Applied Performance Practices

1. Applied Performance Practices © 2009 The McGraw-Hill Companies, Inc. All rights reserved

2. Applied Performance Practices at Nucor Nucor has survived and thrived in the turbulent steel industry through the benefits of performance-based rewards, job design, and empowerment. Courtesy Nucor

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

4. Types of Rewards in the Workplace • Membership and seniority • Job status • Competencies • Performance-based © Corel Corp. With permission.

5. Membership/Seniority Based Rewards • Fixed wages, seniority increases • Advantages • Guaranteed wages may attract job applicants • Seniority-based rewards reduce turnover • Disadvantages • Doesn’t motivate job performance • Discourages poor performers from leaving • May act as golden handcuffs (tie people to the job)

6. Job Status-Based Rewards • Includes job evaluation and status perks • Advantages: • Job evaluation tries to maintain pay equity • Motivates competition for promotions • Disadvantages: • Employees exaggerate duties, hoard resources • Reinforces status, hierarchy • Inconsistent with workplace flexibility

7. Competency-Based Rewards • Pay increases with competencies acquired and demonstrated • Skill-based pay • Pay increases with skill modules learned • Advantages • More flexible work force, better quality, consistent with employability • Disadvantages • Potentially subjective, higher training costs

8. Performance Pay at Spruceland Millworks Spruceland Millworks, an Alberta-based remanufacturer of mouldings, decking, and other niche lumber products, is a high-performance workplace that rewards individual, team, organization-level performance.“

9. Team rewards • Bonuses • Gainsharing • Bonuses • Commissions • Piece rate Individual rewards Performance-Based Rewards • Profit sharing • Share ownership • Share options • Balanced scorecard Organizational rewards

10. Evaluating Organizational Rewards • Positive effects • Creates an “ownership culture” • Adjusts pay with firm's prosperity • Scorecards align rewards with several specific organizational outcomes • Concerns with performance pay • Weak connection between individual effort and rewards • Reward amounts affected by external forces

11. 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.

12. Job Design • Assigning tasks to a job, including the interdependency of those tasks with other jobs • Organization's goal -- to create jobs that allow work to be performed efficiently yet employees are motivated and engaged

13. Job Specialization • Dividing work into separate jobs that include a subset of the tasks required to complete the product or service • Scientific management • Frederick Winslow Taylor • advocates job specialization • Taylor also emphasized person-job matching, training, goal setting, work incentives

14. Less time changing activities Lower training costs Job mastered quickly Better person-job matching Job boredom Discontentment pay Higher costs Lower quality Lower motivation Evaluating Job Specialization Advantages Disadvantages

15. Skill variety Task identity Task significance Meaningfulness Autonomy Responsibility Feedback from job Knowledge of results Individual differences Job Characteristics Model Core Job Characteristics Critical Psychological States Outcomes Work motivation Growth satisfaction General satisfaction Work effectiveness

16. Job Rotation • Moving from one job to another • Benefits • Minimizes repetitive strain injury • Multiskills the workforce • Potentially reduces job boredom Job ‘A’ Job ‘B’ Job ‘D’ Job ‘C’

17. Traditional news team Video journalist • Operates camera • Operates sound • Reports story Employee 1 Operates camera Employee 2 Operates sound Employee 3 Reports story Job Enlargement • Adding tasks to an existing job • Example: video journalist

18. Job Enrichment Given more responsibility for scheduling, coordinating, and planning one’s 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

19. Kambuku Empowerment Pretoria Portland Cement introduced “Kambuku”, a companywide initiative that made the South African company more performance-oriented through employee empowerment. Courtesy Pretoria Portland Cement

20. Dimensions of Empowerment Self-determination Employees feel they have freedom and discretion Meaning Employees believe their work is important Competence Employees have feelings of self-efficacy Impact Employees feel their actions influence success

21. Supporting Empowerment • Individual factors • Possess required competencies, able to perform the work • Job design factors • Autonomy, task identity, task significance, job feedback • Organizational factors • Resources, learning orientation, trust Courtesy Pretoria Portland Cement

22. Self-Leadership • The process of influencing oneself to establish the self-direction and self-motivation needed to perform a task • Includes concepts/practices from: • Goal setting • Social learning theory • Sports psychology

23. Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment Elements of Self-Leadership Personal Goal Setting • Personal goal setting • Employees set their own goals • Apply effective goal setting practices

24. Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment • Positive self-talk • Talking to ourselves about thoughts/actions • Potentially increases self-efficacy • Mental imagery • Mentally practicing a task • Visualizing successful task completion

25. Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment • Finding ways to make the job itself more motivating • eg. altering the way the task is accomplished

26. Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment • Keeping track of your progress toward the self-set goal • Looking for naturally-occurring feedback • Designing artificial feedback

27. Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards Self- Monitoring Self- Reinforce- ment • “Taking” a reinforcer only after completing a self-set goal • eg. Watching a movie after writing two more sections of a report • eg. Starting a fun task after completing a task that you don’t like

28. Applied Performance Practices © 2009 The McGraw-Hill Companies, Inc. All rights reserved