HBO Chapter VI - Appraising and Rewarding Performance
HBO Chapter VI - Appraising and Rewarding Performance
HBO Chapter VI - Appraising and Rewarding Performance
ORGANIZATION Chapter VI
Service (Seniority
Reward increases, etc.)
Base pay
Perfomance (Internally aligned
reward by job evaluation; Profit reward
(Incentive and (Profit-sharing
determined primarily
gain-sharing systems, etc.)
sysytems, etc.) by market fectors)
The three systems are complimentary because
each reflects a different set of factors in total
situation. Base pay and skill-based pay motivate
employees to progress to jobs of higher skills and
responsibility. Performance pay is an incentiveto
improve performance on the job. Profit sharing
motivates workers toward teamwork to improve an
organization's performance.
Money as Means of Rewarding Employees
Money often has high valence. This dual role means that most
employees do respond to money as a reward.
Behavior Modification The two desired conditions
for applying contingent rewards under behavior
modification principles, employees can see that there
is a direct connection between performance and
reward.
Cost-Reward Comparison
The employee identifies and compares personal costs
and rewards to determine the point at which they are
equal.
Additional Consideration in the Use of Money
1. Objective setting
-joint determinaton by manager and employee of
appropriate levels of future performance for the employee,
within the context of overall unit goals and resources.
2. Action planning
-participated or even independent planning by the
employee as to how to reach those objective.
3. Periodic reviews
-joint assessment of progress toward objectives
by manager and employee, perform informally
sometimes spontanously
4. Annual evaluation
-more formal assessment of success in ahieving
the employee's annual objectives, coupled with a
renewal of the planning cycle.
Performance Appraisal
Performance AppraisalPlays a key role in reward
systems.
• is an organizational necessity
• is based on well-defined, objectives criteria
• is based on careful job analysis
• uses only job-related criteria
• is supported by adequate studies
• is applied by trained, qualified raters
• is applied objectively throughout the
organization
Appraisal Philosopy
Appraisal Philosophy Performance emphasis with goals
and mutual goal setting and feedback.
1. Performance Orientation
-it is not enough to put forth effort; that effort must result
in the attainment of desired outcomes(product or services)
2. Focus on goals or objectives
-employees need to have a clear of what they are suppose
to be doing and priorities among their task.
As the saying goes, "If you know where you want to go, you
are more likely to get there."
3. Mutual goal setting between supervisor and employee
-this is the belief that people work harder for goals and
objectives that they have participated in setting.
4. Clarification of behavioral expectations
-this is often done via a behavioraly anchored rating scale
(BARS), which provides the employee and manager with
concrete examples aof various levels of behaviors.
5. Extensive Feedback Systems
-employees can fine-tune their performance better if they
know what they are doing in the eyes of the organization.
Appraisal Interview
Many appraisal systems also point toward both
historical performance and the individual's potential
for growth and advancement.
Performance Feedback
Feedback enhances an employee's self-image and
feeling of competence. It leads to both improved
performance and improved attitudes if handled
properly by the manager.
360 Degree Feedback
This is the process of systematically gathering data on
a person's skills, abilities, and behaviors from a
variety of sources -- the managers, peers,
subordinates, and even customers or clients.
This system works best if individuals match the data
gathered with their own self-assesments.
Make it well-timed
Relate it ti the job be specific
PERFORMANCE
FEEDBACK
Check for understanding
Determine if it is desire
Allow choice
Appraisal Problems Performance
appraisal interview can be confrontational,
emotional, judgmental and complex.
Process of Making and Using Attributions
Personal Characteristics
Success Employee (high abillty or strong
effort)
Personal Characteristics
Failure Manager (low ability or poor effort)
Galatea Effect High expectations by
employees themselves lead to high
performance.
Piece Rate
It provides a simple, direct connection
between performance and reward.
Advantage
They increase employee beliefs that reward
will follow high performance. Strengthen
instrumentality beliefs, create perceptions of
equity, reinforce desirable behaviors, provide
objective basis for rewards.
Disadvantage
Certain unfavorable things such as the
following; cost, system complexity, declining or
variable pay , union resistance, delay in receipt,
rigidity of system, narrowness or performance.
Incentive Measure Example
1. Indirect Relationship
2. Delay
3. Lack of Predictability
3. Union Skepticism
Gain Sharing
A gain-shairing plan establishes a
historical base period of organizational
performance, measures improvements,
and shares the gains with employees on
some formula basis.
Behavioral Basis Gain sharing plans use several
fundamental ideas from organizational behavior and are
much more than pay systems. Encourage employees
performance and provide an incentive for coordination
and teamwork.