1. BUSN 221 Chapter 7 Jeff Parsons Evaluation, Feedback and Rewards

2. Learning Objectives 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 Describe the cognitive model of feedback and explain its usefulness to managers in today’s workplace Identify the key insights to be derived from reinforcement theory and demonstrate how these insights could be meaningfully utilized in contemporary organizations Evaluate the impact of the various elements of the reward system with respect to the objective of enhancing employee commitment and motivation.

3. Performance Evaluation Considered essential to the employee’s ability to perform duties effectively Judgmental purposes Developmental purposes

4. Performance Evaluation – Judgmental Purpose Basis for reward allocation Identify high-potential employees Evaluation of employee selection procedures Evaluation of previous employee training programs

5. 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

6. 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

7. 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

8. 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

9. 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

10. Performance Evaluation Feedback Explain what went into the evaluation Explain how to improve or sustain performance Be specific, not generic Most managers dread this

11. Purpose of Evaluation Feedback Instructional Motivational

13. Values

14. Needs

15. Goals

16. Self-Concept

18. Self-motivation to Adjust

19. Persistence

20. Disregard or Non-acceptance

21. Person

22. Others

24. Expectancies

25. Personal Standards

26. Form of Feedback (Objective or Subjective)

27. 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

28. 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

29. 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

30. Reinforcement Theory Some 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

31. Videos http://www.youtube.com/watch?v=LSv992Ts6as http://www.youtube.com/watch?v=I_ctJqjlrHA

32. Reinforcement Theory Reinforcement 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

33. Reinforcement Theory Punishment Uncomfortable or unwanted consequences for a behaviour response Can suppress behaviour when used effectively Use after careful, objective evaluation of situation

34. Reinforcement Theory Extinction 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

35. Reinforcement Schedules

36. Reward Program Objectives Attract qualified people to join the organization Keep employees coming to work Motivate employees to high performance levels

37. Reward Programs Integrate the following: Satisfaction Motivation Performance Rewards Ability, skill and experience are required with motivation to produce high performance

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

39. 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

40. 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

41. Intrinsic and Extrinsic Rewards Intrinsic Completion Achievement Autonomy Personal growth Extrinsic Salary/wages Employee Benefits Interpersonal rewards Promotions

42. Rewards and Organizational Issues Rewards affect employee Perceptions Attitudes Behaviour Organizational concerns affected Turnover and absenteeism Performance Organizational commitment

43. Innovative Reward Systems Skill-based pay Broadbanding Concierge Services Team-based rewards Part-time benefits Gain-sharing Employee Stock ownership plans

44. “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