This document discusses performance appraisal and rewarding employee performance. It covers topics like total reward systems, using money as motivation, behavioral considerations, effective feedback programs, attribution theory, and linking pay to performance. The objectives are to appraise and evaluate employee performance, provide feedback, motivate workers, and comply with regulations. Both advantages and disadvantages of incentive-based compensation are addressed.

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Appraising and
Rewarding
Performance
user

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Chapter Objectives
 Total Reward System
 Money as an Economic and Social medium of exchange
 The Role of money in money in motivational models
 Behavioral Considerations
 The characteristic of good feedback programs
 The process of attribution
 How and why to link pay with performance
 Uses of Profit-Sharing, Gain-Sharing, and Skill-based
pay programs

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Money as a means of rewarding
Employees
 Purchase goods and services
 Medium of exchange for allocation
of economic resources
 Social medium of exchange
 Status symbol
 Status value

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Application of Motivational
Models
 Money satisfies many
drives and needs
 Money has high
valence
 High instrumentality
desired
 Cost-reward
Comparison

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Additional
Considerations
in the use of
money
 Extrinsic and Intrinsic
 Compliance with the
Law
 Equal pay act of 1963
 Comparable worth
 Equality (other factor)

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Organizational behavior and performance appraisal
 Objective setting
 Action planning
 Periodic reviews
 Annual evluation
Performance Appraisal
1.allocate resources in a dynamic environment
2.motivate and reward employees
3.give employees feedback about their work
4.maintain fair relationship within the group
5.coach and develop employees
6.comply with regulations

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Appraisal Philosophy
 Performance orientation
 Focus on goals or objective
 Mutual goal setting between supervisor and employee
 Clarification of behavioral expectations
 Extensive feedback systems
Appraisal Problems
 confrontational
Emotional
Judgmental
Complex task for managers

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Nature of Attribution
Attribution – the process by which people interpret and
assign causes for their own and other’s behavior
Attribution Process
 Observes
 Describes
 Understand and diagnose
 Predict and control
Three Basic Factors are asserted as attributions
Consistency
Distinctiveness
Consensus

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Advantages and Disadvantages of Incentives
Linking Pay with Performance
Advantages
 Strengthen instrumentality
belief
 Create perceptions of Equity
 Reinforce desirable behaviors
 Provide objective basis for
reward
Disadvantages
• Cost (to both employer
and employee)
• System complexity
• Union Resistance
• Delay in Receipt
•Rigidity of System
•Narrowness of Performance

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Advantages and Disadvantages of Incentives
Linking Pay with Performance
Advantages
 Strengthen instrumentality
belief
 Create perceptions of Equity
 Reinforce desirable behaviors
 Provide objective basis for
reward
Disadvantages
• Cost (to both employer
and employee)
• System complexity
• Union Resistance
• Delay in Receipt
•Rigidity of System
•Narrowness of Performance