Applied Performance

Practices

Chapter 6

6-2Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Learning Objectives 6.1 Discuss the meaning of money and identify several

individual-level, team-level and organisation-level performance-based rewards

6.2 Describe five ways to improve reward effectiveness

6.3 List the advantages and disadvantages of job specialisation

6.4 Outline the job characteristics model and describe three ways to improve employee motivation through job design

6.5 Define empowerment and identify strategies that support empowerment

6.6 Describe the five elements of self-leadership and identify specific personal and work environment influences on self-leadership

6-3Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Applying Performance Practices Through the Excellence Philosophy• Mercedes-Benz

embraces effective and efficient job design models and empowers staff through creativity and entrepreneurship. The company provides workers with authority to make decisions and encourages self- managed teams

<<Insert Mercedes Image ch06, p. 175>>

6-4Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Financial Reward Practices

• 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 do

• Cultural values influence the meaning and value of money© Corel Corp. With permission.

6-5Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Types of Rewards in the Workplace

• Membership and seniority• Job status• Competencies• Task performance

© Corel Corp. With permission.

6-6Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Membership/Seniority Based Rewards• Some benefits increase with seniority • Advantages

– Attract job applicants– Reduce turnover

• Disadvantages– Do not motivate high performance– Discourage poor performers from leaving

6-7Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Job Status-Based Rewards• Includes job evaluation and status perks• Advantages:

– Job evaluation tries to maintain fairness (pay equity)

– Motivates competition for promotions

• Disadvantages:– Encourages bureaucratic hierarchy– Might undermine cost-efficiency and

responsiveness– Reinforces status mentality – Encourages competition, not collaboration

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Competency-Based Rewards• Pay increases with acquired and

demonstrated competencies • Skill-based pay

– Pay increases with skill modules learned

• Advantages – More flexible workforce, better quality, consistent

with employability

• Disadvantages– Potentially subjective, higher training costs

6-9Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Call Centre Employees Engaged

Engagement has always been a cultural value for Salmat Salesforce, which was built on the values of ‘fun, focus and fulfilment’. Flexible pay and reward systems are a major factor in employee commitment

6-10Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Organisationalrewards

• Profit sharing • Share ownership• Stock options• Balanced scorecard

Teamrewards

• Bonuses• Gainsharing

Individualrewards

• Bonuses• Commissions• Piece rate

Performance-Based Rewards

6-11Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Evaluating Organisational Rewards

• Positive effects– Creates an ‘ownership culture’– Adjusts pay with firm’s prosperity

• Concerns with performance pay– Weak connection between individual effort and

rewards– Reward amounts affected by external forces

6-12Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

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.

6-13Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Job Design• Assigning tasks to a job, including the

interdependency of those tasks with other jobs

• Organisation's goal—to create jobs that can be performed efficiently, yet employees are motivated and engaged

6-14Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Job Design and Work Efficiency• Dividing work into separate jobs that include a subset

of the tasks required to complete the product or service

• Scientific management– Frederick Winslow Taylor– Advocated job specialisation– Taylor also emphasised

person-job matching, training, goal setting, work incentives

6-15Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Evaluating Job Specialisation

• Less time changing activities

• Lower training costs• Job mastered

quickly• Better person-job

matching

• Job boredom• Discontentment pay• Higher costs• Lower quality• Lower motivation

Advantages Disadvantages

6-16Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Job Design and Work Motivation

• Motivation is now the central focus of many job design changes

• Motivator: hygiene theory proposes that employees experience job satisfaction when they fulfil growth and esteem needs (motivators), and experience dissatisfaction when they have poor working conditions (hygienes)

6-17Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Job Characteristics Model

6-18Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Job Design Practices that Motivate• Job Rotation

– Moving from one job to another

– Benefits Minimises repetitive

strain injury Multiskills the

workforce Potentially reduces

job boredom

Job ‘A’

Job ‘B’

Job ‘C’

Job ‘D’

6-19Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Job Enlargement• Adding tasks to an existing job• Example: video journalist

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Job Enrichment• Giving employees more responsibility for

scheduling, coordinating and planning their 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

6-21Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Empowerment Practices

Meaning

Competence

Employees believe their work is important

Employees have feelings of self-efficacy

ImpactEmployees feel their actions influence success

Self-determination

Employees feel they have freedom and discretion

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Empowerment atSvenska Handelsbanken

Svenska Handelsbanken gives each branch considerable autonomy without centralised controls, resulting in high levels of employee empowerment. ‘Being empowered and having this trust leads to better decisions and higher satisfaction,’ explains a manager at the Swedish financial institution

6-23Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Supporting Empowerment• Individual factors

– Possess required competencies, able to perform the work

• Job design factors– Autonomy, task identity, task significance, job

feedback

• Organisational factors– Resources, learning orientation, trust

6-24Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Self-Leadership• The process of influencing oneself to

establish the self-direction and self-motivation needed to perform a task

• Includes concepts and practices from:– Goal setting– Social learning theory– Sports psychology

6-25Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Elements of Self-Leadership• Personal goal setting

– Employees set their own goals– Apply effective goal setting practices

Personalgoal setting

Constructivethoughtpatterns

Designingnaturalrewards

Self-monitoring

Self-reinforce-

ment

6-26Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Personalgoal setting

Designingnaturalrewards

Self-monitoring

Self-reinforce-

ment

Constructivethoughtpatterns

Elements of Self-Leadership continued

• Positive self-talk– Talking to ourselves about thoughts and actions– Potentially increases self-efficacy

• Mental imagery– Mentally practising a task– Visualising successful task completion

6-27Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Designingnaturalrewards

Constructivethoughtpatterns

Self-monitoring

Self-reinforce-

ment

Personalgoal setting

Elements of Self-Leadership continued

• Finding ways to make the job itself more motivating– E.g. altering the way the task is accomplished

6-28Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Constructivethoughtpatterns

Designingnaturalrewards

Self-reinforce-

ment

Personalgoal setting

Self-monitoring

Elements of Self-Leadership continued

• Keeping track of your progress toward the self-set goal– Looking for naturally-occurring feedback– Designing artificial feedback

6-29Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Self-reinforce-

ment

Constructivethoughtpatterns

Designingnaturalrewards

Self-monitoring

Personalgoal setting

Elements of Self-Leadership continued

• ‘Taking’ a reinforcer only after completing a self-set goal– E.g. watching a movie after writing two more sections

of a report– E.g. starting a fun task after completing a task that you

do not like

6-30Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Self-Leadership Contingencies• Individual factors

– Higher levels of conscientiousness and extroversion

– Positive self-evaluation (self-esteem, self-efficacy, internal locus)

• Organisational factors– Job autonomy– Participative leadership– Measurement-oriented culture

6-31Copyright © 2013 McGraw-Hill Australia Pty LtdMcShane, Olekalns, Travaglione, Organisational Behaviour, 4e

Summary• Financial rewards relate to our needs, emotions and self-

concepts• Organisations reward for membership and seniority, job

status, competencies and performance• Job design (e.g. job specialisation, enlargement and

enrichment) is the process of assigning tasks to a job in ways that can increase performance and motivation

• Empowered people experience more self- determination, meaning, competence and impact regarding their role in the organisation

• Self-leadership is the process of influencing oneself to establish the self-direction and self-motivation needed to perform a task

Applied Performance

Practices

Chapter 6