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Chapter Nine

Improving Job Performance


with Feedback and Rewards

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999


Chapter Nine Outline
9-1

■ Understanding the Feedback Process


- Two Functions of Feedback
- A Cognitive-Processing Model of Performance Feedback
- Sources of Feedback
- The Recipient of Feedback
- Behavioural Outcomes of Feedback
- Practical Lessons from Feedback Research
■ Nontraditional Feedback: Upward and 360-Degree
- Upward Feedback
- 360-Degree Feedback
- Some Concluding Tips for Giving Good Feedback
■ Organizational Reward Systems
- Types of Rewards
- Organizational Reward Norms
- Desired Outcomes of the Reward System
- Why Do Rewards Fail to Motivate?
■ Pay for Performance
- Putting Pay for Performance in Perspective
- Incentive Bonuses and Motivation: A Double-Impact Model
- Profit Sharing versus Gainsharing
- Making Pay for Performance Work
©The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
9-2

Feedback
Feedback: “Objective information about
individual or collective performance.”

Functions of Feedback:
- Instructional
- Motivational

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999


9-3

A Cognitive-Processing Model
of Feedback
(Sources and Outcomes)
■ Sources of Feedback:
- Others
- Task
- Self
■ Behavioural Outcomes:
- Direction
- Effort
- Persistence
- Resistance
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999
9-4

A Cognitive-Processing Model
of Feedback (Recipient)
■ Recipient’s Characteristics:
- Self-esteem - Self-efficacy
- Needs and goals - Desire for performance
feedback
■ Recipient’s Perception:
- Sign and content of feedback message
■ Recipient’s Cognitive Evaluations:
- Feedback accuracy - Source credibility
- System fairness - Expectancies
- Behavioural standards
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999
9-5

Six Common Trouble Signs


for Organizational Feedback
Systems
❶ Feedback is used to punish, embarrass, or put down employees
❷ Those receiving the feedback see it as irrelevant to their work
❸ Feedback information is provided too late to do any good
❹ People receiving feedback believe it relates to matters beyond
their control
❺ Employees complain about wasting too much time collecting and
recording feedback data
❻ Feedback recipients complain about feedback being too complex
or difficult to understand
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999
9-6

Some Concluding Tips for


Giving Good Feedback
Managers need to keep the following tips in mind when giving
feedback:
✔ Relate feedback to existing performance goals and clear
expectations.
✔ Give specific feedback tied to observable behaviour or
measurable results.
✔ Channel feedback toward key result areas.
✔ Give feedback as soon as possible.
✔ Give positive feedback for improvement, not just final results.
✔ Focus feedback on performance, not personalities.
✔ Base feedback on accurate and credible information.
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999
9-7

General Model of Organizational


Reward Systems
■ Types of Rewards:
- Financial/material (extrinsic) - Social (extrinsic)
- Psychic (intrinsic)
■ Organizational Reward Norms:
- Profit maximization - Equity
- Equality - Need
■ Distribution Criteria:
- Results - Behaviour
- Other factors
■ Desired Outcomes:
- Attract - Motivate
- Develop - Satisfy
- Retain
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999
9-8

Why Do Rewards Fail to Motivate?


● Too much emphasis on monetary rewards
● Rewards lack an “appreciation effect”
● Extensive benefits become entitlements
● Counterproductive behaviour is rewarded
● Too long a delay between performance and rewards
● Too many one-size-fits-all rewards
● Use of one-shot rewards with a short-lived motivational
impact
● Continued use of demotivating practices such as
layoffs, across-the-board raises and cuts, and excessive
executive compensation
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999
9-9

Profit Sharing v. Gainsharing


Profit sharing: “Occurs when individual employees or work
groups are granted a specified portion of any economic
profits earned by the business as a whole.”

Gain sharing: “Involves a measurement of productivity


combined with the calculation of a bonus designed to offer
employees a mutual share of any increases in total
organizational productivity. Usually all those responsible
for the increase receive the bonus.”

For Class Discussion: From a strategic organizational


standpoint, which approach is preferable? Why? Which
approach would you as an employee prefer? Why?
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999
9-10

Making Pay for Performance Work


✪ 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.
✪ 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 such as suggestion systems or quality circles.

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999


9-11

Making Pay for Performance Work


(continued)

✪ 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
✪ Remember that money motivates when it comes in
significant amounts, not occasionally

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999