Managing Employee Performance

1
Managing Employee Performance
1. What kind of performance is expected from my
employees?
2. What kind of behavior is needed for this
performance?
Performance
Employee Behavior

• Volume
• High Margin Products
• Cost Reduction
• Customer Satisfaction and Retention

• Selling vs. Consulting
• Product Focus
• Face-to-Face vs. Other Communication
• Retention vs. Acquisition

2
Antecedents to Performance
3. Is the employee capable of engaging in the
behavior?

• Knowledge
• Skills
• Abilities

4. Does the employee want to engage in the
behavior? Whats in it for the employee?
Behavior
Performance
Motivation
5. Do external constraints prevent the behavior?
External Constraints
3
Motivation Key Questions
Performance
Behavior
Rewards Recognition
Motivation

• Motivation
• Does the employee value the reward or the
  recognition?
• Does the employee believe that he/she can attain
  the reward or the recognition?
• Employee Behavior and Performance
• Which behavior does the reward motivate?
• For how long does the reward motivate this
  behavior?
• What level of effort (low/high) does the reward
  motivate?
• Are there unintended side effects?

4
Motivation

• The processes that arouse, direct, and maintain
  human behavior towards attaining some goal.

5
Reinforcement Basics

• Law of Effect
• Behavior that results in a pleasant outcome is
  likely to be repeated.
• Operant Conditioning
• learner recognizes the connection between a
  behavior and its consequences

6
Two important reinforcement concepts

• Contingencies of reinforcement
• How the reinforcer and behavior are paired
  together
• Examples positive reinforcement, negative
  reinforcement, punishment, or extinction
• Schedules of reinforcement
• How the reinforcer is delivered
• Examples continuous, fixed interval, variable
  interval, fixed ratio, or variable ratio

7
Organizational Errors Using Reinforcement

• All rewards are not reinforcers
• All rewards do not work for all people
• Rewarding undesired behaviors and punishing
  desired ones-- the Folly of Rewarding A While
  Hoping for B
• Big Point Think about how youre pairing your
  reinforcers and desired behaviors

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Hot Stove Rule. Punishment Should be..

• Forewarned
• Immediate
• Consistent
• Impersonal

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Other Tips for Using Punishment

• Do it in private
• Punish behavior, not person
• Communicate Reason
• Dont follow with non-contingent reward

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Expectancy Theory

• People choose between various behaviors and
  levels of effort by asking themselves
• Can I perform at a specified level if I try?
• If I perform at that level, what will happen?
• How much do I value those things that will happen?

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Expectancy Theory

• Expectancy- Belief (probability) that effort will
  lead to a successful performance
• Instrumentality- Belief (probability) that
  successful performance will lead to a specific
  outcome(s)
• Valence- Perceived value of the outcomes

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Expectancy Theory

• Motivational Force- Degree of effort that will be
  directed towards various levels of performance
• MF E x I x V

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Valence of Outcomes
Expected satisfaction from a given outcome

• Valence
• .2
• .9
• 1.0
• -.6

• Outcomes
• Praise
• Promotion
• Pay Raise
• Coworker derision

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Instrumentality

• Expectation that performance will result in
  outcome (-1 ? 1)
• High performance ? Praise (.8)
• High performance ? Promotion (0)
• High performance ? Pay Raise (.2)
• High performance ? Coworker derision (.5)

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How much motivation will employees have??

• Fred
• Outcomes V I VI
• Praise 2 .8 1.6
• Promotion 9 .0 0
• Pay Raise 10 .2 2
• Derision -6 .5 -3
• ?VI .6
• E .3
• M .18

• Ethel
• Outcomes V I VI
• Praise 7 .8 5.6
• Promotion 6 .3 1.8
• Pay Raise 10 .4 4
• Derision 0 .5 0
• ?VI 11.4
• E 1.0
• M 11.4!!

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Applying Expectancy Theory

• Theory provides rational basis for why people
  expend effort
• As a manager, you can possibly increase
  motivation if you can
• Increase the links between effort and performance
• Increase the links between performance and
  outcomes
• Provide valued outcomes

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Applying Expectancy Theory

• Expectancy
• Insure employees can do their jobs
• Instrumentality
• Make sure the link between job performance and
  rewards is clear and explicit
• Valence
• Offer appropriate rewards that employees value

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Perfect Pizzeria

• No positive incentives for employees
• Punishment ineffective not contingent on
  behavior
• No incentives for night manager
• Other incentives in place to encourage food
  theft/waste (expectancy application)