BUSN 221 Chapter 7

Jeff Parsons

Evaluation, Feedback and Rewards

Learning Objectives

1. Identify the major purposes of performance evaluation and specify the process through which such evaluation should be undertaken so as to contribute toward high levels of employee commitment and motivation

2. Describe the cognitive model of feedback and explain its usefulness to managers in today’s workplace

3. Identify the key insights to be derived from reinforcement theory and demonstrate how these insights could be meaningfully utilized in contemporary organizations

4. Evaluate the impact of the various elements of the reward system with respect to the objective of enhancing employee commitment and motivation.

Performance Evaluation

Considered essential to the employee’s ability to perform duties effectively

Judgmental purposes Developmental purposes

Performance Evaluation – Judgmental Purpose

Basis for reward allocation Identify high-potential employees Evaluation of employee selection

procedures Evaluation of previous employee training

programs

Performance Evaluation – Developmental Purpose

Stimulate improved future performance Develop ways of overcoming obstacles

and performance barriers Identify training and development

opportunities Establish supervisor-employee agreement

on performance expectations

Focus of Evaluation

Performance evaluation should be a continuous, ongoing process that focuses on the job performance, not the individual Translate responsibilities into daily

activities Goals associated with responsibilities Degree to which goals have been

achieved

Focus of Evaluation

Weighting of relevant behaviours Deficiency – evaluation does not cover

all aspects of the job Contamination – activities that are not

part of the job are included in the evaluation

Distortion – improper emphasis given to various job elements

Improving Evaluations

Maximize use and acceptance of evaluations while minimizing dissatisfaction level of employee participation in

evaluation process Set SMART (Specific, Measurable,

Agreed upon, Realistic, Time constrained) performance goals

Provide training during the process

Improving Evaluations cont’d

Evaluate how effectively duties were performed

Communicate results to employee Actively recognize and reinforce good

performance Evaluate performance on a continuous,

ongoing basis

Performance Evaluation Feedback

Explain what went into the evaluation Explain how to improve or sustain

performance Be specific, not generic

Most managers dread this

Purpose of Evaluation Feedback

Instructional Motivational

Cognitive Model of Feedback

• Person

• Others

• Job

Behavioral Results

• Effort• Self-motivation to Adjust

• Persistence• Disregard or Non-acceptance

Individual Characteristics• Perceptual Process• Values• Needs• Goals• Self-Concept• Self-Efficacy

Cognitive Evaluation

• Creditive of Feedback Source

• Expectancies

• Personal Standards• Form of Feedback

(Objective or Subjective)

Evaluated Person

Multisource Feedback (360°)

90% of Fortune 1000 companies use some form of it

Feedback from creditors, supervisors, peers, subordinates,

Result of requests for fairness, clarity, and credibility in performance improvement programs

Multisource Feedback Best Practices

Individual development only Link feedback to overall

strategy/direction of company Administration must control the

process Senior management as role models Use trained internal coaches Evaluate effectiveness of the process

Multisource (360°) Feedback

FOR Concern for

fairness and credibility

AGAINST Feedback sources

may be concerned about use of rating and thus may artificially inflate it

Observation frequency and/or knowledge of person being evaluated

Reinforcement TheorySome believe reinforcement is the most important principle of learning Positive Consequences

strength of behaviour probability of repetition

Negative Consequences strength of behaviour probability of repetition

Operants Behaviours controlled by altering

consequences that follow

Videos

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

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

Reinforcement TheoryReinforcement different than Reward Reward is desirable, provided after

performance Not all rewards are reinforcers Reinforcers increase rate of behaviour Positive Reinforcement

Behaviour as positive stimulus applied Negative Reinforcement

Behaviour as negative stimulus removed

Reinforcement TheoryPunishment Uncomfortable or unwanted

consequences for a behaviour response Can suppress behaviour when used

effectively Use after careful, objective evaluation of

situation

Reinforcement TheoryExtinction Reducing unwanted behaviour Positive reinforcement for a learned

response withheld, behaviour continues for some period of time

Behaviour will decrease in frequency until it disappears if positive reinforcement continues to be withheld

Reinforcement SchedulesSchedule Description Organizational ExampleContinuous Reinforcer follows every

responsePraise after every new sale and order

Fixed interval Response after specific time period is reinforced

Weekly, bimonthly, monthly paycheck

Variable interval

Response after varying period of time (an average) is reinforced

Transfers, unexpected bonuses, promotions, recognition

Fixed ratio A fixed number of responses must occur before reinforcement

Piece rate, commission on units sold

Variable ratio A varying number (average) of responses must occur before reinforcement

Random checks for quality yield praise for doing good work

Reward Program Objectives

Attract qualified people to join the organization

Keep employees coming to work Motivate employees to high

performance levels

Reward Programs

Integrate the following: Satisfaction Motivation Performance Rewards

Ability, skill and experience are required with motivation to produce high performance

Reward Process

Feedback

Motivation to exert effort

Ability and skill

Experience

Performance results:

Individual

Performance evaluation

Intrinsic rewards

Extrinsic rewards

Satisfaction

Satisfaction and RewardsLawler’s Conclusions

Satisfaction with a reward depends on: How much is received How much individual feels they should

receive One’s own satisfaction is influenced by

what happens to others Different people desire different

rewards and differ in how important the rewards are to them

Satisfaction and RewardsLawler’s Conclusions

Satisfaction is influenced by how satisfied people are with intrinsic and extrinsic rewards

Some extrinsic rewards are satisfying because they lead to other rewards

Intrinsic and Extrinsic Rewards

Intrinsic Completion Achievement Autonomy Personal growth

Extrinsic Salary/wages Employee Benefits Interpersonal

rewards Promotions

Rewards and Organizational Issues

Rewards affect employee Perceptions Attitudes Behaviour

Organizational concerns affected Turnover and absenteeism Performance Organizational commitment

Innovative Reward Systems

Skill-based pay Broadbanding Concierge Services Team-based rewards Part-time benefits Gain-sharing Employee Stock ownership plans

“Line of Sight” – Key Issue

Employee perception that their performance is directly linked to rewards received

Easy to say, difficult to do Should be considered in job design