Organizational Behavior Kreitner 10th Edition Solutions Manual

Organizational Behavior Kreitner 10th Edition
Solutions Manual
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Organizational Behavior Kreitner 10th Edition Solutions Manual
Chapter 09 - Improving Job Performance with Goals, Feedback, Rewards, and Positive Reinforcement
CHAPTER Nine: Improving Job Performance with Goals, Feedback, Rewards, and
Positive Reinforcement
LEARNING OJBECTIVES
See Slides 9-2, 9-3
When you finish studying the material in this chapter, you should be able to:
• Define the term performance management, distinguish between learning goals

and performance outcome goals, and explain the three-step goal-setting process.
• Identify the two basic functions of feedback, and specify at least three practical
lessons from feedback research.
• Define 360-degree feedback, and summarize how to give good feedback in a

performance management program.
• Distinguish between extrinsic and intrinsic rewards, and explain the four building
blocks of intrinsic rewards and motivation.
• Summarize the reasons why extrinsic rewards often fail to motivate employees.
• Discuss how managers can generally improve extrinsic reward and pay-for-
performance plans.
• State Thorndike’s law of effect, and explain Skinner’s distinction between

respondent and operant behavior.
• Define positive reinforcement, negative reinforcement, punishment, and

extinction, and distinguish between continuous and intermittent schedules of
reinforcement.
• Demonstrate your knowledge of behavior shaping.
CHAPTER SUMMARY
Chapter 9 defines performance management and discusses the factors that impact the
success of a performance management process. Goal setting and management by
objectives are described, and practical recommendations for managing goal setting are
presented. This chapter discusses the functions of feedback, describes 360-degree
feedback and explains how to provide effective feedback. This chapter also describes
organizational reward systems, including
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the types of rewards that can influence behavior and why these rewards often fail to
motivate. Finally, Chapter 9 discusses positive reinforcement and the various
schedules of reinforcement which can be used to influence and shape employee
behavior.
Performance management is a continuous cycle of improving individual job

performance with goal setting, feedback and coaching, and rewards and positive
reinforcement. Figure 9-1 illustrates the factors that foster ongoing performance
management and improvement.
Employees with a clear line of sight understand the organization’s strategic goals and
know what actions they need to take, both individually and as team members. There
are two types of goals: a performance outcome goal (targets a specific end-result) and a
learning goal (strives to improve creativity and develop skills). Goal setting is a
cornerstone of the management by objectives (MBO) technique. The three steps in
implementing a goal-setting program are: goal setting, goal commitment, and support
and feedback. Managers should set SMART goals. That is, goals that are specific,
measurable, attainable, results oriented, and time bound. Table 9-1 presents guidelines
for writing SMART goals. Goal commitment is important because employees are more
motivated to pursue goals viewed as reasonable, obtainable, and fair. Providing
support and feedback requires providing employees with the skills and information to
get the job done.
Feedback is information about individual or collective performance shared with those in

a position to improve the situation. Feedback serves two functions: it is instructional
and it is motivational. Personality characteristics (e.g., self-esteem, self-efficacy, or self-
monitoring), needs, and goals influence one's desire for feedback. People tend to
perceive and recall positive feedback more accurately than they do negative feedback.
Negative feedback can have a positive motivational effect but it can also damage self-
efficacy. After receiving feedback, people cognitively evaluate factors such as its
accuracy, source credibility, fairness of the system, performance-reward expectancies,
and the reasonableness of the standards to determine the relative importance to give to
the feedback. 360-degree feedback allows individuals to compare their own perceived
performance with feedback from their supervisor, subordinates, and peers. Such
programs should maintain anonymity and not be linked to pay or promotion decisions.
Rewards are a critical component of a performance improvement cycle. Figure 9-2

presents the important components of organizational reward systems. Rewards may be
extrinsic or intrinsic. Extrinsic rewards come from the environment while intrinsic
motivation is driven by positive feelings associated with doing well on a task. Extrinsic
rewards include financial/material and social rewards, while psychic rewards are
intrinsic. Three criteria for the distribution of
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rewards are results, actions and behaviors, and nonperformance considerations.

Performance results include tangible outcomes regarding quality and quantity of
performance. Performance actions and behaviors include teamwork or creativity. A
good reward system should attract talented people and motivate and satisfy them once
they have joined the organization.
Intrinsic motivation is driven by positive feelings associated with doing well on a task.
Four intrinsic rewards underlie a person’s level of intrinsic motivation: a sense of
meaningfulness, a sense of choice, a sense of competence, and a sense of progress.
Managers can enhance intrinsic motivation by increasing the amount of intrinsic
rewards employees derive from their work. Managers lead for meaningfulness by
inspiring their employees and modeling desired behaviors. Managers lead for choice by
empowering employees and delegating meaningful assignments. Managers lead for
competence by supporting and coaching their employees. Managers lead for progress
by monitoring and rewarding others.
Pay-for-performance programs link at least some portion of employees’ pay directly to

results or accomplishments. Research results show mixed outcomes from pay for
performance and many organizational reward systems fail to motivate. When
implementing a pay-for-performance plan, managers should make the pay an integral
part of the organizational strategy and base decisions on objective performance data.
Employees should actively participate in the development, implementation and revision
of the plan and teamwork should be rewarded whenever possible. Supervisors and
middle managers must support the plan and be amenable to two-way communication
from employees. Finally, any cash bonuses should be distributed in sizable lump sums
in order to maximize their motivational impact.
Feedback and extrinsic reward programs are often ineffective because they are
administered haphazardly. A behavior modification technique called positive
reinforcement helps managers achieve desired effects by systematically providing
feedback and extrinsic rewards. Thorndike formulated the “law of effect” which says
behavior with favorable consequences tends to be repeated, while behavior with
unfavorable consequences tends to disappear. Skinner drew an important distinction
between two types of behavior: respondent and operant. Unlearned reflexes or
stimulus-response (S-R) connections are called respondent behavior. Operant behavior
is learned when one “operates on” the environment to produce desired consequences.
Contingent consequences control behavior in four ways: positive reinforcement,

negative reinforcement, punishment, and extinction. Positive reinforcement is the
process of strengthening a behavior by contingently presenting something desirable.
Negative reinforcement also strengthens behavior, but by contingently withdrawing
something displeasing. Punishment is the process of weakening
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behavior through either the contingent presentation of something displeasing or the

contingent withdrawal of something desirable. Extinction is the weakening of a behavior
by ignoring it or making sure it is not reinforced.
There are two broad categories of reinforcement schedules: continuous and

intermittent. A continuous reinforcement schedule reinforces every instance of the
target behavior. Intermittent reinforcement schedules reinforce some but not all
instances of the target behavior. Intermittent schedules have four subcategories. In a
fixed ratio schedule, reinforcement occurs after a fixed number of responses is emitted.
A variable ratio scale reinforces after a varying or random number of responses is
emitted. A fixed interval schedule reinforces the first response after a specific period of
time has elapsed. Finally, variable interval schedules reinforce the first response after
varying or random time periods have elapsed. Ratio schedules are contingent on the
number of responses emitted, while interval schedules are tied to the passage of time.
The schedule of reinforcement can more powerfully influence behavior than the
magnitude of reinforcement. Variable ratio and variable interval schedules produce the
strongest behavior that is most resistant to extinction.
Behavior shaping is defined as the process of reinforcing closer and closer

approximations to a target behavior. The key to successful behavior shaping lies in
reducing a complex target behavior to easily learned steps. After the steps are
established, then it is important to faithfully reinforce any improvement. Table 9-3
presents practical tips for shaping job behavior.
LECTURE OUTLINE
I. Performance Management Overview
i) Performance management: an organization wide system for improving
performance by setting, monitoring, and evaluating goals; providing feedback
and coaching; and rewarding employees on a continuous basis. See
Slide 9-4
ii) Figure 9-1: Improving Individual Job Performance: A Continuous
Process illustrates the factors that foster ongoing performance management
and improvement. See Slide 9-5
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II. Goal Setting
i) Goal Setting Overview
(1) Many workers in the United States don’t clearly understand their
employer’s most important goals and many don’t have their own clearly
defined goals.
(2) Line of sight: employees know the organization’s strategic goals and how
they need to contribute. See Slide 9-6
ii) Two Types of Goals See Slide 9-7
(1) Performance outcome goal: targets a specific end result.
(2) Learning goal: encourages learning, creativity, and skill development.
(3) The Real World/Real People: Starwood’s CEO Frits van Paasschen
Runs on Goals profiles the impact of goals for one executive.
(4) Managers typically overemphasize performance outcome goals and
ignore learning goals.
(5) Performance outcome goals are more frustrating than motivating for
employees who lack the necessary skills.
iii) Management by Objectives
(1) Goal setting has been promoted through a management technique called
management by objectives.
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(2) Management by objectives (MBO): management system incorporating
participation into decision making, goal setting, and feedback. See
Slide 9-8
(3) Meta-analyses indicate that MBO programs foster productivity gains and
employee job satisfaction.
(4) There can be ethical problems stemming from extreme pressure for
results in MBO programs.
iv) Managing the Goal-Setting Process See Slides 9-9, 9-10, 9-11, 9-14,
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(1) Step 1: Set Goals
(a) Goals should be “SMART”: specific, measurable, attainable, results
oriented, and time bound.
(b) Table 9-1: Guidelines for Writing SMART Goals describes the
aspects of SMART in more detail. See Slide 9-12
(c) For complex tasks, managers should train employees in problem-
solving techniques and encourage them to develop a performance
action plan.
(d) Individual differences should be considered when establishing goals,
including the person’s goal orientation.
(i) Learning goal orientation: view their skills sets as something that
can be developed.
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(ii) Performance-prove goal orientation: focus on performance and
try to demonstrate their ability by looking better than others.
(iii)Performance-avoid goal orientation: focus on performance to
avoid negative outcomes.
(2) Step 2: Promote Goal Commitment
(a) Obtaining goal commitment is important because employees are more
motivated to pursue goals they view as reasonable, obtainable, and
fair.
(b) Goal commitment can be enhanced by following these guidelines:
(i) Explain why the organization is committed to a comprehensive
goal-setting program.
(ii) Create clear lines of sight by clarifying the corporate goals and
linking the individual’s goals to them.
(iii)Let employees participate in setting their own goals, preferably
“stretch” goals, and creating their own action plans.
(iv)Foster personal growth by having employees build goal ladders.
1. Goal ladder: a chain of progressively more difficult and
challenging goals that fosters personal growth.
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2. Focusing on completed goals in a goal ladder promotes a
feeling of satisfaction, while focusing on remaining goals in the
ladder tends to motivate a higher level of achievement.
(3) Step 3: Provide Support and Feedback
(a) Managers must provide employees with the necessary skills and
information to reach their goals.
(b) Managers should pay attention to employees’ effort → performance
expectations, perceived self-efficacy, and reward preferences and
adjust accordingly.
(c) Managers should be supportive and helpful.
(d) Employees should be provided with timely, task-specific feedback
(knowledge of results) on how they are doing.
(e) Managers should provide monetary and nonmonetary incentives and
reward both significant progress and goal accomplishment.
III. Feedback
i) Feedback Overview
(1) Feedback: information about individual or collective performance shared
with those in a position to improve the situation. See Slide 9-16
(2) Feedback is the exchange of information about the status and quality of
work products.
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ii) Two Functions of Feedback See Slide 9-17
(1) Feedback serves two functions for those who receive it: one is
instructional and the other motivational.
(a) Instructional: feedback that clarifies roles or teaches new behaviors.
(b) Motivational: feedback that serves as a reward or promises a reward.
(2) The Real World/Real People: Feedback Is a Way of Life for Ford’s
CEO Alan Mulally profiles one executive’s use of feedback.
(3) The motivational function of feedback can be significantly enhanced by
pairing specific, challenging goals with specific feedback about results.
iii) Are the Feedback Recipients Ready, Willing, and Able?
(1) The Recipient’s Characteristics
(a) Personality characteristics such as self-esteem and self-efficacy can
help or hinder one’s readiness for feedback.
(b) Needs and goals also influence one’s openness to feedback.
(c) High self-monitors are also more open to feedback because it helps
them adapt their behavior to the situation.
(2) The Recipient’s Perception of Feedback
(a) People tend to receive and recall positive feedback more accurately
than they do negative feedback.
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(b) Negative feedback can have a positive motivational effect but it can
also damage self-efficacy.
(3) The Recipient’s Cognitive Evaluation of Feedback
(a) Upon receiving feedback people cognitively evaluate factors such as
its accuracy, the credibility of the source, the fairness of the system,
their performance reward-expectancies, and the reasonableness of the
standards.
(b) Any feedback that fails to clear one or more of these cognitive hurdles
will be rejected or downplayed.
(c) Feedback must foster high effort → performance expectations and
performance → reward linkages if it is to motivate desired behavior.
iv) Practical Lessons from Feedback Research See Slide 9-19
(1) Research provides the following practical implications for managers about
feedback:
(a) The acceptance of feedback should not be treated as a given.
(b) Managers can enhance their credibility as sources of feedback by
developing their expertise and creating a climate of trust.
(c) Negative feedback is typically misperceived or rejected.
(d) Although very frequent feedback may erode one’s sense of personal
control and initiative, feedback is too infrequent in most work
organizations.
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(e) While average and below-average performers need extrinsic rewards
for performance, high performers respond to feedback that enhances
their feelings of competence and personal control.
(2) Table 9-2: Six Common Trouble Signs for Organizational Feedback
Systems profiles signs of an ineffective feedback system. See Slide
9-20
v) 360-Degree Feedback See Slide 9-21
(1) 360-degree feedback: comparison of anonymous feedback from one’s
superior, subordinates, and peers with self-perceptions.
(2) The idea behind 360-degree feedback is to let individuals know how their
behavior affects others, with the goal of motivating change.
(3) Top-management support and an organizational climate of openness can
help 360-degree feedback programs succeed.
(4) 360-degree feedback should be anonymous and used for development,
rather than pay and promotion decisions.
vi) How to Give Feedback for Coaching Purposes and Organizational
Effectiveness See Slide 9-22
(1) When giving feedback as part of a comprehensive performance
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management program, managers should:
(a) Focus on performance, not personalities.
(b) Give specific feedback linked to learning goals and performance
outcome goals.
(c) Channel feedback toward key result areas for the organization.
(d) Give feedback as soon as possible.
(e) Give feedback to coach improvement, not just for final results.
(f) Base feedback on accurate and credible information.
(g) Pair feedback with clear expectations for improvement.
IV. Organizational Reward Systems
i) Reward Systems Overview
(1) The subject of organizational rewards includes, but goes far beyond,
monetary compensation since some individuals get more than just a
paycheck from their jobs.
(2) Figure 9-2: A General Model of Organizational Reward Systems
indicates the three components of a reward system: types of rewards,
distribution criteria, and desired outcomes. See Slide 9-23
ii) Types of Rewards See Slide 9-24
(1) Financial, material, and social rewards qualify as extrinsic rewards
because they come from the environment.
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(2) Psychic rewards are intrinsic rewards because they are self-granted.
(3) An employee who works to obtain extrinsic rewards, such as money or
praise, is said to be extrinsically motivated.
(4) One who derives pleasure from the task itself or experiences a sense of
competence or self-determination is said to be intrinsically motivated.
(5) The relative importance of extrinsic and intrinsic rewards is a matter of
culture and personal tastes.
(6) The Real World/Real People: Seventy-one-Year-Old Judith Van Ginkel
Loves 60-Hour Workweeks profiles someone who is intrinsically
motivated.
iii) Reward Distribution Criteria See Slide 9-26
(1) The general criteria for the distribution of rewards are:
(a) Performance: results: tangible outcomes such as individual, group, or
organization performance; quantity and quality of performance.
(b) Performance: actions and behaviors: criteria such as teamwork,
cooperation, risk taking, and creativity.
(c) Nonperformance considerations: where the type of job, nature of the
work, equity, tenure, level in hierarchy, etc., are
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rewarded.
(2) The trend today is toward performance criteria and away from
nonperformance criteria.
iv) Desired Outcomes of the Reward System
(1) A good reward system should attract talented people and motivate and
satisfy them once they have joined the organization.
(2) A good reward system should foster personal growth and development
and keep talented people from leaving.
v) The Building Blocks of Intrinsic Rewards and Motivation
(1) The Building Blocks of Intrinsic Rewards and Motivation Overview
(a) There is a great deal managers can do to create situations in which
employees are more likely to experience intrinsic rewards and be
intrinsically motivated.
(b) Figure 9-3: Thomas’s Building Blocks for Intrinsic Rewards and
Motivation provides helpful direction in fostering intrinsic motivation.
See Slide 9-27
(2) Leading for Meaningfulness
(a) Managers lead for meaningfulness by inspiring their employees and
modeling desired behaviors.
(b) Employees are more engaged and productive when they see the
connection between their work and the organization’s vision.
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(3) Leading for Choice
(a) Managers lead for choice by empowering employees and delegating
meaningful assignments and tasks.
(4) Leading for Competence
(a) Managers lead for competence by supporting and coaching their
employees.
(5) Leading for Progress
(a) Managers lead for progress by monitoring and rewarding others.
vi) Why Do Extrinsic Rewards Too Often Fail to Motivate? See Slide 9-
28
(1) Despite huge investments of time and money for organizational reward
systems, the desired motivational effect often is not achieved because:
(a) There is too much emphasis on monetary rewards.
(b) Rewards lack an “appreciation effect.”
(c) Extensive benefits become entitlements.
(d) Counterproductive behavior is rewarded.
(e) There is too long a delay between performance and rewards.
(f) There are too many one-size-fits-all rewards.
(g) One-shot rewards with a short-lived motivational impact are used.
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(h) Firms continue to use demotivating practices such as layoffs, across-
the-board raises and cuts, and excessive executive compensation.
vii) Pay for Performance
(1) Pay for Performance Overview
(a) Pay for performance: monetary incentives tied to one’s results or
accomplishments. See Slide 9-29
(b) Pay for performance plans, also referred to as incentive pay or variable
pay, can include merit pay, bonuses and profit sharing as well as
piece-rate systems and sales commissions.
(c) Pay for performance plans are designed to reward employees with
additional pay for work that exceeds minimum performance standards.
(d) Proponents of incentive compensation say something extra is needed
because hourly wages and fixed salaries do little more than motivate
people to show up at work and put in the required hours.
(2) Modern Incentive Pay Plans
(a) One-size-fits-all approaches to incentive compensation are
inappropriate.
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(3) Research Insights
(a) Research results show mixed outcomes from pay for performance and
the programs do not always result in greater productivity or
performance.
(b) Successful pay for performance programs provide the appropriate
amount of administrative, communication and monetary support.
viii) Getting the Most out of Extrinsic Rewards and Pay for Performance
See Slide 9-30
(1) To maximize the motivational impact of extrinsic rewards:
(a) Tie noncash rewards to specific results.
(b) Make pay for performance an integral part of organizational strategy.
(c) Base incentive determinations on objective performance data.
(d) Encourage participation in the development, implementation, and
revision of the plan.
(e) Encourage two-way communication.
(f) Build plans around participative structures.
(g) Reward teamwork and cooperation.
(h) Actively sell to supervisors and middle managers.
(i) Pay cash bonuses in a lump sum.
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(j) Selectively use creative noncash rewards to create buzz and
excitement.
V. Positive Reinforcement
i) Thorndike’s Law of Effect
(1) Law of effect: behavior with favorable consequences is repeated;
behavior with unfavorable consequences disappears. See Slide 9-
31
(2) Thorndike’s Law of Effect was a dramatic departure from the prevailing
notion a century ago that behavior was the product of inborn instincts.
ii) Skinner’s Operant Conditioning Model
(1) Skinner drew an important distinction between two types of behavior:
See Slide 9-33
(a) Respondent behavior: unlearned stimulus-response reflexes.
(b) Operant behavior: learned consequence-shaped behavior.
(2) Examples of respondent behavior would include shedding tears while
peeling onions and reflexively withdrawing one’s hand from a hot stove,
and this type of behavior represents only a very small proportion of adult
human behavior.
(3) Skinner’s work has significant implications for OB because the vast
majority of organizational behavior falls into the operant category.
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iii) Contingent Consequences See Slides 9-35, 9-36
(1) Contingent Consequences Overview
(a) The term contingent means there is a systematic if-then linkage
between the target behavior and the consequence.
(b) Figure 9-4: Contingent Consequences in Operant Conditioning
illustrates how operant conditioning can be used to control behavior.
See Slides 9-34
(2) Positive Reinforcement Strengthens Behavior
(a) Positive reinforcement: the process of strengthening a behavior by
contingently presenting something pleasing.
(b) A behavior is strengthened when it increases in frequency and
weakened when it decreases in frequency.
(3) Negative Reinforcement Also Strengthens Behavior
(a) Negative reinforcement: strengthens a desired behavior by
contingently withdrawing something displeasing.
(b) Negative reinforcement is not the same as punishment since negative
reinforcement seeks to strengthen a behavior, while punishment seeks
to decrease one.
(4) Punishment Weakens Behavior
(a) Punishment: the process of weakening behavior through either the
contingent presentation of something displeasing or the contingent
withdrawal of something positive.
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(5) Extinction Also Weakens Behavior
(a) Extinction: weakening a behavior by ignoring it or making sure it is not
reinforced.
(b) A behavior without occasional reinforcement eventually stops.
iv) Schedules of Reinforcement See Slide 9-37
(1) Continuous Reinforcement
(a) Table 9-1: Reinforcement Schedules summarizes the options for the
timing of behavioral consequences and the probable effects on
responding.
(b) Continuous reinforcement (CRF): reinforcing every instance of a
behavior.
(c) Behavior weakens rapidly (undergoes extinction) when reinforcers are
withheld.
(2) Intermittent Reinforcement
(a) Intermittent reinforcement: reinforcing some but not all instances of
behavior.
(b) Reinforcement for ratio schedules is contingent on the number of
responses emitted.
(c) Interval reinforcement is tied to the passage of time.
(d) Examples of intermittent reinforcement are:
(i) Fixed ratio (FR): a fixed number of responses must be emitted
before reinforcement occurs.
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(ii) Variable ratio (VR): a varying or random number of responses
must be emitted before reinforcement occurs.
(iii)Fixed interval (FI): the first response after a specific period of time
has elapsed is reinforced.
(iv)Variable interval (VI): the first response after varying or random
periods of time have elapsed is reinforced.
(3) Scheduling Is Critical
(a) The schedule of reinforcement can more powerfully influence behavior
than the magnitude of reinforcement.
(b) A field study of beaver trappers shows that variable ratio schedules
may result in higher productivity.
(4) Work Organizations Typically Rely on the Weakest Schedule
(a) Generally variable ratio and variable interval schedules of
reinforcement produce the strongest behavior that is most resistant to
extinction.
(b) Fixed and continuous schedules are the least likely to have the desired
effects over time.
(c) Despite the trend toward pay-for-performance, time-based pay
schemes that rely on the weakest schedule of reinforcement (fixed
interval) are still the rule in today’s workplaces.
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v) Behavior Shaping
(1) Shaping: reinforcing closer and closer approximations to a target
behavior. See Slide 9-38
(2) Successful behavior shaping requires reducing a complex target behavior
to easily learned steps and then consistently reinforcing improvements
until the target behavior is achieved.
(3) Table 9-3: Ten Practical Tips for Shaping Job Behavior profiles
suggestions for using shaping. See Slide 9-39
BACK TO THE CHAPTER-OPENING CASE
1. Why would MBO work well at NuStar?
a. A MBO program would work well at NuStar because the company treats
its employees as its most important asset. The employees are committed
to achieving goals and would welcome the opportunity to participate in the
goal-setting process of an MBO program.
2. Why is volunteering so intrinsically rewarding?
a. There are many reasons volunteering can be intrinsically rewarding. First,

volunteers may find enjoyment in the tasks required in the volunteer
activities. The tasks may require the volunteers to learn new skills,
perform interesting work, or complete challenging assignments.
Volunteers may also find the social interactions or team-based projects of
volunteer work to be intrinsically motivating. Second, volunteers may
receive satisfaction from the knowledge that they are helping others and
the act of helping others in and of itself gives enjoyment to many.
9-22
3. Why is NuStar’s approach to incentive compensation so effective?
a. One of the recommendations for maximizing the motivational impact of

extrinsic motivation is to make pay for performance an integral part of
organizational strategy. The company has a policy that “Everybody gets a
bonus—or nobody does.” The company also uses sizeable monetary
payments to maximize their motivational impact. For instance, the
average merit pay rate was 3%. Finally, the company has clearly sold
supervisors and middle managers on the plans.
4. Is there any form of variable reinforcement in NuStar’s compensation plan that

could boost employees’ motivation with a surprise effect?
a. Variable reinforcement schedules reinforce the first response after a

varying number of responses or after a varying period of time. Variable
ratio and variable interval schedules of reinforcement generally produce
the strongest behavior that is most resistant to extinction. NuStar’s
bonuses appear to be provided on a varying interval schedule; some
years the employees get a bonus, other years they do not. The firm’s
equity grants also appear to be on a variable schedule because only half
the company got them. When a NuStar employee receives a bonus or an
equity grant, this would likely provide a surprise effect that would boost
employees’ motivation.
To gain further insight and knowledge about NuStar Energy, visit its website:
http://www.nustarenergy.com/ and explore the content in the “Company” section.
OB IN ACTION CASE STUDY: Why DineEquity’s CEO Julia A Stewart Manages

Like a Teacher
1. What elements of the performance management cycle in Figure 9-1 are evident
in Stewart’s comments?
a. In her management style, Julia Stewart focuses on the three main

components of the performance improvement cycle: goal setting,
feedback and coaching, and rewards and positive reinforcement. She
invests the time to provide feedback to employees to allow them to know
what they are doing well and what they could improve upon in the future.
She uses positive reinforcement through her use of compliments, praise
and a simple thank you. She also emphasizes goal setting by
encouraging employees to learn so they become more enthusiastic about
their work.
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2. Is Julia Stewart a good role model for how to generate employee engagement
and motivate the employees in her company’s restaurants? Explain.
a. Julia Stewart is a good role model for how to generate employee

engagement and how to motivate the employees in her company’s
restaurants. She may not be able to make the jobs more intrinsically
motivating by increasing the challenge of the jobs, but she does make the
employees feel valued for performing the highly repetitive jobs that
characterize the restaurant industry. Her use of praise and compliments
costs only a few minutes of her time, but it likely pays handsomely with
higher levels of employee engagement and motivation, which likely leads
to lower turnover rates, a key cost in the restaurant industry.
3. In terms of Thomas’s four building blocks in Figure 9-3, how would you rate
Stewart’s “teaching” style of management for generating intrinsic motivation in
her employees? Explain.
a. Four rewards underlie a person’s level of intrinsic motivation: a sense of

meaningfulness, a sense of choice, a sense of competence, and a sense
of progress. Julia Stewart’s management style emphasizes these four
building blocks of intrinsic motivation. She fosters meaningfulness by
creating an exciting vision for the firm and she seeks to inspire passion in
her employees. She builds competency by making sure employees have
the knowledge they need to be successful and by providing positive
feedback about their performance. She seems to foster choice by having
trust in her employees and by establishing a clear purpose. She also
fosters progress by supporting a collaborative culture and although not
explicitly stated in the information presented in the case, she is likely to
acknowledge milestones and to celebrate successes.
4. What role does positive reinforcement play in this case? Do you think Stewart
uses it effectively? Explain.
a. Julia Stewart effectively uses positive reinforcement. She compliments

employees for doing something correctly and she also makes sure other
employees notice when she is complimenting an employee. For an
employee classification that is not likely to otherwise get many
expressions of thanks or a ton of praise, Julia’s simple actions seem to
effectively motivate her employees.
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5. Would you like to work as a restaurant manager for DineEquity under Stewart’s
leadership? Why or why not.
a. This is a personal opinion question and responses will vary.
LEGAL/ETHICAL CHALLENGE: Is Overtime the Right Way to Go?
What are the ethical implications of Westlund-Deenihan’s decision?
1. This is a very fair deal based on the management principle of “share the pain,
share the gain.” It also gives Westlund-Deenihan some room to maneuver in
case the economy softens again.
2. Rehiring the laid-off employees (those willing and able to return) for at least part-
time work, before granting overtime to existing employees, would have better
served the greater good. In all fairness, the laid-off employees probably suffered
the most.
3. Westlund-Deenihan should have had the employees vote for overtime or for
bringing back all laid-off employees, and acted accordingly.
4. Invent other options. Explain and discuss.
Discussion:
In today’s uncertain economic times, companies are more hesitant than ever to hire
employees. Employers don’t like laying-off valuable workers any more than employees
like to be laid-off. The benefit of using the overtime strategy is that the company can
avoid the need to hire new employees or re-hire laid-off employees until it is certain that
the economic recovery is stable. Although laid-off employees who have yet to find a
new, or comparable job, might jump at the chance to return to work, it would be even
more demotivating for them only to be laid-off once again if the economy once again
turns sour. Any laid-off workers who are re-hired only to be laid-off again may also face
negative consequences if it impacts their unemployment insurance and/or severance
package they received from the company. The disadvantage of using overtime is that it
is not sustainable in the long-run. Employees will become exhausted if they are forced
to work too much overtime or they may suffer work-family conflict if the increased hours
makes it difficult for them address their work and family responsibilities. There would be
several potential advantages to allowing employees to have a voice in deciding between
the choice between overtime work and the re-hiring of former colleagues. It would
foster choice and progress, two of the building blocks of intrinsic motivation. A potential
disadvantage of the employee participation plan is that employees may feel accountable
for the outcome if it
9-25
becomes clear that the employees made a poor choice. For instance, survivor’s guilt is
hard enough the first time around; it would likely be nearly unbearable if the re-hired
workers needed to be laid-off again after just a few months.
INTERNET EXERCISE
http://www.bbc.co.uk/science/humanbody/mind/index_surveys.shtml
BBC, the European news organization, has an interesting collection of surveys,

interactive activities and exercises on its website to give you insight into a variety of
aspects of personality. Not all of the activities are business related, but many are. For
this exercise, you will be asked to complete two assessments from this webpage. The
first survey is designed to give you feedback about which type of career suits you best.
The instrument has seven questions and should take between 5-10 minutes. For the
seven questions, you are asked to select from a list of tasks which of the tasks you
would most like to do and which one you would least like to do. After answering all the
questions, you are given a summary report that describes broad classifications of jobs
that would be well suited to your interests and preferences. To complete this
instrument, go the Science & Nature: Human Body and Mind section of the BBC
webpage at: http://www.bbc.co.uk/science/humanbody/mind/index_surveys.shtml
Under the “Personality and Individuality” section, click on “Careers” under the
“Psychology Tests and Surveys” heading and complete the “Careers Test” instrument.
The second survey is designed to measure how much of a perfectionist you are. The
instrument has 35 questions and should take about 10 minutes. To take this
instrument, return to the “Personality and Individuality” section, click on “Perfectionism”
under the “Psychology Tests and Surveys” heading and complete the instrument. After
completing both instruments, answer the questions below.
Questions:
1. To what extent do you think that your personality assessment profiles are an
accurate assessment of who you are as a person? Explain.
2. Based on your survey results and what you have learned in Parts One and Two
of the textbook, discuss what you can conclude about your individual differences
and what this means for the types of jobs that would suit you.
3. Based on your scores on the “Careers” instrument, what types of tasks and
activities would you find intrinsically motivating?
4. Based on your scores on the “Perfectionism” instrument, what type of feedback is

most likely to motivate you?
9-26
INSTRUCTIONAL RESOURCES
1. For some excellent material for in-class discussion and expansion on the topic of
how to bring employees closer to the company and increase loyalty and
performance see “Employee Engagement: A Roadmap for Creating Profits,
Optimizing Performance, and Increasing Loyalty” by B. Federman (Jossey-Bass,
2009).
2. See “Topic 7: Motivation and Goal Setting” and “Topic 8: Feedback” in “An
Instructor’s Guide to an Active Classroom” by A. Johnson & A. Kinicki (McGraw-
Hill/Irwin, 2006).
3. See “Gender, Age, and the MBA: An Analysis of Extrinsic and Intrinsic Career
Benefits” by R. Simpson, J. Struges, A. Woods, and Y. Altman in Journal of
Management Education, 2005, Vol. 29(2), pp. 218-247.
4. Personal goal setting is discussed in “The Personal Data Analysis Exercise” by

D. Bacon and K. Stewart in Journal of Management Education, 2001, Vol. 25(1),
pp. 70-78.
TOPICAL RESOURCES
1. What happens when your goals conflict? Read “Effect of Perceived Conflict
Among Multiple Performance Goals and Goal Difficulty on Task Performance” by
M. Cheng et al. in Accounting & Finance, 2007, Vol. 47, pp. 221-242.
2. Feedback can help group members know who to listen to for what. See “The
Effects of Member Expertise on Group Decision-Making and Group
Performance” by B. Bonner et al. in Organizational Behavior and Human
Decision Processes, Vol. 88, pp. 719-736.
3. See “The Effect of Feedback Sign on Task Performance Depends on Self-

Concept Discrepancies” by J. Vancouver and E. Teschner in Journal of Applied
Psychology, 2004, Vol. 89(6), pp. 1092-1098.
VIDEO RESOURCES
1. A review of modern motivational approaches is contained in the film "A New Look
at Motivation" (CRM Films).
2. An overview of motivation theories is presented in the film "Understanding

Motivation" (BNA Communications, Inc).
3. Insight Media produces three videos dealing with motivation. They include
“Motivation,” “Motivating Others,” and “Motivating People in Today’s Workplace.”
9-27
DISCUSSION QUESTIONS
1. Why do many managers fall short when providing employee feedback?
2. Analyze the potential advantages and disadvantages of 360-degree feedback.
3. What forms of intrinsic motivation do you experience based on your success in

your classes this term?
4. Assume you wanted to achieve a personal goal such as losing weight, getting
more exercise, getting organized, etc. How could you apply the principles of
positive reinforcement to help you achieve your goal?
5. Discuss why organizational reward systems often fail and describe specific
actions firms could take to improve their reward systems.
SUPPLEMENTAL EXERCISE 1: SHAPING BEHAVIOR
APPLICATION
This exercise gives students the chance to apply the behavior modification concepts
presented in this chapter to realistic scenarios. It is designed to help them understand
the practical applications of the concepts, as well as the limitations. For each brief
scenario, have students identify the target behavior and decide upon the appropriate
contingent consequences.
These scenarios can form the basis for a written assignment, be completed individually
or in groups in class. A handout containing the three scenarios is presented at the end
of the exercise. Some suggested approaches to the scenarios are shown below.
***
SCENARIO I: The Tardy Operators
Despite repeated warnings and discussions on this issue, the three switchboard
operators in your department are late on a regular basis. This unreliability creates
significant problems, because the switchboard is the only way to receive incoming calls.
After a "crackdown," the operators get in on time for a while, but then slip back into old
patterns. You know that part of the problem is that all three have pre-school children,
and excuses for lateness usually revolve around getting them up and to day care.
However, other employees with young children are able to get to work on time regularly.
9-28
Solution: The target behavior in this case is the on-time record of the three switchboard
operators. Remember, managers want to identify a desirable behavior that occurs too
seldom (e.g., being on time) rather than an undesirable behavior that occurs too often
(e.g., being late). A functional analysis of the situation involves identifying of the
reasons given for on-time behavior (and providing opportunities for this behavior) and
for the late behavior (these are obstacles for the desired behavior). Also, it is possible
that the three employees are reinforcing each other’s lateness through discussion and
behavior. Arranging antecedents and provide consequences may involve discussing
their morning schedules with them, suggesting possibilities such as getting up earlier,
finding a closer day care, or having the spouse drop off the children. Another idea is to
create a modified flex-time rotation schedule, where each of the three employees only
need to be "on-time" every three days, and can start a half-hour later the other two
days. Negative consequences could include written reprimands, low performance
evaluations, and eventually termination. (However, it should be made clear that positive
consequences have longer lasting impact.) Positive consequences could range from
donuts to celebrate a month of success, to time off in recognition of continuous on-time
performance. Evaluating results may be accomplished through a review of attendance
records.
SCENARIO II: The Perpetual Whistler
Sam, a co-worker in your department, is an incessant whistler. Often, he isn't even

aware that he is doing it. Sometimes he whistles show tunes, but when he is really
concentrating, his whistling is tuneless and aimless. This is driving you and everyone
else in hearing distance crazy. You know that it is not intentional or malicious, and
other than this one issue, Sam is a consistently excellent worker. His manager has
spoken to him about it a number of times, but he just can't seem to stop. Sam is just as
frustrated by it as everyone else, and would welcome any suggestions you may have.
Solution: The target behavior in this case is Sam’s almost continuous whistling. To
manage situational cues Sam needs to discover what antecedents trigger the whistling.
When trying to alter his behavior he may find that reminders such as notes on his desk
in the morning, chewing gum or sucking on hard candy may help. He could also ask co-
workers to signal him when he starts to whistle. Self-talk and rehearsal may help Sam
bring the unconscious pattern of whistling into conscious focus. It is important that Sam
keep this part of the process positively focused. Sam may want to create personal
rewards for not whistling for a certain amount of time as a way of managing
consequences. He could start with short periods, and extend them as he gets more
successful. Sam could also ask for positive reinforcement from peers, who will probably
be thrilled to help him with this.
9-29
SCENARIO III: Getting Past "Um"
As a training manager for a large technical firm, you are responsible for helping
technical subject experts develop the presentation and facilitation skills needed to
present their information to others. The first group to go through your "train the
technical trainer" series is doing very well, with one exception. They all suffer from "um-
itis." It is seemingly impossible for them to last through more than two or three
sentences without "ums" peppering their speech. This is not only distracting, but
detracts from the effectiveness of their presentations and their credibility as trainers.
Solution: The target behavior in this case is the "um" habit. Ums come into speech as
a substitute for silent pauses. Thus, the likely antecedent is feeling uncomfortable at a
silent pause. The trainers should realize that pauses are acceptable, and consciously
and constructively use them in their presentations. The trainers need to feel
comfortable substituting silent pauses for the ums in their presentations. Toastmasters
uses an "um" beeper to let people know when they say um rather than pause. Other
approaches could include having the audience raise their hands, throwing imaginary
balls at the speaker, or anything that calls attention to it in a non-threatening way.
Positive consequences could include um elimination contests, where people were
rewarded for having the fewest ums, or the longest time without an um. They could also
compete against themselves in this, trying to beat previous records.
SHAPING BEHAVIOR -- THREE SCENARIOS
The following three scenarios depict issues needing to be addressed. Outline how you
would approach solving the problem using the contingent consequences and behavior
shaping.
SCENARIO I: The Tardy Operators
Despite repeated warnings and discussions on this issue, the three switchboard
operators in your department are late on a regular basis. This unreliability creates
significant problems, because the switchboard is the only way to receive incoming calls.
After a "crackdown," the operators get in on time for a while, but then slip back into old
patterns. You know that part of the problem is that all three have pre-school children,
and excuses for lateness usually revolve around getting them up and to day care.
However, other employees with young children are able to get to work on time regularly.
SCENARIO II: The Perpetual Whistler
Sam, a co-worker in your department, is an incessant whistler. Often, he isn't even

aware that he is doing it. Sometimes he whistles show tunes, but when he
9-30
is really concentrating, his whistling is tuneless and aimless. This is driving you and
everyone else in hearing distance crazy. You know that it is not intentional or malicious,
and other than this one issue, Sam is a consistently excellent worker. His manager has
spoken to him about it a number of times, but he just can't seem to stop. Sam is just as
frustrated by it as everyone else, and would welcome any suggestions you may have.
SCENARIO III: Getting Past "Um"
As a training manager for a large technical firm, you are responsible for helping
technical subject experts develop the presentation and facilitation skills needed to
present their information to others. The first group to go through your "train the
technical trainer" series is doing very well, with one exception. They all suffer from "um-
itis." It is seemingly impossible for them to last through more than two or three
sentences without "ums" peppering their speech. This is not only distracting, but
detracts from the effectiveness of their presentations and their credibility as trainers.
SUPPLEMENTAL LECTURETTE 1: ORGANIZATIONAL REWARD NORMS
APPLICATION
This lecturette discusses an additional component of extrinsic reward systems. This

lecturette may be used to supplement the chapter’s coverage of organizational reward
systems.
***
The employer-employee linkage can be viewed as an exchange relationship.

Employees exchange their time and talent for rewards. Ideally, four alternative norms
dictate the nature of this exchange. In their purist forms, each would lead to a
significantly different reward distribution system. They include:
Profit Maximization. The objective of each party is to maximize its net gain, regardless
of how the other party fairs. A profit-maximizing company would attempt to pay the
least amount of wages for maximum effort. Conversely, a profit-maximizing employee
would seek maximum rewards, regardless of the organization’s financial well-being, and
leave the organization for a better deal.
Equity. According to the reward equity norm, rewards should be allocated proportionate
to contributions. Those who contribute the most should be rewarded the most. Basic
principles of fairness and justice are found in most cultures in varying strengths, drive
the equity norm.
Equality. The reward equality norm calls for rewarding all parties equally, regardless of
their comparative contributions. Although absolute equality does
9-31
Organizational Behavior Kreitner 10th Edition Solutions Manual
not exist in today’s hierarchical organizations, researchers have looked at the impact of
pay inequality. That is, they looked at pay dispersion (the pay gap between high-level
and low-level employees). Results indicate that the smaller the pay gap, the better the
individual and organizational performance.1 Thus, the outlandish compensation
packages for many of today’s top executives is not only a widely debated moral issue,
it’s perhaps a productivity issue as well.
Need. This norm calls for distributing rewards according to employees’ needs rather
than their contributions.
Conflict and ethical debates often arise over the perceived fairness of reward allocations
because of disagreement about reward norms. Stockholders might prefer a profit-
maximization norm, while technical specialists would like an equity norm, and unionized
hourly workers would argue for a pay system based on equality. A reward norm
anchored to need might prevail in a family owned and operated business. Effective
reward systems are based on clear and consensual exchange norms.
1M. Bloom, “The Performance Effects of Pay Dispersion on Individuals and Organizations,” Academy of
Management Journal, 1999, pp. 25-40.
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See Slides 9-2, 9-3

• Define the term performance management, distinguish between learning goals

• Define 360-degree feedback, and summarize how to give good feedback in a

• State Thorndike’s law of effect, and explain Skinner’s distinction between

• Define positive reinforcement, negative reinforcement, punishment, and

• Demonstrate your knowledge of behavior shaping.

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Performance management is a continuous cycle of improving individual job

Feedback is information about individual or collective performance shared with those in

Rewards are a critical component of a performance improvement cycle. Figure 9-2

rewards are results, actions and behaviors, and nonperformance considerations.

Pay-for-performance programs link at least some portion of employees’ pay directly to

Contingent consequences control behavior in four ways: positive reinforcement,

behavior through either the contingent presentation of something displeasing or the

There are two broad categories of reinforcement schedules: continuous and

Behavior shaping is defined as the process of reinforcing closer and closer

I. Performance Management Overview

i) Performance management: an organization wide system for improving

performance by setting, monitoring, and evaluating goals; providing feedback

and coaching; and rewarding employees on a continuous basis. See

ii) Figure 9-1: Improving Individual Job Performance: A Continuous

Process illustrates the factors that foster ongoing performance management

and improvement. See Slide 9-5

II. Goal Setting

i) Goal Setting Overview

they need to contribute. See Slide 9-6

ii) Two Types of Goals See Slide 9-7

(1) Performance outcome goal: targets a specific end result.

(2) Learning goal: encourages learning, creativity, and skill development.

Runs on Goals profiles the impact of goals for one executive.

(4) Managers typically overemphasize performance outcome goals and

ignore learning goals.

employees who lack the necessary skills.

iii) Management by Objectives

(2) Management by objectives (MBO): management system incorporating

participation into decision making, goal setting, and feedback. See

employee job satisfaction.

results in MBO programs.

(1) Step 1: Set Goals

(a) Goals should be “SMART”: specific, measurable, attainable, results

oriented, and time bound.

aspects of SMART in more detail. See Slide 9-12

(c) For complex tasks, managers should train employees in problem-

solving techniques and encourage them to develop a performance

(d) Individual differences should be considered when establishing goals,

including the person’s goal orientation.

(ii) Performance-prove goal orientation: focus on performance and

try to demonstrate their ability by looking better than others.

(iii)Performance-avoid goal orientation: focus on performance to

avoid negative outcomes.

(2) Step 2: Promote Goal Commitment

(a) Obtaining goal commitment is important because employees are more

motivated to pursue goals they view as reasonable, obtainable, and

(b) Goal commitment can be enhanced by following these guidelines:

(i) Explain why the organization is committed to a comprehensive

linking the individual’s goals to them.

(iii)Let employees participate in setting their own goals, preferably

“stretch” goals, and creating their own action plans.

(iv)Foster personal growth by having employees build goal ladders.

1. Goal ladder: a chain of progressively more difficult and

challenging goals that fosters personal growth.

2. Focusing on completed goals in a goal ladder promotes a