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What is the link between motivation,
performance, and rewards?
What are the essentials of performance
management?
How do job designs influence motivation and
performance?
What are the motivational opportunities of
alternative work arrangements?
6-2Copyright © 2010 John Wiley & Sons, Inc.
Copyright © 2010 John Wiley & Sons, Inc.6-3
6-4Copyright © 2010 John Wiley & Sons, Inc.
Copyright © 2010 John Wiley & Sons, Inc.6-5
Intrinsic rewards Positively valued work outcomes that the
individual receives directly as a result of task
performance.
Extrinsic rewards Positively valued work outcomes that are
given to an individual or group by some other
person or source in the work setting.
Pay for performance – the concept that
monetary rewards are in whole, or in part,
linked to accomplishments (individual or
team). Programs that provide incentives for employees to
increase their outputs.
In the 2008-09 economic recession, HRGURU finds
that employers are finding that ‘cash is still king’
when it comes to incentives.
6-6Copyright © 2010 John Wiley & Sons, Inc.
Copyright © 2010 John Wiley & Sons, Inc.6-7
Merit pay Compensation system that directly ties an
individual’s salary or wage increase to measures of
performance accomplishments during a specific
time period.
Seeks to create a belief among employees that the
way to achieve high pay is to perform at high
levels.
Bonus – additional monetary award that meets
specified benchmarks.
Copyright © 2010 John Wiley & Sons, Inc.6-8
Gain sharing
Gives workers the opportunity to earn
more by receiving shares of any
productivity gains that they help to create.
Copyright © 2010 John Wiley & Sons, Inc.6-9
Profit-sharing plans
Reward employees based on overall
organizational profit.
Criticism: organizational profits are not
always a direct result of employees’ efforts,
Copyright © 2010 John Wiley & Sons, Inc.6-10
Skill-based pay
Rewards people for acquiring and
developing job relevant skills.
Stock Options
Provide employees with an opportunity to
buy shares of stock at a future date at a
fixed price.
6-11Copyright © 2010 John Wiley & Sons, Inc.
Employee stock ownership plans
(ESOPs)
May give stock to employees, or allow
stock to be purchased at a price below
market value.
6-12Copyright © 2010 John Wiley & Sons, Inc.
Copyright © 2010 John Wiley & Sons, Inc.6-13
Performance management
Fair and accurate measurement and
application of rewards, and the
various human resource
management decisions and actions
based on such measurement.
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Copyright © 2010 John Wiley & Sons, Inc.6-15
Performance management is:
Evaluative - lets people know where they
stand relative to objectives and standards;
Developmental – provides insights into
individual strengths and weaknesses that
are useful for personal development.
Copyright © 2010 John Wiley & Sons, Inc.6-16
Performance Measurement
Output measures
assess actual work results
Activity measures
assess work efforts or inputs
Copyright © 2010 John Wiley & Sons, Inc.6-17
Performance
appraisal
Formal procedure for
measuring and
documenting a person’s
work performance.
Copyright © 2010 John Wiley & Sons, Inc. 6-18
Copyright © 2010 John Wiley & Sons, Inc.6-19
Rating scales
Graphic - Raters assign scores on a list of dimensions
related to high performance outcomes in a given job.
Behavioral - Raters identify observable job behaviors,
and specifically describe superior or inferior
performance.
Critical incident diaries
Rater records incidents of unusual success or failure
in a given performance aspect.
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360° Evaluation
Includes not only the evaluations of
bosses, peers, and subordinates, but also
self-ratings, customer ratings, and ratings
by others with whom the employee deals
with outside the immediate work unit.
Think of a performance management
discussion you have had with a
manager?
Did you look forward to the meeting?
Put yourself in the manager’s place.
What would you change about the procedure?
Which evaluation tool will be most beneficial?
6-23Copyright © 2010 John Wiley & Sons, Inc.
Copyright © 2010 John Wiley & Sons, Inc.6-24
To be meaningful, an appraisal system
must be:
Reliable - provide consistent results across
time.
Valid - actually measure people on relevant
job content.
Job design
Process through which managers plan and
specify job tasks and the work
arrangements that allow them to be
accomplished.
6-25Copyright © 2010 John Wiley & Sons, Inc.
Scientific management
Sought to improve work efficiency by
creating small, repetitive tasks and
training workers to do these tasks well.
6-26Copyright © 2010 John Wiley & Sons, Inc.
6-27Copyright © 2010 John Wiley & Sons, Inc.
Job simplification A scientific management
approach that standardizes work
procedures and employs people
in clearly defined and highly
specialized tasks.
Intent is to increase efficiency,
but it may be decreased due to
the motivational impact of
unappealing jobs.
6-28Copyright © 2010 John Wiley & Sons, Inc.
Job enlargement
Increases task variety by combining into
one job two or more tasks that were
previously assigned to separate workers.
Job rotation
Increases task variety by periodically
shifting workers among jobs involving
different tasks.
6-29Copyright © 2010 John Wiley & Sons, Inc.
Job enrichment
The practice of enhancing job content by
building motivating factors such as
responsibility, achievement, recognition,
and personal growth into the job.
6-30Copyright © 2010 John Wiley & Sons, Inc.
Concerns about job enrichment
Job enrichment can be very costly.
Controversy concerning whether pay must
be increased when jobs are enriched.
6-31Copyright © 2010 John Wiley & Sons, Inc.
6-32Copyright © 2010 John Wiley & Sons, Inc.
Job characteristics model
Provides a data-based approach to
creating job designs with good person-job
fit that maximize the potential for
motivation and performance.
6-33Copyright © 2010 John Wiley & Sons, Inc.
Motivating potential score
MPS indicates the degree to which the job
is capable of motivating people.
A job’s MPS can be raised by enriching the
core characteristics.
6-34Copyright © 2010 John Wiley & Sons, Inc.
When the core characteristics are highly
enriched, three critical psychological states
are positively influenced:
Experienced meaningfulness of work
Experienced responsibility for work
outcomes
Knowledge of actual results of work activities
6-35Copyright © 2010 John Wiley & Sons, Inc.
Moderators that influence the degree of
positive outcomes of enriched jobs:
Employee growth-need strength is high.
The employee has the required knowledge
and skills.
Employee is satisfied with the work context
(salary, supervision, relationships).
6-36Copyright © 2010 John Wiley & Sons, Inc.
Managerial and global implications of
enriching jobs
Not everyone’s job should be enriched.
Job enrichment can apply to groups.
Culture has a substantial impact on job
enrichment.
6-37Copyright © 2010 John Wiley & Sons, Inc.
Alternative work arrangements
A key feature of contemporary
organizations.
Designed to provide work-life balance and
increase employee motivation,
performance and job satisfaction.
6-38Copyright © 2010 John Wiley & Sons, Inc.
Compressed work weeks – any scheduling of work that allows
a full time job to be completed in fewer than the standard five
days.
Advantages
For workers: added time off.
For organizations: lower absenteeism and improved
recruiting of new employees.
Disadvantages
For workers: increased fatigue and family adjustment
problems.
For organizations: work scheduling problems,
customer complaints, possible union opposition.6-39Copyright © 2010 John Wiley & Sons, Inc.
Flexible working hours
Gives individuals a daily choice in the timing of their
work commitments.
Advantages:
For workers: shorter commuting time, more leisure time,
more job satisfaction, and greater sense of responsibility.
For organizations: less absenteeism, tardiness, and
turnover; more commitment, and higher performance.
6-40Copyright © 2010 John Wiley & Sons, Inc.
Job sharing One full-time job is assigned to two or more
persons who divide the work according to agreed-
upon hours.
Advantages:
For workers: less burnout and higher energy level.
For organizations: attracting talented people who
would otherwise be unable to work.
6-41Copyright © 2010 John Wiley & Sons, Inc.
Work sharing Workers agree to cut back on the number of
hours they work in order to protect against
layoffs.
Some employers may mandate a cutback due to
economic necessity.
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Telecommuting - Work done at home or in a remote location utilizing technology to communicate with a central office or other employment location.
Advantages For workers: flexibility, comforts of home, and choice of
work locations consistent with one’s lifestyle.
For organizations: costs savings, efficiency, and improved employee satisfaction.
Disadvantages For workers: isolation from co-workers, decreased
identification with work team, family distractions.
6-43Copyright © 2010 John Wiley & Sons, Inc.
Advantages of part-time work For workers: appeals to people who want to supplement other
jobs or do not want full-time work.
For organizations: lower labor costs, ability to better
accommodate peaks and valleys of business cycle, and better
management of retention.
Disadvantages For workers: added stress and potentially diminished
performance if holding two jobs, failure to qualify for benefits,
and lower pay rates than full-time counterparts.› For organizations: when a person holds multiple part-time
jobs, the work burdens can be stressful; performance may suffer on the job.
6-44Copyright © 2010 John Wiley & Sons, Inc.
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