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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