EVALUATION AND REWARDS

INFLUENCE BEHAVIOR
MANAGEMENT AND ORGANIZATIONAL BEHAVIOR
BM6013
LECTURER: SHARON @ TOH PEI SUNG, PH.D
 Learning Outcomes
1. Describe the purposes of performance evaluation.
2. Explain how feedback is used to evaluate performance.
3. Summarize the basic principles of reinforcement theory.
4. Differentiate between intrinsic and extrinsic rewards.
5. Discuss how rewards affect important organizational outcomes.
 Introduction
• Reward distribution strategies
• Universal or across-the-board (example: a 3% pay raise for all employees)
• Tenure or seniority
• Job performance

• To achieve maximum effectiveness, employee evaluation systems

must be linked with reward systems
 Rewards Impact…

❑ Behavior

❑ Absenteeism

❑ Turnover

❑ Job performance

❑ Commitment
 Purposes of Evaluation
• Judgmental
• Provide a basis for reward
allocation
• Identify high-potential
employees
• Validate the effectiveness of
employee selection
procedures
• Evaluate previous training
programs
Focus on past performance and judgmental on
which employee should be rewarded and how
effective organizational programs
• Development
• Stimulate performance
improvement
• Develop ways of overcoming
obstacles and performance
barriers
• Identify training &
development opportunities
• Establish supervisor-
employee agreement on
performance expectations
Concerned with future performance by
ensuring expectations are clear and facilitate
employee performance through training
 Focus of Evaluation
• Deficiency- The evaluation doesn’t cover all aspects of the
job
• Example: In the job evaluation process for a software developer
position, the evaluation criteria do not consider the importance of
communication skills, which are crucial for collaborating with team
members and stakeholders. As a result, the evaluation doesn't cover
all aspects of the job.
 Focus of Evaluation
• Contamination- Activities that are not part of the job are
included in the evaluation
• Example: When assessing a marketing manager's performance, the
evaluation includes tasks that are not part of their job description,
such as managing office supplies or handling IT support requests.
These unrelated activities contaminate the evaluation process and
make it less accurate.
 Focus of Evaluation
• Distortion- Improper emphasis is given to various job
elements
• Example: In a job evaluation for a sales representative, the evaluation
criteria place excessive emphasis on the number of calls made per
day, while neglecting the quality of customer relationships and actual
sales results. This distortion can lead employees to prioritize quantity
over quality in their work, which is not aligned with the organization's
goals.
 Improving Evaluations
Maximize use and acceptance of evaluations
• Increase employee participation in the evaluation process
• Set specific performance goals
• Provide manager training in evaluations
• Evaluate on how effectively the duties were performed
• Communicate results to employees
• Actively recognize and reinforce good performance
• Evaluate performance on a continuous basis
 Performance Evaluation Feedback

❑ Provide Feedback After Performance Evaluations

❑ Explain what went into the evaluation

❑ Explain how to improve or sustain performance

❑ Avoid generic phrases

❑ Managers generally fear giving feedback

 Purpose of Evaluation Feedback

▪ Instructional – it points out areas for improvement and teaches

new behavior.
▪ Motivational – it provides a reward.
Cognitive Feedback Model
 360-Degree Approach to Feedback
• Up to 90% of Fortune 1000 firms use some form of multisource
feedback program.

• Increasing use came from calls for fairness, clarity, and credibility.

• In a 360-degree program, evaluators could include creditors, peers or

team members, supervisors, subordinates, and the person being
evaluated.
 Reinforcement Theory
• Reinforcement is a Key Principle of Learning.
• Reinforcement is a fundamental concept in learning.
• It involves the use of consequences to strengthen or weaken
behaviors, which, in turn, affects the likelihood of those behaviors
being repeated.
 Reinforcement Theory
• Positive consequences increase the strength of a behavior and the
probability of repetition.
• Scenario: In a classroom, a teacher wants to encourage students to
participate actively in class discussions. Whenever a student raises
their hand and provides an insightful answer during the discussion,
the teacher praises them and awards them a small prize, like a sticker.
• Explanation: In this case, the praise and the sticker serve as positive
reinforcements. By receiving praise and a reward (sticker) for active
participation, the student is more likely to engage in discussions in
the future, as the positive consequences increase the strength of the
behavior.
 Reinforcement Theory
• Negative consequences increase the strength of a response and the
probability of repetition.
• Scenario: An employee at a busy call center is frequently subjected to loud
and distracting background noise. To encourage employees to wear noise-
canceling headphones, the company offers a policy where employees who
wear headphones can have their workstations in quieter areas of the
office.
• Explanation: In this case, the removal of the aversive stimulus (loud
background noise) is the negative reinforcement. Employees who wear
noise-canceling headphones are more likely to continue doing so because it
leads to a quieter work environment. The behavior of wearing headphones
is strengthened because it removes the aversive condition.
 Reinforcement Theory

A reinforcement is different from a reward:

• A reward is perceived as desirable, and is provided
after performance

• Not all rewards are reinforcers

• Reinforcers increase the rate of behavior

 Reinforcement Theory
• Imagine a manager at a company, Sarah, wants to improve the
punctuality and productivity of her team. She decides to use
reinforcement strategies and rewards to achieve these goals.
• Reinforcement: Sarah identifies that arriving at work on time and
completing tasks promptly is essential. To reinforce punctuality and
productivity, she implements a system where employees who
consistently arrive on time and complete their tasks efficiently receive
extra training opportunities, which can lead to career advancement
within the company. In this case, the extra training opportunities
serve as reinforcers because they increase the likelihood of
employees being punctual and productive.
 Reinforcement Theory
• Imagine a manager at a company, Sarah, wants to improve the
punctuality and productivity of her team. She decides to use
reinforcement strategies and rewards to achieve these goals.
• Reward: Additionally, Sarah wants to boost team morale, so she
introduces a monthly "Employee of the Month" award. The employee
who demonstrates exceptional dedication, teamwork, and
performance during the month receives a certificate, a gift card, and
public recognition. This award is a reward because it is provided after
performance and is seen as desirable by employees. However, not all
employees may find this reward equally motivating, so it may not
serve as a reinforcer for everyone.
 Reinforcement Theory
• Punishment

 An uncomfortable or unwanted consequence for a

particular behavior response

 Should be used only after careful and objective

consideration of the situation
 Reinforcement Theory
• Extinction- Reducing unwanted behavior

• If positive reinforcement for a learned response is withheld,

the behavior continues for some time.
• If non-reinforcement continues, the behavior decreases in
frequency until it disappears.
• Example: the continual telephone calls from a financial
advisor that are not returned are eventually going to stop.
 Reinforcement Theory
• Imagine a parent, Lisa, has a young child named Emily who frequently
throws tantrums in public places when she doesn't get what she
wants. The parent has been unintentionally reinforcing this behavior
by giving in to Emily's demands to stop the tantrum and avoid
embarrassment in public.
 Reinforcement Theory
• Using Extinction:
• To reduce Emily's tantrums, Lisa decides to apply the principle of
extinction:
• Withholding Positive Reinforcement: Lisa realizes that Emily's
tantrums are often followed by her receiving the desired item or
attention (positive reinforcement). Instead of giving in to Emily's
demands during a tantrum, Lisa decides not to provide the
reinforcement.
• Initial Continued Behavior: When Lisa first withholds positive
reinforcement, Emily's tantrum continues for a period. She cries
loudly and throws herself on the floor, seeking attention or the
desired item.
 Reinforcement Theory
• Continued Non-Reinforcement: Lisa remains consistent and continues
to withhold reinforcement, even if Emily's tantrum persists. Lisa
ignores the behavior and avoids giving in to Emily's demands.
• Behavior Decreases: Over time, as Emily realizes that her tantrums no
longer result in her getting what she wants, the frequency and
intensity of her tantrums begin to decrease. She starts to understand
that tantrums are no longer an effective way to achieve her goals.
• Behavior Disappears: With continued non-reinforcement, Emily's
tantrums eventually disappear altogether. She learns alternative,
more appropriate ways to express her needs and desires.
 Individual Rewards
• Three Main Objectives of Reward Programs
➢ Attract qualified people to the organization
➢ Keep employees coming to work
➢ Motivate high levels of employee performance
 Individual Rewards
The reward process Motivation alone is insufficient
attempts to integrate: to cause good performance.
✓ Satisfaction ✓ Performance also requires
ability, skill, and experience
✓ Motivation
✓ Performance
✓ Rewards
The Reward Process
 Lawler’s Conclusions
➢ Satisfaction with a reward
• A function of how much is received, and how much one feels should be
received
➢ Is influenced by
• Comparisons with what happens to others
• How satisfied one is with both intrinsic and extrinsic rewards
➢ People differ in the rewards they desire, and in how important
rewards are to them
 Lawler’s Conclusions
• Scenario: Employee Bonuses at a Company
• Factors Influencing Satisfaction with Rewards:
• Imagine a company, XYZ Inc., that provides annual bonuses to its
employees based on performance. The level of satisfaction with these
bonuses can vary among employees due to several factors:
• Amount Received vs. Expectations: Two employees, Sarah and John,
receive their annual bonuses. Sarah receives a substantial bonus that
exceeds her expectations, while John receives a smaller bonus that
falls below his expectations. Sarah is highly satisfied with her bonus
because it exceeds what she felt she should receive, whereas John is
less satisfied because his bonus is below his expectations.
 Lawler’s Conclusions
• Comparisons with Others: Sarah and John both discuss their bonuses
with their colleagues. Sarah's colleagues received bonuses of similar
or smaller amounts, so she feels relatively more satisfied compared to
her peers. However, John's colleagues received larger bonuses,
leading him to feel less satisfied in comparison.
• Intrinsic and Extrinsic Rewards: Some employees at XYZ Inc. value
intrinsic rewards, such as job satisfaction, recognition, or
opportunities for personal growth, more than extrinsic rewards like
bonuses. For example, Emily finds great satisfaction in the challenging
projects she's assigned, and her bonus is less important to her. In
contrast, Michael highly values financial bonuses and places less
importance on intrinsic rewards.
 Lawler’s Conclusions
• Individual Differences: XYZ Inc. has a diverse workforce with
employees who have different preferences and priorities when it
comes to rewards. While some employees prioritize monetary
rewards, others may prioritize flexible work hours, additional time off,
or professional development opportunities.
 Satisfaction & Rewards
Any reward package should be…
• Sufficient to satisfy basic needs
• Equitable
• Individually oriented

Types of rewards
• Intrinsic… self-administered by the person
• Extrinsic… initiated from outside the person
 Intrinsic and Extrinsic Rewards

• Extrinsic rewards • Intrinsic rewards

• Salary and wages • Completion

• Employee benefits • Achievement

• Interpersonal rewards • Autonomy

• Promotions • Personal growth

 Intrinsic Rewards
• Completion – the ability to start and finish a project or job
• A form of self-reward – a powerful motivating effect.
• Achievement – A self-administered reward – derived when a person
reaches a challenging goal.
• Autonomy – Right and privilege to make decisions and operate
without being closely supervised.
• Personal Growth – Sense of his or her development
 Administering Rewards
• Positive Reinforcement – the desired behavior leads to job
performance.
• The relationship between behavior and consequences.
• Modeling and Social Imitation – Observational learning
• Expectancy Theory – Effort → Performance → Desired Outcomes
Rewards Affect Employee and Organizational
Concerns
Employee concerns Organizational concerns
affected affected
• Perceptions • Organizational
• Attitudes commitment
• Behavior • Job performance
• Turnover and
absenteeism
THANK YOU
 Discussion

Which Reward Motivates You and Why?

(Rank-order your top three choices)