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Chapter 6: Applied Performance Practices
Instructor’s Manual to Accompany

Organizational Behavior 7/e
(Global Edition)
by Steven L. McShane and Mary Ann Von Glinow
Chapter 6:
Applied Performance
Practices
Prepared by:
Steven L. McShane, The University of Western Australia
Page 6-1
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Applied Performance
6 Practices
LEARNING OBJECTIVES
After reading this chapter, students should be able to:
1. Discuss the meaning of money and identify several individual-, team-, and organizational-
level performance-based rewards.
2. Describe five ways to improve reward effectiveness.
3. List the advantages and disadvantages of job specialization.
4. Diagram the job characteristics model and describe three ways to improve employee
motivation through job design.
5. Define empowerment and identify strategies that support empowerment.
6. Describe the five elements of self-leadership and identify specific personal and work
environment influences on self-leadership.
CHAPTER GLOSSARY
autonomy -- The degree to which a job gives employees job design -- The process of assigning tasks to a job,
the freedom, independence, and discretion to schedule including the interdependency of those tasks with other
their work and determine the procedures used in jobs.
completing it.
job enlargement -- The practice of adding more tasks to
employee stock ownership plan (ESOP) -- A reward an existing job.
system that encourages employees to buy company
job enrichment -- The practice of giving employees more
stock.
responsibility for scheduling, coordinating, and
empowerment -- A psychological concept in which planning their own work.
people experience more self- determination, meaning,
job evaluation -- Systematically rating the worth of jobs
competence, and impact regarding their role in the
within an organization by measuring the required skill,
organization.
effort, responsibility, and working conditions.
gainsharing plan -- A team-based reward that calculates
job specialization -- The result of a division of labor, in
bonuses from the work unit’s cost savings and
which work is subdivided into separate jobs assigned to
productivity improvement.
different people.
job characteristics model -- A job design model that
mental imagery -- The process of mentally practicing a
relates the motivational properties of jobs to specific
task and visualizing its successful completion.
personal and organizational consequences of those
properties.
Page 6-2
motivator-hygiene theory -- Herzberg’s theory stating skill variety -- The extent to which employees must use
that employees are primarily motivated by growth and different skills and talents to perform tasks within their
esteem needs, not by lower-level needs. jobs.
profit-sharing plan -- A reward system that pays stock options -- A reward system that gives employees
bonuses to employees on the basis of the previous year’s the right to purchase company stock at a future date at a
level of corporate profits. predetermined price.
scientific management -- The practice of systematically task identity -- The degree to which a job requires
partitioning work into its smallest elements and completion of a whole or an identifiable piece of work.
standardizing tasks to achieve maximum efficiency.
task significance -- The degree to which a job has a
self-leadership -- The process of influencing oneself to substantial impact on the organization and/or larger
establish the self- direction and self-motivation needed society.
to perform a task.
self-talk -- The process of talking to ourselves about our
own thoughts or actions.
CHAPTER SUMMARY BY LEARNING OBJECTIVE

6-1 Discuss the meaning of money and identify several individual-, team-, and organizational-level performance-
based rewards.
Money (and other financial rewards) is a fundamental part of the employment relationship, but it also relates to
our needs, our emotions, and our self-concept. It is viewed as a symbol of status and prestige, as a source of
security, as a source of evil, or as a source of anxiety or feelings of inadequacy.
Organizations reward employees for their membership and seniority, job status, competencies, and performance.
Membership-based rewards may attract job applicants and seniority-based rewards reduce turnover, but these
reward objectives tend to discourage turnover among those with the lowest performance. Rewards based on job
status try to maintain internal equity and motivate employees to compete for promotions. However, they tend to
encourage a bureaucratic hierarchy, support status differences, and motivate employees to compete and hoard
resources. Competency-based rewards are becoming increasingly popular because they encourage skill
development. However, they tend to be subjectively measured and can result in higher costs as employees spend
more time learning new skills.
Awards and bonuses, commissions, and other individual performance-based rewards have existed for centuries
and are widely used. Many companies are shifting to team-based rewards such as gainsharing plans and to
organizational rewards such as employee stock ownership plans (ESOPs), stock options, and profit sharing.
Although ESOPs and stock options create an ownership culture, employees often perceive a weak connection
between individual performance and the organizational reward.
6-2 Describe five ways to improve reward effectiveness.

Financial rewards have a number of limitations, but reward effectiveness can be improved in several ways.
Organizational leaders should ensure that rewards are linked to work performance, rewards are aligned with
performance within the employee’s control, team rewards are used where jobs are interdependent, rewards are
valued by employees, and rewards have no unintended consequences.
Page 6-3
6-3 List the advantages and disadvantages of job specialization.

Job design is the process of assigning tasks to a job, including the interdependency of those tasks with other jobs.
Job specialization subdivides work into separate jobs for different people. This increases work efficiency, because
employees master the tasks quickly, spend less time changing tasks, require less training, and can be matched more
closely with the jobs best suited to their skills. However, job specialization may reduce work motivation, create
mental health problems, lower product or service quality, and increase costs through discontentment, absenteeism,
and turnover.
6-4 Diagram the job characteristics model and describe three ways to improve employee motivation through job
design.
The job characteristics model is a template for job redesign that specifies core job dimensions, psychological states,
and individual differences. The five core job dimensions are skill variety, task identity, task significance, autonomy,
and job feedback. Jobs also vary in their required social interaction (task interdependence), predictability of work
activities (task variability), and procedural clarity (task analyzability). Contemporary job design strategies try to
motivate employees through job rotation, job enlargement, and job enrichment. Organizations introduce job
rotation to reduce job boredom, develop a more flexible workforce, and reduce the incidence of repetitive strain
injuries. Job enlargement involves increasing the number of tasks within the job. Two ways to enrich jobs are
clustering tasks into natural groups and establishing client relationships.
6-5 Define empowerment and identify strategies that support empowerment.

Empowerment is a psychological concept represented by four dimensions: self-determination, meaning,
competence, and impact, related to the individual’s role in the organization. Individual characteristics seem to
have a minor influence on empowerment. Job design is a major influence, particularly autonomy, task identity, task
significance, and job feedback. Empowerment is also supported at the organizational level through a learning
orientation culture, sufficient information and resources, and corporate leaders who trust employees.
6-6 Describe the five elements of self-leadership and identify specific personal and work environment influences
on self-leadership.
Self-leadership is the process of influencing oneself to establish the self-direction and self-motivation needed to
perform a task. This includes personal goal setting, constructive thought patterns, designing natural rewards,
self-monitoring, and self- reinforcement. Constructive thought patterns include self-talk and mental imagery. Self-
talk occurs in any situation in which a person talks to himself or herself about his or her own thoughts or actions.
Mental imagery involves mentally practicing a task and imagining successfully performing it beforehand. People
with higher levels of conscientiousness, extroversion, and a positive self-concept are more likely to apply self-
leadership strategies. It also increases in workplaces that support empowerment and have high trust between
employees and management.
Page 6-4
LECTURE OUTLINE (WITH POWERPOINT® SLIDES)
Applied Performance Practices
Applied Performance
Practices
Slide 1
Applied Performance Practices at Hilcorp Energy

Hilcorp Energy Co. has a highly motivated workforce, driven by generous
company-wide performance-based financial bonuses (including new cars
shown here) and intrinsically motivating jobs.
Applied Performance
Practices at Hilcorp
Energy
Slide 2
Meaning of Money at Work

Money motivates, more than previously thought
Money means different things to different people
Meaning of Money at • Symbol of achievement/success/status
Work • Reinforcer and motivator
Slide 3 • Reflection of performance
• Source of enhanced or reduced anxiety
Money ethic -- higher when money is perceived as:
• not evil
• a symbol of achievement, respect, and power
• something of value to be budgeted carefully
Gender differences
• Money is valued more by men than by women
• Men view money as a symbol of power/status
• Women view money as instrumental (exchanged for things of value)
Cultural differences
• Higher respect/priority for money in high power distance cultures
Page 6-5
Membership/Seniority-Based Rewards
Represent the largest part of most paychecks – “pay for pulse” e.g. fixed
wages
Membership/Seniority- Advantages
Based Rewards • Guaranteed wages may attract job applicants
Slide 4
• Seniority-based rewards reduce turnover
Disadvantages
• Do not directly motivate job performance
• Discourages poor performers from leaving voluntarily
• May act as “golden handcuffs” – discourage employees from quitting
Job Status-Based Rewards
Higher pay for employees in jobs with higher worth or status
Job evaluation --measures a job’s skill, effort, responsibility, working
Job Status-Based conditions
Rewards
Slide 5 Job status reward also include more perks in higher status jobs
Advantages:
• Improve feelings of fairness
• Motivates competition for promotions
Disadvantages:
• Encourages bureaucratic hierarchy
• Reinforces status vs. egalitarian workplace culture
• Employees may exaggerate duties, hoard resources
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Competency-Based Rewards
Two main types of competency pay
1. Broad competency-based pay bands -- employees increase pay within
the band by acquiring and demonstrating more competencies
Competency-Based
Rewards 2. Skill-based pay -- pay increases with number of skill blocks/modules
Slide 6 learned e.g. technical skills
Advantages
• More flexible and multiskilled work force
• Better product/service quality; consistent with employability
Disadvantages
• Competency definitions may be vague/subjective – skill-based plans
are more objective
• Higher training costs
Performance-Based Rewards
Individual-level rewards
• Bonuses (executives), commissions (sales), piece rate systems (hotel
housekeepers)
Performance-based
Rewards Team Rewards -- typically bonuses to entire team
Slide 7 • Gainsharing plans – bonuses based on team’s cost savings and
productivity improvement (i.e. share part of cost savings with firm)
Organizational Rewards
• Employee stock ownership plans (ESOPs) – reward systems that encourage
employees to buy company stock
• Stock options – the right to purchase company stock at a future date at a
predetermined price
• Profit-sharing plans – pays bonuses to employees from level of corporate
profits
Evaluating Organizational Rewards
• ESOPs, stock options create an “ownership culture”
• Profit-sharing automatically adjusts pay with firm’s prosperity
• Problem with organizational rewards
➡ weak connection between individual effort and rewards (low P-to-O
expectancy)
➡ ESOPs used as substitute for pension plan, lacks diversification
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Improving Reward Effectiveness

Link rewards to performance
• Higher rewards to those with better performance
Improving Reward Ensure rewards are relevant
Effectiveness • Reward outcomes within employee’s control (“line of sight”)
Slide 8
Use team rewards for interdependent jobs
• difficult to measure individual performance when jobs interdependent
Ensure rewards are valued
• Avoid assuming what employees want or that all want the same thing
Watch out for unintended consequences
• Think through consequences of rewards
• Test incentives in a pilot project
Unintended Consequences of Rewards at TransSantiago
Transit bus drivers in Santiago, Chile, were paid by the number of fare-
paying passengers. This incentive system motivated drivers to begin their
route on time, take shorter breaks and drive efficiently, however,
Unintended
Consequences of unintended results occurred:
Rewards at • Reckless driving to the next passenger waiting area
TransSantiago
• Cutting off competing buses
Slide 9
• Passenger injuries/fatalities because drivers speeded off before
passengers were seated
• Skipped stops where only one passenger was waiting
• Many traffic accidents
Job Design
Job design -- process of assigning tasks to a job, including the
interdependency of those tasks with other jobs
Organization's goal – to create jobs that allow work to be performed efficiently
Job Design
yet employees are motivated and engaged
Slide 10
Page 6-8
Job Specialization and Scientific Management

The result of division of labor in which each job includes a subset of the
tasks required to complete the product or service
Job Specialization and Scientific management
Scientific Management • Advocated by Frederick Winslow Taylor in early 1900s
Slide 11
• Mainly about high job specialization and standardization of tasks to
achieve maximum efficiency
• Taylor also popularized training, goal setting, work incentives
Advantages of job specialization
• Less time changing activities; lower training costs; jobs mastered quickly;
better person-job matching
Disadvantages of job specialization
• Job boredom; discontentment pay to attract employees resulting in higher
costs; reduced work quality; undermines the motivational aspect of jobs
Page 6-9
Job Characteristics Model

Five core job dimensions that produce three psychological states
Core job characteristics
Job Characteristics • Skill variety – using different skills/talents to perform tasks
Model ➡ e.g. sales clerks also stock inventory and change store-front displays
Slide 12
• Task identity – completing a whole or identifiable piece of work
➡ e.g. assembling an entire broadband modem rather than just soldering
circuitry
• Task significance – job’s perceived effect on firm and/or society
➡ e.g. quality of servicing aircraft engines affects passenger safety
• Autonomy – freedom, independence and discretion in scheduling the
work and determining procedures
• Job feedback – direct feedback from job about task performance
➡ e.g. pilots can tell how well they land the plane while performing the task
Critical Psychological States

• Experienced meaningfulness – believe the work is worthwhile/
important
• Experienced responsibility – feel personally accountable
• Knowledge of results – information on consequences of work effort
Individual Differences
• Job dimensions motivate only when employees have skills and
knowledge to master job
• Model originally also included growth need strength and satisfaction
with job context, but mixed support for these contingencies
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Other Job Characteristics

Social characteristics of the job
• Required interaction with other people (clients, coworkers, etc)
• Task interdependence -- job requires social interaction with coworkers
Other Job
Characteristics • Feedback from others -- from coworkers, clients, etc
Slide 13
Predictability/information processing demands of the job
• High task variability -- job has nonroutine work patterns;
➡ different and nonpredictable tasks on one day than another day
• High task analyzability -- job can be performed using known
procedures and rules.
➡ ready-made “cookbook” to guide most decisions and actions
➡ low task analyzability jobs require employee creativity and judgment
Job Rotation at EYE Lighting Int’l

Employees at Ohio-based EYE Lighting International practice job rotation.
“The employees love it because they don’t get bored in their daily job,”
says company president Tom Salpietra. He adds that job rotation also
Job Rotation at EYE
Lighting Int’l minimizes repetitive strain injuries and “allows us a tremendous amount
Slide 14 of flexibility” in work assignments.
Job Design Practices That Motivate
Job Rotation
The practice of moving employees from one job to another
Job Rotation
Slide 15 Benefits
• Minimizes health risks from repetitive strain and heavy lifting
• Supports multi-skilling which increases workforce flexibility
• Potentially reduces the boredom of highly repetitive jobs
Job Enlargement
Adding more tasks to an existing job – increases skill variety
Example: Video journalist is an example of an enlarged job
Job Enlargement • A traditional news team consists of a camera operator, a sound and
Slide 16 lighting specialist, and the journalist who writes and reports the story
• One video journalist performs all of these tasks
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Job Enrichment
Giving employees more responsibility for scheduling, coordinating, and
planning their work
Jon Enrichment Job enrichment strategies:
Slide 17 1. Natural grouping – combining interdependent tasks into one job
➡ e.g. video journalist completes an entire product (a news story)
2. Establishing client relationships – putting employees in direct contact
with their clients -- supervisor isn’t a go-between
Dimensions of Empowerment
Empowerment is a psychological concept with four dimensions:
Self determination
Dimensions of • Empowered employees feel that they have freedom, independence,
Empowerment and discretion over their work activities
Slide 18
Meaning
• Employees who feel empowered care about their work and believe that
what they do is important
Competence
• Empowered employees are confident about their ability to perform the
work well and have a capacity to grow with new challenges (self-
efficacy)
Impact
• Empowered employees view themselves as active participants in the
organization – their decisions and actions influence the company’s
success
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Supporting Empowerment
Individual factors
• Possess competencies, can perform the work, can handle additional
decision making demands
Supporting
Empowerment Job characteristics (job design factors)
Slide 19 • Autonomy, task identity, task significance, receive job feedback
Organizational factors
• Resources and information is accessible, learning orientation culture,
employees are trusted
Self-Leadership
The process of influencing oneself to establish the self-direction and self-
motivation needed to perform a task
Self-Leadership Includes concepts/practices from:
Slide 20 • Goal setting
• Social cognitive theory
• Sports psychology – constructive thought processes
Elements of Self-Leadership
1. Personal Goal Setting
• Set goals for your own work effort
• Apply effective goal setting practices
Elements of Self- • Requires a high degree of self-awareness
Leadership
Slide 21 2. Constructive Thought Patterns
• Self-talk – talking to ourselves about our own thoughts or actions
➡ Positive self-talk increases self-efficacy
• Mental imagery – two parts (a) mentally practicing a task and anticipating
obstacles, and (b) visualizing successful task completion
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Elements of Self-Leadership (cont’d)

3. Designing Natural Rewards
• Finding ways to make the job more motivating
➡ e.g. altering the way the task is accomplished – making slight changes to suit
Elements of Self- personal needs and preferences
Leadership (cont’d)
Slide 22 4. Self-Monitoring
• Keeping track of one’s progress toward a self-set goal
• Using naturally-occurring feedback
➡ e.g. lawn maintenance employees can see improved lawn
• Designing feedback systems
➡ e.g. arranging to receive a monthly report on sales levels
5. Self-reinforcement
• “Taking” a reinforcer only after completing a self-set goal
➡ e.g. taking a break after reaching a pre-determined stage of your work
Predictors of Self-Leadership
Self-leadership activities more frequent among employees with:
• higher levels of conscientiousness and extroversion
• positive self-concept evaluation (self-esteem, self-efficacy, internal
Predictors of Self-
Leadership locus)
Slide 23 Organizations increase self-leadership when:
• employees are given more autonomy
• employees have an empowering/trusting rather than controlling boss
• company’s culture emphasizes performance measurement
Applied Performance Practices
Applied Performance
Practices
Slide 24
Page 6-14
SOLUTIONS TO CRITICAL THINKING QUESTIONS
1. As a consultant, you have been asked to recommend either a gainsharing plan or a profit-sharing plan for
employees who work in the four regional distribution and warehousing facilities of a large retail organization.
Which reward system would you recommend? Explain your answer.
Gainsharing plans are team rewards that motivate team members to reduce costs and increase labor efficiency in
their work process. Profit sharing includes any arrangement where a designated group of employees receives a
share of corporate profits.
In this situation, a gainsharing plan in each of the four regional facilities would probably be more appropriate. The
main reason is that these employees would have a small effect on corporate profits, but could significantly
influence costs in their respective facility. As noted in the textbook, rewards are more effective when employees
have direct control over the outcomes measured for those rewards.
A related explanation is that gainsharing is team-based whereas profit sharing applies to al employees. The
mandate here is clearly to introduce a reward system for people within the four facilities, not a reward for the
entire organization.
2. Which of the performance reward practices—individual, team, or organizational—would work better in

improving organizational goals? Please comment with reference to an organization of your choice.
Individual, team or organizational performance based rewards are likely to work differently depending on the
type of organization. For example, in a research based organization, individual reward practices are likely to
discourage researchers from sharing thoughts and ideas and any information related to their research with their
colleagues. Team rewards are likely to work better because it will encourage researchers to come together as
groups and will enhance within-group sharing practices. Organizational level rewards may create a culture where
the researchers feel aligned with the organization’s success, however, it may not work enough to motivate the
poor-performers nor provide enough incentives for the top performers to work harder.
3. Waco Tire Corporation redesigned its production facilities around a team-based system. However, the company
president believes that employees will not be motivated unless they receive incentives based on their
individual performance. Give three reasons why Waco Tire should introduce team-based rather than individual
rewards in this setting.
Waco Tire should definitely use team rather than only individual rewards in this situation. One reason is that the
company probably won’t be able to identify or measure individual contributions very well in the redesigned
production facility.
Even if Waco Tire could distinguish individual performance, it should use team incentives because they tend to
make employees more co-operative and less competitive. People see that that their bonuses or other incentives
depend on how well they work with co-workers, and they act accordingly.
The third reason for having team rewards in team settings is that they influence employee preferences for team-
based work arrangements. If Waco Tire wants employees to accept and support the team-based structure, a team-
based reward system would help to increase that acceptance.
Page 6-15
4. What can organizations do to increase the effectiveness of financial rewards?

Link rewards to performance. Use objective performance criteria; ensure rewards are timely and significant enough
to create positive emotions.
Ensure rewards are relevant. Reward people for performance within their control/influence and be ready to adjust
performance measures due to factors beyond employees’ control.
Ensure rewards are valued. Know your employee and what you need and want.
Watch out for unintended consequences. Use pilot projects to test the impact the reward will have on employees and
make changes before implementing throughout the organization.
5. Most of us have watched pizzas being made while waiting in a pizzeria. What level of job specialization do you
usually notice in these operations? Why does this high or low level of specialization exist? If some pizzerias
have different levels of specialization than others, identify the contingencies that might explain these
differences.
The answer to this question partly depends on how pizzas are made in your area. Our nonsystematic observation
of pizza-making is that, in busy pizza places, several people are assigned to specific tasks. One person prepares the
dough; one or more people fill the orders (puts ingredients on the pizza and places it in the conveyor or fixed
oven); someone else unloads, cuts, and boxes the cooked pizzas. The person operating the cash register usually has
the pizza unloading task. Other people perform the pizza delivery task.
This relatively high level of specialization occurs because it increases efficiency. Time is saved because employees
don’t change tasks. They develop their skills quickly in their assigned task (an important issue where pizza shops
rely on students and other temporary part-time staff). This specialization also allows the store to assign people to
tasks for which they demonstrate the best skill. For example, some people have better coordination at tossing the
pizza dough so it spreads out evenly. Others have good physical strength to cut pizzas.
Students will probably identify different degrees of specialization than we have noted here. Smaller pizza shops
may be operated by two people who share most tasks (except delivery). They might both prepare the pizzas as
well as load and unload them from the oven.
Technology may also play a role in the division of labor. Conveyor-type ovens (uncooked pizza is placed on one
end and cooked pizza comes out the other end) would allow two people to load and unload the pizzas,
respectively. A fixed oven (where the pizza is loaded in and pulled out) might work better with one person
because he/she keeps track of the cooking time.
Lastly, some students might note that jobs are generally specialized but there is job rotation throughout the shift.
This might occur to minimize boredom and avoid repetitive strain injuries.
6. Can a manager or supervisor “empower” an employee? Discuss fully.

Empowerment refers to a feeling of control and self-efficacy that emerges when people are given power in a
previously powerless situation. Empowered people are given autonomy -- the freedom, independence, and
discretion over their work activities. They are assigned tasks that have high levels of task significance -- importance
to themselves and others. In summary, empowerment is a psychological concept. Supervisors or managers cannot
directly empower an employee. However, they can create a work environment where employees are more likely to
experience empowerment. Some of these initiatives include:
- Ensuring employees have the necessary competencies to be effective
- Reducing bureaucratic control
- Designing jobs that provide task significance and task identify
- Ensuring employees have the information and resources they need
- Appreciating learning and recognizing mistakes are part of the learning employees
- Trusting employees
Page 6-16
7. Describe a time when you practiced self-leadership to perform a task successfully. With reference to each step
in the self-leadership process, describe what you did to achieve this success.
This question provides the opportunity for students to reflect on their own application and experience with self-
leadership. Increasingly, corporate leaders desire to hire employees with the ability to demonstrate self-leadership.
Reflecting on a time when you demonstrated self-leadership and describing your behaviors will prepare you to
respond to an interview question designed to assess this valued competency. Responses will vary. Following are
some considerations that an organizational recruiter may look for:
Personal goal setting. Establishing goals that were specific, results-oriented and challenging.
Constructive thought patterns. Engaging in positive self talk and/or using mental imagery to visualize successful
completion of a task.
Designing natural rewards. Considering your own needs and preferences to make your job more motivating and
satisfying.
Self-monitoring. Keeping track of your progress and/or ensuring you received feedback needed to enhance your
performance.
Self-reinforcement. Using self-induced forms of positive reinforcement to reward yourself for completing a task or
achieving a goal.
8. Can self-leadership replace formal leadership in an organizational setting?

Self-leadership is an applied performance practice that enhances and supports formal leadership in an
organization.
Self-leadership is a process where people regulate their own actions and manage themselves most of the time.
Effective formal leadership practices will still be needed in certain situations to ensure alignment of individual and
team results with organizational goals.
Page 6-17
CASE STUDY: YAKKATECH, INC.
Case Synopsis
This case describes events at the customer service centers of YakkaTech, Inc., an information technology services firm
employing 1500 people throughout Washington and Oregon. YakkaTech relies on a ticket system, in which staff
complete work for a specific “ticket” rather than serve one client all of the time. The system (as well as dramatically
larger customer service centers) has resulted in several problems, including poorer customer service, employee
indifference to client problems, slow response, and lack of staff knowledge about each client. Staff turnover has
increased above the industry average. Employees report that the work is monotonous and they feel disconnected from
their work results. the company increased pay rates and introduced a vested profit-sharing plan to improve morale
and reduce turnover. turnover dropped, but customer complaints and productivity remain below expectations or have
worsened.
Discussion Questions with Suggested Answers

1. What symptom(s) in this case suggest that something has gone wrong?
This case identifies several symptoms, including poorer customer service, employee indifference to client
problems, slow response, lack of staff knowledge about each client, high staff turnover (prior to reward system
change), declining employee referrals, lower productivity. Students should distinguish these symptoms according
to their causes (problem analysis).
2. What are the main causes of these symptoms?

(a) Jobs Have Low Motivational Potential
The main problem in this case is that the jobs have low motivational potential. Students need to analyze the
motivational potential of these jobs by considering the five core job characteristics:
Skill variety -- Seems to be moderate because each ticket would result in some variety of tasks. However, staff say
the work gets monotonous over time. Furthermore, staff are organized into departments, which may result in a
narrow range of tasks performed by each person.
Task identity -- Some students might say task identity is high because staff complete an entire ticket. But is the
ticket an entire task? The case suggests that managing the clients entire system (or subsystem, such as software
maintenance, hardware, maintenance, etc) is the “whole task.” As such, the ticket system results in fairly low task
identity.
Task significance -- This appears to be quite low because staff don’t know how their work affects the client. Also, if
they perform one small task for a particular client (low task identity), the significance of their work is less
apparent, and likely perceived to be low.
Autonomy -- Not much information on autonomy. We don’t know whether staff members need to follow precise
procedures or whether they have a lot of freedom to conduct their work. However, the ticket system necessarily
restricts autonomy regarding managing one’s job duties, because staff are fed precise jobs to perform, rather than
having the autonomy to arrange timing on when they perform a variety of jobs.
Job feedback -- The case indicates that employees receive very little job feedback. They don’t know whether their
actions produced a long-term or only brief solution to the problem, because a recurring problem results in a new
ticket submitted randomly to another staff member. Furthermore, the case implies that staff have limited direct
interaction with clients. Client feedback, including subtle verbal and nonverbal communication, can be considered
a form of job feedback, so job feedback is low in this regard.
Page 6-18
This diagnosis predicts that employees experience low meaninglessness in their jobs, a conditions which is verified
in employee comments that they feel disconnected from the results of their work and that employees show little
care towards client issues. Jobs with low motivational potential also result in lower job satisfaction and lower
work effectiveness, both of which are apparent in this case.
(b) Poor Alignment of Money and Rewards
The latter part of this case stated that YakkaTech increased raise pay rates for its customer service staff to become
among the highest in the industry. The assumption was that the high pay rates would improve morale and reduce
turnover, thereby reducing hiring costs and improving productivity. In addition, YakkaTech introduced a vested
profit-sharing plan, in which employees received the profit-sharing bonus only if they remained with the company
for two years after the bonus was awarded. these actions reduced turnover because both were clearly linked to
continued employment. the vested profit sharing plan punished those who quit because they lost up to two years
of profit sharing bonus. the significant pay increase punished those who left because few other jobs in the industry
paid as well.
However, the reward system was misaligned in other ways. First, these pay interventions were only remotely
associated with individual job performance. Specifically, the profit sharing bonus would have been affected to a
very small extent by each employees performance. This remote connection is unlikely to motivate employees to
perform better, particularly in a company of this size and when the bonus is not paid out two years later. the pay
system also relies heavily on individual membership, whereas it appears that these jobs have a degree of
interdependence, such as working with the on0site team or sharing a ticket with people in another department.
Thus, the individual reward plan was minimally aligned with the work.
(c) Continuance Commitment from Golden Handcuffs
Some students will analyze this case, in part, from the perspective or continuance commitment. Specifically, the
company introduced a vested profit-sharing plan, in which employees receive the profit sharing bonus for that
year only if they remain with the company for the subsequent two years. This situation creates continuance
commitment, in which it becomes more costly to leave the company -- employees who quit or are sacked for just
cause lose up to two years of profit sharing bonus. Continuance commitment tends to produce lower job
performance and lower job satisfaction, both of which occurred in this case after the vested profit-sharing plan was
introduced.
(d) Exit-Voice-Loyalty-Neglect (EVLN)
Some students might apply the EVLN model. In this case, however, EVLN is more a description of what happened
rather than any explanation. Exit (high turnover until pay incentive introduced); Voice (indirect complaints to mgt,
survey results); Loyalty (not much evidence of this); Neglect (poor service, not passing on jobs).
3. What actions should YakkaTech executives take to correct these problems?

The clearest action in this case is to reorganize jobs to increase their motivational potential as well as improve
coordination for interdependent work. Job enrichment around establishing client relationships seems to be well-
suited to this situation. In effect, individuals (or more likely, teams) would be organized around clients such that
clients approach the same staff for all of their IT problems and needs. Staff members would feel a greater sense of
task significance and task identity. They would develop a better understanding of the client’s needs for each
incident, would develop better feedback about the effectiveness of their interventions, and would feel more
responsibility for their actions (because of greater psychological closeness to the client).
A second solution is to revise the reward and recognition practices so they are aligned with the work and desirable
attitudes and behaviors. If jobs are redesigned around teams and clients, then a team-based reward system could
be considered because specific people can be identified with specific long-term client successes and failures. Profit
sharing might remain, but more proximate rewards are preferred.
Page 6-19
TEAM EXERCISE: IS STUDENT WORK

ENRICHED?
Purpose
This exercise is designed to help students to learn how to measure the motivational potential of jobs and to evaluate
the extent that jobs should be further enriched.
Instructions (Small Class)

Being a student is like a job in several ways. You have tasks to perform and someone (such as your instructor) oversees
your work. Although few people want to be students most of their lives (the pay rate is too low!), it may be interesting
to determine how enriched your job is as a student.
Step 1: Students are placed into teams (preferably 4 or 5 people).
Step 2: Working alone, each student completes both sets of measures in this exercise. Then, using the guidelines below,
they individually calculate the score for the five core job characteristics as well as the overall motivating potential score
for the job.
Step 3: Members of each team compare their individual results. The group should identify differences of opinion for
each core job characteristic. They should also note which core jobs characteristics have the lowest scores and
recommend how these scores could be increased.
Step 4: The entire class will now meet to discuss the results of the exercise. The instructor may ask some teams to
present their comparisons and recommendations for a particular core job characteristic.
Instructions (Large Class)

Step 1: Working alone, each student completes both sets of measures in this exercise. Then, using the guidelines below,
they individually calculate the score for the five core job characteristics as well as the overall motivating potential score
for the job.
Step 2: Using a show of hands or classroom technology, students indicate their results for each core job characteristics.
The instructor will ask for results for several bands across the range of the scales. Alternatively, student can complete
this activity prior to class and submit their results through online classroom technology. Later, the instructors will
provide feedback to the class showing the collective results (i.e. distribution of results across the range of scores).
Step 3: Where possible. t instructor might ask students with very high or very low results to discuss their views with
the class.
Comments to Instructors
This exercise is self-explanatory. The answer key is provided in the textbook for students to score their own results.
they can also completed this self-assessment online, with automatic scoring and documented feedback.
Students tend to enjoy this exercise because it forces them to evaluate something that is central to them (particularly
full-time students). Be prepared for some searching questions about why some instructors don’t make student work
more enriched! Here are some discussion activities for this exercise.
1. Compare student enrichment scores with those of other jobs. The average scores of the five core job characteristics
and MPS for selected job groups are presented in the exhibit below. (This information is not provided in the textbook.)
2. Determine where students are least enriched in their work, and determine how this could become more enriched. In
other words, after identifying the weakest core job characteristic(s), identify job enrichment strategies that would raise
the motivating potential score for students along this or these dimensions.
Page 6-20
Motivating Potential Scores for Selected Job Groups

Variable Managerial Clerical Sales National (U.S.)
Skill Variety 5.6 4.0 4.8 4.7
Task Identity 4.7 4.7 4.4 4.7
Task Significance 5.8 5.3 5.5 5.5
Autonomy 5.4 4.5 4.8 4.9
Job feedback 5.2 4.6 5.4 4.9
MPS 156 106 146 128
SELF-ASSESSMENT: WHAT IS YOUR ATTITUDE

TOWARD MONEY?
Purpose
This exercise is designed to help students to understand the types of attitudes toward money and to assess their
attitude toward money.
Overview
Money is a fundamental part of the employment relationship, but it is more than just an economic medium of
exchange. Money affects our needs, our emotions, and our self-perception. People hold a variety of attitudes towards
money. One set of attitudes, known as the “money ethic”, is measured in this self-assessment.
Instructions
Students are asked to read each of the statements in the survey instrument and circle the response that they believe
best reflects their position regarding each statement. Student then use the scoring key in Appendix B to calculate their
results., or they can have the results self-scored by using the student CD.
Feedback for the Money Attitude Scale

This self-assessment generates considerable interest among students, not surprising given the interest that most people
have about money.
This money attitude scale estimates the person’s overall “money ethic” as well as scores on its three dimensions:
money as power/prestige, retention time, and money anxiety. Each subscale has a potential score ranging from 4 to 20
points; the overall money attitude scale has a range from 12 to 60 points. Higher scores indicate that the person has a
higher level of each attitude. The following tables indicate the range of scores among a sample of over 200 MBA
students.
Money as Power/Prestige
People with higher scores on this dimension tend to use money to influence and impress others. Scores on this subscale
range from 4 to 20. The average score among a sample of MBA students was 9.9.
Page 6-21
Score Interpretation
12 to 20 High power/prestige score

9 to 11 Moderate power/prestige score
4 to 8 Low power/prestige score
Retention Time
People with higher scores on this dimension tend to be careful financial planners. Scores on this subscale range from 4
to 20. The average score among a sample of MBA students was 15.
17 to 20 High retention time score

14 to 16 Moderate retention time score
4 to 13 Low retention time score
Money Anxiety
People with higher scores on this dimension tend to view money as a source of anxiety. Scores on this subscale range
from 4 to 20. The average score among a sample of MBA students was 12.8.
12 to 20 High money anxiety score

9 to 11 Moderate money anxiety score
4 to 8 Low money anxiety score
Money Attitude Total

This is a general estimate of how much respect and attention you give to money. Scores on this total scale range from
12 to 60. The average score among a sample of MBA students was 37.6.
41 to 60 High money ethic score

35 to 40 Moderate money ethic score
16 to 34 Low money ethic score
Page 6-22

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Chapter 6: Applied Performance Practices

Instructor’s Manual to Accompany

CHAPTER SUMMARY BY LEARNING OBJECTIVE

6-2 Describe five ways to improve reward effectiveness.

6-3 List the advantages and disadvantages of job specialization.

6-5 Define empowerment and identify strategies that support empowerment.

LECTURE OUTLINE (WITH POWERPOINT® SLIDES)

Applied Performance Practices

Applied Performance Practices at Hilcorp Energy

Meaning of Money at Work

Improving Reward Effectiveness

Job Specialization and Scientific Management

Job Characteristics Model

Critical Psychological States

Other Job Characteristics

Job Rotation at EYE Lighting Int’l

Job Design Practices That Motivate

Elements of Self-Leadership (cont’d)

SOLUTIONS TO CRITICAL THINKING QUESTIONS

2. Which of the performance reward practices—individual, team, or organizational—would work better in

4. What can organizations do to increase the effectiveness of financial rewards?

6. Can a manager or supervisor “empower” an employee? Discuss fully.

8. Can self-leadership replace formal leadership in an organizational setting?

CASE STUDY: YAKKATECH, INC.

Discussion Questions with Suggested Answers

2. What are the main causes of these symptoms?

3. What actions should YakkaTech executives take to correct these problems?

TEAM EXERCISE: IS STUDENT WORK

Instructions (Small Class)

Instructions (Large Class)

Motivating Potential Scores for Selected Job Groups

SELF-ASSESSMENT: WHAT IS YOUR ATTITUDE

Feedback for the Money Attitude Scale

12 to 20 High power/prestige score

17 to 20 High retention time score

12 to 20 High money anxiety score

Money Attitude Total

41 to 60 High money ethic score

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