Motivation and Rewards System

Appraising and Rewarding Performance

Rochelle Anne Baclay

MGT 202 - Human Behavior in Organization
Motivation
- forces within an individual that account for the
level, direction and persistence of effort expended
at work.
TWO DISTINCT VIEWS OF HUMAN BEINGS:

1.Theory X

2.Theory Y
 2 KINDS OF MOTIVATORS

1.INTRINSIC MOTIVATORS

2.EXTRINSIC MOTIVATORS
Content Theories Process Theories

Hierarchy of Needs Expectancy Theory

Theory

ERG Theory Self - Efficacy Theory

Acquired Needs Theory Goal-Setting Theory

Motivation-Hygiene Reinforcement
Theory Theory
Hierarchy of Needs Theory

Higher-order
needs

Lower-order
needs
How does Expectancy Theory Work?

My professor offers me $1 million if I memorize the textbook by tomorrow morning.

EXPECTANCY INSTRUMENTALITY VALENCE

Effort ----- Performance Link
No matter how much effort I
put in, probably not possible
to memorize the text in 24
hours.
E=0
Performance ---- Rewards Link
My professor does not look
like someone who has $1
million.
I=0
Rewards ---- Personal Goals Link
There are a lot of wonderful
things I could do with $1
million.
V=1

Conclusion: Though I value the reward, I will not be motivated to do this task.
Steps to Increasing Motivation, Using Expectancy Theory
IMPROVING
EXPECTANCY
Improve the ability of the
individual to perform.
• Make sure employees
have skills for the task.
• Provide training.
• Assign reasonable
tasks and goals.
IMPROVING IMPROVING VALENCE
INSTRUMENTALITY
Make sure that the reward is
Increase the individual’s meaningful to the individual.
belief that performance
will lead to reward. • Ask employees what
• Observe and recognize rewards they value.
performance. • Give rewards that are
• Deliver rewards as valued.
promised.
• Indicate to employees
how previous good
performance led to
greater rewards.
 Types of Reinforcement
Reinforcement Type Example

Positive Reinforcement A manager praises an employee for a job well done

Negative An instructor asks a question and a student looks
Reinforcement through her lecture notes to avoid being called on.
She has learned that looking busily through her
notes prevents the instructor from calling on her.

Punishment A manager gives an employee a two-day suspension

from work without pay for showing up drunk.
Extinction An instructor ignores a student who raises her hands
to ask questions. Hand-raising becomes instinct.
 Schedules of Reinforcement
Reinforcement Nature of Effect on Behavior Example
Schedule Reinforcement
Continuous Reward given after Fast learning of new Compliments
each desired behavior but rapid extinction
behavior
Fixed-interval Reward given at Average and irregular Weekly
fixed time intervals performance with rapid paycheques
extinction
Variable- Reward given at Moderately high and stable Pop quizzes
interval variable time performance with slow
intervals extinction
Fixed-ratio Reward given High and stable performance Piece-rate pay
at fixed amounts attained quickly but also with
of output rapid extinction
Variable-ratio Reward given at Very high performance Commissioned
variable amounts with slow extinction sales
of output
Responses to the Reward System

Equity Fair
Process &
Theory Treatment

Self- Increasing
Determi- Intrinsic
nation Motivation
Theory
Responses to the Reward System

How important is
Equity Fair
Process & fairness to you?
Theory Treatment

Self- Increasing
Determi-
nation
Intrinsic
Theory Motivation
Responses to the Reward System
Employees evaluate
Equity Fair how fairly they are
Process & treated along four
Theory Treatment
dimensions

Self- Increasing
Determi-
nation
Intrinsic
Theory Motivation
Model of Organizational Justice
Responses to the Reward System

Equity Fair
Process &
Theory Treatment
people prefer to feel they
have control over their
Self- Increasing actions, so anything that
Determi-
nation
Intrinsic makes a previously enjoyed
Theory Motivation task feel more like an
obligation than a freely
chosen activity will
undermine motivation.
Responses to the Reward System
4 Key Rewards:
1. Sense of Choice
2. Sense of Competence
Equity Fair
Process & 3. Sense of Meaningfulness
Theory Treatment 4. Sense of Progress

4 sets of behavior managers

Self- can use:
Increasing 1. Leading for Choice
Determi-
nation
Intrinsic 2. Leading for Competence
Theory Motivation 3. Leading for Meaningfulness
4. Leading for Progress
 Motivating by Job Redesign
Task
Skill variety
identity
The Job
Characteristics Task
Model Autonomy
significance

Feedback
Motivating by Job Redesign
 Motivating by Job Redesign

Job
Rotation
How can jobs
be redesigned?
Job
Enrichment
Alternative Work Arrangement

Flextime Job
Sharing

Telecommuting
Money as Means of Rewarding Employees

“Money is probably the most emotionally meaningful

object in contemporary life..”
Rewards
Baby Boomers
High-quality colleagues
An intellectually stimulating
workplace
Autonomy regarding work tasks
Flexible work arrangements
Access to new experiences and
challenges
Giving back to the world through work Access to new experiences and
Recognition from one’s company or
boss
Millennials
High-quality colleagues
Flexible work arrangements
Prospects for advancement
Recognition from one’s company or boss
A steady rate of advancement and
promotion
challenges
Complete Program

• Base Pay
• Performance Rewards
• Profit Sharing
 Performance-Based Incentive
• Piece Rate
• Profit Sharing
• Gain Sharing
• Skill-Based Pay
Reward Pyramid: Non- (Comp time, on-site
economic day care, etc)
award
The Makeup of a (Vacation, pensions,
Non-work unemployment
Complete Pay Program award compensation, etc.)

Sacrifice (Overtime, shift

reward differential, etc.)

Service (Seniority
Reward increases, etc.)

Real Pay Adjustment

(cost-of-living adjustment etc)

Skill-base pay adjustment

Base pay
Perfomance
reward (Internally aligned
Profit reward
(Incentive and by job evaluation;
(Profit-sharing
gain-sharing determined primarily systems, etc.)
sysytems, etc.) by market fectors)
 Organizational Behavior
and Performance Appraisal
Management by Objectives (MBO) is cyclical process that often
consists of four steps as a way to attain desired performance:
1. Objective setting
2. Action planning
3. Periodic reviews
4. Annual evaluation
 Performance Appraisal
Appraisal is necessary in order to do the following:
1. Allocate scarce resources in a dynamic
environment.
2. Motivate and reward employees.
3. Give employees feedback about their work.
4. Maintain fair relationships within groups.
5. Coach and develop employees.
6. Comply with Regulations
 Appraisal Philosophy

1. Performance Orientation
2. Focus on goals or objectives
3. Mutual goal setting between supervisor and
employee
4. Clarification of behavioral expectations
5. Extensive Feedback Systems
Appraisal Interview
Appraisal Interviews are most likely to be successful when
the appraiser:

1. Is knowledgeable about the employee's job.

2. Has previously set measurable performance standards.
3. Has gathered specific evidence frequently about
performance.
4. Seeks and uses inputs from other observers in the
organization.
Appraisal Interview

5. Sharply limits the amount of criticism to a few major

items (so the employees can focus their improvement
efforts).
6. Provides support, acceptance, and praise for tasks well
done.
7. Listens actively to the employee's input and reactions.
8. Shares responsibility for outcomes and offers future
assistance.
9. Allows participation in the discussion.
Appraisal Approaches
• Self-Appraisal

• Performance Feedback

• 360 Degree Feedback

Advice to Future Managers…
1. Seek to establish accurate measures of performance,
and make the connection between performance and
rewards clear to all.

2. Provide rewards that people value; if you don't know

what they value, ask them.

3. Make it clear to employees how the organization's

monetary rewards relate to their various needs and
drives.

4. Make sure that the employees believe their goals are

attainable if they perform well.
Advice to Future Managers…

5. If you are trying to promote teamwork, provide

team-based, not individual, rewards.

6. Be aware of unintended consequences that are

associated with any reward system, and try to
minimize these.

7. Utilize the advantages of 360-degree feedback

system for providing employees with a broad and
rich source of performance feedback
Advice to Future Managers…

8. Monitor your own behavior, and that of your

employee, for signs of inappropriate attributions of
behavior during performance appraisals.

9. Remember that providing performance feedback to

some employees can be threatening; provide
opportunities for them to save face.

10. Encourage employees to become feedback seekers;

this will help open up productive and ongoing
dialogue with them.