ETM5221 Engineering Teaming: Application and Execution

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ETM5221 Engineering Teaming Application and
Execution

• Nicholas C. Romano, Jr.Nicholas-Romano_at_mstm.oksta
  te.eduPaul E. Rosslerprossle_at_okstate.edu

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Week 5 April 30, 2002Motivation and Reward
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Team Development The skills of effective team-work
REF Team Handbook
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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 dont
• The good (and bad) news is that reward systems
  work

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Some basic difficulties with rewards

• People arent pigeons
• Can have a punitive effect
• Powerful forces can run counter to managements
  intentions
• Provide a poor substitute for better management
• Motivate people to get rewards
• Can undermine interest in task itself

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An overall reward strategy
Intrinsic
Career - Growth - Development - Opportunities -
Security
Job Content - Buy in of results - Level of
responsibility - Meaningful work - Feedback
Environment - Culture - Balance work/life -
Relationships
Direct Financial - Base Salary -Variable pay -
short-term/long-term - Support programs
Indirect Financial - Benefits - Awards - Support
programs
Extrinsic
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Incentives for knowledge sharing
Rewards
Financial rewards
Hard
Career advancement/security as reward
Soft
Access to information and knowledge as reward
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Incentives for knowledge sharing
Rewards
Hard
Enhanced reputation as reward
Gratitude Flattery Recognition Cross-hierarchy
alliances Positive results of altruism
Soft
Personal satisfaction as reward
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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

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Team Incentive Plan

• Compensation plan where all team members receive
  an incentive bonus payment when production or
  service standards are met or exceeded

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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

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Type of Monetary Rewards
Variable Programs Base Programs
Team-Based
Individual-Based
Market Based
Individual Incentives
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Why do rewards (sometimes) fail to motivate?

• 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

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Why do rewards (sometimes) fail to motivate?
(contd.)

• 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

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• 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 ones 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
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Two primary theories
Reinforcement
Expectancy

• Behaviors occur due to experience in
  reinforcement and objective measurement of value
  of past rewards

• Adjusts behaviors due to anticipation and
  subjective weighing of future rewards

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Motivation Theory in a nutshell
Force to perform f(VIE or Needs or Inequity or
Consequence)
Expectancy
Instrumentality
Valence
Performance
Outcome
Effort
Behaviorism
My Outcomes My Inputs
Others Outcomes Others Inputs

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Value Exchange Theory suggests a balance is
needed
Benefits
Career
Job
Compensation
Opportunity
Employee or Team Member Gives
Employer or Team Gives
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Performance vs. Payout
Performance
High
Low
High
Overpaying Who designed this?!
Ideal Worth the investment
Payout
Underachieving Something is not working
Unstable Value Exchange Issue
Low
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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 individuals 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

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Motivation theory recap (contd.)

• 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

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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

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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
• Managements job is to motivate

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Job satisfaction drives productivity?

• . . . the relationship is vague, ambiguous, and
  too weak to be useful.
• Participations correlation with performance and
  satisfaction ranges from .08 to .25 (about 6
  variance explained

Source William T. Morris, Work Your Future
Living Poorer, Working Harder, 1975, p. 129
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.
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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
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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

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Most people want job enrichment, involvement
(contd.)

• 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.

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Most people want job enrichment, involvement
(contd.)

• 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

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Most people want job enrichment, involvement
(contd.)

• 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

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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.
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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.

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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 doesnt work very well.

Source William T. Morris, Work Your
Future Living Poorer, Working Harder, 1975, p.
109
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• 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
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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
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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
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Work is the central dimension of most peoples
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
  self-actualizing. They are willing to work for
  other reasons, but letting work become a central
  aspect of their mental well-being just doesnt
  make sense to them.

(Source William Morris, Work Your
Future Living Poorer, Working Harder, 1975, p.
114)
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• The belief that we can get people interested in
  improving their own productivity is a very
  dubious one indeed, at least below the
  supervisory levelFrom the working persons point
  of view, increasing productivityis simply
  inconsistent with the adversary relationship

(Source William Morris, Work Your
Future Living Poorer, Working Harder, 1975, p.
126)
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Managements 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
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The cultural basis of teams

• Information must be used for self-control and
  improvement, not punishment or micro-management
• 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.
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Cultural basis (contd.)

• 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 moments notice
• A climate of fairness as demonstrated by such
  things as trust, respect, integrity, and clear
  expectations must exist

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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

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In other words, management rewards A and hopes
for B
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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

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Six common problems with feedback (contd.)

• 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

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Some tips forgiving 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

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Some tips forgiving good feedback (contd.)

• Give positive feedback for improvement, not just
  final results
• Focus feedback on performance, not personalities
• Base feedback on accurate and credible information

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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

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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
  (self-control)

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Performance appraisal methods for types of teams
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Evaluation alternatives

• Forced distribution - 10 receive an A, 40 B,
  40 C, 10 D
• Norm-based
• Criterion-based
• Benchmark-based

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Evaluation Alternatives (continued)

1. Negotiated- Establish goals that, if
   accomplished, earn a high rating
2. Team-based - Each team member receives rating
   assigned to team
3. Individual-based in team environment Each team
   member receives rating based on individual
   performance

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Evaluation Alternatives (contd.)

1. Trait-based Rating based on exhibiting certain
   traits such as hard working
2. Non-judgmental - Everyone receives a high (or
   medium or low) rating
3. Participative Team members determine other team
   members ratings
4. Open Individual ratings and pay are publicly
   posted

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Increasing the probability that pay for
performance works

• Make pay for performance an integral part of the
  organizations 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

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Increasing the probability that pay for
performance works (contd.)

• 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

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Increasing the probability that pay for
performance works (contd.)

• 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

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Increasing the probability that pay for
performance works (contd.)

• Remember that money motivates when it comes in
  significant amounts, not occasional nickels and
  dimes

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How to increase the probability that team-based
pay works

• Prepare employees with interpersonal skills
  training
• Dont 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

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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

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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 simple strategy.

Source William T. Morris, Work Your
Future Living Poorer, Working Harder, 1975, p.
116-117
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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)