Performance Management

and Motivation
Shafique Ahmed UQAILI

Prepared for
University of Central Punjab
Performance Management and Motivation (HRM6143)
November 2020
 Attribution Theory (1 of 3) 2
Attribution Theory is what happens, when a person takes the information he/she perceives and then
determines a reason as to what happened.

Mr. Fritz Heider, a psychologist, stated that people have a desire to explain the reasoning behind
(1)

their actions and the actions of others.

Attribution Theory tries to explain, the ways in which, we judge people differently, depending upon
the meaning, we attribute to a given behavior.

Attribution Theory: An attempt to determine whether an individual’s behavior is (2)‘internally caused’,

or (3)‘externally caused’.
(1)Mr. Fritz Heider: Austrian psychologist (born: 19 February 1896 in Vienna, Austria; died: 02 January 1988 in Lawrence, Kansas, USA)
(2)Internally caused: are those behaviors that we believe to be under the personal control of the individual.

(3)Externally caused: are those behaviors that we imagine the situation forced the individual to do.

Professor Shafique Ahmed UQAILI 1/21/21

 Attribution Theory (2 of 3) 3
Attribution Theory (continued..)
When we observe an individual’s behavior, we attempt to determine whether, it is ‘internally’ caused
or ‘externally’ caused. This determination is based on the following three factors:

a) Distinctiveness(1)
b) Consensus(2)
c) Consistency(3)

(1)Distinctiveness: Refers to whether an individual displays unusual behaviors in different situations,

e.g., employees comes late and ALSO has lack of commitment, etc.
(2)Consensus: Everyone responding in the same way, if faced with a similar situation.

(3)Consistency: Yes, if there is a consistency in the behavior (in particular situations).

Professor Shafique Ahmed UQAILI 1/21/21
 Attribution Theory (3 of 3) 4
Observation Interpretation Attribution of cause

External Self serving

Distinctiveness
bias is the
Internal tendency to
attribute own
Consensus External successes on
Individual behavior
internal
factors and
Internal put the
blame for
Consistency Internal failures on
Fundamental Attribution Error is the tendency to underestimate influence
external
of external factors and overestimate influence of internal factors, when External factors.
making judgements about others’ behavior.
Professor Shafique Ahmed UQAILI 1/21/21
 Common Shortcuts in judging others (1 of 5) 5

There are ‘Shortcuts’ to form opinions while

judging others.

These shortcuts are valuable, but at times, they

tend to also mislead.

Professor Shafique Ahmed UQAILI 1/21/21

 Common Shortcuts in judging others (2 of 5) 6

Selective Perception: The tendency to

selectively interpret what one sees, on the basis
of one’s interests, background, experience and
attitudes.

Professor Shafique Ahmed UQAILI 1/21/21

 Common Shortcuts in judging others (3 of 5) 7

Halo Effect: The tendency to draw a general

impression about an individual, on the basis of a
single characteristic.

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 Common Shortcuts in judging others (4 of 5) 8

Contrast Effect: Evaluation of a person’s

characteristics that is affected by comparisons
with other people recently encountered who
rank higher or lower on the same
characteristics.

Professor Shafique Ahmed UQAILI 1/21/21

 Common Shortcuts in judging others (5 of 5) 9

Stereotyping: Judging someone on the basis of

one’s perception of the group to which, that
person belongs.

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 Specific Applications of Shortcuts in
organizations (1 of 3) 10

1. Employment Interviews:

a) Most people are hired through interviews.

b) Interviewers make perceptual judgements, that are often inaccurate.
c) Research shows that human beings form impressions of others within a
tenth of a second, based on our first glance.
d) If the first impressions are negative, they tend to be more heavily
weighted in the interview than if the same information came out later.
e) Most interviewers decisions change very little, after the first 4 to 5
minutes of an interview. As a result, information elicited early in the
interview, carries greater weight than does the information elicited later.
Professor Shafique Ahmed UQAILI 1/21/21
 Specific Applications of Shortcuts in
organizations (2 of 3) 11

2. Performance Expectations:
a) People attempt to validate their perceptions of
reality, even when they are faulty. It is called,
‘Self-fulfilling prophecy’.

b) An individual’s behavior is determined by other’s

expectations. It is called, ‘Pygmalion Effect’.
Professor Shafique Ahmed UQAILI 1/21/21
 Specific Applications of Shortcuts in
organizations (3 of 3) 12

3. Performance Evaluation:
a) Performance evaluations depend on the perceptual
process to a great extent.
b) An employee’s future is closely tied to the appraisal
(promotion, pay raises and continuation of
employment, etc.)
c) Subjective evaluations are faulty (due to ‘selective
perception’, ‘halo effect’, ‘contrast effect’, etc.
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 Decision-making in organizations 13

Decisions: Choices made from among two or more alternatives.

Problem: A discrepancy between the current state of affairs

and some desired state.

Decision-making: Process of making choices by identifying a

decision, gathering information, and assessing alternatives
resolutions.
Professor Shafique Ahmed UQAILI 1/21/21
 Decision-making in organizations
Rational Decision-making Model 14

Rational: Characterized by making consistent, value maximizing choices, within

specified constraints.

Steps of Rational Decision-making Model: Choices made from among two or more
alternatives.
a) Define the problem
b) Identify the decision criteria
c) Allocate weights to the criteria
d) Develop the alternatives
e) Evaluate the alternatives
f) Select the best alternative
Professor Shafique Ahmed UQAILI 1/21/21
 Decision-making in organizations
Bounded Rationality 15

• Limited information-processing capability makes it impossible to

assimilate and understand all the information necessary to optimize.
• So most people respond to a complex problem by reducing it to a
level at which, they can readily understand it.
• Also, many problems do not have optimal solution because they are
too complicated to fit the rational decision-making model.
• So people ‘satisfice’, i.e., they seek solutions that are satisfactory
and sufficient.
• This is ‘Bounded Rationality’.
Professor Shafique Ahmed UQAILI 1/21/21
 Decision-making in organizations
Intuition 16

• The least rational way of making decisions is ‘intuitive decision-making’.

• It is an unconscious process, created from (1)distilled experience.
• It occurs outside conscious mind.
• It relies on (2)holistic associations.
• It engages emotions.

• Distilled: Precipitate, Exude, Purify, Transform

• (1)Distilled experience: A thought or idea ‘distilled’ from previous thoughts,
ideas, or experiences.
• (2)Holistic: Related to whole, complete system.
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 Common Biases and Errors in Decision-making 17
(1 of 3)

1. Overconfidence Bias: People tend to believe that they know more

than they actually know, thus take decisions in ‘overconfidence bias’.
2. Anchoring Bias: Tendency to fixate on initial information, from which
one then fails to adequately adjust for subsequent information.
3. Confirmation Bias: Rational Decision-making process assumes that
information is gathered objectively. However, it is not done like that.
Information is selectively gathered. Confirmation Bias is a case of
selective perception. We seek out information that reaffirms our past
choices, and we discount information, that contradicts them.

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 Common Biases and Errors in Decision-making 18
(2 of 3)

4. Availability Bias: Tendency for people to base their

judgements on information that is readily available to
them.
5. Escalation of Commitment: An increased commitment
to a previous decision in spite of negative
information.
6. Randomness Error: Tendency of individuals to believe
that they can predict the outcome of random events.
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 Common Biases and Errors in Decision-making 19
(3 of 3)

7. Risk Aversion: Tendency to prefer a sure gain of a moderate amount

over a riskier outcome, even if the riskier outcome might have a
higher expected payoff.
8. Hindsight Bias: Tendency to believe falsely, after an outcome of an
event is actually known, that one would have accurately predicted
that outcome.
9. Application – Financial Decision-making: Financial crises was created
in 2008, when large loans were made to individuals who could not
repay them, and then finance companies purchased these bad debts
without realizing, how poor the prospects of repayment were.
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 Individual Differences in Decision-making 20

1. Personality: Personalities do influence decision-making. For example,

‘achievement-striving’ people are more likely to escalate their
commitments, whereas, ‘dutiful’ people are do that less.
2. Gender: Research shows that women spend more time than men, analyzing
the past, present and the future.
3. Mental Ability: People with higher levels of mental ability are able to process
information more quickly, solve problems more accurately, and learn faster.
However, this sometimes leads to ‘overconfidence’ or ‘anchoring’.
4. Cultural Differences: Most of the ‘Organizational Behavior’ researches ignore
the element of ‘cultural differences’, whereas, the cultural differences play
an important role in decision-making.
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 Organizational Constraints in Decision-making 21
Organizations can constrain decision-makers, creating deviations from the ‘rational’ model. Managers shape their decisions to
reflect the organization’s performance evaluation and reward system, to comply with its formal regulations, and to meet
organizationally imposed time constraints. Precedent can also limit decisions.

1. Performance Evaluation: Managers are strongly influenced by the criteria on which they are evaluated. If a division manager
believes the manufacturing plants under his responsibility are operating best when he hears nothing negative, we shouldn’t be
surprised to find his plant managers spending a good part of their time, ensuring that negative information doesn’t reach him
2. Reward Systems: The organizations’ reward system influences decision makers by suggesting which choices have better
personal payoffs. If the organization rewards risk aversion, managers are more likely to make conservative decisions.
3. Formal Regulations: All but the smallest organizations create rules and policies to program decisions and get individuals to act
in the intended manner, and of course, in doing so, they limit decision choices.
4. System-imposed Time Constraints: Almost all important decisions come with explicit deadlines. Such conditions often make it
difficult, if not impossible, for managers to gather all the information they might like before making a final decision.
5. Historical Precedents: Decisions are not made in vacuum; they have a context. Individual decisions are points in a stream of
choice. Those made in the past, are like ghosts that haunt and constrain current choices. Choices made today, are largely a
result of choices made over the years.

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Three Ethical Decision Criteria 22

Ethical considerations should be an important criterion in all

organizational decision-making. There are three ways to frame decisions,
ethically:

1. Unilateralism A system in which, decisions are made to provide the

greatest good for a greatest number.
2. Protection of Rights: A system in which decisions are made to protect
the rights of greatest number of persons.
3. Justice: A system to impose and enforce rules fairly and impartially to
ensure justice or equitable distribution of benefits and costs.
Professor Shafique Ahmed UQAILI 1/21/21
Motivation 23

Motivation:
The processes that account for an individual's intensity, direction, and
persistence of effort toward attaining a goal.

‘Motivation’ is the ‘reason’ for people’s actions, willingness and goals.

The word, ‘Motivation’, is derived from the word, ‘Motive’, which is

defined as needs that require satisfaction. These needs could be wants
or desires.
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Theories of Motivation
Hierarchy of Needs Theory 24

Abraham Maslow’s ‘hierarchy of needs’ hypothesized that within every human

being, there exists a hierarchy of following five needs:
1. Physiological: Hunger, thirst, shelter, sex, bodily needs.
2. Safety: Security, protection from physical and emotional harm.
3. Social: Affection, belongingness, acceptance, friendship.
4. Esteem: Internal  Self respect, autonomy; External  Status, attention, etc.
5. Self-actualization: Drive to become what we are capable of becoming – self fulfillment.

Abraham Harold Maslow: American psychologist, born: 01 April 1908; died: 08 June 1908.
He remained Professor of Psychology at: Alliant International University, Brandies
University, Brooklyn College, New School for Social Research and Columbia University.
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Theories of Motivation
Hierarchy of Needs Theory 25

Lower-order needs: Needs that are satisfied externally,

such as physiological and safety needs.

Higher-order needs: Needs that are satisfied internally,

such as social, self-esteem and self-actualization needs.

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Theories of Motivation
Theory X and Theory Y 26

Douglas McGregor proposed two distinct views of human beings: One basically
negative, labeled as Theory X and the other basically positive, labeled as
Theory Y.

1. Theory X: The assumption that employees dislike work, are lazy, dislike responsibility,
and must be coerced to perform.
2. Theory Y: The assumption that employees like work, are creative, seek responsibility,
and can exercise self-direction.

Douglas Murray McGregor: American management professor, born: 06 September 1906; died:
01 October 1964. He remained Professor at: Harvard University, MIT, Antioch University.

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 Theories of Motivation
Two-factor Theory 27

Two-factor Theory (by Frederick Herzberg):

1. A theory that relates (1)intrinsic factors to job satisfaction and associates (2)extrinsic factors with
dissatisfaction.
2. This is also called: ‘motivation-hygiene theory’.
3. According to Herzberg, the factors that lead to ‘job satisfaction’ are separate and distinct from those
that lead to ‘job dissatisfaction’. He characterized conditions such as quality of supervision, pay,
company policies, physical working conditions, relationships with others, and job security as ‘hygiene
factors’. When they are adequate, people will not be dissatisfied.

(1)Intrinsic: originating or due to causes within a body, organ.

(2)Extrinsic: originating from or on the outside.

Frederick Irving Herzberg: American Psychologist (born: 18 April 1923; died: 19 January 2000) – worked at
the University of Utah.
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Theories of Motivation
McClelland’s Theory of Needs 28
McClelland’s Theory of Needs (by David McClelland):
states that achievement, power, and affiliation are three important needs, that
help explain, motivation.

1.Need for achievement: (nArch) is the drive to excel, to achieve in relationship to a

set of standards.
2.Need for power: (nPow) is the need to make others behave in a way they would
not have, otherwise.
3.Need for affiliation: (nAff) is the desire for friendly and close interpersonal
relationships.

David Clarence McClelland: American Psychologist (born: 20 May 1917; died: 27 March 1998) – worked at Harvard University
of 30 years.
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Theories of Motivation
Self-Determination Theory of Motivation 29

Self-Determination Theory of Motivation:

•A theory of motivation that is concerned with the beneficial effects of intrinsic motivation and
harmful effects of extrinsic motivation.
•It proposes that people prefer to feel they have control over their actions, so anything that makes a
previously enjoyed task feel more like an obligation than a freely chosen activity, will undermine
motivation.
•‘Cognitive evaluation theory’ is a version of self-determination theory which holds that allocating
extrinsic rewards for behaviors that had been previously intrinsically rewarding, tends to decrease the
overall level of motivation, if the rewards are seen as controlling.

• Self-concordance: The degree to which peoples’ reasons for pursuing goals are consistent with their interests and core values.
• Job engagement: The investment of employee’s physical, cognitive, and emotional energies into job performance.
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Theories of Motivation
Goal-Setting Theory of Motivation 30

Goal-Setting Theory of Motivation:

• A theory that says that specific and difficult goals, with feedback, lead
to higher performance.

• A systematic way of goal-setting is ‘Management by Objectives’ (MBO),

which emphasizes participatively set goals that are tangible, verifiable
and measurable, for an explicit time-period, with feedback on goal
progress.

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Theories of Motivation
Self-Efficacy Theory 31
Self-Efficacy Theory (by Albert Bandura):
• An individual’s belief that he or she is capable of performing a task.
• Albert Bandura proposes four ways self-efficacy can be increased:
a) Enactive mastery: psychological states, through which a learner organizes his or her own set of beliefs, regarding
ability from a variety of sources.. Past failure or success influences one’s likelihood to believe that one will succeed
or fail at a given task.
b) Vicarious modeling: occurs when an individual learns something simply through observation without direct
reinforcement or punishment of the behavior.
c) Verbal persuasion: involves someone convincing another person that they have the capability to perform a task,
successfully.
d) Arousal: suggests that people are driven to perform actions in order to maintain an optimum level of psychological
arousal.

Albert Bandura: is a Canadian-American psychologist. His specialties are Cognitive Psychology, Social Psychology and
Philosophy of Action. He is 95 years old (born: 04 December 1925). He is currently a David Starr Jordan Professor
Emeritus of Social Sciences at Stanford University.
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Theories of Motivation
Reinforcement Theory 32
Reinforcement Theory (by B. F. Skinner):
• A theory that says that behavior is a function of its consequences.
• ‘Operant conditioning theory’ is a component of ‘reinforcement theory of management’ and it says that people learn to behave to get
something they want or to avoid something they do not want.
• The concept of ‘operant conditioning’ is a part of broader concept of ‘Behaviorism’, which argues that behavior follows stimuli in a
relatively unthinking manner. In this theory, feelings, thoughts, and other states of mind are rejected, as causes of behavior.
• People learn to associate stimulus and response, but their conscious awareness of this association, is irrelevant.
• ‘Social-learning theory’ which is a part of Reinforcement Theory, says that people can learn through observation and direct experience,
with the following four processes.
a) Attentional processes: People learn from a model only, when they recognize and pay attention to its critical features.
b) Retention processes: A model’s influence depends on how well, the individual remembers the model’s action, afterwards.
c) Motor reproduction processes: After a person has seen a new behavior by observing the model, watching must be converted to doing.
d) Reinforcement processes: Individuals are motivated to exhibit the modeled behavior, if positive incentives or rewards are provided.

Burrhus Frederic Skinner: is an American psychologist, behaviorist, inventor and social philosopher (born: 20 March 1904; died: 18 August 1990). He is known
for: Operant Conditioning, Radical Behaviorism, Applied Behavior Analysis, and others. He was lastly Professor of Psychology at Harvard University.

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Theories of Motivation
Equity Theory/Organizational Justice 33
Equity Theory (by John Adams):
• A theory that says that individuals compare their job inputs and outputs with those of others and then respond to eliminate any
inequities.
• Equity Theory has four referent comparisons:
Self-inside: An employee’s experiences in a different position inside the employee’s current organization.
Self-outside: An employee’s experiences in a situation or position outside the employee’s current organization.
Other-inside: Another individual or group of individuals inside the employee’s organization.
Other-outside: Another individual or group of individuals outside the employee’s organization.

• Distributive Justice: Perceived fairness of the amount and allocation of rewards among individuals.
• Organizational Justice: An overall perception of what is fair in the workplace, composed of distributive, procedural, and
interactional justice.
• Procedural Justice: The perceived fairness of the process used to determine the distribution of rewards.
• Interactional Justice: The perceived degree to which, an individual is treated with dignity, concern, and respect.

John Stacey Adams: is a Belgian psychologist, born: 16 March 1925. He is 94.5 years old.
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Theories of Motivation
Equity Theory/Organizational Justice 34
Distributive Justice
Definition: perceived fairness of outcome
Example: I got the pay raise, I deserved

Procedural Justice
Organizational Justice
Definition: perceived fairness of process used to
determine outcome Definition: Overall
Example: I had input into the process used to give perception of what is
raises and was given a good explanation of why I fair in the workplace
received the raise, I did Example: I think this
is a fair place to work
Interactional Justice

Definition: perceived degree, to which, one is

treated with dignity and respect.
Example: When telling me about my raise, my
Professor Shafique Ahmed UQAILI 1/21/21
superior was very nice and complimentary
Theories of Motivation
Expectancy Theory (1 of 2) 35
Expectancy Theory (by Victor Vroom):
• A theory that says that the strength of tendency to act in a certain way, depends on the
strength of an expectation that the act will be followed by a given outcome and on the
attractiveness of that outcome, to the individual. It focuses on three relationships:
Effort-performance relationship: The probability perceived by the individual that exerting a
given amount of effort, will lead to performance.
Performance Reward relationship: The degree to which, the individual believes in performing
at a particular level, will lead to the attainment of a desired outcome.
Rewards-personal goals relationship: The degree to which organizational rewards satisfy an
individual’s personal goals (or needs) and the attractiveness of those protentional rewards for
the individual.

Dr. Victor Harold Vroom is a Canadian is a business school professor at the Yale School of Business, born: 09
AugustProfessor
1932. He is 88 years old.
Shafique Ahmed UQAILI 1/21/21
Theories of Motivation
Expectancy Theory (2 of 2) 36

1 2 3
Individual Individual Organizational Personal
effort performance rewards Goals

1 Effort-performance relationship

2 Performance-reward relationship

3 Rewards-personal goals relationship

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Integrating Contemporary Theories of
Motivation 37

High nAch

Job design

Performance Organizational
Opportunity Ability evaluation justice
criteria

Individual Individual Organizational Personal

effort performance rewards Goals

Objective Dominant
performance Reinforcement needs
evaluation system
Goals direct behavior
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Motivating by Job Design 38

• Increasingly, research on motivation focuses on

approaches that link motivational concepts to changes
in the way, work is structured.

• Research in Job design suggests the way the elements

in a job are organized, can increase or decrease
efforts and also suggests what those elements are.
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Motivating by Job Design
The Job Characteristics Model 39

Developed by J. Richard Hackman and Greg Oldham

They say that any job can be described in terms of five core
dimensions.

J. Richard Hackman: Cahners-Rabb Professor of Social and Organizational Psychology at

Harvard University (born: 14 June 1940; died: 08 January 2013)
Greg Robert Oldham: American economist (born: 23 June 1950; died: 05 November 2014)
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Motivating by Job Design
The Job Characteristics Model 40

Job Design: The way the elements in a job, are organized.

Job Characteristics: Feature or quality belonging to a job.

Job Characteristics Model (JCM): A model that proposes

that any job can be described in terms of five core job
dimensions: skill variety, task identity, task significance,
autonomy, and feedback.
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Motivating by Job Design
The Job Characteristics Model (1 of 2) 41

1. Skill variety: The degree to which, a job

requires a variety of different activities.
2. Task identity: The degree to which, a job
requires completion of a whole and identifiable
piece of work.
3. Task significance: The degree to which, a job
has a substantial impact on the lives or work of
others.
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Motivating by Job Design
The Job Characteristics Model (2 of 2) 42

4. Autonomy: The degree to which, a job provides

substantial freedom and discretion to the individual
in scheduling the work and in determining the
procedures to be used in carrying it out.
5. Feedback: The degree to which, carrying out the
work activities required by a job, results in the
individual obtaining direct and clear information
about the effectiveness of his or her performance.
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Motivating by Job Design
The Job Characteristics Model 43

Motivating Potential Score (MPS):

MPS =
(Skill variety + Task identity + Task significance)
divided by 3
multiplied by Autonomy
multiplied by Feedback
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Performance Appraisal Form (APF) 44

What is a ‘performance appraisal form’?

• It is a document, on-paper or electronic, that managers

and HR departments use to evaluate the performance of
employees.

• It is a tool, used by people, managers and HR teams, to

measure and benchmark the performance of employees.
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