Motivation, Rewards & Performance: Essentials of Managing Job Design

What is the link between motivation, rewards,
and performance?
What are the essentials of performance
management?
How do job designs influence motivation and
performance?
What are the motivational opportunities of
alternative work arrangements?
6-2Copyright © 2012 John Wiley & Sons, Inc.

Copyright © 2012 John Wiley & Sons, Inc.
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Intrinsic rewards
 Positively valued work outcomes that an
individual receives directly as a result of task
performance.
Extrinsic rewards
 Positively valued work outcomes that are given
to an individual or group by some other person
or source in the work setting.

Pay for performance
 When pay functions well it can help
organizations attract and retain highly capable
workers.
 Pay can also help satisfy and motivate workers
to work hard to achieve high performance.
 When something goes wrong with pay, negative
effects on motivation performance may occur.

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Merit pay
 Compensation system that directly ties an
individual’s salary or wage increase to measures of
performance accomplishments during a specific
time period.
 Seeks to create a belief among employees that the
way to achieve high pay is to perform at high levels.
 Bonus – extra pay for performance that meets
certain benchmarks or is above expectations.

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Gain sharing
Gives workers the opportunity to earn more
by receiving shares of any productivity gains
that they help to create.

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Profit-sharing plans
Reward employees for increased
organizational profits.
 Criticism: organizational profit increases and
decreases are not always a direct result of
employees’ efforts.

Stock Options
Provide employees with an opportunity to
buy shares of stock at a future date at a
fixed price.

Employee stock ownership plans (ESOPs)
 Companies may give stock to employees,
or allow stock to be purchased by them at a
price below market value.

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Skill-based pay
Rewards people for acquiring and
developing job relevant skills.

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Performance management involves two
purposes:
 It serves an evaluation purpose when it lets
people know where their actual performance
stands relative to objectives and standards.
 It serves a developmental purpose when it
provides insights into individual strengths and
weaknesses.

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Performance Measurement
Output measures
 Assess actual work results.
Activity measures
 Assess work inputs in respect to activities tried
and efforts expended.

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Performance appraisal
Formal procedure for
measuring and
documenting a person’s
work performance.

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 Rating scales
 Graphic – Lists a variety of performance dimensions that
an individual is expected to exhibit.
 Behavioral – Adds more sophistication by linking ratings
to specific and observable job-related behaviors.
 Critical incident diaries
 Written records that give examples of a person’s work
behavior that leads to either unusual performance
success or failure.

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360° Evaluation
Uses a combination of evaluations from a
person’s bosses, peers, and subordinates, as
well as internal and external customers and
self-ratings.

Think of a performance management
discussion you have had with a
manager?
 Did you look forward to the meeting?
 Put yourself in the manager’s place.
 What would you change about the procedure?
 Which evaluation tool will be most beneficial?

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To be meaningful, an appraisal system
must be:
Reliable - provide consistent results each
time it is used for the same person and
situation.
Valid - actually measure dimensions with
direct relevance to job performance.

Measurement errors that can reduce the
reliability or validity of a performance measure:
 Halo error
 Leniency error
 Central tendency error
 Recency error
 Personal bias error

Job design
Process through which managers plan and
specify job tasks and the work arrangements
that allow them to be accomplished.

Scientific management
Sought to create management and
organizational practices that would increase
people’s efficiency at work.

Job simplification
 A scientific management
approach to job design that
standardizes work procedures and
employs people in clearly defined
and highly specialized tasks.
 Intent is to increase efficiency, but
it may be decreased due to the
motivational impact of
unappealing jobs.

Job enlargement
 Increases task variety by combining into
one job two or more tasks that were
previously assigned to separate workers.
Job rotation
 Increases task variety by periodically
shifting workers among jobs involving
different tasks.

Job enrichment
The practice of enhancing job content by
building high content jobs full of motivating
factors such as responsibility, achievement,
recognition, and personal growth.

Job characteristics model
Provides a data-based approach for
creating job designs with good person-job
fits that maximize the potential for motivation
and performance.

When the core characteristics are highly
enriched, three critical psychological states
are positively influenced:
 Experienced meaningfulness of work
 Experienced responsibility for work outcomes
 Knowledge of actual results of work activities

Moderators that influence the degree of
positive outcomes of enriched jobs:
Employee growth-need strength is high.
The employee has the required knowledge
and skills.
Employee is satisfied with the work context
(salary, supervision, relationships).

Managerial and global implications of
enriching jobs
Not everyone’s job should be enriched.
Job enrichment can apply to groups.

Alternative work arrangements
New work arrangements reshaping the
traditional 40-hour week.
Designed to provide work-life balance and
more “family friendly” employers are growing
ever more apparent.

Compressed work weeks – any scheduling of work that allows a full
time job to be completed in fewer than the standard five days.
 Advantages
 For workers: added time off, increased leisure time,
lower commuting costs.
 For organizations: lower absenteeism and improved
recruiting of new employees.
 Disadvantages
 For workers: increased fatigue from the extended work
day and family adjustment problems.
 For organizations: work scheduling problems, customer
complaints, possible union opposition.

Flexible working hours
 Gives individuals a daily choice in the timing of their
work commitments.
 Advantages:
 For workers: shorter commuting time, more leisure time,
more job satisfaction, and greater sense of
responsibility.
 For organizations: less absenteeism, tardiness, and
turnover; more commitment, and higher performance.

Job sharing
 One full-time job is assigned to two or more persons
who then divide the work according to agreed-upon
hours.
 Advantages:
 For workers: less burnout and higher energy level.
 For organizations: attracting talented people who
would otherwise be unable to work.

Work sharing
 Workers agree to cut back on the number of
hours they work in order to protect against
layoffs.
 Some employers may mandate a cutback due to
economic necessity.

Telecommuting - Work done at home or in a remote
location via the use of computers and advanced
telecommunication linkages with a central office or
other employment location.
 Advantages:
 For workers: flexibility, comforts of home, and
choice of work locations consistent with one’s
lifestyle.
 Disadvantages:
 For workers: isolation from co-workers, decreased
identification with work team, family distractions.

Advantages of part-time work
 For workers: appeals to people who want to supplement other
jobs or do not want full-time work.
 For organizations: lower labor costs, ability to better
accommodate peaks and valleys of business cycle, can easily
release and hire as needs dictate.
Disadvantages
 For workers: added stress and potentially diminished
performance if holding two jobs, failure to qualify for benefits,
and lower pay rates than full-time counterparts.
› For organizations: when a person holds multiple part-time jobs,
the work burdens can be stressful; performance may suffer on
the job, and may have negative effects on family and leisure.

Motivation, Rewards & Performance: Essentials of Managing Job Design

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Motivation, Rewards & Performance: Essentials of Managing Job Design

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