Evaluation, Feedback, and Rewards

2. Chapter 7 Evaluation, Feedback, and Rewards

3. Introduction • Organizations use a variety of rewards to attract and retain people and to motivate them to achieve their personal and organizational goals • The manner and timing of distributing rewards are important issues for managers • To distribute rewards equitably, it is necessary to evaluate employee performance

4. Purposes of Evaluation: Judgmental • Provide a basis for reward allocation (e.g., raises, promotions, transfers, etc.) • Identify high-potential employees • Validate the effectiveness of employee selection procedures • Evaluate previous training programs

5. Purposes of Evaluation: Developmental • Stimulate performance improvement • Develop ways of overcoming obstacles and performance barriers • Identify training and development opportunities • Establish supervisor-employee agreement on performance expectations

6. Focus of Evaluation • Evaluations should focus on translating the position responsibilities into each employee’s day-to-day activities • Performance evaluations should focus on job performance, not individuals • Evaluations should have proper weighting of relevant behaviors

7. Relevancy of Evaluation • Deficiency – occurs when the evaluation does not focus on all aspects of the job • Contamination – occurs when activities not part of the job are included in the evaluation • Distortion – occurs in the evaluation process when an improper emphasis is given to various job elements

8. Improving Evaluations (1 of 3) • Higher levels of employee participation in the evaluation process lead to more satisfaction with the system • Setting specific performance goals to be met results in greater performance improvement than discussions of more general goals

9. Improving Evaluations (2 of 3) • Supervisors should receive training in how to evaluate employee performance • They should be evaluated on how effectively they do this • Systematic evaluation of performance does little good if the results are not communicated to employees

10. Improving Evaluations (3 of 3) • Performance evaluation feedback should not focus solely on problem areas • Good performance should be actively recognized and reinforced • Effective performance evaluation is a continuous, ongoing process

11. Performance Evaluation Feedback • The need for feedback among people on and off the job is significant • People want to know: • how they are doing • how they are being perceived by others • how they can make adjustments to perform better • Delivering feedback to a poor performing employee is a difficult experience for a manager

12. Purpose of Evaluation Feedback Instructional Motivational

13. A Feedback Model Evaluated Person Individual Characteristics: • Perceptual Process • Values • Needs • Goals • Self-Concept • Self-Efficacy Behavioral Results • Effort • Self-motivation to Adjust • Persistence • Disregard or Non-acceptance • Person • Others • Job Cognitive Evaluation: • Creditive of Feedback Source • Expectancies • Personal Standards • Form of Feedback • (Objective or Subjective)

14. Multisource Feedback: A 360-Degree Approach • 90 percent of Fortune 1000 firms use some form of multisource program • The increasing use of multisource programs is the result of calls for more • fairness • clarity • credibility • Everyone in the person’s full domain could serve as an evaluator

15. Best Practices to Improve 360-Degree Feedback Programs (1 of 2) • Use 360-degree feedback primarily for individual development • Link the feedback process with the overall strategy and direction of the firm • Exert administrative control over every aspect of the 360-degree process

16. Best Practices to Improve 360-Degree Feedback Programs (2 of 2) • Use senior management as role models • Use highly trained internal coaches to leverage the investment • Evaluate the effectiveness or return on investment of the process

17. Reinforcement Theory • Reinforcement is the most important principle of learning • Desirable or reinforcing consequences will increase the strength of a behavior and increase the probability of being repeated • Undesirable or punishment consequences will decrease the strength of a response and decrease its probability of being repeated

18. Rewards, Reinforcement, and Punishment Punishment (behavior decreases) Positive reinforcement (behavior increases) Negative reinforcement (behavior increases) Punishment (behavior decreases) II I Applied IV III Withdrawn Undesirable Desirable

19. Reinforcement Theory: Operant Conditioning • Operant conditioning – attempts to influence behavior through the use of rewards and punishments • Operants – behaviors that can be controlled by altering the consequences that follow them • Most workplace behaviors are operants

20. Operant Conditioning: Key Principles Reinforcement Punishment Extinction

21. Reinforcement Schedules

22. Individual Rewards The main objectives of reward programs are: • to attract qualified people to join the organization • to keep employees coming to work • to motivate employees to achieve high levels of performance

23. The Reward Process Ability and skill Intrinsic rewards Performance results: Individual Motivation to exert effort Performance evaluation Satisfaction Extrinsic rewards Experience Feedback

24. Lawler’s Conclusions on Satisfaction and Rewards (1 of 2) • Satisfaction with a reward is a function both of how much is received and of how much the individual feels should be received • An individual’s feelings of satisfaction are influenced by comparisons with what happens to others • Satisfaction is influenced by how satisfied employees are with both intrinsic and extrinsic rewards

25. Lawler’s Conclusions on Satisfaction and Rewards (2 of 2) • People differ in the rewards they desire and in how important different rewards are to them • Some extrinsic rewards are satisfying because they lead to other rewards

26. Management Considerations for Developing and Distributing Rewards • The rewards available must be sufficient to satisfy basic human needs • Individuals tend to compare their rewards with those of others • The process by which rewards are distributed should be perceived as fair • The managers distributing the rewards must recognize individual differences

27. Extrinsic reward – initiated from outside the person Salary and wages Employee benefits Interpersonal rewards Promotions Intrinsic reward – one that is self-administered by the person Completion Achievement Autonomy Personal growth Intrinsic and Extrinsic Rewards

28. Administering Rewards Positive Reinforcement Modeling and Social Imitation Expectancy Theory

29. Rewards Affect Organizational Concerns • Rewards affect employee perceptions, attitudes, and behavior • Key organizational concerns affected by rewards: • Turnover • Absenteeism • Performance • Commitment

30. Skill-based pay Broadbanding Team-based rewards Concierge services Banking time off Part-time Benefits Gainsharing Employee stock ownership plans Innovative Reward Systems

31. Line of Sight: The Key Issue (1 of 2) • Line of sight – means that the employee perceives that there is a “real” linkage between his or her performance and the rewards received • For extrinsic rewards, organizations need to have systems that clearly tie rewards to desired performance

32. Line of Sight: The Key Issue (2 of 2) • Organizations can influence intrinsic rewards by: • providing jobs that are challenging • providing clear feedback on job performance