cycle
Organizational Behavior

                                                     Timely and

                                                                  • Learning
                          Ability    Effort                • Personal development
                                                      • Stable, strong job performance

Organizational Behavior              A Cognitive-Processing Model of Feedback

                                                     • Self-esteem
                                                    • Self-efficacy
                                                  • Needs and goals       Behavioral
                           Sources             • Desire for performance   Outcomes
                          • Others                                        • Direction
                          • Task                 • Sign and content of    • Effort
                                                   feedback message
                          • Self                                          • Persistence
                                                Cognitive Evaluations
                                                 • Feedback accuracy      • Resistance
                                                  • Source credibility
                                                   • System fairness
                                                     • Expectations
                                                • Behavioral standards
                                Six Common Trouble Signs
                           for Organizational Feedback Systems
Organizational Behavior

                           Feedback is used to punish, embarrass, or put down
                           Those receiving the feedback see it as irrelevant to their
                           Feedback information is provided too late to do any
                           People receiving feedback believe it relates to matters
                            beyond their control
                           Employees complain about wasting too much time
                            collecting and recording feedback data
                           Feedback recipients complain about feedback being too
                            complex or difficult to understand
                                    Some Concluding Tips for
                                     Giving Good Feedback
Organizational Behavior

                          Managers need to keep the following tips in mind when giving
                           Relate feedback to existing performance goals and clear
                           Give specific feedback tied to observable behavior or measurable
                           Channel feedback toward key result areas.
                           Give feedback as soon as possible.
                           Give positive feedback for improvement, not just final results.
                           Focus feedback on performance, not personalities.
                           Base feedback on accurate and credible information.
                                  Nontraditional Feedback
Organizational Behavior

                           Upward Feedback: Subordinates evaluate their
                            manager’s style and performance.

                           360-Degree Feedback: Specific (typically anonymous)
                            feedback generated by one’s manager, peers,
                            subordinates, and other key people.
                                 Sources and Types of Feedback in
                                    the 360-Degree Approach
Organizational Behavior


                                            Manager/Focal Person
                                               Self-evaluation of:
                                          • Planning/administrative/    Relevant others
                          Peers/team              financial skills          such as
                           members        • Technical/business skills     customers
                                              • Interpersonal skills     and suppliers
                                           • Problem-solving skills
                                            • Team-building skills
                                             • Other relevant skills

                                                       The Reward Process
Organizational Behavior


                                          Ability &                                             Intrinsic
                                            Skill                                               Rewards

                          Motivation to                 Performance:              Performance
                           exert effort                  Individual                Evaluation

                                       The Reward Process
Organizational Behavior

                          • Satisfaction with a reward is a function of both how
                            much is received and how much the individual feels
                            should be received. (Equity theory)
                          • An individual’s feelings of satisfaction are influenced
                            by comparisons of what happens to others.
                          • Satisfaction is influenced by how satisfied employees
                            are with both intrinsic and extrinsic rewards.
                          • People differ in the reward they desire and in the
                            relative importance different rewards have for them
                          • Some extrinsic rewards are satisfying because they
                            lead to other rewards.
                          • Rewards must be valued and must be related to a
                            specific level of job performance
                                     The Reward Process
Organizational Behavior

                          • Extrinsic rewards – external to the job. What
                            are examples?
                          • Intrinsic rewards – part of the job itself. What
                            are examples?
                          • How do intrinsic and extrinsic rewards
                          • How do rewards influence turnover and
                            absenteeism? Is a low turnover always good?
                                           General Model of Organizational
                                                   Reward Systems
Organizational Behavior

                                                  Organization’s Reward
                                                   • Profit maximization
                                                          • Equity
                                                         • Equality
                                                           • Need
                                                                           Desired Outcomes
                           Types of Rewards
                                                                                • Attract
                          • Financial/material
                                                                               • Motivate
                                                                               • Develop
                           • Social (extrinsic)
                                                                                • Satisfy
                          • Psychic (intrinsic)
                                                                                 • Retain
                                                   Distribution Criteria
                                                         • Results
                                                        • Behavior
                                                     • Other factors
                              Why Do Rewards Fail to Motivate?
Organizational Behavior

                          • Too much emphasis on monetary rewards
                          • Rewards lack an “appreciation effect”
                          • Extensive benefits become entitlements
                          • Counterproductive behavior is rewarded
                          • Too long a delay between performance and rewards
                          • Too many one-size-fits-all rewards
                          • Use of one-shot rewards with a short-lived
                            motivational impact
                          • Continued use of demotivating practices such as
                            layoffs, across-the-board raises and cuts, and excessive
                            executive compensation
                               How To Make Team-Based
                                      Pay Work
Organizational Behavior

                          Prepare employees with interpersonal skills
                          Don’t introduce team-pay until teams are
                           running smoothly.
                          Blend individual and team incentives.
                          Start by rewarding teamwork behaviors and
                           then evolve to incentives for team results.
                          Make sure each team member has a clear line
                           of sight to key team results.
                                   Non-Traditional Rewards
Organizational Behavior

                          •   Cafeteria benefits
                          •   Time off (banked)
                          •   Skill-based pay
                          •   Gainsharing vs profit sharing
                                Profit Sharing vs. Gainsharing
Organizational Behavior

                          Profit sharing: “Occurs when individual employees or work
                            groups are granted a specified portion of any economic
                            profits earned by the business as a whole.”

                          Gainsharing: “Involves a measurement of productivity
                            combined with the calculation of a bonus designed to offer
                            employees a mutual share of any increases in total
                            organizational productivity. Usually all those responsible
                            for the increase receive the bonus.”
                               Making Pay for Performance Work
Organizational Behavior

                           Make pay for performance an integral part of the
                            organization’s basic strategy.
                           Base incentive determinations on objective performance
                           Have all employees actively participate in the
                            development, implementation, and revision of the
                            performance-pay formulas.
                           Encourage two-way communication so problems with the
                            pay-for-performance plan will be detected early.
                           Build the pay-for-performance plan around participative
                            structures such as suggestion systems or quality circles.
                                Making Pay for Performance Work
Organizational Behavior

                           Reward teamwork and cooperation whenever possible
                           Actively sell the plan to supervisors and middle managers
                            who may view employee participation as a threat to their
                            traditional notion of authority
                           If annual cash bonuses are granted, pay them in a lump sum
                            to maximize their motivational impact
                           Remember that money motivates when it comes in
                            significant amounts, not occasional nickels and dimes

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