Hbo appraising and rewarding performance


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Hbo appraising and rewarding performance

  1. 1. Chapter Objective • To understand: –Total Reward System –Money as Economic and Social Medium of Exchange –The Role of Money in Motivational Models –Behavioral Considerations in Performance Appraisal
  2. 2. In the 19th and 20th centuries employees were presumed to want primarily money; therefore, money was believed to produced direct motivation. The more money offered, the more motivation.
  3. 3. Roethlisberger and his followers successfully buried this idea by showing that economic rewards operated through the attitudes of the workers in the social system to produce an indirect incentive.
  4. 4. In this chapter we discuss the Complex Relationship between economic reward systems and organizational behavior. This chapter focuses on how incentives are combined with other parts of wage administration to build a complete reward system that encourage motivation.
  5. 5. Economic Reward System Based Pay Performance Rewards Profit Sharing
  6. 6. Based Pay Motivate employees to progress jobs of higher skill and responsibility.
  7. 7. Performance Rewards Is an incentive to improve performance on the job.
  8. 8. Profit Sharing Motivates workers toward teamwork to improve an organization’s performance
  9. 9. Real Pay Adjustments (cost of living adjustments, etc.) Skill based pay adjustment Base Pay (Internally aligned by job evaluation; determined primarily by market factors) Profit Sharing (Profit Sharing System) Performance Reward (Incentive and gain sharing system) Service Reward Sacrifice Reward Non-work Award Non-economic Reward
  10. 10. Other Payments Primarily non-incentive in nature, are added to the incentive foundation. Seniority Pay – adjustment are made up to reward workers for extended service and to encourage them to remain with their employer.
  11. 11. Money as means of Rewarding Employees Money is important to employees for a number of reasons. Certainly, money is valuable because of goods and services that it will purchase.
  12. 12. This aspects its economic value as medium of exchange for allocation of economic resources. Money is a social medium of exchange.
  13. 13. Application of Motivational Models Drives Needs Expectancy
  14. 14. Drives Achievement-oriented employees maintain a symbolic scorecard in their minds by monitoring their total pay and comparing it with that others.
  15. 15. Needs In the Herzberg model, pay is view as a hygiene factor, although it may have at least short-term motivational value as well.
  16. 16. Expectancy Valence X Expectancy XInstrumentality =Motivation This means that if money is to act a strong motivator, an employee must want more of it (valence),
  17. 17. must believe that effort will be successful in producing desired performance (expectancy), and must trust that the monetary reward will follow better performance (instrumentality).
  18. 18. Behavior Motivation Two desired conditions for applying contingent rewards under behavior modification principles are shown in figure 6.2 as situations 1-4.
  19. 19. In each case employees can see that there is a direct connection between performance and reward. The undesirable states are situation 2-3,where rewards are withheld from high performance or given to low performers.
  20. 20. Situation Level of Performance Level of Economic Reward Instrumentality Condition 1 High High Desirable 2 High Low Undesirable 3 Low High Undesirable 4 Low Low Desirable Desirable and Undesirable Instrumentality Conditions
  21. 21. Equity There is no simple answer for employers in their attempts to create workable systems of economic rewards for increase productivity, but they must at least to understand the employee’s perspective.
  22. 22. The employee’s approach to this complex problem is to make rough type of Cost- Reward Comparison, similar to break-even analysis that is used in financial assessments.
  23. 23. Valueofcostandrewardtoemployee High High Low Low Performance Level A’ A’ B’ B’ Reward Cost Cost of Performance in Relation to Reward for an Employee
  24. 24. Additional Consideration in the Use of Money Extrinsic & Intrinsic Rewards -Money is essentially an extrinsic reward rather than an intrinsic one, so it is administered in behavior modification programs.
  25. 25. Compliance with the Law Labor Code of the Philippines PD. 442 A decree instituting a labor code thereby revising and Consolidating labor and social laws to afford protection To labor, promote employment and human resources Development and insure industrial peace based on social Justice
  26. 26. Organizational Behavior and Performance Appraisal Organization require consistent levels of high performance from their employees in order to survive in a highly competitive global environment.
  27. 27. (MBO) Management by Objectives is cyclical process the often consist of four steps as a way to attain desired performance: Objective Setting, Action Planning, Periodic Reviews, Annual Evaluation
  28. 28. Objective Setting Joint determination by manager and employee appropriate levels of future performance of employee, within the context of overall unit goals and resources.
  29. 29. Action Planning Participate or even independent planning by the employee as to how to reach those objectives.
  30. 30. Periodic Reviews Joint assessment of progress toward objectives by manager and employee, performed informally and sometimes spontaneously.
  31. 31. Annual Evaluation More formal assessment of success in achieving the employee’s annual objective, coupled with a renewal of the planning cycle.
  32. 32. Performance Appraisal Plays a key role in reward system. It is the process of evaluating the performance of the employee, sharing that information with them, and searching for ways to improve their performance.
  33. 33. Appraisal is necessary to: 1.Allocate resources in dynamic env’t. 2.Motivate and reward employees. 3.Give employees feedback about their work. 4.Maintain fair relation within groups. 5.Coach and develop employees. 6.Comply with regulations.
  34. 34. The Performance Appraisal System • Is an organizational necessity • Is based on well-defined, objective 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 by objectively throughout the org. • Can be shown to be non-discriminatory as defined by law
  35. 35. Appraisal Philosophy A generation ago, appraisal programs tended to emphasizes employees traits, deficiencies, and abilities, but modern appraisal philosophy emphasizes present performance and future goals.