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6 LEARNING AND PERFORMANCE MANAGEMENT CHAPTER SCAN This chapter is the second chapter on learning and behavior, and examines external influences on behavior and their relationship to performance. Learning in organizations is facilitated through reward, punishment, and extinction. In addition, Bandura's social learning theory describes how individuals model their behavior after others. The challenge in examining the performance of an individual lies in finding accurate measurement tools. Goal-setting programs provide one avenue for the link between effort and achievement. Strategies for rewarding behavior and dealing with poor behavior are provided. LEARNING OBJECTIVES After reading this chapter, you 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. 103 104 Chapter 6: Learning and Performance Management KEY TERMS Chapter 6 introduces the following key terms: learning classical conditioning operant conditioning positive consequences negative consequences reinforcement punishment extinction task-specific self-efficacy goal setting management by objectives (MBO) performance appraisal consensus distinctiveness consistency mentoring THE CHAPTER SUMMARIZED I. THINKING AHEAD: Breaking the Compensation Paradigm II. LEARNING IN ORGANIZATIONS This chapter also addresses motivation and behavior, but differs from the previous chapter in that this chapter focuses on the external causes of behavior. Learning and motivation are related because learning changes behavior as it is acquired through experience. Henry Ford once said, "anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young." A. Classical Conditioning The first theory of learning developed in the early 1900s. Classical conditioning is pairing an unconditioned (natural) stimulus with a conditioned (learned) stimulus to elicit an unconditional (natural) response. Most students have heard of Pavlov's research with dogs. They may not be aware that the collaborative efforts between the Russian scientist and Walter Cannon lead to the application of the ideas in the United States. Chapter 6: Learning and Performance Management B. 105 Operant Conditioning The second class of learning uses positive or negative consequences for modification of behavior. Operant conditioning is based on the notion that behavior is a function of its consequences. C. The Strategies of Reinforcement, Punishment, and Extinction 1. Reinforcement Both positive and negative consequences are related to reinforcement. Positive consequences are results that individuals find attractive or pleasurable. In contrast, negative consequences are results that individuals find unattractive or aversive. Positive reinforcement results from applying positive consequences when desired behavior occurs. Negative reinforcement results from withholding negative consequences when desired behavior occurs. Schedules for reinforcement are either continuous or intermittent. Intermittent schedules can be fixed or variable ratio, or fixed or variable interval. 2. Punishment There are two approaches to punishment, or the elimination of undesirable behavior. Either applying negative consequences or withholding positive consequences can result in similar outcomes. 3. Extinction Extinction is the attempt to weaken an undesirable behavior by attaching no consequences to it. Extinction is most successful when combined with positive reinforcement of desired behavior. D. Bandura’s Social Learning Theory Bandura’s social learning theory adds a component of interaction as a learning approach. This theory states that people learn by modeling their behavior through the observation of others. Bandura’s theory also emphasizes the importance of task-specific self-efficacy, or the belief in one’s ability to satisfactorily perform a particular task, as a positive force for learning. E. Learning and Personality Differences Not all approaches are appropriate for all personalities. For example, introverts perform better with quiet, concentrated periods of time, while extraverted individuals need to express themselves and exchange ideas with others. Preferences for information gathering and decision making differ with personality as well. 106 Chapter 6: Learning and Performance Management III. GOAL SETTING AT WORK The process of establishing desired results that guide and direct behavior is goal setting. A. Characteristics of Effective Goals To be effective, goals should be specific, measurable, challenging, realistic, and timebound. B. Increasing Work Motivation and Task Performance Goals can be used to increase performance, as studies indicate that challenging goals result in higher performance. The three behavioral aspects of enhancing performance motivation through goal setting are employee participation, supervisory commitment, and useful performance feedback. C. Reducing Role Stress of Conflicting and Confusing Expectations Goal setting reduces stress by clarifying the taskrole expectations. This may be attributable to improved communication between supervisors and employees. D. Improving the Accuracy and Validity of Performance Evaluation The third major function of goal setting is to improve the accuracy and validity of performance evaluation. One of the best known methods is management by objectives, (MBO), which is a goal-setting program based on interaction and negotiation between employees and managers. IV. PERFORMANCE: A KEY CONSTRUCT Performance is closely associated with the concept of task accomplishment. Good performance depends on both effort and outcomes. A. Defining Performance Employees must understand exactly what is expected of them if they are to perform well. Consequently, organizations must first accurately define what they mean by “good performance”, set standards for that performance, and communicate that information clearly to employees. Performance appraisal is the evaluation of a person's performance. Chapter 6: Learning and Performance Management B. 107 Measuring Performance In an optimal situation, the measurements of performance assess actual performance. This is difficult because of our level of refinement of performance appraisal tools. Performance appraisal systems should include analyses of the reliability and validity of the instrument chosen for measurement. C. Performance Feedback: A Communication Challenge Communicating useful performance feedback that employees will accept and learn from poses a difficult challenge for nearly all managers. Focusing on specific statements and changeable behaviors enhances the likelihood of constructive feedback experiences for both supervisor and employees. C. Developing People and Enhancing Careers The most important aspect of performance appraisal is the continual development of employees. Unfortunately, too many appraisals are used singularly for salary decisions, and only provided once a year, begrudgingly. Dr. Deming, a leader in the quality movement, advocated the elimination of performance feedback, in part because of our misuse of the concept. D. Key Characteristics of an Effective Appraisal System There are five characteristics related to effectiveness of performance appraisal – validity, reliability, responsiveness, flexibility, and equitability. V. REWARDING PERFORMANCE A. A Key Organizational Decision Process Individuals observe closely how others are treated in reward and punishment decisions. These decisions affect the organizational culture, as well as the motivation and performance of others. B. Individual versus Team Reward Systems Many organizations are conscious of the competition between individual rewards and group efforts. Individual incentives can improve motivation and performance, but may generate excessive or unwanted internal competition. Team reward systems solve problems caused by individual competitive behavior, but often do not account for individual contributions. 108 Chapter 6: Learning and Performance Management C. The Power of Earning When there is little relationship between performance and rewards, people often begin to believe they are entitled to rewards regardless of how they perform, which illustrates the concept of entitlement. VI. CORRECTING POOR PERFORMANCE If poor performance is not attributable to work design or organizational process problems, then attention should be focused on the employee. The problem may lie in (1) some aspect of the person's relationship to the organization or supervisor, (2) some area of the employee's personal life, or (3) a training or developmental deficiency. A. Attribution and Performance Management Attribution is related to performance measurement because supervisors attribute behavior and performance to either internal or external causes. Kelley proposed that individuals make attributions based on information gathered in the form of three informational cues: consensus, distinctiveness, and consistency. Consensus is the extent to which peers in the same situation behave the same way. Distinctiveness is the degree to which the person behaves the same way in other situations. Consistency refers to the frequency of a particular behavior over time. B. Coaching, Counseling, and Mentoring Important supervisory responsibilities include mentoring, coaching and counseling. Mentoring is a relationship that encourages development and career enhancement for people moving through the career cycle. Chapter 17 addresses mentoring in greater detail. VII. MANAGERIAL IMPLICATIONS: PERFORMANCE MANAGEMENT IS A KEY TASK VIII. LOOKING BACK: Does Employee Ownership Really Pay Off? CHAPTER SUMMARY Learning is a change in behavior acquired through experience. The operant conditioning approach to learning states that behavior is a function of 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 task-specific self-efficacy is important to effective learning. Chapter 6: Learning and Performance Management 109 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. REVIEW QUESTIONS: SUGGESTED ANSWERS 1. Define the terms learning, reinforcement, punishment, and extinction. Learning is a change in behavior acquired through experience. Reinforcement is the bestowing of positive consequences or withholding of negative consequences to develop desired behavior. Punishment, in contrast, bestows negative consequences or withholds positive consequences to eliminate or weaken undesirable behavior. Extinction is the attempt to weaken a behavior by attaching no consequences to it. 2. What are positive and negative consequences in shaping behavior? How should they be managed? Explain the value of extinction as a strategy. Managers have access to useful positive and negative reinforcement strategies to assist employees in their pursuit of goals in the workplace. Consequence-related strategies should be matched to the specific personalities and situations involved. Extinction is a low intrusion approach to behavior modification, and an appropriate strategy for situations that allow for patience and time. 3. How can task-specific self-efficacy be enhanced? What are the differences in the way introverted and extroverted and intuitive and sensing people learn? Task-specific self-efficacy can be enhanced through (1) performance accomplishments, (2) vicarious experiences, (3) verbal persuasion, or (4) emotional arousal. Introverts need quiet time to study, concentrate, and reflect on what they are learning. They think best when they are alone. Extroverts need to interact with other people, learning through the process of expressing themselves and exchanging ideas with others. An intuitive thinker prefers to analyze data and information, looking for the meaning behind the analysis and focusing on the big picture. A sensing feeler prefers to learn through interpersonal involvement and focuses on details and practical applications. 4. What are the five characteristics of well-developed goals? Why is feedback on goal progress important? 110 Chapter 6: Learning and Performance Management Well-developed goals are specific, challenging, measurable, time-bound, and prioritized. Goal acceptance is thought to lead to goal commitment and then to goal accomplishment. Feedback helps employees assess how well their efforts are leading to goal accomplishment. 5. What are the purposes of conducting performance appraisals? Who should appraise performance? Why? Accurate appraisals help supervisors fulfill their dual roles as evaluators and coaches. The major functions of performance appraisals are to give employees feedback on performance, to identify the employees' developmental needs, to make promotion and reward decisions, to make demotion and termination decisions, and to develop information relevant to the organization's selection and placement decisions. Multiple sources of appraisal data should be used: supervisor, self, peers, and employees. 6. What are the two possible attributions of poor performance? What are the implications of each? Poor performance may be attributed to the person or the situation. If poor performance is attributed to the person, interventions such as training, counseling, or disciplinary action may be appropriate. If poor performance is attributed to the situation, an intervention designed to remove situational constraints on performance may be appropriate. 7. How can managers and supervisors best provide useful performance feedback? Feedback should be specific and based on observed behavior. The behavior in question should be controllable by the individual, and both leader and follower should have ample time to prepare for the feedback session. 8. How do mentors and peers help people develop and enhance their careers? Both provide information sharing, career strategizing, job-related feedback, emotional support, and friendship. The key in both mentor and peer relationships is mutual trust. DISCUSSION AND COMMUNICATION QUESTIONS: SUGGESTED ANSWERS 1. Which learning approach – the behavioral approach or Bandura's social learning theory – do you find more appropriate for people? This answer may have to do with how much importance students place on the task-specific selfefficacy aspect of Bandura’s theory. It is obviously a more complex set of dynamics to consider. Students can be encouraged to consider the type of learning (e.g., level of complexity) as another variable. Chapter 6: Learning and Performance Management 111 2. Given your personality type, how do you learn best? Do you miss learning some things because of how they are taught? Students will often be able to determine what they don't like about learning opportunities more readily than they can identify how they would learn more comfortably. It is interesting to ask students whether grading completely through group grades would change their view of individual studying and learning. Many college classes are taught by NTs, who use a particular style. Have students discuss what the NT teaching/learning style is, and how it affects other learning styles. 3. What goals do you set for yourself at work? In your personal life? Will you know if you achieve them? Encourage students to discuss this question beyond the obvious, "complete a business degree." They can evaluate their goals using the characteristics of effective goals, and discuss how they get feedback on their goal progress. 4. If a conflict occurred between your self-evaluation and the evaluation given to you by your supervisor or instructor, how would you respond? What specifically would you do? What have you learned from your supervisor or instructor during the last reporting period? The key is to gather as much information as possible about the other's position. A key in approaching differing views is preparation. Suggest students should respond only after thinking through the information for a day or so. Students can use their knowledge of the perceptual process to analyze this question. 5. What rewards are most important to you? How hard are you willing to work to receive them? Encourage students to develop a gradual rating of the rewards. Not all of the rewards are necessarily worth the cost. They may have some ethical issues related to high performers. The alternative experiential exercise at the end of Chapter 10, Who Works Saturday Night, compares rewards and how badly individuals want rewards versus balance in their lives. 6. Prepare a memo detailing the consequences of behavior in your work or university environment (e.g., grades, awards, suspensions, and scholarships). Include in your memo your classification of these consequences as positive or negative. Should your organization or university change how it applies these consequences? In response to the final question (Should your organization or university change how it applies these consequences?) students should provide support, based on material from the chapter, for why changes should or should not occur. 112 Chapter 6: Learning and Performance Management 7. Develop an oral presentation about the most current management practices in employee rewards and performance management. Find out what at least four different companies are doing in this area. Be prepared to discuss their fit with the text materials. Based on the fit between current management practices identified and text materials, students can discuss how successful they believe the various management practices will be. 8. Interview a manager or supervisor who is responsible for completing performance appraisals on people at work. Ask the manager which aspects of performance appraisal and the performance appraisal interview process are most difficult and how he or she manages these difficulties. Include the aspects of his or her job that enable the manager to meet these three different needs. This is also a good opportunity for students to share experiences (both positive and negative) that they have had as employees being appraised. The contrasting perspectives of the managers/supervisors and the students (as employees) should provide for some interesting discussion. ETHICS QUESTIONS: SUGGESTED ANSWERS 1. Suppose a team of behavioral experts was asked to enhance the motivation of military personnel to kill the enemy. Is this request ethical? Is it socially desirable? Should the team accept the assignment? Explain. The dilemma should be confronted long before the action, and upon entering the organization, the task should be presented so that individuals with moral principle disagreements with the task would have an option to reject the assignment. 2. Suppose the organization you work for simply assigns employees their task goals without consulting them. Is this an ethical problem? Should the organization consult its employees? What are the consequences of not consulting them? The obvious drawback is that individuals may lack loyalty and autonomy that will affect their performance, productivity, and task significance. It is a poor leadership and management strategy, but is not patently unethical. The managerial problem is that people who are assigned goals lack goal commitment, and may be unwilling to put forth the necessary effort to achieve the goal. 3. Assume you are an experienced technical employee with a better understanding of your work than your supervisor has. Further assume that your supervisor sets such high performance standards for an inexperienced coworker that the person cannot ever meet them and therefore is fired. What should you do? Is your supervisor's action ethical? Explain. The action is unethical if the supervisor is aware that the new employee cannot fulfill the expectations. However, it appears that the supervisor needs to be exposed to the degree of difficulty, which you could do diplomatically. Chapter 6: Learning and Performance Management 113 4. Suppose your company announced that it would pay bonuses to employees who met a certain performance standard. The company did not realize, however, that many employees would be able to reach the standard with hard work and that the bonuses would cost the company much more than expected. Is it fair to lower the bonus rate? Is it fair to increase the performance standard for bonuses after the fact? Explain. The time of reference is important to the situation. For example, if a company cannot pay its bills at the end of the year, and layoffs are inevitable, that is different than reneging on a shortterm promise. Students should be encouraged to examine the issue from both the individual and the organizational perspectives. CHALLENGES 6.1 TASKGOAL ATTRIBUTE QUESTIONNAIRE This challenge is a good one to assign prior to class discussion in a class related to goal setting. Students can then relate their scores and their personal experiences with goal setting to the class discussion. 6.2 CORRECTING POOR PERFORMANCE As students list contributing factors to their poor performance, it is important that they consider internal as well as external factors. As a follow-up to this challenge, students might be asked to summarize how effective their plan was once they implemented it. EXPERIENTIAL EXERCISES 6.1 POSITIVE AND NEGATIVE REINFORCEMENT Instructor's Notes: The purpose of this exercise is to illustrate the effects of positive and negative reinforcement on behavior change. This exercise is useful when a class seems unruly and needs a change of pace. It is similar to the childhood game most students have played. Students will become very vocal and typically animated. You may want to take care in selecting the volunteers. Discussion Questions: What were the differences in behavior of the volunteers when different kinds of reinforcement (positive, negative, or both) were used? Most of the time the individual receiving positive reinforcement will have a number of gestures and nonverbal indicators of success. 114 Chapter 6: Learning and Performance Management What were the emotional reactions of the volunteers to the different kinds of reinforcement? One of the ways to give the volunteers time to reflect and to get out of the spotlight for a moment is to have them go to a board or flip chart and list a series of words that described how they felt. Typical for volunteer #1 will be embarrassment, frustration, quit, etc. Volunteer #3 may have feelings like confusion, frustration, and ambiguity. Which type of reinforcement – positive or negative – is most common in organizations? What effect do you think this has on motivation and productivity? Students' responses will depend on their exposure to specific instances. 6.2 CORRECTING POOR PERFORMANCE Role Descriptions Assistant Director, Academic Computing Service Center You are the assistant director of the university's Academic Computing Service Center. You are a skilled information systems software engineer with twenty years of experience at two different universities. You assumed your current job about three years ago. Within the first year you became very familiar with the entire information systems infrastructure at the university and developed a highly successful relationship with all of the technicians and support staff under your supervision. With a notable downturn in enrollment since you came, it has been a struggle to obtain the financial resources necessary to complete all of the upgrades you think are required for a first rate center and to procure all the latest hardware sought by the faculty, research, and teaching staff across campus. The center services a wide variety of university customers, such as the hard science requirements in engineering, physics, and chemistry for massive data analysis and networking with other universities; the social science requirements in psychology, business, and social work for specific types of statistical analysis packages; the administrative requirements of the registrar and financial services offices; and finally the unique needs of the medical school. Because of the differing needs of these customers, the center experiences conflicting pressures and demands. These customers are not information systems experts, and you take a lead role in attempting to educate them about the competing demands and limitations the center faces. You report directly to the new director of the ACS Center who has been on the job for about seven months. Although the director appears friendly, she also does not seem to be a real information systems expert with the technical expertise you would like a director to have. You are scheduled to meet with a university committee of faculty and staff, although you are not exactly sure why, though you have heard rumors there is some discontent among the center's customers. Chapter 6: Learning and Performance Management 115 Role Descriptions University Committee Members You are members of a university committee of faculty and staff that the new director of the Academic Computing Service Center has asked the president to form. You understand that the new director is a rather new graduate of an eastern university with a M.S. degree in information systems and some prior computing and information systems experience prior to going back to graduate school. She has been the director for about seven months, and declines in enrollment which preceded her arrival by several years have taken a toll on the financial and human resources of the university at the same time advances in information systems technology have increased demand for system upgrades and advances across campus. The assistant director of the ACS Center has been in the vice of these forces for several years. The assistant director is a talented, highly proficient information systems expert who grew up through the technical ranks after getting an undergraduate business degree in information systems and management science. His technically superior attitude is apparently evident to the diverse disciplines across campus who see him as increasing the tensions and conflicts flowing from declining resources and increasing demand. The new director seems a little puzzled as to how to sort out all the issues and make appropriate attributions as to the behavior and actions of the various parties involved. A key responsibility for her is getting a clear picture of the performance of her assistant director, who does seem to have some poor performance problems. ALTERNATIVE EXPERIENTIAL EXERCISE THE DEATH OF MANAGEMENT Instructor's Notes: Since this is an editorial page, this is a logical assignment for students to read as homework. A technique that works to aid in getting to the issues quickly in class is to have the students highlight the most important issues for their position. In class, divide into five groups that will discuss this topic with the speaker when he visits campus. Each group will submit, within 20 minutes, what their issue and discussion question will be, and who is their designated debater. The instructor takes the position of the editorial writer, Robert Samuelson. (You may want to let 5 students take his position, and debate for him). During the debate, students may request assistance from their group, and they will need to reference the book for their support. (1) decide who in your group will be the 5 students to debate this topic (2) decide which particular point you wish to refute (3) back up you argument with specific references to this chapter 116 Chapter 6: Learning and Performance Management (4) prepare your group by defining what you believe Samuelson means by the following words: pseudo skills all-purpose executives general managers skills (5) What would Mr. Samuelson say about the concepts in this chapter? Chapter 6: Learning and Performance Management 117 THE DEATH OF MANAGEMENT Robert J. Samuelson, Newsweek, May 10, 1993, 55. We are now witnessing the death of management. By management, I mean the peculiarly American idea (still taught at many business schools) that a "good manager" should be able to manage any enterprise, anywhere, any time. Through incisive analysis and decisive action, our supermanagers supposedly could make any company productive and profitable. The idea has collapsed with failures at companies that once symbolized U.S. management prowess: Sears, Westinghouse, and IBM. With hindsight, we can see the absurdity. We don't imagine a winning football coach switching to basketball, nor a concert pianist becoming a symphony violinist. We don't think an orthopedic surgeon would automatically make a good psychiatrist. We recognize that differences in talent, temperament, knowledge, and experience make some people good at some things and not at others. Somehow, managers were supposed to be immune to this logic. They aren't, of course. Indeed, the people who have created great businesses in recent decades typically confirm the logic. They have not been all-purpose executives, casually changing jobs and succeeding on the strength of dazzling analysis. Instead, they have been semifanatics who doggedly pursued a few good ideas. People like Sam Walton (Wal-Mart), Ray Kroc (McDonald's), William McGowan (MCI), and Bill Gates (Microsoft). What seems astonishing is how such a bad idea survived so long. Our infatuation with it partly reflected American's optimism that all problems are amenable to reason. In 1914, Frederick Winslow Taylor's "The Principles of Scientific Management" appeared and set a tone. Taylor pioneered time-and-motion studies, which analyzed how specific jobs might be done more efficiently. But his larger purpose was to "prove that the best management is a true science, resting upon clearly defined laws..." Up to a point, who can quarrel with the resort to reason? The trouble is that it was taken too far and became self-destructive. The problem was not that freelance managers constantly jumped between companies, although that happened. The problem was that the style of running big companies changed for the worse. The belief that all problems could be solved by analysis favored the rise of executives who were adept with numbers and making slick presentations. Huge staffs of analysts served these executives, who created conglomerates on the theory that a good manager could manage anything. With bigger bureaucracies, companies couldn't respond quickly to market changes - new technologies, competitors or customer needs. The more powerful top executives became, the less they knew. Their information was filtered through staff reports and statistical tables. Some executives developed what consultant Mel Stuckey calls a phobia of manufacturing: they didn't know what happened in factories and feared exposing their ignorance. Roger Smith, GM's chairman between 1981 and 1990, exemplified this sort of knownothing executive. When asked by Fortune to explain what went wrong, he answered, "I don't know. It's a mysterious thing." To fathom what went wrong, Smith truly had to understand how automobiles are designed and made; he apparently never did, despite a career at GM. As a society, we have spent the past decade paying for mistakes like Smith's. Inept management, though not the only cause of corporate, turmoil, has been a major contributor. "Downsizing" and 118 Chapter 6: Learning and Performance Management "restructuring" are but the catch phrases for the harsh process by which companies seek to regain their edge. Truly dead? Consider General Electric. A decade ago, it was "choking on its nitpicking systems of formal reviews...which delayed decisions...and often made GE a laggard at bringing new products to market," write Noel Tichy and Stratford Sherman in a new book. The "mastery of arduous procedures had become an art form" necessary for executive advancement. GE chairman John Welch Jr. fired thousands and sold 19 major businesses. Profits rose from $1.7 billion in 1981 to $4.7 billion in 1992, but GE's payroll shrank from 404,000 to 268,000. Such have been the ultimate social consequences of a bad idea. But is the muddled notion of "management" truly dead? You can object on two grounds. First, some generalists still ascend to the top of big companies, the naming of Louis Gerstner - who knows little of computers - to head IBM is a case in point. Well, maybe. But these executives are often specialists of a different sort; they specialize in dismantling conglomerates or top-heavy bureaucracies. Welch played precisely this role at GE; and Christopher Steffen intended to do the same at Kodak. The second objective is more serious: it is that business schools still aim to produce general managers. The present notion of the M.B.A. (Master of Business Administration) is foolish. It is impossible to take people in their mid-20s - without much business experience - and educate them as "managers.” Yet business schools cling to the notion, because to do otherwise would jeopardize their tuition revenues. What's lost is the opportunity for these bright young people to learn something of value - a specific business, a foreign language, an engineering skill instead of the pseudo skills taught in business school. Until this changes, we shall miseducate a large part of the talent pool for America's business leadership. The one hopeful sign is that the subject now seems open for discussion. Indeed, the Harvard Business Review recently conducted a debate about the M.B.A.degree. Most contributors agreed it is not very useful. M.B.A. graduates are "glib and quick-witted", wrote Henry Mintzberg of McGill University, but are not committed to "particular industries...but to management as a means of personal advancement." A recent M.B.A. graduate said it better, "My main reason for obtaining an M.B.A., "she admitted, "was not necessarily to improve my business skills but because the degree is required to 'get in the door'." When the Harvard Business School can acknowledge that--and act upon it-American management will have taken a huge stride forward. Mr. Samuelson has been asked to your campus to debate the Phi Beta Kappa honorary business fraternity about the accusations presented in this editorial. Your responsibility as a member of the business school, is to practice the question and answer portion of the upcoming event with the individuals selected to talk with him at the open forum. In order to assist your friends, you must: (1) decide who in your group will be the 5 students to debate this topic (2) decide which particular point you wish to refute (3) back up your argument with specific references to this chapter Chapter 6: Learning and Performance Management 119 (4) prepare your group by defining what you believe he means by the following words: pseudo skills all-purpose executives general managers skills EXTRA EXPERIENTIAL EXERCISES The following alternative exercise to supplement the material in the textbook can be obtained from: Marcic, Dorothy, Seltzer, Joseph, & Vaill, Peter. Organizational Behavior: Experiences and Cases, 6th Ed. South Western College Publishing Company, 2001. The Learning Model Instrument. p. 35-41. Time: 30 minutes. Purpose: To help students understand learning style preferences and to determine their own learning style preference. CASE QUESTIONS: SUGGESTED ANSWERS REWARDING EMPLOYEE PERFORMANCE AT HEWLETT-PACKARD 1. Evaluate the performance management impact of variable pay in terms of goal setting. Goal setting can increase work motivation and task performance, reduce role stress that results from conflicting or confusing expectations, and improve the accuracy and validity of performance evaluation. From the perspective of work motivation and task performance, Hewlett-Packard’s use of variable pay can be evaluated in terms of the potential behavioral impact of the company’s three types of variable pay. The company performance bonus links individual rewards to HP’s overall success. The pay for results incentive links compensation for executives and managers to individual, business organization, and company performance results. Sales incentives link the compensation of sales professionals to the attainment of individual, business organization, and company performance goals. With all three variable pay components, HP seeks to reward individual goal attainment within the context of broader organizational success, thereby reinforcing appropriate work behavior and increasing its likelihood of future occurrence. In addition, the linkage of variable pay to individual threshold, target, and aspirational goals identifies key performance activities for employees. This helps to enhance employee performance by clarifying performance expectations. Further, the specification of criteria by which goal attainment is evaluated improves the accuracy and validity of the performance evaluation process. 120 Chapter 6: Learning and Performance Management 2. Why is it important to link an organization’s performance management system to its reward system? From an operant conditioning perspective, positive reinforcement is essential for promoting and encouraging the continued exhibition of work behaviors that contribute to attaining organizational goals. By contingently linking rewards to performance, superior performance is encouraged while inferior performance is discouraged. When rewards are not contingent on performance, inferior, or at best mediocre, performance is encouraged and superior performance is discouraged. Hewlett-Packard’s use of variable pay is intended to encourage superior performance through differential reward levels for achieving threshold, target, and aspirational goals. It also discourages inferior performance by not granting variable pay incentives to those employees who fail to meet threshold goals. HP’s use of employee stock ownership is based on the notion that HP employees will work harder to achieve goals and make contributions because their collective efforts will affect the stock value. Unfortunately, however, the connection between any given employee’s job performance and increased stock value is somewhat elusive. 3. Why should a performance management system be flexible yet embedded in a company’s culture? Any system, performance management or otherwise, that is inflexible is doomed to failure. In the uncertain, global environment of contemporary business, organizations and their systems cannot be static. Like a rigid pole that breaks in a heavy wind, static organizational systems will fail under the onslaught of significant and pervasive environmental change. Thus, organizational systems must be flexible in order to adapt to changing environments. While organizations and their systems must adapt in the face of increasing environmental uncertainty, they must also be grounded in some fundamental guiding principles and processes. Such a firm grounding increases the likelihood of safe passage through the dangerous straits of environmental uncertainty. A performance management system and its associated reward system, if designed well and operated effectively, can both accommodate change and provide a solid anchor for individual performance goals in the context of the broader organizational mission. Role Plays Additional role plays relevant to the material in this chapter are located in Appendix A of this instructor's manual.