Chapter 5 Evaluation, Feedback, and Reward of Individual Behavior John M. Ivancevich Michael T. Matteson Slides Prepared by Bruce R. Barringer University of Central Florida © McGraw-Hill Companies, Inc., 1999

Learning Objectives Slide 1 of 2 Describe several purposes of performance evaluation. Explain why a 360-degree feedback program is considered more thorough. Discuss reinforcement theory. Describe the elements in a model of rewards. © McGraw-Hill Companies, Inc., 1999

Learning Objectives Slide 2 of 2 Compare intrinsic and extrinsic rewards. Understand the role rewards play in turnover, absenteeism, performing, and commitment. Identify several innovative reward systems. © McGraw-Hill Companies, Inc., 1999

Purposes of Evaluation Judgmental Orientation Developmental Orientation - Provide basis for reward allocation - Identify high-potential employees - Validate effectiveness of employee selection procedures - Evaluate previous training programs - Facilitate future performance improvements - Develop ways of overcoming obstacles & performance barriers - Identify training and development opportunities - Establish supervisor-employee agreement on performance expectations © McGraw-Hill Companies, Inc., 1999

Focus of Evaluation Effective performance evaluation asks the following two questions: Is the work being done effectively? Are employee skills and abilities being fully utilized? © McGraw-Hill Companies, Inc., 1999

Improving Evaluations Slide 1 of 2 Suggestions for Improving the Effectiveness of an Evaluation System Ask employees to participate in the evaluation process. Set specific performance goals. Provide supervisor’s training in evaluation subordinates’ performance. Communicate the results of the evaluation process to employees. © McGraw-Hill Companies, Inc., 1999

Improving Evaluations Slide 2 of 2 Suggestions for Improving the Effectiveness of an Evaluation System (continued) Do not focus entirely on problem areas; good performance should be actively recognized and rewarded. Make performance evaluation a continuous, ongoing process. © McGraw-Hill Companies, Inc., 1999

Performance Evaluation Feedback Instructional Feedback instructs when it points out areas for improvement and teaches new behavior Performance evaluation feedback can be instructional and/or motivational to the receiver (the evaluated person). Motivational Feedback is motivational when it provides a reward or promises a reward © McGraw-Hill Companies, Inc., 1999

Multisource Feedback: A 360-Degree Approach A 360-degree program evaluators could include creditors, peers or team members, supervisors, subordinates, and the person being evaluated. The increasing use of multisource programs is the result of calls for more fairness, clarity, and creditability in performance improvement programs. © McGraw-Hill Companies, Inc., 1999

Reinforcement Theory Slide 1 of 2 Rationale behind Reinforcement Theory Learning experts believe that reinforcement is the most important principle of learning. Desired or reinforcing consequences will increase the strength of a behavior and increase the probability of the behavior being repeated. Operants Behaviors that can be controlled by altering the consequences that follow them. © McGraw-Hill Companies, Inc., 1999

Reinforcement Theory Slide 2 of 2 Forms of Reinforcement Positive Reinforcement A stimulus that, when applied to the situation, strengthens the probability of a behavioral response. Punishment Is defined as presenting an uncomfortable or unwanted consequence for a particular behavioral response. Extinction Reduces unwanted behavior by withholding positive reinforcers. © McGraw-Hill Companies, Inc., 1999

Exhibit 5.2: Rewards, Reinforcement, and Punishment Desirable Undesirable I II Positive reinforcement (behavior increases) Punishment (behavior decreases) Applied III IV Withdrawn Punishment (behavior decreases) Negative reinforcement (behavior increases) © McGraw-Hill Companies, Inc., 1999

Reinforcement Schedules Slide 1 of 2 Fixed Interval A situation in which a reinforcer is applied only after a certain period of time has elapsed since the last reinforcer was applied. Variable Interval A reinforcer applied at some variable interval of time. © McGraw-Hill Companies, Inc., 1999

Reinforcement Schedules Slide 2 of 2 Fixed Ratio A reinforcer is applied only if a fixed number of desired responses have occurred. Variable Ratio A reinforcer is applied only after a number of desired responses, with the number of desired responses changing from situation to situation, around an average. © McGraw-Hill Companies, Inc., 1999

Exhibit 5.4: The Reward Process Ability and skill Intrinsic rewards Motivation to exert effort Performance results: Individual Performance evaluation Satisfaction Experience Extrinsic Rewards © McGraw-Hill Companies, Inc., 1999

Intrinsic and Extrinsic Rewards Intrinsic Rewards Rewards that are part of the job itself. The responsibility, challenge, and feedback characteristics of the job are intrinsic rewards. Extrinsic Rewards Rewards external to the job such as pay, promotion, or fringe benefits. © McGraw-Hill Companies, Inc., 1999

Administering Rewards The three major theoretical approaches to reward administration are: Positive Reinforcement Modeling and Social Interaction Expectancy Theory © McGraw-Hill Companies, Inc., 1999

Organizational Concerns that are Influenced by Rewards Turnover and Absenteeism Performance Commitment © McGraw-Hill Companies, Inc., 1999

Innovative Reward Systems Gainsharing Skill-Based Pay Broadbanding Banking Time Off Team-Based Rewards All-Salaried Team Employee Stock Ownership Plans © McGraw-Hill Companies, Inc., 1999

Line of Sight: The Key Issue Line of sight means that the employee perceives that there is a “real” linkage between his or her performance and the rewards received. Real link between performance and rewards © McGraw-Hill Companies, Inc., 1999