Transcript Organizational Behavior 11e

Business Leadership
and
Organizational Behavior
Motivation
&
Performance Management
Craig W. Fontaine, Ph.D.
The Context of Motivation
 Some definitions:
• Performance is a product of motivation and ability
moderated by situation constraints
• Ability is an individual’s capacity to perform certain tasks
• Situational constraints refers to factors in the workplace
that hinder performance
Motivation………..
Defining Motivation
Motivation
The processes that account for an individual’s
intensity, direction, and persistence of effort toward
attaining a goal.
Key Elements
1. Intensity: how hard a person tries
2. Direction: toward beneficial goal
3. Persistence: how long a person tries
The Nature of Motivation (cont’d)
 Intrinsic Motivation
– Behavior that is performed for its own sake.
• The source of the motivation that comes from actually
engaging in the behavior.
• The sense of accomplishment and achievement derived
from doing the work itself
 Extrinsic Motivation
– Behavior that is performed to acquire material or social
rewards or to avoid punishment.
• The source of the motivation is the consequences of the
behavior and not the behavior itself.
Theories of Motivation
Hierarchy of Needs Theory (Maslow)
Hierarchy of Needs Theory
There is a hierarchy of five
needs—physiological, safety,
social, esteem, and selfactualization; as each need is
substantially satisfied, the next
need becomes dominant.
Self-Actualization
The drive to become what one is capable of becoming.
Maslow’s Hierarchy of Needs
Lower-Order Needs
Needs that are satisfied
externally; physiological
and safety needs.
Source: Motivation and Personality , 2nd ed,, by A.H. Maslow, 1970.
Reprinted by permission of Prentice Hall, Inc., Upper Saddle River, NJ.
Higher-Order Needs
Needs that are satisfied
internally; social, esteem,
and self-actualization
needs.
Maslow’s Hierarchy of Needs
NEEDS
General Examples
Organizational Examples
Achievement
Selfactualization
Status
Esteem
Friendship
Stability
Food
Copyright © by Houghton Mifflin Company. All
rights reserved.
Social
Safety
Physiology
Challenging
job
Job
title
Friends
at work
Pension
plan
Base
salary
Alderfer’s ERG Theory
 ERG Theory is slightly different then Need Theory (Maslow)
– People’s needs are grouped into three overlapping categories—
existence, relatedness, and growth.
– Maslow’s hierarchy is collapsed into three levels:
• Existence needs related to physiological and safety needs.
• Relatedness needs that are similar to social and esteem by
others.
• Growth needs encompass needs for self-esteem and selfactualization.
– ERG theory assumes that:
• Multiple needs can be operative at one time (there is no absolute
hierarchy of needs – Unlike Need Theory
• If a need is unsatisfied, a person will regress to a lower-level need
and pursue that need (Frustration Regression).
Need Theory compared to ERG Theory
SA
Growth
Esteem
Relatedness
Social
Safety & Security
Physiological
Existence
Theory X and Theory Y (Douglas McGregor)
Theory X
Assumes that employees dislike
work, lack ambition, avoid
responsibility, and must be
directed and coerced to perform.
Theory Y
Assumes that employees like
work, seek responsibility, are
capable of making decisions,
and exercise self-direction and
self-control when committed to
a goal.
Assumptions of Theory X
 Naturally indolent (Lazy)
 Lack ambition, dislike
responsibility, and prefer to be led
 Inherently self-centered and
indifferent to organizational needs
 Naturally resistant to change
 Gullible, not bright, ready dupes
Adapted from Table 5.1 which is from “The Human Side of Enterprise” by Douglas M. McGregor, reprinted from Management Review, November 1957. Copyright
1957 American Management Association International. Reprinted by permission of American Management Association International, New York, NY. All rights
reserved. http://www.amanet.org.
Assumptions of Theory Y
 Experiences in organizations result in passive
and resistant behaviors; they are not inherent
 Motivation, development potential, capacity for
assuming responsibility, readiness to direct
behavior toward organizational goals are present
in people
 Management’s task—arrange conditions and
operational methods so people can achieve their
own goals by directing efforts to organizational
goals
Adapted from Table 5.1 which is from “The Human Side of Enterprise” by Douglas M. McGregor, reprinted from Management Review, November
1957. Copyright 1957 American Management Association International. Reprinted by permission of American Management Association
International, New York, NY. All rights reserved. http://www.amanet.org.
Herzberg’s Motivation-Hygiene Theory
 Intrinsic factors are related to job satisfaction, while
extrinsic factors are associated with dissatisfaction.
– Motivator needs relate to the nature of the work
itself—autonomy, responsibility, interesting work.
– Hygiene needs are related to the physical and
psychological context of the work—comfortable work
environment, pay, job security.
• Unsatisfied hygiene needs create dissatisfaction;
satisfaction of hygiene needs does not lead to motivation
or job satisfaction.
Motivation Factors
• Achievement
• Recognition
• The work itself
• Responsibility
• Advancement
and growth
Satisfaction
The Two-Factor
Theory of
Motivation
No satisfaction
Hygiene Factors
• Supervisors
• Working conditions
• Interpersonal relations
• Pay and security
• Company policies and
administration
Dissatisfaction
No dissatisfaction
Comparison of Satisfiers
and Dissatisfiers
Factors characterizing
events on the job that led to
extreme job dissatisfaction
Source: Reprinted by permission of Harvard Business Review. An exhibit from One More Time:
How Do You Motivate Employees? by Frederick Herzberg, September–October 1987. Copyright
© 1987 by the President and Fellows of Harvard College: All rights reserved.
Factors characterizing
events on the job that
led to extreme job
satisfaction
Contrasting Views of Satisfaction and Dissatisfaction
David McClelland’s Theory of Needs
Need for Achievement
Need for Affiliation
The drive to excel, to achieve
in relation to a set of
standards, to strive to
succeed.
The desire for friendly
and close personal
relationships.
Need for Power
The need to make others
behave in a way that they
would not have behaved
otherwise.
nPow
nAch
nAff
Goal-Setting Theory (Edwin Locke)
 Goal-Setting Theory
The theory that specific and difficult goals, with feedback,
lead to higher performance.
 Characteristics of Goals
– Goal difficulty
• Extent to which a goal is challenging and requires effort.
• People work harder to achieve more difficult goals.
• Goals should be difficult but attainable.
– Goal specificity
• Clarity and precision of the goal.
• Goals vary in their ability to be
stated specifically.
Goal-Setting Theory (continued)
 Other considerations
– Acceptance
• The extent to which persons accept a goal
as their own.
– Commitment
• The extent to which an individual is
personally interested in reaching a goal.
Reinforcement Theory
The assumption that behavior is a function of its
consequences.
Concepts:
Behavior is environmentally caused.
Behavior can be modified (reinforced) by
providing (controlling) consequences.
Reinforced behavior tends to be repeated.
Reinforcement Theory and Learning
 Reinforcement Theory
– Based on the idea that behavior is a function of its
consequences.
• Behavior that results in pleasant consequences (reward)
is likely to be repeated.
• Behavior that results in unpleasant consequences
(punishment) is less likely to be repeated.
“Responses that produce a satisfying effect in a particular
situation become more likely to occur again in that situation, and
responses that produce a discomforting effect become less
likely to occur again in that situation”
From: Edward Thorndike’s “Law of Effect”
Types of Reinforcement in Organizations
 Positive Reinforcement
– A reward or other desirable consequence that follows behavior.
 Avoidance (Negative Reinforcement)
– Rather than receiving a reward following a desirable behavior, the
person is given the opportunity to avoid an unpleasant
consequence.
 Extinction
– Decreases the frequency of behavior by eliminating a reward or
desirable consequence that follows that behavior.
 Punishment
– An unpleasant, or aversive, consequence that results from
behavior.
Types of Reinforcement – Examples of Use
 Positive Reinforcement and avoidance can be used to motivate desired
behaviors by employees
Types of Reinforcemene – Example of Use
 Extinction and Punishment can be used to change undesired employee
Schedules of Reinforcement
Continuous Reinforcement
A desired behavior is reinforced
each time it is demonstrated.
Intermittent Reinforcement
A desired behavior is reinforced
often enough to make the
behavior worth repeating but not
every time it is demonstrated.
Schedules of Reinforcement (cont’d)
Fixed-Interval Schedule
Rewards are spaced at
uniform time intervals.
Variable-Interval Schedule
Rewards are initiated after a
fixed or constant number of
responses.
Schedules of Reinforcement (cont’d)
Fixed-ratio
Intermittent Schedules of Reinforcement
2–
Intermittent Schedules of Reinforcement (cont’d)
Related Aspects of Learning
 Reinforcement Generalization
– The process of recognizing relationships between behavior
and reinforcement in different settings.
 Social Learning
– Occurs when people observe the behaviors of others,
recognize their consequences, and alter their own behaviors
as a result.
Equity Theory
 Adams proposed that a worker’s motivation is based
on social comparison.
 Individuals compare their job inputs and outcomes
with those of others and then respond to eliminate
any inequities.
 There can be:
• Equity
• Underpayment
• Overpayment
Equity Theory (cont’d)
Condition
Equity
Underpayment
Equity
Overpayment
Equity
Person
Outcomes
Inputs
Outcomes
Inputs
Outcomes
Inputs
Referent
Example
= Outcomes
Inputs
Worker contributes
more inputs but also
gets more outputs
than referent
< Outcomes
Inputs
Worker contributes
more inputs but also
gets the same outputs
as referent
> Outcomes
Inputs
Worker contributes
same inputs but also
gets more outputs
than referent
Responses to Perceptions of Equity and Inequity
Equity Theory – Related Concepts
Distributive Justice
Perceived fairness of the
amount and allocation of
rewards among individuals.
Procedural Justice
The perceived fairness of
the process to determine
the distribution of
rewards.
Expectancy Theory
 A cognitive theory, assumes workers to be a rational
decision maker who will expend energy on activities
that lead to desired rewards
 Three basics elements:
• Expectancy an individuals perception that their effort
(E) will result in performance (P)
• Instrumentality an individual’s perception that
performance will lead to desired outcome (O)
• Valance the value the individual places on outcome (V)
Basic Concepts of Expectancy Theory
Valance
Effort
Performance
Expectancy
Outcome
Instrumentality
Expectancy Theory Relationships Summary
 Effort–Performance Relationship
– The probability that exerting a given amount of effort
will lead to performance.
 Performance–Reward Relationship
– The belief that performing at a particular level will lead
to the attainment of a desired outcome.
 Rewards–Personal Goals Relationship
– The degree to which organizational rewards satisfy an
individual’s goals or needs and the attractiveness of
potential rewards for the individual.
The Porter-Lawler Model
The model predicts that satisfaction is
determined by the perceived equity of
intrinsic and extrinsic rewards for
high-level performance.
Reference: Figure from Porter, Lyman W., and Edward E.
Lawler, Managerial Attitudes and Performance. Copyright ©
1968. Reproduced by permission of the publisher, McGrawHill, Inc.
Summary and Implications for Managers
 Need Theories
Maslow’s hierarchy, Two factor, ERG, & McClelland’s
 Goal Setting Theory
Clear and difficult goals often lead to higher levels of employee
productivity.
 Reinforcement Theory
Good predictor of quality and quantity of work, persistence of
effort, absenteeism, tardiness, and accident rates.
 Equity Theory
Strongest when predicting absence and turnover behaviors.
Weakest when predicting differences in employee productivity.
 Expectancy Theory
Focus on performance variables
It is a “rational” model so be careful when using it
This theory may be better applied to employees with greater
discretion in their jobs (i.e., as opposed to semi-skilled positions)
Popular Motivational Strategies
 Empowerment and Participation
– Empowerment
• The process of enabling workers to set their own work
goals, make decisions, and solve problems within their
sphere of influence.
– Participation
• The process of giving employees a voice in making
decisions about their work.
– Areas of Participation for Employees
• Making decisions about their jobs.
• Decisions about administrative matters (e.g., work
schedules).
• Participating in decision making about broader issues of
product quality.
Actions That Empower Employees
Increase
signature authority
at all levels
Reduce the
number of
approval steps
Provide more
freedom of access
to people
Reduce the
number of rules
Specific
Actions that
Empower
Provide more
freedom of access
to resources
Assign
nonroutine
jobs
Allow
independent
judgment
Define jobs
more broadly as
projects
Business Leadership
and
Organizational Behavior
Performance Management
Craig W. Fontaine, Ph.D.
Identifying and Measuring Employee Performance
 Performance Management System
– Processes used to identify, encourage, measure, evaluate,
improve, and reward employee performance.
 Performance
– What an employee does and does not do.
• Quantity of output
• Timeliness of output
• Cooperativeness
• Quality of output
• Presence at work
Performance Management Process
Goal Setting
Performance Review
Develop mutually-agreed upon
performance and competency
objectives. These objectives
are based on job requirements,
organizational goals and
competency assessment.
Prepare and review
performance against
objectives.
Ongoing
coaching &
feedback
Performance Planning
Execution
Use performance plan to
execute goals
Formulate an action plan with
resources, timelines, etc.
Formal and Informal
 Performance Appraisal
– Performance Appraisal – The formal periodic
assessment of workers performance (normally
annually)
– The process of evaluating how well employees
perform their jobs when compared to a set of
standards, and then communicating the information
to employees.
– Informal Appraisal
• Day-to-day contacts, largely undocumented
Performance Appraisal – Also known as….
Synonyms
 Performance review
 Performance evaluation
 Personnel rating
 Merit rating
 Employee appraisal
 Employee evaluation
Performance Appraisals Activities
 Review goals
 Summarize performance and accomplishments
 Specify strengths
 Specify development needs
 Discuss career path
 Set goals
 Create development and performance plans
Conflicting Roles for Performance Appraisal
Note on Goal setting
 Can be part of or separate from appraisal
 Clearly separate types of goals, e.g.,
– Operational
– Project
– Developmental
 Ensure goals are concrete
 Ensure goals relate to organizational goals
and development needs
 Include measures of success
Linkage Between
Strategy,
Outcomes,
and
Organizational
Results
The Big Picture
Popular Methods of Performance Appraisal
Rating Scale - Check Lists
 Checklists
– A performance appraisal tool that uses a list of statements or
work behaviors that are checked by raters.
• Can be quantified by applying weights to individual checklist items.
– Drawbacks
• Interpretation of item meanings by raters
• Weighting creates problems in appraisal interpretation
• Assignment of weights to items by persons other than the raters
Graphic Rating Scale
 Graphic Rating Scale
A scale that allows the rater to indicate an
employee’s performance on a continuum.
•
Typically focuses on traits (see example)
Drawbacks:
• Restrictions on the range of possible rater responses
• Differences in the interpretations of the meanings of
scale items and scale ranges by raters
• Poorly designed scales that encourage rater errors
• Rating form deficiencies limit the effectiveness of the
appraisal
Graphic Rating Scales for a Bank Teller
Behaviorally Anchored Scales
 Behavioral Rating Approach
Assesses employees’ behaviors instead of other
characteristics
– Consists of a series of scales created by:
• Identifying important job dimensions
• Creating statements describing a range of desired and
undesirable behaviors (anchors).
Behavioral Scale - Example
Comparative Methods
 Ranking
– Listing of all employees from highest to lowest in
performance.
– Drawback
• Does not show size of differences in performance
between employees
• Implies that lowest-ranked employees are unsatisfactory
performers.
• Becomes an unwieldy process if the group to be ranked
is large.
Comparative Methods (cont’d)
 Forced Distribution
– Performance appraisal method in which ratings of
employees are distributed along a bell-shaped
curve.
– Drawbacks
• Assumes a normal distribution of performance.
• Resistance by managers to placing individuals in the
lowest or highest groups.
• Providing explanation for placement in a higher or lower
grouping can be difficult.
• Is not readily applicable to small groups of employees.
Forced Distribution on a Bell-Shaped Curve
Narrative Methods
 Critical Incident
– Manager keeps a written record of highly favorable
and unfavorable employee actions.
– Drawbacks
• Variations in how managers define a “critical incident”
• Time involved in documenting employee actions
• Most employee actions are not observed and may become
different if observed
• Employee concerns about manager’s “black books”
Narrative Methods (continued)
 Essay Method
– Manager writes a short essay describing an employee’s
performance.
– Drawbacks
• Depends on the managers’ writing skills and their ability to
express themselves.
 Field Review
– Outside reviewer interviews the manager about the
performance of each employee and develops a rating for the
employees from the interview notes.
Common Rater Errors
Performance Management Rater Errors
Rater Errors of Range Restriction
Central
Tendency
Harshness
0
1
Low Score
2
3
Leniency
4
5
High Score
Performance Management Rater Errors
Halo Effect Bias
Competence
B
True Score
0
1
Low Score
Competence B
Halo Effect
2
3
Competence A
4
5
High Score
Performance Management Rater Errors
Recency Error
True Evaluation
Score
0
1
Low Score
2
3
Biased score due to
recent event
4
5
High Score
Rater Error Solution - 360 Degree Appraisal
 360 degree appraisal broadens the feedback
– Self and supervisor plus:
– Direct reports
– Teammates and co-workers
– Customers
– Collaborators and colleagues
The latest of greatest approach to
Performance Management
is
Competency Modeling
Competency Modeling
A process of systematically identifying a
set of competencies that are necessary for
successful performance in a particular job
or job family.
– Behavioral indicators associated with
performance on each competency are specified.
More Definitions of a Competency
 “A combination of motives, traits, self-concepts, attitudes… content
knowledge, or cognitive behavior skills; any individual characteristic that
can be reliably measured…and… shown to differentiate superior from
average performers” (Spencer, McClelland, & Spencer, 1994).
 “A measurable pattern of knowledge, skills, abilities, behaviors, and other
characteristics…an individual needs to perform work roles…successfully”
(Office of Personnel Management).
 “…observable performance dimensions, including individual knowledge,
skills, attitudes, and behaviors, as well as collective team, process, and
organizational capabilities, that are linked to high performance, and
provide the organization with sustainable competitive advantage” (Arvy &
Orth, 1999).
Why Competency Modeling?
Competency model approach:
•
•
•
•
Improves employee performance
Focuses on organizational culture and values
Communicates business strategy throughout the
organization
Provides a framework for integrating HR
applications which are evolutionary, not
revolutionary
Interation of HR Processes
Recruitment
Selection
Performance
Evaluations
Integration
Training
Succession
Planning
The best friend of HR
 Competency models can be used to fully integrate human resource
processes and the cumulative effect of such integration is the full
alignment of the firm’s human capital with its strategic and
business goals.
– Competency assessment can be used to assess how well an internal or
external candidate fits the requirements for a specific task. By creating
a competency based resourcing profile, recruiters and managers can screen
candidates on how well their competency proficiencies match the profile
– Competency assessment facilitates the performance process in the
organisation. By providing an objective set of measures, competencies
provide an effective benchmark from which to measure the performance
gains of both employees and teams.
– Competency assessment can effectively isolate employees’ current skills gaps
and help them in mapping out training and development plans targeted
at closing those gaps..
– When the competencies are behaviour based and adequately validated, they
also support merit and competency based pay strategies.
Competeny
A set of observable and measurable
behaviors and personal attributes that
individuals must have to successfully
accomplish the desired results of a job.
KEY CHARACTERISTICS OF COMPETENCIES
 Knowledge, skills, and behaviors that
contribute to success in a job
– Observable and/or measurable
– Contribute to improved employee performance and
organizational success
– Demonstrate knowledge and skill
Knowledge
The technical or professional
information acquired through formal
education, training, or personal
experience needed to perform the job.
Skill
The proficient application of
knowledge needed to
complete a job, task or duty.
Behaviors (Behavioral Indicators)
The observable actions an
employee uses to achieve jobspecific results.
Examples of Behavioral Indicators
 Aligns own activities and
priorities to meet
organizational needs.
 Responds directly and
thoroughly to questions.
 Maintains eye contact
appropriate to the
situation.
 Writes clearly, logically
and effectively.
 Responds positively to
changes in direction,
priorities, responsibilities
or assignments.
Exercise
Let’s build a quick Competency Model
for a…..
College Professor
Exercise
To speed things, do up you agree that
3 key competencies are:
Subject Matter Expertise
Organization and Planning
Effective Communication
Example 1- Single Competency and Supporting Behavioral Indicators
ANALYTICAL THINKING - The ability to break down problems
into component parts and consider or organize parts in a
systematic way; the process of looking for underlying causes
or thinking through the consequences of different courses of
action.
• Demonstrates the ability to organize work by taking large projects and
breaking them into manageable pieces
• Maintains an awareness of the interrelationships among activities in a
project; planning work assignments and resource allocation accordingly
• Anticipates obstacles realistically when planning
• Uses judgment; takes a logical approach to problems and reasons
things through
• Exhibits an interest in studying the “best practices” aspect of an issue
by demonstrating continuous learning
Example 2 - Single Competency and Supporting Behavioral Indicators
SPEAKS EFFECTIVELY - The ability to express and present
thoughts and complex ideas clearly, succinctly, and in an
understandable manner individually and in groups including
adjusting language or terminology to the characteristics and
needs of the audience.
• Speaks frankly and clearly and insures that others understand
the meaning of what is being communicated
• Listens to and responds to the ideas of others
• Is direct and to the point in communication delivery
• Listens to questions; anticipates impact of decision before
providing a factual answer or recommended options
• Balances courtesy with being firm
• Demonstrates effective nonverbal communication
• Makes the subject as interesting as possible for the audience
Example 3 - Single Competency and Supporting Behavioral Indicators
CREATIVITY/PROBLEM-SOLVING – The ability to generate
ideas, fresh perspectives and original approaches and to
engage in open-minded thinking; “thinks out of the box” and
goes beyond traditional ways to address issues despite
obstacles or resistance.
• Develops or supports the introduction of new and improved
methods, procedures or technologies
• Demonstrates commitment to original ideas
• Applies a creative approach to problem solving
• Is willing to accept ideas from others
• Encourages open communication and an environment where
staff is free to express their ideas and apply creative solutions to
problems
Core VS. Technical Competencies
 Core Competency
Competencies that may be shared across a job
family or all organization members.
 Technical Competency
Competencies that are unique to classifications or
job families.
Why
Competency
Modeling?
Examples
of
Skill
Types
of Competencies
Examples
of Skills
Core Competencies
Required for excellent performance across all levels and functions
Leadership and Management Competencies
Success factors that differentiate performance across levels
(e.g. First-Level, Middle, Executive)
Function-Specific Competencies
Success factors that distinguish functional groups
Finance
Human Resources
Information Systems
Marketing
Customer Service
Legal
Sales
Purchasing
Real-World Example:
Verizon’s Competency Assessment System
Go to Verizon’s PowerPoint...
Performance Appraisals and the Law
 Legally Defensible PA System
–
–
–
–
–
–
–
–
Appraisal criteria based on job analysis
Absence of disparate impact and evidence of validity
Formal evaluation criterion that limit managerial discretion
Formal rating instrument linked to job duties and
responsibilities
Personal knowledge of and contact with ratee
Training of supervisors in conducting appraisals
Review process to prevent undue control of careers
Counseling to help poor performers improve