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Chapter 14. Managing and Enhancing Performance. Chapter 14 Objectives. Describe the relationships among performance measured at different levels within an organization and discuss how training, development, and job redesign can help improve performance

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slide1

Chapter 14

Managing and Enhancing Performance

chapter 14 objectives
Chapter 14 Objectives
  • Describe the relationships among performance measured at different levels within an organization and discuss how training, development, and job redesign can help improve performance
  • Discuss the role of alternate work arrangements in motivating and enhancing performance
  • Describe the role of incentive pay and identify different programs for individual-based and team-based incentive plans
enhancing performance at different levels
Enhancing Performance at Different Levels
  • The goal of productivity improvement programs is to improve productivity by increasing employee motivation.
    • Extrinsic rewards: given by the employer to employees.
    • Intrinsic rewards: those that come from within a person.
  • Successful productivity improvement programs are able to establish a clear connection between employee efforts and rewards.
  • Many theories attempt to explain the motivational process.
enhancing performance at different levels2
Firm-Level Performance

Is an indication of the likelihood of long-term survival of the firm.

Generates profits for potential profit sharing and determines the firm’s stock price.

Enhancing Performance at Different Levels
slide6

Enhancing Performance at Different Levels – Training and Development

Training and development contributes to performance enhancement by:

  • Enhancing recruitment
  • Increasing worker competence (new and current)
  • Reducing the likelihood of unwanted turnover.
slide7

Enhancing Performance at Different Levels – Training and Development

  • Enhancing Recruitment:
    • Attract best candidates
slide8

Enhancing Performance at Different Levels – Training and Development

  • Increasing the competence of new employees:
    • Technical training: Provide technical knowledge and skills needed to perform a job.
    • Orientation training: Learn about the job, the company, and its policies and procedures.
    • Literacy training: Improve basic skills in such areas as writing, basic arithmetic, listening/following oral instructions, speaking, and understanding manuals, graphs, and schedules.
slide9

Enhancing Performance at Different Levels – Training and Development

  • Increasing the competence of current workers:
    • Remedial training: Implemented when workers are deficient in some skills.
    • Change-related training: Used to keep up-to-date with various changes including technology, laws or procedures, or the organization’s strategic plan.
    • Developmental programs: Provide employees with the appropriate skills needed for higher level positions.
slide10

Enhancing Performance at Different Levels – Training and Development

  • Reducing the likelihood of unwanted turnover:
    • Training can prevent unnecessary terminations by:
      • Building employee job skills, improving job performance.
      • Improving supervisors' capabilities for managing “underperforming” workers.
      • Reeducating people whose skills have become obsolete, allowing the organization to assign them to new job responsibilities.
    • Effective training programs can reduce turnover by strengthening employee loyalty.
slide11

Enhancing Performance at Different Levels – Training and Development

  • Training
  • The process of providing employees with specific skills or helping them correct deficiencies in their performance.
      • Current Job
      • Individual Employees
      • Immediate
      • Fix current skill deficit
      • May be seen as negative
  • Development
  • An effort to provide employees with the abilities the organization will need in the future.
      • Current and future job
      • Work group and organization
      • Long term
      • Prepare for future work demands
slide12

Enhancing Performance at Different Levels – Training and Development

Challenges of Training

  • Is training the solution to the problem?
  • Are the goals of training clear and realistic?
  • Is training a good investment?
  • Will the training work?
slide13

Enhancing Performance at Different Levels – Training and Development

Managing the Training Process

slide14

Enhancing Performance at Different Levels – Training and Development

Managing the Training Process – Needs Assessment

  • Levels of needs assessment:
slide15

Enhancing Performance at Different Levels – Training and Development

Managing the Training Process – Needs Assessment

  • First Step to Conducting a Needs Assessment:
  • Perform a "Gap" Analysis:
    • Current situation vs. Desired or necessary
    • situation
    • The difference or the "gap" between
    • the current and the necessary will
    • identify our needs, purposes, and
    • objectives:
        • Problems or deficits
        • Impending change
        • Opportunities
        • Strengths
        • New directions
        • Mandated training
slide16

Enhancing Performance at Different Levels – Training and Development

Managing the Training Process – Development and Conduct of Training

  • Approaches vary by:
slide17

Enhancing Performance at Different Levels – Training and Development

  • Development and Conduct of Training Phase:
  • Location Options – On the Job (OJT):
    • Job rotation
    • Apprenticeships
    • Internships
  • Advantages:
    • Relevant to job
    • Can be inexpensive to implement
    • Immediate feedback
  • Disadvantages:
    • Can be costly in customer satisfaction
    • Wide variation in quality and content of
    • teaching
slide18

Enhancing Performance at Different Levels – Training and Development

  • Development and Conduct of Training Phase:
  • Location Options – Off- the-Job Training:
    • Advantages:
      • Gives employees uninterrupted time
      • More conducive to learning/less
      • distractions
    • Disadvantages:
      • Learning may not transfer back to job
      • Employees may view training as an
      • opportunity to enjoy time away from
      • work
slide19

Enhancing Performance at Different Levels – Training and Development

  • Development and Conduct of Training Phase:
  • Presentation Options:
    • Slides and Videotapes
    • Teletraining
    • Computers
    • Simulations
      • Replicate job demands at off-site
      • facility
    • Virtual Reality (VR):
      • The use of a number of
      • technologies to replicate the entire
      • real-life working environment in real
      • time
    • Classroom Instruction and Role-plays
slide20

Enhancing Performance at Different Levels – Training and Development

  • Development and Conduct of Training Phase:
  • Types of Training Options:
    • Skills Training:
      • Job aids:
        • External sources of information that provide job related
        • information
    • Retraining
    • Cross-functional Training
    • Team Training
slide21

Enhancing Performance at Different Levels – Training and Development

  • Development and Conduct of Training Phase:
  • Types of Training (cont.):
    • Creativity Training – brainstorming
    • Literacy Training
    • Diversity Training
    • Crisis Training
    • Customer Service Training
    • Ethics Training
slide22

Enhancing Performance at Different Levels – Training and Development

  • Phase 3 – The Evaluation Phase
  • Return on Investment (ROI)
slide23

Enhancing Performance at Different Levels – Job Redesign

  • Job Redesign:
  • Job Rotation
  • Job Enlargement
  • Job Enrichment
slide24

Enhancing Performance at Different Levels – Job Redesign

  • Job Characteristics Model
    • Aims to redesign jobs to be more intrinsically rewarding.
    • Characteristics that make a job intrinsically rewarding are skill variety, task identity, task significance, autonomy, and job feedback.
    • Some specific techniques for enriching a job:
      • Combine tasks
      • Establish client relationships
      • Reduce direct supervision
      • Increase identification with product/service
slide26

Enhancing Performance at Different Levels – Job Redesign

Job Enrichment

  • Strengths
    • Makes jobs less automated, and more interesting and rewarding.
    • Enrichment leads to improvements in productivity, quality, absenteeism rates, and retention.
  • Weaknesses
    • Production may become less efficient.
    • Employees preferring highly automated jobs may oppose job enrichment efforts.
slide27

Enhancing Performance at Different Levels – Job Redesign

  • Self-managed work teams
    • Consist of 6 to 18 employees from different departments who work together to produce a well-defined segment of finished work.
    • Team members are given the authority to plan, organize, and coordinate, and take corrective actions.
    • To prepare team-members for self-management, the organization must provide training in three areas:
      • Technical skills
      • Interpersonal skills
      • Administrative skills
slide28

Alternative Work Arrangements

  • Alternative Work Arrangements:
  • Flexible work hour plans
  • Compressed workweeks
  • Telecommuting
  • Job sharing
  • Part-time employment
slide29

Incentives and Performance-Based

Rewards

  • Merit pay plans
    • Grant employees annual pay raises based on their levels of job performance.
    • The merit pay guidechart shows the size of a merit pay raise associated with each level of job performance.
  • Merit pay plan—strengths
    • Established effort-performance and performance–reward link.
    • Publicized merit pay guidecharts to strengthen the performance–reward link.
slide30

Incentives and Performance-Based

Rewards

  • Merit pay plan—weaknesses
    • Fail to establish a clear performance-reward link.
    • Fails when employees do not value the rewards offered by the company.
    • Hinder performance-reward link when supervisors fail to distinguish between employees within the team
    • Time lag exists between behavior and reward.
    • Is not very cost-efficient.
    • Productivity hindered if these plans fail to reward behaviors that contribute to organizational goals.
slide31

Incentives and Performance-Based

Rewards – Individual Incentive Plans

  • Piece rate plans
    • Base an individual’s wages on the number of “pieces” or product units he or she produces.
    • Piece rate plans vary.
      • Straight piecework: pays workers a set amount for each unit produced.
      • Different piece rates: depends on whether the worker has met the standard.
slide32

Incentives and Performance-Based

Rewards – Individual Incentive Plans

  • Piece rate plans
  • Strengths
    • Cost efficient.
    • Employees know what to do to earn reward.
    • Performance standards are objective.
    • Rewards are tied directly to performance.
  • Weaknesses
    • Pressure placed on employees to produce.
    • Workers may resist management’s attempts to introduce new technology or systems.
    • Workers are not rewarded for suggesting new ideas.
    • Employees may neglect aspects not covered in the performance goals.
    • Encourage competition rather than teamwork.
slide33

Incentives and Performance-Based

Rewards – Team and Group Plans

  • Gainsharing plans offer employees a cash award for meeting or exceeding goals based on the collaborative performance of a team of employees.
  • Most gainsharing plans feature the following:
    • The organization has productivity goals that can be achieved through effective teamwork.
    • Employees receive cash bonuses if goals are met.
    • Productivity is measured by an explicit formula with objective measures.
    • Employees are encouraged to submit suggestions for cutting production costs or increasing productivity.
slide34

Incentives and Performance-Based

Rewards – Team and Group Plans

  • The Scanlon Plan
    • Is a gainsharing plan.
    • Aims to cut production costs, relative to output.
    • For implementing a Scanlon Plan:
      • Calculate the ratio of production cost/sales value of production that would be expected in a typical year.
      • Decide how production costs are to be cut.
      • Allocates bonuses in the following manner: 75 percent is paid out and 25 percent is held in reserve for lean periods in which there are no bonuses.
slide35

Incentives and Performance-Based

Rewards – Team and Group Plans

  • Gainsharing plans
  • Strengths
    • Effort-performance and performance-reward links are strong.
    • Link performance with the organization’s mission.
    • Promote teamwork.
    • Are cost-effective.
  • Weaknesses
    • Employees may perceive rewards as being unfairly distributed.
    • Employee suggestions for improving efficiency may dwindle over time.
    • May suffer if payout formulas are inflexible.
slide36

Incentives and Performance-Based

Rewards – Team and Group Plans

  • Profit-sharing plans
    • Reward group, rather than individual, performance.
    • The payout is based on profits rather than gains.
    • A portion of the company’s profits is contributed to individual employee accounts.
slide37

Incentives and Performance-Based

Rewards – Team and Group Plans

  • Three types of profit-sharing plans:
    • Deferred plans: An individual’s profit-sharing earnings are distributed at retirement.
    • Distribution plans: The company fully distributes each period’s earnings as soon as the profit-sharing pool is calculated.
    • Combination plans: Employees receive a portion of each period’s earnings immediately; the remainder awaits future distribution.
slide38

Incentives and Performance-Based

Rewards – Team and Group Plans

  • Profit-sharing plans
  • Strengths
    • Improves productivity by making employees’ interests compatible with employers’ goals.
    • Employees may gain a greater sense of ownership.
  • Weaknesses
    • Only marginally address effort-performance-rewards links.
    • Not always cost efficient.
    • Rewards are not timely.