ETM5221 Engineering Teaming: Application and Execution

1. ETM5221 Engineering Teaming: Application and Execution Nicholas C. Romano, Jr.Nicholas-Romano@mstm.okstate.eduPaul E. Rosslerprossle@okstate.edu

2. Week 5 April 30, 2002Motivation and Reward

3. Goals • 4. Performing • Solving problems • Achieving results • Celebrating successes • 3. Norming • Accepting individual differences • Giving feed-back • Setting ground rules • 2. Storming • Dealing with criticism • Handling confrontations • Avoiding rejection • 1. Forming • Establishing purpose • Sharing goals • Building trust Effective Teamwork Team Development The skills of effective team-work REF: ‘Team Handbook’

4. Some basic premises underlying work motivation and reward • Managers often get what they assume about employees • The way out often leads back in • Most people are rational, acting in ways that they find rewarding and avoiding those they don’t • The good (and bad) news is that reward systems work

5. Some basic difficulties with rewards • People aren’t pigeons • Can have a punitive effect • Powerful forces can run counter to management’s intentions • Provide a poor substitute for better management • Motivate people to get rewards • Can undermine interest in task itself

6. An overall reward strategy Intrinsic Career - Growth - Development - Opportunities - Security Job Content -“Buy in” of results - Level of responsibility - Meaningful work - Feedback Environment - Culture - Balance work/life - Relationships Direct Financial - Base Salary -Variable pay - short-term/long-term - Support programs Indirect Financial - Benefits - Awards - Support programs Extrinsic

7. Incentives for knowledge sharing Rewards Financial rewards Hard Career advancement/security as reward Soft Access to information and knowledge as reward

8. Incentives for knowledge sharing Rewards Hard Enhanced reputation as reward Gratitude Flattery Recognition Cross-hierarchy alliances Positive results of altruism Soft Personal satisfaction as reward

9. Merit pay incentives for professionals • Traditional Merit Pay Characteristics • merit pay granted as higher base salary (a raise) • usually based on individual performance only • New Merit Pay Characteristics • merit pay awarded as lump sum once per year (NOT a raise) • merit pay tied to both individual and organizational performance

10. Compensation plan where all team members receive an incentive bonus payment when production or service standards are met or exceeded Team Incentive Plan

11. Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability Gainsharing Plans

12. Team Incentives VentureSystems GeneralIncrease Profit Sharing Success Sharing COLA Gainsharing Time Based Reward Platform CompetencyBased MBO Lump SumPayments Skill Based Perf. Based Commissions& Piece Rates Market Based Individual Incentives ‘Type’ of Monetary Rewards Variable Programs Base Programs Team-Based Individual-Based Market Based Individual Incentives

13. Why do rewards (sometimes) fail to motivate? • Too much emphasis on monetary rewards • Rewards lack an “appreciation effect” • Extensive benefits become entitlements • Counterproductive behavior is rewarded • Too long a delay between performance and rewards

14. Why do rewards (sometimes) fail to motivate? (cont’d.) • Too many one-size-fits-all rewards • Use of one-shot rewards with a short-lived motivational impact • Continued use of de-motivating practices such as layoffs, across-the-board raises and cuts, and excessive executive compensation

15. “Yet when what management does is seen to some degree as dishonest, as forcing people to make difficult choices in favor of company goals, and as the creation of games which must be played to get one’s reward, what is going on probably captures many of the meanings of manipulation. It seems likely that there exists a significant group of people who resent being “motivated,” resent being put “on incentive.” and resent what they see as treatment for laboratory rats in a maze.” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 127

16. Behaviors occur due to experience in reinforcement and objective measurement of value of past rewards Adjusts behaviors due to anticipation and subjective weighing of future rewards Two primary theories Reinforcement Expectancy

17. Motivation Theory in a nutshell Force to perform = f(VIE or Needs or Inequity or Consequence) Expectancy Instrumentality Valence Effort Performance Outcome Behaviorism My Outcomes My Inputs Other’s Outcomes Other’s Inputs =

18. Energy Value Add Loyalty Effort Commitment Time Value Exchange Theory suggests a balance is needed Benefits Career Job Compensation Opportunity Employee or Team Member Gives Employer or Team Gives

19. Performance vs. Payout Performance Low High High Overpaying Who designed this?! Ideal Worth the investment Payout Underachieving Something is not working Unstable Value Exchange Issue Low

20. Motivation theory recap • Satisfaction with a reward is a function of both how much is received and how much the individual feels should be received • An individual’s feelings of satisfaction are influenced by comparisons of what happens to others • Satisfaction is influenced by how satisfied employees are with both intrinsic and extrinsic rewards

21. Motivation theory recap (cont’d.) • People differ in the reward they desire and in the relative importance different rewards have for them • Some extrinsic rewards are satisfying because they lead to other rewards • Rewards must be valued and must be related to a specific level of job performance

22. People looking at people working • Many managers consider themselves to be already working to their full potential • Working people are seen as bored with and alienated from work, not working to their full potential, not caring . . . • This leads to a searching for ways to get working people to work harder and smarter • Popular approaches include job enrichment, involvement, training, reward

23. Some questionable assumptions • Job satisfaction drives productivity and performance • Most people want job enrichment, involvement • People can readily and easily change their attitudes and behaviors • People are alike in their wants, needs, and responses • Work is a central dimension • Management’s job is to motivate

24. Job satisfaction drives productivity? “. . . the relationship is vague, ambiguous, and too weak to be useful.” Participation’s correlation with performance and satisfaction ranges from .08 to .25 (about 6% variance explained Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 129 Source: John Wagner III, Participations effects on performance and satisfaction: A reconsideration of research evidence, Academy of Management Review, Vol. 19, No. 2, 312-330.

25. All knotted up and intertwined “The behavior of working people . . . is an extremely complex phenomenon. It depends on a great many things which vary from the physical design of the task to the ideals and aspirations of the individual . . . Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 116-117

26. Most people want job enrichment, involvement • If most working people wanted their jobs enriched, they would be asking for it, and unions would be negotiating for it • Experience suggests only 15% of the work force responds well to this strategy

27. Most people want job enrichment, involvement (cont’d.) • Some workers clearly prefer the simplicity of a repetitive task • Many more people exist than we may care to acknowledge who are well-motivated, highly productive, and satisfied in a regimented, autocratic setting.

28. Most people want job enrichment, involvement (cont’d.) • Most job enrichment programs create enlarged jobs, not enriched ones • Base pay oftentimes remains unchanged • Technology limits many jobs’ enrichment or involvement potential • If involvement is situational, many managers seem unable to easily shift from one management style to another

29. Most people want job enrichment, involvement (cont’d.) • Involvement might take more energy than most people are willing to spend, at least in their work environments. • Unanswered question is whether a significant percentage of the work force wants to participate long-term • Past the novelty of doing so

30. As for the Japanese… In its broad definition participation, is not practiced in Japan because Japanese culture itself precludes it Source: Richard Mazzini, Unexpected lessons from visiting a Japanese company, Journal of Management Inquiry, Vol. 1, No. 3, 214-219.

31. What about the experiments, the Greenfield plants? • Employee involvement experiments seem to follow the Hawthorne experience • They rarely involve the majority of working people throughout their life cycle. • Greenfield plants appear to be a possible exception • But their selection and placement processes screen out a great many. • And, many who do fit find their new working arrangement far from utopian.

32. People are alike in their wants, needs, and responses “We are a very long way from freeing ourselves from this systematic ignoring of individual differences. It is a model of working behavior which has a powerful appeal — so powerful in fact that we tend to ignore the unhappy result. It simply doesn’t work very well.” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 109

33. “…they assumed that, unlike the rest of the human race, working people were fairly clear in knowing what they wanted, would be willing to make an effort to get what they said they wanted, and would be happier if they succeeded.” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 111

34. “The cultural background of working people, the type of environment in which they live, the size of the work group in which they are a part – all are clearly useful in predicting their response to work restructuring.” The cultural background or context influences responses Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 111

35. People easily and readily change attitudes and behaviors “It is sufficiently difficult . . .to interest people in working harder, but it has often been done. It is much more difficult to interest people in working smarter, and this has seldom been done.” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 148

36. Work is the central dimension of most people’s lives  “There is little evidence that working people, beyond the special few, find fulfillment in their work. Indeed, it has been suggested that they are able to remain mentally healthy only because they refuse to get overly involved in work which simply cannot be rewarding intrinsically, or self-actualizing. They are willing to work for other reasons, but letting work become a central aspect of their mental well-being just doesn’t make sense to them.” (Source: William Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 114)

37. “The belief that we can get people interested in improving their own productivity is a very dubious one indeed, at least below the supervisory level…From the working person’s point of view, increasing productivity…is simply inconsistent with the adversary relationship…” (Source: William Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 126)

38. Management’s job is to motivate “We have told ourselves for so long that one of the basic functions of management is to motivate people [that] . . . if it became clear that the reason some working people respond in the wrong way to management strategies [is] because they do not want to be motivated . . . [by] whatever system of rewards . . . managers decide to invent.” Source: William T. Morris, Work & Your Future: Living Poorer, Working Harder, 1975, p. 128

39. The cultural basis of teams • Information must be used for self-control and improvement, not punishment or micro-management • Authority must be equal to responsibility • Equitable compensation and equitable rewards for results must be available Adapted from Sashkin, M. and K.J. Kiser, Putting Total Quality Management to Work. 1993, San Francisco: Berrett-Kohler.

40. Cultural basis (cont’d.) • Cooperation, not competition, must be the basis for working together • Team members must know their jobs are secure, not easily or readily discarded at a moment’s notice • A climate of fairness as demonstrated by such things as trust, respect, integrity, and clear expectations must exist

41. Unfortunately, many teams operate in or under… • Individual appraisal and reward systems that foster competitiveness • Decision processes that undermine authority • Lean and mean staffing strategies that erode a sense of security, ownership, and create a sense of inequity • Intense cost and time pressure that encourages making minimal commitments and cutting corners

42. In other words, management rewards A and hopes for B

43. Common problems with feedback • Feedback is used to punish, embarrass, or put someone down • Those receiving the feedback see it as irrelevant to their work • Feedback information is provided too late to do any good

44. Six common problems with feedback (cont’d.) • People receiving feedback believe it relates to matters beyond their control • Employees complain about wasting too much time collecting and recording the data • Recipients complain about feedback being too complex or difficult to understand

45. Some tips forgiving good feedback • Relate feedback to existing performance goals and clear expectations • Give specific feedback tied to observable behavior or measurable results • Channel feedback toward key result areas • Give feedback as soon as possible

46. Some tips forgiving good feedback (cont’d.) • Give positive feedback for improvement, not just final results • Focus feedback on performance, not personalities • Base feedback on accurate and credible information

47. Individual appraisal or team appraisal or both? • Individual level appraisal helps reduce social loafing • But ignores interaction and synergy that characterize excellent team performance • Team performance assessment provides information helps to identify problems, develop capabilities, and create joint accountability

48. Other key questions • What is rated? • Behavior, competency, outcome, or all three? • Who provides the rating? • Manager, project leaders, team leader, other team members, customers, self, coworkers • How is the rating used? • Development, evaluation, self-regulation (self-control)

49. Performance appraisal methods for types of teams

50. Evaluation alternatives • Forced distribution - 10% receive an A, 40% B, 40% C, 10% D • Norm-based • Criterion-based • Benchmark-based