Organizational Behavior
Chapter 6
Applied Performance Practices

The meaning of money in the workplace

Money is much more than an object of compensation for an employee’s contribution to organizational objectives.
Money relates to our needs and our self-concept.
It generates a variety of emotions.
Money is a symbol of achievement and status, a motivator, and an influence on our propensity to make ethical or risky decisions.

To some extent, the influence of money on human thoughts and behavior occurs nonconsiously.

The meaning of money varies considerably form one person to the next.
The meaning and effects of money differ between men and women.

• Men attach more importance or value to money
• Men are more likely to view money as a symbol of power and status as well as the means to autonomy.
• Women are more likely to view money in terms of things for which it can be exchanged

The meaning of money varies across cultures.

• People in countries with high power distance tend to have a high respect and priority for money
• People in countries with a strong egalitarian culture are discouraged from openly talking about money or displaying their personal wealth

The motivational effect of money is due more to its symbolic value than to what it can buy.

Financial reward practices

Membership- and seniority-based rewards

Sometimes called pay for pulse.

Job status-based rewards

Companies measure job worth through job evaluation.
Job evaluation: systematically rating the worth of jobs within an organization by measuring the required skill, effort, responsibility, and working conditions.

Competency-based rewards

Skill-based pay plans are a more specific variation of competency-based rewards in which people receive higher pay determined by their mastery of measurable skills.

Performance-based rewards

Individual rewards

Team rewards

Gainsharing plan: a team-based reward that calculates bonuses from the work unit’s cost savings and productivity improvement.

Organizational rewards

Employee stock ownership plans (ESOPs): a reward system that encourages employees to buy company stock. Usually at a discounted price.

Stock options: a reward system that gives employees the right to purchase company stock at a future date at a predetermined price.

Profit-sharing plan: a reward system that pays bonuses to employees on the basis of the previous year’s level of corporate profits.

Improving reward effectiveness

Link rewards to performance

• Gainsharing, ESOPs and other plans that use objective performance measures
• Apply rewards soon after the performance occurs, in a large-enough dose

Ensure that rewards are relevant

Companies need to align rewards with performance within the employees control. The more employees see a ‘line of sight’ between their daily actions and the reward, the more they are motivate to improve performance.
Reward systems also need to correct for situational factors.

Use team rewards for interdependent jobs

Team rewards work better than individual rewards when employees work in highly interdependent jobs, because it is difficult to measure individual performance in these situations.
Also encourages cooperation.
Tend to support employee preferences for team-based work.

Ensure that rewards are valued

Ask employees what they value.

Watch out for unintended consequences

Job design practices

Job design: the process of assigning task to a job, including the interdependency of those tasks with other jobs.
A job is a set of tasks performed by one person.

Job design and work efficiency

Job specialization: the result of a division of labor, in which work is subdivided into separate jobs assigned to different people.
Each resulting job includes a narrow subset of tasks, usually completed in a short cycle time.
Potentially improves work efficiency.

• Employees have less variety tasks to juggle.
• Employees can become proficient more quickly in specialized jobs.
• Shorter work cycles give employees more frequent practice with the task.
• Specialization tens to increase work efficiency by allowing employees with specific aptitudes or skills to be matched more precisely to the job for which they are suited.

Scientific management

Scientific management: the practice of systematically partitioning work into its smallest elements and standardizing tasks to achieve maximum efficiency.

Problems with job specialization

It affects employee attitudes and motivation.
It affects output quality, but in two opposing ways

• Produces higher-level quality because they master their work faster. But many jobs are specialized to the point that they are highly repetitive and tedious. So negative effects of lower attentiveness and motivation.
• Disassociating job incumbents form the overall product or service.

Job design and work motivation

Motivator-hygiene theory: Herzberg’s theory stating that employees are primarily motivate by growth and esteem needs, not by lower-level needs.
Employees experience job satisfaction when they fulfill growth and esteem needs (motivators)
Employees experience dissatisfaction when they have poor working conditions, low job security, and other factors categorized as lower-order needs (hygienes).
Only characteristics of the job itself motivate employees, whereas hygiene factors merely prevent dissatisfaction.

Job characteristics model: a job design model that relates the motivational properties of jobs to specific personal and organizational consequences of those properties.

Core job characteristics → critical psychological states → .outcomes

Skill variety, task identity, task significance → meaningfulness → work motivation
Autonomy → responsibility → growth satisfaction
Feedback from job → knowledge of results → work effectiveness→ general satisfaction

Core job characteristics

Five core job characteristics. Under the right conditions, employees are more motivated and satisfied when jobs have higher levels of these characteristics.

• Skill variety
  The extent to which employees must use different skills and talents to perform tasks within their jobs.
• Task identity
  The degree to which a job requires completion of a whole or an identifiable piece of work
• Task significance
  The degree to which a job has a substantial impact on the organization and/or larger society
• Autonomy
  The degree to which a job gives employees the freedom, independence, and discretion to schedule their work and determine the procedures used in completing it.
• Job feedback

Critical psychological states

The five core job characteristics affect employee motivation and satisfaction through three critical psychological states.

• Skill variety, task identity, and task significance directly contribute to toe job’s experienced meaningfulness
• Autonomy directly contributes to feelings of experienced responsibility
• Knowledge of results

Individual differences

Growth need strength, an individual’s need for personal growth and development.

Social and informational processing job characteristics

Task interdependence: the extent to which team members must share materials, information, or expertise in order to perform their jobs.
And feedback from others.

The other cluster of job characteristics missing from the job characteristic model relates the the information processing demands of the job.

• Task variability
• Task analyzability

Job design practices that motivate

Job rotation

(Extreme) training employees on all assembly stations and rotating them through different jobs every three or four hours.
Three potential benefits of job rotation.

• It increases skill variety throughout the workday
• It minimizes health risks from repetitive strain and heavy lifting
• Supports multiskilling

Job enlargement

The practice of adding more tasks to an existing job.

• Skill variety increases
• Improves work efficiency and flexibility

But won’t affect motivation, performance of job satisfaction. These benefits result only when skill variety is combined with more autonomy and job knowledge.

Job enrichment

The practice of giving employees more responsibility for scheduling, coordinating, and planning their own work.

• Higher job satisfaction and work motivation
• Lower absenteeism and turnover.
• Higher productivity when task identity and feedback are improved.

One way to increase job enrichment is by combining highly interdependent tasks into one job. Natural grouping.
One other ways is establishing client relationships.

Empowerment practices

Empowerment: a psychological concept in which people experience more self-determination, meaning, competence, and impact regarding their role in the organization.

• Self-determination
  Empowered employees feel that they have more freedom, independence, and discretion over their work activities
• Meaning
  Employees care about their work and believe that what they do is important
• Competence
  Confident about their ability to perform the work well and have capacity to grow with new challenges
• Impact
  View themselves as active participants in the organization

Supporting empowerment

Employees are much more likely to experience self-determination when working in jobs with a high degree of autonomy and minimal bureaucratic control.
More meaningfulness when working in jobs with high level of task identity and task significance
More self-confidence when working in jobs that allow them to receive feedback about their performance and accomplishments

More empowered in organizations in which information and other resources are easily accessible.
And organizations that demonstrate a commitment to employee learning.
Requires corporate leaders to trust employees and be willing to take the risks that empowerment creates.

Self-leadership practices

Self-leadership: specific cognitive and behavioral strategies to achieve personal goals and standards through self-direction and self-motivation.

Self-leadership strategies

Personal goal setting → constructive thought strategies → designing natural rewards → self monitoring → self-reinforcement

Personal goal setting

Setting self-determined goals

Constructive thought strategies

Two constructive (positive) thought strategies about that work and its accomplishments

• Positive self-talk: the process of talking to ourselves about our own thoughts and actions
• Mental imagery: the process of mentally practicing a task and visualizing its successful completion.

Designing natural rewards

One way to build natural rewards into the job is to alter the way a task is accomplished.

Self-monitoring

The process of keeping track at regular intervals of one’s progress toward a goal by using naturally occurring feedback.

Self-reinforcement