Chapter 07 - Evaluation and Rewards Influence Behavior
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Summary of Key Points
Performance evaluation serves several major purposes, including (1) providing a basis for
reward allocation, (2) identifying high-potential employees, (3) validating the effectiveness of
employee selection procedures, (4) evaluating previous training programs, and (5) facilitating
future performance improvement.
Feedback sessions should use objective information to help guide the evaluated employee to
improve or sustain performance.
A 360-degree feedback program involves the use of multiple sources of evaluation
information collected from a full circle of evaluators (e.g., supervisors, subordinates, peers,
and others). •Reinforcement theory suggests that behavior is influenced by its consequences
and that it is possible to affect behavior by controlling such consequences. Desired behaviors
are reinforced through the use of rewards, while undesired behaviors can be extinguished
through punishment. The timing of rewards and punishments is extremely critical and is
controlled through the use of various reinforcement schedules.
A useful model of individual rewards would include the suggestion that ability, skill, and
experience, in addition to motivation, result in various levels of individual performance. The
resulting performance is then evaluated by management, which can distribute two types of
rewards: intrinsic and extrinsic. These rewards are evaluated by the individual receiving them
and, to the extent that they result in satisfaction, motivation to perform is enhanced.
Organizational rewards can be classified as either extrinsic or intrinsic. Extrinsic rewards
include salary and wages, fringe benefits, promotions, and certain types of interpersonal
rewards. Intrinsic rewards can include such things as a sense of completion, achievement,
autonomy, and personal growth.
An effective reward system would encourage the best performers to remain with the
organization, while causing the poorer performers to leave. To accomplish this, the system
must be perceived as equitable. Additionally, the reward system should minimize the
incidence of absenteeism. Generally, absenteeism will be less if an employee feels that
attendance will lead to more valued rewards and fewer negative consequences
Both extrinsic and intrinsic rewards can be used to motivate job performance. For this to
occur, certain conditions must exist: The rewards must be valued by the employee, and they
must be related to the level of job performance that is to be motivated.
In addition to standard organizational rewards such as pay, fringe benefits, advancement, and
opportunities for growth, some organizations are experimenting with more innovative reward
programs. Examples of such approaches include skill-based pay, broadbanding, concierge
services, team-based rewards, part-time benefits, gain-sharing, and employee stock ownership
plans
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