ETM5221 Engineering Teaming:
Application and Execution
Nicholas C. Romano, Jr.
Nicholas-Romano@mstm.okstate.edu
Paul E. Rossler
prossle@okstate.edu
Week 5 April 30, 2002
Motivation and Reward
Team Development
The skills of effective team-work
4. Performing
Goals
• Solving problems
• Achieving results
• Celebrating successes
3. Norming
• Accepting individual differences
• Giving feed-back
• Setting ground rules
2. Storming
• Dealing with criticism
• Handling confrontations
• Avoiding rejection
1. Forming
• Establishing purpose
• Sharing goals
• Building trust
Effective Teamwork
REF: ‘Team Handbook’
Some basic premises underlying
work motivation and reward
• Managers often get what they assume about
employees
– The way out often leads back in
• Most people are rational, acting in ways that
they find rewarding and avoiding those they
don’t
• The good (and bad) news is that reward
systems work
Some basic difficulties with
rewards
• People aren’t pigeons
• Can have a punitive effect
• Powerful forces can run counter to
management’s intentions
• Provide a poor substitute for better
management
• Motivate people to get rewards
• Can undermine interest in task itself
An overall reward strategy
Intrinsic
Job Content
Career
- “Buy in” of results
- Level of responsibility
- Meaningful work
- Feedback
- Growth
- Development
- Opportunities
- Security
Direct Financial
Environment
- Culture
- Balance work/life
- Relationships
- Base Salary
-Variable pay
Indirect Financial
- Benefits
- Awards
- Support programs
- short-term/long-term
- Support programs
Extrinsic
Incentives for knowledge sharing
Rewards
Financial rewards
Hard
Soft
Career advancement/security as reward
Access to information and knowledge as reward
Incentives for knowledge sharing
Rewards
Hard
Enhanced reputation as reward
Soft
Personal satisfaction as reward
Gratitude
Flattery
Recognition
Cross-hierarchy
alliances
Positive results of
altruism
Merit pay incentives for
professionals
• Traditional Merit Pay Characteristics
– merit pay granted as higher base salary (a raise)
– usually based on individual performance only
• New Merit Pay Characteristics
– merit pay awarded as lump sum once per year
(NOT a raise)
– merit pay tied to both individual and
organizational performance
Team Incentive Plan
Compensation plan where all team members
receive an incentive bonus payment when
production or service standards are met or
exceeded
Gainsharing Plans
Programs under which both employees and
the organization share the financial gains
according to a predetermined formula
that reflects improved productivity
and profitability
‘Type’ of Monetary Rewards
Variable Programs
Team-Based
Base Programs
Reward
Platform
IndividualBased
Why do rewards (sometimes) fail
to motivate?
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•
•
•
•
Too much emphasis on monetary rewards
Rewards lack an “appreciation effect”
Extensive benefits become entitlements
Counterproductive behavior is rewarded
Too long a delay between performance and
rewards
Why do rewards (sometimes) fail
to motivate? (cont’d.)
• Too many one-size-fits-all rewards
• Use of one-shot rewards with a short-lived
motivational impact
• Continued use of de-motivating practices
such as layoffs, across-the-board raises and
cuts, and excessive executive compensation
“Yet when what management does is seen to some
degree as dishonest, as forcing people to make
difficult choices in favor of company goals, and as
the creation of games which must be played to get
one’s reward, what is going on probably captures
many of the meanings of manipulation. It seems
likely that there exists a significant group of people
who resent being “motivated,” resent being put “on
incentive.” and resent what they see as treatment for
laboratory rats in a maze.”
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 127
Two primary theories
Reinforcement
Expectancy
Behaviors occur due to Adjusts behaviors due to
experience in
anticipation and
reinforcement and
subjective weighing of
objective measurement
future rewards
of value of past rewards
Motivation Theory in a nutshell
Force to perform = f(VIE or Needs or Inequity or Consequence)
Expectancy
Effort
Instrumentality
Performance
Valence
Outcome
Behaviorism
My Outcomes = Other’s Outcomes
My Inputs
Other’s Inputs
Value Exchange Theory
suggests a balance is needed
Energy
Effort
Employee or Team
Member Gives
Job
Employer or
Team Gives
Performance vs. Payout
Low
Performance
High
High
Overpaying
Ideal
Who designed this?!
Worth the investment
Underachieving
Unstable
Something is not working
Value Exchange Issue
Payout
Low
Motivation theory recap
• Satisfaction with a reward is a function of both
how much is received and how much the
individual feels should be received
• An individual’s feelings of satisfaction are
influenced by comparisons of what happens to
others
• Satisfaction is influenced by how satisfied
employees are with both intrinsic and extrinsic
rewards
Motivation theory recap (cont’d.)
• People differ in the reward they desire and
in the relative importance different rewards
have for them
• Some extrinsic rewards are satisfying
because they lead to other rewards
• Rewards must be valued and must be
related to a specific level of job
performance
People looking at people working
•
•
•
•
Many managers consider themselves to be
already working to their full potential
Working people are seen as bored with and
alienated from work, not working to their full
potential, not caring . . .
This leads to a searching for ways to get
working people to work harder and smarter
Popular approaches include job enrichment,
involvement, training, reward
Some questionable assumptions
• Job satisfaction drives productivity and
performance
• Most people want job enrichment, involvement
• People can readily and easily change their
attitudes and behaviors
• People are alike in their wants, needs, and
responses
• Work is a central dimension
• Management’s job is to motivate
Job satisfaction drives
productivity?
“. . . the relationship is vague, ambiguous, and too
weak to be useful.”
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 129
Participation’s correlation with performance and
satisfaction ranges from .08 to .25 (about 6%
variance explained
Source: John Wagner III, Participations effects on performance
and satisfaction: A reconsideration of research evidence,
Academy of Management Review, Vol. 19, No. 2, 312-330.
All knotted up and intertwined
“The behavior of working people . . . is an
extremely complex phenomenon. It depends
on a great many things which vary from the
physical design of the task to the ideals and
aspirations of the individual . . .
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 116-117
Most people want job
enrichment, involvement
• If most working people wanted their jobs enriched,
they would be asking for it, and unions would be
negotiating for it
– Experience suggests only 15% of the work force
responds well to this strategy
Most people want job enrichment,
involvement (cont’d.)
• Some workers clearly prefer the simplicity of a
repetitive task
– Many more people exist than we may care to
acknowledge who are well-motivated, highly
productive, and satisfied in a regimented, autocratic
setting.
Most people want job enrichment,
involvement (cont’d.)
• Most job enrichment programs create
enlarged jobs, not enriched ones
– Base pay oftentimes remains unchanged
• Technology limits many jobs’ enrichment or
involvement potential
• If involvement is situational, many
managers seem unable to easily shift from
one management style to another
Most people want job enrichment,
involvement (cont’d.)
• Involvement might take more energy than most
people are willing to spend, at least in their work
environments.
• Unanswered question is whether a significant
percentage of the work force wants to participate
long-term
– Past the novelty of doing so
As for the Japanese…
In its broad definition participation, is not
practiced in Japan because Japanese culture
itself precludes it
Source: Richard Mazzini, Unexpected lessons from visiting a Japanese
company, Journal of Management Inquiry, Vol. 1, No. 3, 214-219.
What about the experiments, the
Greenfield plants?
• Employee involvement experiments seem to
follow the Hawthorne experience
– They rarely involve the majority of working people throughout
their life cycle.
• Greenfield plants appear to be a possible
exception
– But their selection and placement processes screen out a great
many.
– And, many who do fit find their new working arrangement far
from utopian.
People are alike in their wants,
needs, and responses
“We are a very long way from freeing
ourselves from this systematic ignoring of
individual differences. It is a model of
working behavior which has a powerful
appeal — so powerful in fact that we tend to
ignore the unhappy result. It simply doesn’t
work very well.”
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 109
“…they assumed that, unlike the rest of the
human race, working people were fairly clear
in knowing what they wanted, would be
willing to make an effort to get what they said
they wanted, and would be happier if they
succeeded.”
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 111
The cultural background or
context influences responses
“The cultural background of working people,
the type of environment in which they live,
the size of the work group in which they are a
part – all are clearly useful in predicting their
response to work restructuring.”
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 111
People easily and readily change
attitudes and behaviors
“It is sufficiently difficult . . .to interest people
in working harder, but it has often been done.
It is much more difficult to interest people in
working smarter, and this has seldom been
done.”
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 148
Work is the central dimension of
most people’s lives
“There is little evidence that working people,
beyond the special few, find fulfillment in their
work. Indeed, it has been suggested that they are
able to remain mentally healthy only because they
refuse to get overly involved in work which simply
cannot be rewarding intrinsically, or selfactualizing. They are willing to work for other
reasons, but letting work become a central aspect
of their mental well-being just doesn’t make sense
to them.” (Source: William Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 114)
“The belief that we can get people interested
in improving their own productivity is a very
dubious one indeed, at least below the
supervisory level…From the working
person’s point of view, increasing
productivity…is simply inconsistent with the
adversary relationship…”
(Source: William Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 126)
Management’s job is to motivate
“We have told ourselves for so long that one
of the basic functions of management is to
motivate people [that] . . . if it became clear
that the reason some working people respond
in the wrong way to management strategies
[is] because they do not want to be motivated
. . . [by] whatever system of rewards . . .
managers decide to invent.”
Source: William T. Morris, Work & Your Future:
Living Poorer, Working Harder, 1975, p. 128
The cultural basis of teams
• Information must be used for self-control
and improvement, not punishment or micromanagement
• Authority must be equal to responsibility
• Equitable compensation and equitable
rewards for results must be available
Adapted from Sashkin, M. and K.J. Kiser, Putting Total Quality Management to
Work. 1993, San Francisco: Berrett-Kohler.
Cultural basis (cont’d.)
• Cooperation, not competition, must be the
basis for working together
• Team members must know their jobs are
secure, not easily or readily discarded at a
moment’s notice
• A climate of fairness as demonstrated by
such things as trust, respect, integrity, and
clear expectations must exist
Unfortunately, many teams
operate in or under…
• Individual appraisal and reward systems
that foster competitiveness
• Decision processes that undermine authority
• Lean and mean staffing strategies that erode
a sense of security, ownership, and create a
sense of inequity
• Intense cost and time pressure that
encourages making minimal commitments
and cutting corners
In other words, management
rewards A and hopes for B
Common problems with feedback
• Feedback is used to punish, embarrass, or
put someone down
• Those receiving the feedback see it as
irrelevant to their work
• Feedback information is provided too late to
do any good
Six common problems with
feedback (cont’d.)
• People receiving feedback believe it relates
to matters beyond their control
• Employees complain about wasting too
much time collecting and recording the data
• Recipients complain about feedback being
too complex or difficult to understand
Some tips for
giving good feedback
• Relate feedback to existing performance
goals and clear expectations
• Give specific feedback tied to observable
behavior or measurable results
• Channel feedback toward key result areas
• Give feedback as soon as possible
Some tips for
giving good feedback (cont’d.)
• Give positive feedback for improvement,
not just final results
• Focus feedback on performance, not
personalities
• Base feedback on accurate and credible
information
Individual appraisal
or team appraisal or both?
• Individual level appraisal helps reduce
social loafing
– But ignores interaction and synergy that
characterize excellent team performance
• Team performance assessment provides
information helps to identify problems,
develop capabilities, and create joint
accountability
Other key questions
• What is rated?
– Behavior, competency, outcome, or all three?
• Who provides the rating?
– Manager, project leaders, team leader, other
team members, customers, self, coworkers
• How is the rating used?
– Development, evaluation, self-regulation (selfcontrol)
Performance appraisal methods
for types of teams
Evaluation alternatives
1. Forced distribution - 10% receive an A,
40% B, 40% C, 10% D
•
•
•
Norm-based
Criterion-based
Benchmark-based
Evaluation Alternatives
(continued)
2. Negotiated- Establish goals that, if
accomplished, earn a high rating
3. Team-based - Each team member receives
rating assigned to team
4. Individual-based in team environment –
Each team member receives rating based
on individual performance
Evaluation Alternatives (cont’d.)
5. Trait-based – Rating based on exhibiting
certain traits such as “hard working”
6. Non-judgmental - Everyone receives a
high (or medium or low) rating
7. Participative – Team members determine
other team members ratings
8. Open – Individual ratings and pay are
publicly posted
Increasing the probability that
pay for performance works
• Make pay for performance an integral part
of the organization’s basic strategy
• Base incentive determinations on objective
performance data
• Have all employees actively participate in
the development, implementation, and
revision of the performance-pay formulas
Increasing the probability that pay
for performance works (cont’d.)
• Encourage two-way communication so
problems with the pay-for-performance plan
will be detected early
• Build the pay-for-performance plan around
participative structures
Increasing the probability that pay
for performance works (cont’d.)
• Reward teamwork and cooperation
whenever possible
• Actively sell the plan to supervisors and
middle managers who may view employee
participation as a threat to their traditional
notion of authority
• If annual cash bonuses are granted, pay
them in a lump sum to maximize their
motivational impact
Increasing the probability that pay
for performance works (cont’d.)
• Remember that money motivates when it
comes in significant amounts, not
occasional nickels and dimes
How to increase the probability
that team-based pay works
• Prepare employees with interpersonal skills
training
• Don’t introduce team-pay until teams are
running smoothly.
• Blend individual and team incentives
• Start by rewarding teamwork behaviors and
then evolve to incentives for team results
• Make sure each team member has a clear
line of sight to key team results
Link rewards to incentives
• What gets rewarded gets measured
• Rewards & incentives systems focus on
company goals & objectives
– Eg., Customer satisfaction, Improved quality
• Employees encouraged to excel when
rewards/incentives consistent w/measures
• Quantify performance before implementing
rewards/incentives program
A warning
The weakness of simple explanations and the
general failure of simplistic strategies for
increasing productivity present an overwhelming
array of data to which it is time we attended . . .
The simple, effective, easily formulated approach
is not a very likely prospect, and the related data
says this quite strongly. Human behavior in work
situations is an extremely involved affair, and the
best strategy is to be highly suspicious of the
Source: William T. Morris, Work & Your Future:
simple strategy.”
Living Poorer, Working Harder, 1975, p. 116-117
A delicate matter and
difficult challenge
“…excepting in rare instances, the difficulties of
securing the means of offering incentives, of avoiding
conflicts of incentives, and of making effective
persuasive efforts, are inherently great; and that the
determination of the precise combination of incentives
and of persuasion that will be both effective and
feasible is a matter of great delicacy. Indeed, it is so
delicate and complex that rarely, if ever, is the
scheme of incentives determinable in advance of
application, It can only evolve…(Chester Barnard,
The Functions of the Executive, p. 158)