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Video Segment 2 LaBelle Management
2
LaBelle Management: A Case Study in
Performance Appraisals
(Video available on VHS tape)
CHAPTER 6: LEARNING AND PERFORMANCE MANAGEMENT
Chapter 6 Summary
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Learning is a change in behavior acquired through experience.
The operant conditioning approach to learning states that behavior is a function of its positive and negative
consequences.
Reinforcement is used to develop desirable behavior; punishment and extinction are used to decrease undesirable
behavior.
Bandura’s social learning theory suggests that self-efficacy is important to effective learning.
Goal setting improves work motivation and task performance, reduces role stress, and improves the accuracy and
validity of performance appraisal.
Performance appraisals help organizations develop employees and make decisions about them.
Making accurate attributions about the behavior of others is an essential prerequisite to correcting poor
performance.
High-quality performance should be rewarded and poor performance should be corrected.
Mentoring is a relationship for encouraging development and career enhancement for people moving through the
career cycle.
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Learning Objectives
After reading this chapter, students should be able to do the following:
1. Define learning, reinforcement, punishment, extinction, and goal setting.
2. Distinguish between classical and operant conditioning.
3. Explain the use of positive and negative consequences of behavior in strategies of reinforcement and punishment.
4. Identify the purposes of goal setting and five characteristics of effective goals.
5. Describe effective strategies for giving and receiving performance feedback.
6. Compare individual and team-oriented reward systems.
7. Describe strategies for correcting poor performance.
SEGMENT SUMMARY: LABELLE MANAGEMENT—A CASE STUDY IN
PERFORMANCE APPRAISALS
Headquartered in Mt. Pleasant, Michigan, LaBelle Management owns and operates 31 restaurants and hotels.
“Performance appraisal is the core of personnel management,” says one of LaBelle’s owners. Performance appraisal
is a two-way exchange between the company and the employee. At LaBelle, employees are evaluated twice a year.
Open feedback takes place on an ongoing basis. Managers sit down with employees on-on-one and give an honest
evaluation of what the employee needs to do to meet company expectations. Employees give feedback to the
managers as well, stating what they like and do not like about the company.
What should LeBelle use to conduct performance appraisals? LaBelle uses different criteria for different
organizational levels. For example, the crew (first-level employees) are evaluated on attitude, attendance, team work,
ability to adhere to standards, and how they impact the customers. Shift managers, area supervisors, district
managers, and administrative personnel are evaluated according to leadership skills, human resource skills, and
customer service skills. All levels of employees are told where the company stands today, and where the company
wants to be in the future. Managers want to know if they can count on employees to help the company reach its
goals. Are the employees accountable?
How does LaBelle assure that performance appraisals are fair and unbiased? Evaluations by supervisors are
reviewed by an outside third party prior to discussing the appraisal with an employee. Employees should already
know their strengths and weaknesses. “If you are dropping a bombshell, you are not managing well,” explains a
LaBelle manager.
How does LaBelle utilize performance appraisals for administrative and developmental purposes? Merit pay is tied
to performance. Career management is tied to abilities at each management level. Retention is based on performance.
To develop employees, managers tell them what the company expects and how they are meeting those expectations.
LaBelle has a complete recognition and reward program to include both individual and team rewards. When poor
performance is identified, a manager sits down with the employee and maps out a plan for improved performance.
Evaluations help employees set goals. Then, after three months, a poor performing employee is reviewed again.
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PREVIEWING ACTIVITIES
I. Before Class Preparation for Students
A. Review Chapter 6.
B. Define the following key terms: 1) reinforcement; 2) goal setting; 3) management by objective; and 4)
mentoring.
C. Students will turn to Chapter 3 and review the concept of self-efficacy. Students will give examples of the
four sources of self-efficacy.
 Self-efficacy is an individual’s beliefs and expectancies about his or her ability to perform a specific task
effectively. Individuals with high self-efficacy believe that they have the ability to get things done, that they are
capable of putting forth the effort to accomplish the task, and that they can overcome any obstacles to their
success. Employees with low self-efficacy quit trying prematurely, and even fail a task.
 There are four sources of self-efficacy: prior experiences, behavior models, persuasion from other people, and
assessment of current physical and emotional capabilities.
II.
In-Class Previewing
A. What are the purposes for conducting performance appraisals?
 A performance appraisal is the evaluation of a person’s performance. Accurate appraisals help supervisors fulfill
their dual roles as evaluators and coaches. As a coach, a supervisor is responsible for encouraging employee
growth and development. As an evaluator, a supervisor is responsible for making judgments that influence
employees’ roles in the organization.
B. List the possible reasons for poor performance.
 Reasons include: poorly designed work systems, poor selection processes, inadequate training and skills
development, lack of personal motivation, and personal problems intruding on the work environment.
C. Review Figure 6.5, Attribution Model.
 According to attribution theory, managers make attributions (inferences) concerning employees’ behavior and
performance. Supervisors and employees who share perceptions and attitudes tend to evaluate each other
highly. Figure 6.5 presents an attribution model that specifically addresses how supervisors respond to poor
performance.
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VIEWING ACTIVITIES
I. One of LaBelle’s owners states that “performance appraisal is the core of personnel management.” Explain.
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At LaBelle, performance appraisal is considered a two-way exchange of what an employee needs to do and how
the company is doing according to the employee. Performance appraisal is considered so important that two
appraisals take place each year, and open feedback is given on an ongoing basis. One manager calls open
feedback “a gift.” It is a two-way system of communication that lets employees say what they like and what they
don’t like about the job. It lets managers sit down with an employee one-on-one without having to wait for a
formal appraisal.
II. Describe the ways LaBelle Management utilizes performance appraisals.
 LaBelle utilizes performance appraisals for administrative and developmental purposes. For administrative
purposes, LaBelle ties merit pay to performance. LaBelle ties an employee’s career path to performance. A
person can move from crew to shift manager to area supervisor to district manager to executive. At each level, a
manager must sign off on certain employee skills. For retention purposes, LaBelle uses performance appraisals
to see how employees are doing in comparison to others.
 For developmental purposes, performance appraisals tell people where they stand. Performance appraisals tell
employees what the job expectations are and how they are doing. LaBelle has a complete recognition program
to reward employees for positive behavior. There are both individual and team rewards, trips, cars, plus
employee and manager of the month.
 Performance appraisals also identify poor performance so that managers can sit down and map out a
development plan for an employee.
III. What is the role of goal setting at LaBelle Management?
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Goal setting is the process of establishing desired results that guide and direct behavior. Goals help crystalize
the sense of purpose and mission that is essential to success at work. Effective goals are specific, challenging,
measurable, time-bound, and prioritized.
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LaBelle managers feel that, for developmental purposes, managers must evaluate employees honestly and help
them set goals. “This is where we want you to be and after three months we sit down and visit with them again.”
LaBelle management uses goal setting to increase employee effort and motivation, which in turn improve task
performance.
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FOLLOW-UP ACTIVITIES – STUDENTS APPLY & EXTEND
I. As a library assignment, students should read more about Peter Drucker’s Management By Objectives. How
might LaBelle Management use this program?
 Management by objectives (MBO) is a goal-setting program based on interaction and negotiation between
employees and managers. MBO programs have been pervasive in organizations for nearly thirty years.
 According to Peter Drucker, who originated the concept , the objectives-setting process begins with the
employee writing an “employee letter” to the manager. The letter would explain the employee’s general
understanding of the scope of the manager’s job, an understanding of the scope of the employee’s job, and the
set of specific objectives to be pursued over the next six months or year. After some discussion and negotiation,
the manager and the employee would finalize these items into a performance plan.
 Drucker considers MBO a participative and interactive process.
II. Describe mentoring. How might LaBelle Management use mentoring?
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Mentoring is a work relationship that encourages development and career enhancement for people moving
through the career cycle. Mentor relationships typically go through four phases: initiation, cultivation,
separation, and redefinition. The relationship can definitely enhance the early development of a newcomer
and the mid-career development of an experienced employee. Career development can be enhanced through
peer relationships which may be thought of as rewards or consequences of behavior, and they believe that
there are relationships as an alternative to traditional mentoring relationships.
III. How might LaBelle managers apply Bandura’s Social Learning Theory? This question can be answered in small
groups.
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Bandura believes that social learning occurs through observation of other people and modeling of their
behavior. Since employees look to their supervisors for acceptable norms of behavior, they are likely to
pattern their own responses on the supervisor’s.
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Central to Bandura’s theory is the concept of self-efficacy. Self-efficacy expectations may be enhanced
through: 1) performance accomplishments; 2) vicarious experiences; 3) verbal persuasion; and 4) emotional
arousal, i.e., getting excited about doing something.
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LaBelle could use this theory to motivate employees to achieve at a higher level and master the abilities
needed to move up to a higher managerial level within the company.
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