Chapter 6
Applied Performance
Practices
Canadian OB 7e: McShane/Steen
1
© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Applied Performance Practices at Nucor
Courtesy Nucor
Nucor has survived and thrived in the turbulent steel
industry through the benefits of performance-based
rewards, job design, and empowerment.
Financial Reward Practices


Financial rewards -- fundamental part
of employment relationship
Pay has multiple meanings
•
•
•
•


© Corel Corp. With permission.
symbol of success
reinforcer and motivator
reflection of performance
can reduce anxiety
Men value money more than women
Cultural values influence the meaning
and value of money
Types of Rewards in the Workplace
© Corel Corp. With permission.

Membership and seniority

Job status

Competencies

Performance-based
Membership/Seniority Based Rewards

Fixed wages, seniority increases
 Advantages
• Guaranteed wages may attract job applicants
• Seniority-based rewards reduce turnover

Disadvantages
• Doesn’t motivate job performance
• Discourages poor performers from leaving
• May act as golden handcuffs (tie people to the job)
Job Status-Based Rewards

Includes job evaluation and status perks
 Advantages:
• Job evaluation tries to maintain pay equity
• Motivates competition for promotions

Disadvantages:
• Employees exaggerate duties, hoard resources
• Reinforces status, hierarchy
• Inconsistent with workplace flexibility
Competency-Based Rewards

Pay increases with competencies acquired
and demonstrated
 Skill-based pay
• Pay increases with skill modules learned

Advantages
• More flexible work force, better quality,
consistent with employability

Disadvantages
• Potentially subjective, higher training costs
Performance Pay at Spruceland
Millworks
Spruceland Millworks, an
Alberta-based
remanufacturer of
mouldings, decking, and
other niche lumber
products, is a highperformance workplace
that rewards individual,
team, organization-level
performance.“
Performance-Based Rewards
Organizational
rewards
•
•
•
•
Profit sharing
Share ownership
Share options
Balanced scorecard
Team • Bonuses
rewards • Gainsharing
• Bonuses
Individual • Commissions
rewards • Piece rate
Evaluating Organizational Rewards

Positive effects
• Creates an “ownership culture”
• Adjusts pay with firm's prosperity
• Scorecards align rewards with several specific organizational
outcomes

Concerns with performance pay
• Weak connection between individual effort and rewards
• Reward amounts affected by external forces
Improving Reward Effectiveness
© Corel Corp. With permission.

Link rewards to performance

Ensure rewards are relevant

Team rewards for interdependent
jobs

Ensure rewards are valued

Watch out for unintended
consequences
Job Design

Assigning tasks to a job, including the
interdependency of those tasks with other
jobs

Organization's goal -- to create jobs that
allow work to be performed efficiently yet
employees are motivated and engaged
Job Specialization

Dividing work into separate jobs that include
a subset of the tasks required to complete the
product or service

Scientific management
• Frederick Winslow Taylor
• advocates job specialization
• Taylor also emphasized person-job matching,
training, goal setting, work incentives
Evaluating Job Specialization
Advantages




Less time changing
activities
Lower training costs
Job mastered quickly
Better person-job
matching
Disadvantages





Job boredom
Discontentment pay
Higher costs
Lower quality
Lower motivation
Job Characteristics Model
Core Job
Characteristics
Critical
Psychological
States
Outcomes
Work
motivation
Skill variety
Task identity
Task significance
Meaningfulness
Autonomy
Responsibility
General
satisfaction
Feedback
from job
Knowledge
of results
Work
effectiveness
Growth
satisfaction
Individual
differences
Job Rotation


Moving from one job to
another
Benefits
Job ‘A’
• Minimizes repetitive strain
injury
• Multiskills the workforce
• Potentially reduces job
boredom
Job ‘B’
Job ‘D’
Job ‘C’
Job Enlargement


Adding tasks to an existing job
Example: video journalist
Traditional news team
Employee 1
Operates camera
Employee 2
Operates sound
Employee 3
Reports story
Video journalist
• Operates camera
• Operates sound
• Reports story
Job Enrichment
Given more responsibility for scheduling,
coordinating, and planning one’s own work
1. Clustering tasks into natural groups
• Stitching highly interdependent tasks into one job
• e.g., video journalist, assembling entire product
2. Establishing client relationships
• Directly responsible for specific clients
• Communicate directly with those clients
Kambuku Empowerment
Pretoria Portland Cement
introduced “Kambuku”, a
companywide initiative that
made the South African
company more
performance-oriented
through employee
empowerment.
Courtesy Pretoria Portland Cement
Dimensions of Empowerment
Selfdetermination
Employees feel they have
freedom and discretion
Meaning
Employees believe their work is
important
Competence
Employees have feelings of selfefficacy
Impact
Employees feel their actions
influence success
Supporting Empowerment

Individual factors
• Possess required
competencies, able to
perform the work

Job design factors
• Autonomy, task identity,
task significance, job
feedback

Organizational factors
• Resources, learning
orientation, trust
Courtesy Pretoria Portland Cement
Self-Leadership

The process of influencing oneself to
establish the self-direction and selfmotivation needed to perform a task

Includes concepts/practices from:
• Goal setting
• Social learning theory
• Sports psychology
Elements of Self-Leadership
Personal
Goal Setting

Constructive
Thought
Patterns
Designing
Natural
Rewards
SelfMonitoring
Personal goal setting
• Employees set their own goals
• Apply effective goal setting practices
SelfReinforcement
Elements of Self-Leadership
Personal
Goal Setting

Constructive
Thought
Patterns
Designing
Natural
Rewards
SelfMonitoring
Positive self-talk
• Talking to ourselves about thoughts/actions
• Potentially increases self-efficacy

Mental imagery
• Mentally practicing a task
• Visualizing successful task completion
SelfReinforcement
Elements of Self-Leadership
Personal
Goal Setting

Constructive
Thought
Patterns
Designing
Natural
Rewards
SelfMonitoring
Finding ways to make the job itself more
motivating
• eg. altering the way the task is accomplished
SelfReinforcement
Elements of Self-Leadership
Personal
Goal Setting

Constructive
Thought
Patterns
Designing
Natural
Rewards
SelfMonitoring
SelfReinforcement
Keeping track of your progress toward the selfset goal
• Looking for naturally-occurring feedback
• Designing artificial feedback
Elements of Self-Leadership
Personal
Goal Setting

Constructive
Thought
Patterns
Designing
Natural
Rewards
SelfMonitoring
SelfReinforcement
“Taking” a reinforcer only after completing a
self-set goal
• eg. Watching a movie after writing two more sections
of a report
• eg. Starting a fun task after completing a task that
you don’t like
Chapter 6
Applied Performance
Practices
Canadian OB 7e: McShane/Steen
28
© 2009 The McGraw-Hill Companies, Inc. All rights reserved