Managing Performance in Organisations

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Lecture3MPO_MS.pptx

— Lecture 3: Performance standards and motivation

Managing Performance in Organisations

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Recap – Lecture 2

The KPI framework

How KPIs are used to monitor performance

Operational plans: What’s the dealio with them?

Explain the relationship between operational plans and performance management

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Learning overview

Define and explain ‘motivation’

Understand the differences between Intrinsic and Extrinsic motivation

Describe the different content (needs) and cognitive (process) theories in motivation

Explain the term ‘performance standard’.

Describe the relationship between performance standards and strategy

Write clear and concise performance standards.

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Motivation – A definition

Motivation is the process by which a person’s efforts are energised, directed and sustained towards attaining a goal.

Three key elements in this definition: energy, direction, persistence.

Energy: Intensity and drive.

Direction: Effort that is directed towards and is consistent with organisation goals.

Persistence: Employees putting in effort at all times to achieve goals

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The Nature of Motivation

Two types: Intrinsic and Extrinsic

Intrinsic:

Behaviour performed for its own sake

Motivation stems from performing behaviour itself

Extrinsic:

Behaviour performed to avoid punishment or acquire material or social rewards

Motivation is the consequences of the behaviour itself

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Early motivation theories

Maslow’s Hierarchy of Needs

McClelland’s Three-needs Theory

McGregor’s Theory X and Theory Y

Hertzberg’s Two-factor Theory

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Maslow’s Hierarchy of Needs

Work your way up the pyramid

Managers do things to satisfy employees’ needs

Once a need is satisfied, an individual isn’t motivated to satisfy (or continue) satisfying that particular need

Focus on satisfying needs at or above the level a person is on

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McClelland’s Three-needs Theory

Three acquired – not innate – needs for achievement

Needs for power: Making others behave in a way they wouldn’t otherwise

Needs for affiliation: Desire for interpersonal relationships

Needs for achievement: The drive to succeed and excel in relation to a set of standards

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McGregor’s Theory X and Theory Y

Theory X: Negative view of people

People have little ambition

Dislike work

Avoid responsibility

Need for close control for work to be done

Theory Y: Positive view of people

People enjoy work

Seek out and accept responsibility

Exercise self-direction

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Hertzberg’s Two-factor Theory

People’s working conditions influence motivation

Extrinsic factors influencing motivation called “hygiene factors”

Intrinsic factors influencing motivation called “motivators”

While managers can control hygiene factors, it is argued that managers need to tap into motivators

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Contemporary motivation theories

Vroom’s Expectancy Theory

Equity Theory

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Vroom’s Expectancy Theory

Motivation depends on individuals’ expectations about their ability to perform tasks and receive desired rewards

Check out this video: https://www.youtube.com/watch?v=Wm5ypcltyvI

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Adam’s Equity Theory

People compare themselves to others

Employees compare what they get from a job (outcomes) in relation to what they put into it (inputs), and then compare that ratio to others

Typical responses to “unfair” outcomes: quitting jobs, putting in less effort, distort our own effort or other’s effort (e.g. he had to work 90 hrs instead to get X, whereas I didn’t)

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Performance Standards: What are they?

Simply put, it’s a measure of performance in the form of a statement of how well the performance is done

Focused on quality, quantity, and/or timeliness.

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Examples

Fries are only kept for 7 minutes before disposal!

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Examples of Managerial Performance Standards

People Performance

Financial Performance

Employee turnover reduced by 30%

Employee engagement survey results improve by 10%

Absenteeism rates reduced by 10%

Number of new clients increase by 20%

Sales increased by 20%

Profit margin more than 30%

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The link between strategy and performance standards

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Performance standards provide clarity and reduce misunderstandings

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What do you see here?

Poor communication leads to mistakes being made

Assuming something is one way when it isn’t also leads to performance problems

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Setting Performance Standards

PS = R+M:

Performance Standard [PS] equals

Result [R] plus a Measure [M] of the result

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Tests for Performance Standards

The truth test - Is the measure definitely measuring what it's meant to measure?

The focus test - Is the measure only measuring what it's meant to measure?

The consistency test - Is the measure consistent whenever or whoever measures?

The access test - Can the data be readily communicated and easily understood?

The clarity test - Is any ambiguity possible in interpretation of the results?

The so what test - Can, and will, the data be acted upon?

The timeliness test - Can the data be analysed soon enough so that action can be taken?

The cost test -  Is it worth the cost of collecting and analysing the data?

The gaming test - Does the measure encourage any undesirable behaviours?

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Review Questions

What are some of the early theories of motivation?

What are more contemporary theories of motivation?

How does motivation interact with performance standards?

If you can see something, can management measure it?

If a woodchuck could chuck and would chuck wood, how much wood would a woodchuck chuck if a woodchuck could chuck wood?

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