BUSN 221 Chapter 7
Jeff Parsons
Evaluation, Feedback and Rewards
Learning Objectives
1. Identify the major purposes of performance evaluation and specify the process through which such evaluation should be undertaken so as to contribute toward high levels of employee commitment and motivation
2. Describe the cognitive model of feedback and explain its usefulness to managers in today’s workplace
3. Identify the key insights to be derived from reinforcement theory and demonstrate how these insights could be meaningfully utilized in contemporary organizations
4. Evaluate the impact of the various elements of the reward system with respect to the objective of enhancing employee commitment and motivation.
Performance Evaluation
Considered essential to the employee’s ability to perform duties effectively
Judgmental purposes Developmental purposes
Performance Evaluation – Judgmental Purpose
Basis for reward allocation Identify high-potential employees Evaluation of employee selection
procedures Evaluation of previous employee training
programs
Performance Evaluation – Developmental Purpose
Stimulate improved future performance Develop ways of overcoming obstacles
and performance barriers Identify training and development
opportunities Establish supervisor-employee agreement
on performance expectations
Focus of Evaluation
Performance evaluation should be a continuous, ongoing process that focuses on the job performance, not the individual Translate responsibilities into daily
activities Goals associated with responsibilities Degree to which goals have been
achieved
Focus of Evaluation
Weighting of relevant behaviours Deficiency – evaluation does not cover
all aspects of the job Contamination – activities that are not
part of the job are included in the evaluation
Distortion – improper emphasis given to various job elements
Improving Evaluations
Maximize use and acceptance of evaluations while minimizing dissatisfaction level of employee participation in
evaluation process Set SMART (Specific, Measurable,
Agreed upon, Realistic, Time constrained) performance goals
Provide training during the process
Improving Evaluations cont’d
Evaluate how effectively duties were performed
Communicate results to employee Actively recognize and reinforce good
performance Evaluate performance on a continuous,
ongoing basis
Performance Evaluation Feedback
Explain what went into the evaluation Explain how to improve or sustain
performance Be specific, not generic
Most managers dread this
Purpose of Evaluation Feedback
Instructional Motivational
Cognitive Model of Feedback
• Person
• Others
• Job
Behavioral Results
• Effort• Self-motivation to Adjust
• Persistence• Disregard or Non-acceptance
Individual Characteristics• Perceptual Process• Values• Needs• Goals• Self-Concept• Self-Efficacy
Cognitive Evaluation
• Creditive of Feedback Source
• Expectancies
• Personal Standards• Form of Feedback
(Objective or Subjective)
Evaluated Person
Multisource Feedback (360°)
90% of Fortune 1000 companies use some form of it
Feedback from creditors, supervisors, peers, subordinates,
Result of requests for fairness, clarity, and credibility in performance improvement programs
Multisource Feedback Best Practices
Individual development only Link feedback to overall
strategy/direction of company Administration must control the
process Senior management as role models Use trained internal coaches Evaluate effectiveness of the process
Multisource (360°) Feedback
FOR Concern for
fairness and credibility
AGAINST Feedback sources
may be concerned about use of rating and thus may artificially inflate it
Observation frequency and/or knowledge of person being evaluated
Reinforcement TheorySome believe reinforcement is the most important principle of learning Positive Consequences
strength of behaviour probability of repetition
Negative Consequences strength of behaviour probability of repetition
Operants Behaviours controlled by altering
consequences that follow
Videos
http://www.youtube.com/watch?v=I_ctJqjlrHA
http://www.youtube.com/watch?v=LSv992Ts6as
Reinforcement TheoryReinforcement different than Reward Reward is desirable, provided after
performance Not all rewards are reinforcers Reinforcers increase rate of behaviour Positive Reinforcement
Behaviour as positive stimulus applied Negative Reinforcement
Behaviour as negative stimulus removed
Reinforcement TheoryPunishment Uncomfortable or unwanted
consequences for a behaviour response Can suppress behaviour when used
effectively Use after careful, objective evaluation of
situation
Reinforcement TheoryExtinction Reducing unwanted behaviour Positive reinforcement for a learned
response withheld, behaviour continues for some period of time
Behaviour will decrease in frequency until it disappears if positive reinforcement continues to be withheld
Reinforcement SchedulesSchedule Description Organizational ExampleContinuous Reinforcer follows every
responsePraise after every new sale and order
Fixed interval Response after specific time period is reinforced
Weekly, bimonthly, monthly paycheck
Variable interval
Response after varying period of time (an average) is reinforced
Transfers, unexpected bonuses, promotions, recognition
Fixed ratio A fixed number of responses must occur before reinforcement
Piece rate, commission on units sold
Variable ratio A varying number (average) of responses must occur before reinforcement
Random checks for quality yield praise for doing good work
Reward Program Objectives
Attract qualified people to join the organization
Keep employees coming to work Motivate employees to high
performance levels
Reward Programs
Integrate the following: Satisfaction Motivation Performance Rewards
Ability, skill and experience are required with motivation to produce high performance
Reward Process
Feedback
Motivation to exert effort
Ability and skill
Experience
Performance results:
Individual
Performance evaluation
Intrinsic rewards
Extrinsic rewards
Satisfaction
Satisfaction and RewardsLawler’s Conclusions
Satisfaction with a reward depends on: How much is received How much individual feels they should
receive One’s own satisfaction is influenced by
what happens to others Different people desire different
rewards and differ in how important the rewards are to them
Satisfaction and RewardsLawler’s Conclusions
Satisfaction is influenced by how satisfied people are with intrinsic and extrinsic rewards
Some extrinsic rewards are satisfying because they lead to other rewards
Intrinsic and Extrinsic Rewards
Intrinsic Completion Achievement Autonomy Personal growth
Extrinsic Salary/wages Employee Benefits Interpersonal
rewards Promotions
Rewards and Organizational Issues
Rewards affect employee Perceptions Attitudes Behaviour
Organizational concerns affected Turnover and absenteeism Performance Organizational commitment
Innovative Reward Systems
Skill-based pay Broadbanding Concierge Services Team-based rewards Part-time benefits Gain-sharing Employee Stock ownership plans
“Line of Sight” – Key Issue
Employee perception that their performance is directly linked to rewards received
Easy to say, difficult to do Should be considered in job design