13chapter 07

Chapter 7: Motivation: Goal Setting and Reward Programs | 227
Chapter 7
Motivation: Goal Setting and Reward Programs

CHAPTER !ER!"E#
Goals play an important part in motivating individuals to strive for high performance. The basic concepts in goal setting remain an important source for motivating employees. Regardless of the nature of their specific achievements, successful people tend to set goals. Their lives are goal oriented. This is true for politicians, students, and leaders in all sorts of organizations. In this chapter, we begin by presenting a model of goal setting and performance based on the individual. In the next section, we discuss the effects of goal setting on employees behaviors. inally, we conclude the chapter with a discussion of four commonly used reward programs that reinforce desired behaviors of employees.
$EAR%"%G G A$S
!pon completion of this chapter, the students should be able to" #xplain how goal setting affects performance. $tate the effects of goal setting on an individuals behavior. %escribe reward programs for improving performance.
CHAPTER
I. II.
&T$"%E
&earning 'ontent Learning from Experience: #nterprise Rent()('ar *odel of Goal $etting and +erformance ). Teams Competen'(,-eff Gordons Rainbow .arriors /. A'ross C)lt)res Competen'(* 0ewlett(+ac1ard
2 3455 'engage &earning. )ll Rights Reserved. *ay not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
22+ | Chapter 7: Motivation: Goal Setting and Reward Programs III. I6. 6. #ffects of Goal $etting ,iversit( Competen'(* &oc1heed *artin *$3 Team Reward +rograms for Improving +erformance Change Competen'(*7ucors +rofit $haring +rogram 'hapter $ummary ). 8ey Terms and 'oncepts /. %iscussion 9uestions #xperiential #xercise and 'ase ). E-periential E-er'ise" Sel. Competen'(,Goal $etting /. Case: ,iversit( Competen'(,)llstate Insurance 'ompany
6I.
/E0 TERMS A%, C %CEPTS

Thirteen 1ey terms and concepts are developed in 'hapter :. The 1ey terms and concepts, along with definitions or appropriate descriptions, are as follows" Ca.eteria1st(le 2ene.it programs: flexible benefit plans. 3eed2a'4: provides information to the employee about how well he or she is doing. 3le-i2le 2ene.it plans: allows employees to choose the benefits they want, rather than having management choose for them. Goal 'larit(: a goal must be clear and specific if it is to be useful in directing effort. Goal 'ommitment: the individuals determination to reach a goal, regardless of whether the goal was set by that person or someone else. Goal di..i')lt(: a goal should be challenging but not impossible to achieve. Goal setting: the process of specifying desired outcomes toward which individuals, teams, departments, and organizations will strive, and it is intended to increase organizational efficiency and effectiveness. Goals: the future outcomes ;results< that individuals and groups desire and strive to achieve. "n.ormal rewards: refer to those that result from interactions between people. Management 2( 25e'tives 6M7 8: a management system that uses goal difficulty and goal clarity as its foundation for motivating employees.
Chapter 7: Motivation: Goal Setting and Reward Programs | 229 Pro.it1sharing programs: provides employees with a portion of the companys earnings. S4ill12ased pa(: based on the number and level of =ob(related s1ills that an employee has learned. Tas4 'omple-it(: refers to the cognitive processing that is needed by a person to solve a tas1.
$ECT&RE % TES
CHAPTER 7: P #ER P "%T 7:; Motivation: Goal Setting and Reward Programs I. $EAR%"%G C %TE%T In this chapter, we begin by presenting a model of goal setting and performance based on the individual. In the next section, we discuss the effects of goal setting on employees behaviors. inally, we conclude the chapter with a discussion of four commonly used reward programs that reinforce desired behaviors of employees. The chapter addresses three important learning goals regarding the motivational impact of goal setting and reward systems. )s shown in +ower +oint :.5, these learning goals include" "%STR&CT R<S % TES:==================================================== ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========= ). /. #xplain how goal setting affects performance. $tate the effects of goal setting on an individuals behavior.
2>; | Chapter 7: Motivation: Goal Setting and Reward Programs
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%escribe reward programs for improving performance. CHAPTER 7: P #ER P "%T 7:? $earning Goals .or Motivation: Goal Setting and Reward Programs
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Learning from Experience: Enterprise Rent- -Car CHAPTER 7: P #ER P "%T 7:2 $earning .rom E-perien'e Enterprise Rent1A1Car
$earning "nsights > Emplo(ees pa( tied to a'hieving goals > Teams help red)'e t)rnovers > Enterprise Servi'e @)alit( "nde- is 4e( per.orman'e metri'
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PAGE ?92: M
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3 G A$ SETT"%G A%, PER3 RMA%CE
Learning goal: Explain how goal setting affects performance! /asic definitions. 5. 3. Goals are the future outcomes ;results< that individuals and groups desire and strive to achieve. Goal setting is the process of specifying desired outcomes toward which individuals, teams, departments, and organizations will strive and is intended to increase organizational efficiency and effectiveness.
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Importance of goal setting ;see +ower +oint :.?<.
CHAPTER 7: P #ER P "%T 7:> "mportan'e o. Goal Setting
Chapter 7: Motivation: Goal Setting and Reward Programs | 2>?
E%R"CHME%T M ,&$E
Cassatts En'o)rage St)dents to Set Per.orman'e Goals: The 'assatt $tring 9uartet use stories to help students create a vision, which reflects the ensembles shared purpose. In the stonecutters tale, the first stonecutter says, @Im cutting stone.A The second says, @Im carving a cornerstone,A but the third says, @Im building a concert hall.A The third has a vision. The 'assatts as1 students where they see themselves (( the school orchestra, a competition, or 'arnegie 0all.B $tudents who see the big picture aim for a higher performance level. or any ensemble, discussing goals, ob=ectives and vision unifies the performance approach. To accomplish goal setting, the 'assatts use the tool of Bstoryboarding.B $tudents set a specific and clear performance goal, decide upon a course of action and write step by step how to ma1e it a reality. $teps toward a successful school performance might include" listening to a recording of the wor1C practicing individual parts to prepare for rehearsalsC wor1ing out the fingerings and bowings as a group and D< improving intonation on specific passages. 'assatt members help students set performance goals, which serve as motivators because students can compare their present performance level with that reEuired for the desired performance. If they feel they are far from their goal, they will feel dissatisfied and wor1 harder((((rehearse more(((for goal attainment, provided that the performance level is within their playing abilities. This enrichment module is adapted from" &eshnower, $. *a1ing music and learning leadership" 'assatt $tring 9uartet, Wharton Leadership Digest, *ay 3445, 6ol. F, 7o. G. http"HHleadership.wharton.upenn.eduHdigestHindex.shtml %. PAGE ?9>: Goal $etting has four motivational aspects as depicted in +ower +oint :.D,which duplicates igure :.5. 5. 3. ?. D. Goals direct attention. Goals regulate effort. Goals increase persistence. Goals foster strategies and action programs. CHAPTER 7: P #ER P "%T 7:A Motivational Aspe'ts o. Goal Setting 63ig)re 7:?8 #. (
) model of individual goal setting and performance is found in +ower +oint :.F which duplicates igure :.3.
2>2 | Chapter 7: Motivation: Goal Setting and Reward Programs 5. ) goal serves as a motivator because it allows people to compare their present performance with that reEuired to achieve the goal. 3. If people believe they will fall short of a goal, they will feel dissatisfied and wor1 harder to attain it as long as they believe that it can be achieved. ?. D. 0aving a goal also may improve performance because the goal ma1es clear the type and level of performance expected. +erformance is li1ely to be high when" a. challenging goals have been set. b. the moderators ;ability, goal commitment, feedbac1, and tas1 complexity< are present. c. the mediators ;direction, effort, persistence, and tas1 strategy< are operating. CHAPTER 7: P #ER P "%T 7:B Model o. Goal1Setting 63ig)re 7:28
E%R"CHME%T M ,&$E
The Motivational Power o. Goal Setting 6 n Experiential ctivit"8 The utility of the model of individual goal setting and performance can be enhanced by having students apply parts of it to themselves, using the following exercise. $tep 5" 0ave each student write down three goals that sHhe would li1e to achieve during the current semester. $tep 3" !sing the concepts of goal difficulty and goal clarity, have the students rewrite their three goals so that they have substantial motivational potential. $tep ?" 0ave each student assess herHhis ability to achieve these goals. $tep D" 0ave each student assess herHhis level of commitment to achieving these goals. $tep F" 0ave each student evaluate how much effort sHhe is willing to put forth in the pursuit of these goals as well as how persistent sHhe will be in putting forth this effort.
This enrichment module is adapted from an exercise developed by *. 8. *c'uddy.

Chapter 7: Motivation: Goal Setting and Reward Programs | 2>>
PAGE ?9A: 'hallenge

5. 3. Goals should challenge the individual. Two 1ey attributes of challenging goals are particularly important" a.
PAGE ?9B: Goal di..i')lt( means that a goal should be

challenging but not impossible to achieve.
b. PAGE ?9B: Goal 'larit( means that a goal must be clear and specific if it is to be useful in directing effort. c. . #nterprise rental agents are expected to answer customers calls by the third ring of the phone ;see +ower +oint :.I<.
CHAPTER 7: P #ER P "%T 7:C Comm)ni'ation "nsight The list o. things that we tell new emplo(ees in'l)des an opport)nit( to 2e a part o. something 2igD respe't othersD straight tal4D open dialog)eD good stewardship and a 'ommitment to learn .rom ea'h other: Pamela %i'holsonD PresidentD Enterprise Rent1A1Car d. PAGE ?9B: Management 2( 25e'tives ;*/J< is a management system that uses goal difficulty and goal clarity as its foundation for motivating employees. e. Self-efficacy ;see 'hapter D<,an individuals belief about hisHher ability to perform at a certain level in a given situation,is related to challenge and performance. Individuals who set high goals perform at a high level when they also have high self(efficacy. f. +ower +oints :.: and :.G which duplicate Table :.5 , provides a summary of the 1ey lin1s between goal setting and individual performance.
2>A | Chapter 7: Motivation: Goal Setting and Reward Programs
CHAPTER 7: P #ER P "%T 7:7 "mpa't o. Goals on Per.orman'e 6Ta2le 7:?8
CHAPTER 7: P #ER P "%T 7:7 "mpa't o. Goals on Per.orman'e 6Ta2le 7:?8 6Contin)ed8
g. The following Teams 'ompetency feature illustrates how people in teams use the basic concepts of goal challenge, goal clarity, and self( efficacy to instill teamwor1 ;see +ower +oint :.K<.
CHAPTER 7: P #ER P "%T 7:9 Team Competen'( Ee.. Gordon<s Rain2ow #arriors $earning "nsights > Rain2ow #arriors goal is to have 'ar 2a'4 on tra'4 in ?> se'onds or less F Rain2ow #arriors pra'ti'e team 2ehaviors related to goals F Team shares in Gordon<s priGe mone(
Teams Competen'(" -eff Gordons Rainbow .arriors .hen the Rainbow .arriors crew was assembled, its members decided to do things differently. &etarte and Gordon decided to have two crews" The first crew was responsible for the mechanics of the carC the second,the pit crew, was responsible for the car during the race. !nder &etarte and Gordons leadership, the team hired a coach to develop the teamwor1 competency of the pit crew. )ll members of the pit crew were trained to perform all necessary tas1s. /y analyzing other 7)$')R drivers, &etarte determined that Gordons car could leave the pit 5 second faster than the competitions cars. The pit crew set a goal of having the car exit the pit in 5?
Chapter 7: Motivation: Goal Setting and Reward Programs | 2>B
seconds or less. %uring a race, all crew members listen to each other on their scanners. /efore the race, all the Rainbow .arriors sit in a circle to discuss race strategy. The circle symbolizes that the team is stronger than any individual. .hen Gordon wins a race, signs a personal services contact, or is paid to sign autographs, all members of both crews receive a percentage of that money. To learn more about -eff Gordon, go to www:5e..gordon:'om: G.
PAGE ?97: *oderators

5. 3. /y increasing or decreasing moderators, the strength between challenge and the mediators changes. *oderators consist of four variables" ability, goal commitment, feedbac1, and tas1 complexity ;see +ower +oint :.54<. CHAPTER 7: P #ER P "%T 7:?; Moderators o. Goal1Setting a. Ability limits an individuals capacity to respond to a challenge. +erformance levels off as the limits of an individuals ability are approached. b. PAGE ?97: Goal 'ommitment refers to an individuals determination to reach a goal, regardless of whether the goal was set by that person or someone else. ;5< ;3< Table :.3 contains a short Euestionnaire that the students can use to assess the level of commitment to achieve a goal. Goal commitment is li1ely to be stronger when an individual ;see +ower +oint :.55<" ;a< ;b< ;c< ;d< +ublic commitment to achieve the goal. $trong need for achievement.
/elief in personal control ;internal locus of control<. +articipates in setting the goal.
2>C | Chapter 7: Motivation: Goal Setting and Reward Programs ;e< ;f< ;g< +ositive outcomes depend on goal achievement. #xpects to be punished for not achieving goals. +erceives eEuitable distribution of rewards.
CHAPTER 7: P #ER P "%T 7:?? #hen "s Goal Commitment StrongH
c. d.
PAGE ?99: 3eed2a'4 provides information to the employee about how well he or she is doing.
It enables the individual to relate received rewards to those expected in terms of actual performance. +ower +oint :.53 highlights characteristics of useful feedbac1. CHAPTER 7: P #ER P "%T 7:?2 Chara'teristi's o. &se.)l 3eed2a'4
e. PAGE ?99: Tas4 'omple-it( refers to the cognitive processing that is needed by a person to solve a tas1. ;5< or simple tas1s, the effort reEuired by challenging goals leads directly to high tas1 performance.
;3< or complex tas1s, effort doesnt lead directly to high tas1 performance. ;?< ?. The individual must decide where and how to allocate effort.
PAGE ?99: *ediators are lin1s that =oin challenge and performanceC they
consist of four variables ;see +ower +oint :.5?<. a. b. Direction of attention focuses on goal(direct behavior. Effort is positively related to challenge. c. wor1 at a tas1. Persistence reflects a persons willingness to
Chapter 7: Motivation: Goal Setting and Reward Programs | 2>7 d. Task strategy is an approach to tac1ling a tas1.
CHAPTER 7: P #ER P "%T 7:?> Mediators in the Goal1Setting Model
D.
PAGE 2;;: +erformance.
a. &eaders and employees set goals is to achieve a level of performance that helps the entire organization achieve its goal;s<. b. 9uantitative indicators can be used to assess performance" units of production or Euality, dollars ;profits, costs<, and time ;attendance, deadlines<. c. be used. d. e. ;5< ;3< ;?< ;D< reward unethical behavior. Jrganizations often use a code of ethics to support employees in setting ethical goals and ma1ing ethical decisions. The advantages of setting ethical goals include ;see +ower +oint :.5D<" Identifies what leaders recognize as acceptable behaviors. &egitimizing ethics as part of decision ma1ing. )voids Euestions about right and wrong behaviors. )voids inconsistencies caused by leaders who appear to 9ualitative goals ;customer satisfaction, teamwor1< and indicators may
CHAPTER 7: P #ER P "%T 7:?A Advantages o. Setting Ethi'al Goals f. The following )cross 'ultures 'ompetency feature shows how a manager at 0ewlett(+ac1ard created industry(wide changes by setting the standards for her employees ;see +ower +oint :.5F<.
2>+ | Chapter 7: Motivation: Goal Setting and Reward Programs
CHAPTER 7: P #ER P "%T 7:?B A'ross C)lt)res Competen'( Hewlett1Pa'4ard $earning "nsights F HP sets per.orman'e standards .or s)ppliers F HP a)dits s)ppliers wor4ing 'onditions and gives them .eed2a'4 on their la2or and environmental pra'ti'es F S)ppliers who .ail to meet per.orman'e standards are dropped
A'ross C)lt)res Competen'(: 0ewlett(+ac1ard
mpetency
0+ manager, /onnie 7ixon(Gardiner, showed up unannounced in &ong 0ua, 'hina, to inspect the wor1ing conditions of 0(+s largest suppliers. $he was concerned about the sweatshop conditions that had been exposed in the media. To address those concerns, she began benchmar1ing how other companies monitored their suppliers. Then she set high standards for 0( +s suppliers. 0(+ now has a system of :4 auditors who inspect more than 344 factories owned by 5F4 of their suppliers. 7ixon(Gardiner also started a training program to teach 'hinese suppliers how to prevent labor and environmental abuses. This was her goal" @ or consumers to 1now that when they touch an 0(+ product, they are guaranteed that it was made in a socially and environmentally responsible way.A $he also got %ell, I/*, Intel, and other companies to formulate the #lectronic Industry 'ode of 'onduct. This code bans abuses such as child labor, forced labor ;use of prisoners<, and excessive overtime. It also reEuires manufacturers to adhere to basic standards for environmental protection and participate in an inspection for monitoring wor1ing conditions in the plants. The inspection and enforcement of these standards are the responsibility of each manufacturer. $he has been trac1ing performance data for several years now and can see that her efforts are paying off. To learn more about 0(+, go to www:hp:'om: To learn more about industry(wide standards, go to www:ei'':in.o:
Chapter 7: Motivation: Goal Setting and Reward Programs | 2>9 Across F.
PAGE 2;?: Rewards.

a. .hen an employee attains a high level of performance, rewards are inducements to continue performing at that level.
b. Rewards can be external ;bonuses, paid vacations, and the li1e< or internal ;a sense of achievement, pride in accomplishment, and feelings of success<. c. ) reward in one culture may not be viewed as a reward in a different culture. +raising an individual in public for achievement in 6ietnam is embarrassing because rewards are not given in public as in the !.$. I.
PAGE 2;?: $atisfaction

a. In the goal(setting model, the primary focus is on the employees degree of satisfaction with performance. b. 'ompromise on goal difficulty may be necessary to maximize satisfaction and performance. c. $ome satisfaction is associated with striving for difficult goals, such as responding to a challenge.
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PAGE 2;2: 'onseEuences
a. Reaching a goal include both a willingness to accept future challenges and to increase commitment to the organization. b or leaders, a conseEuence is that employees 1now what the goal is because their behaviors reflect the acceptance of the goals. """:
PAGE 2;2: E33ECTS
3 G A$ SETT"%G
"%STR&CT R<S % TES:==================================================== ========================================================================== ========================================================================== ========================================================================== ==========================================================================

2A; | Chapter 7: Motivation: Goal Setting and Reward Programs ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========================================================================== ========= ). Learning goal: State the effects of goal setting on an individ#al$s %ehavior! /. PAGE 2;2: ive conditions must come together for managers to gain the benefits of a goal(setting program ;see +ower +oint :.5I<. 5. 3. ?. D. F. #mployee has 1nowledge and ability to attain goal. #mployee is committed to achieving the goal. #mployee needs feedbac1 on performance. 'omplex tas1s need to be bro1en down. &eaders need to ensure employee has resources to attain goal.
CHAPTER 7: P #ER P "%T 7:?C Conditions .or E..e'tive Goal Setting
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PAGE 2;>: Impact on +erformance.

5. Goal setting motivates people to achieve high performance because ;see +ower +oint :.5:<" a. b. c. %ifficult but achievable goals prompt people to concentrate on achieving the goals. %ifficult goals motivate people to spend lots of time and effort on developing methods for achieving the goals. %ifficult goals increase peoples persistence in trying to achieve the goals.
Chapter 7: Motivation: Goal Setting and Reward Programs | 2A? CHAPTER 7: P #ER P "%T 7:?7 #h( Goal Setting Motivates High Per.orman'e 3. +ower +oint :.5G. gives additional reasons why goal setting wor1s. CHAPTER 7: P #ER P "%T 7:?+ #h( Goal Setting #or4s ?. The %iversity 'ompetency feature highlights how the &oc1heed *artin *$3 team developed a diversity program by setting goals ;see +ower +oint :.5K<.
CHAPTER 7: P #ER P "%T 7:?9 ,iversit( Competen'(: $o'4heed Martin MS2 Team $earning "nsights F Clear goals to 2e a'hieved stated 2( leaders F Teams de'ided how to rea'h diversit( goals F Emplo(ees provided .eed2a'4 on diversit( goals
,iversit( Competen'(: &oc1heed *artin *$3 Team The &oc1heed *artin *$3 employee communication and design team focused on an innovative @#mbrace %iversityA print campaign. The goals were ;5< to engage employees understanding and acceptance of inclusive behavior and ;3< to set the stage for greater employee involvement in both diversity communication and the companys efforts to create a diverse, inclusive wor1 environment. The team established two 1ey goals" ;5< to reach at least :F percent of employees and ;3< to establish a baseline of employee understanding of what constitutes a diverse environment. The team designed 53 different postcards that explored themes such as generational differences, cultural and religious traditions, and military experience. The intent was to explore the
2A2 | Chapter 7: Motivation: Goal Setting and Reward Programs beliefs and bac1grounds that contribute to an inclusive wor1 environment by presenting realistic scenarios. $econd, with multiple postcards, the team could explore a wide variety of issues each month. Third, employees seated in nearby office or cubicles received different versions of the same theme, encouraging conversation about the theme. The team also focused on measurement and evaluation. urthermore, more than GF percent of employees strongly agreed that *$3 was serious about its commitment to have a diverse, inclusive wor1 environment. To learn more about the program, go to www:lo'4heedmartin:'om: %.
PAGE 2;A: &imitations to goal setting ;see +ower +oint :.34<.

5. .hen employees lac1 competencies to perform at a high level, goal setting doesnt wor1. 3. .hen a considerable amount of learning is needed, successful goal setting ta1es longer. ?. .hen the goal(setting system rewards the wrong behavior, ma=or problems can result.
CHAPTER 7: P #ER P "%T 7:2; $imitations to Goal Setting
Change "nsight .hy should I pay you to get in the batters boxL .hen you hit the ball, Ill increase your pay. Results are paid forC showing up doesnt count for much. Carlos Sep)lvedaD CE D "nterstate 7atter(
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PAGE 2;B: Insights for &eaders

5. Individuals who are both satisfied with and committed to the organization are more li1ely to stay with the organization and to accept the challenges the organization presents. Turnover and absenteeism rates for satisfied individuals are lower.
3.
Chapter 7: Motivation: Goal Setting and Reward Programs | 2A> ?. a. .hen people become dissatisfied, the following may result"
-ob avoidance ;Euitting<. b. .or1 avoidance ;absenteeism, arriving to wor1 late and leaving early<.
c. d. e. f.
+sychological defenses ;alcohol andHor drug abuse<. 'onstructive protest ;complaining<. %efiance ;refusing to do what is as1ed<. )ggression ;theft or assault<.
D. Implications of the goal(setting model for employees, managers, and teams ;see +ower +oint :.35<" a. +rovides a framewor1 for diagnosing potential problems with low(performing or average(performing employees. b. +rovides on creating a high(performance wor1 environment.
c. $hows factors affecting the achievement of high performance.
CHAPTER 7: P #ER P "%T 7:2? "mpli'ations o. Goal1Setting Model .or Emplo(eesD ManagersD and Teams
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PAGE 2;B: RE#AR, S0STEMS 3
R H"GH PER3 RMA%CE
"%STR&CT R<S % TES:===================================================== ============================================================================= ============================================================================= ============================================================================= ============================================================================= =============================================================================

2AA | Chapter 7: Motivation: Goal Setting and Reward Programs ============================================================================= ============================================================================= ============================================================================= ============================================================================= ========= ). Learning goal: &escri%e reward programs for improving performance! 5. Jne of the basic goals of leaders is to motivate employees to perform at their highest levels. a. b. *anagers agree that tying pay to performance is essential. Implementing programs that lin1 pay to performance is difficult.
3. The ability of rewards to motivate high performance depends on six factors ;see +ower +oint :.33<. a. b. c. d. e. f. )vailability. Timeliness. +erformance contingency. %urability. #Euity. 6isibility.
CHAPTER 7: P #ER P "%T 7:22 Reward 3a'tors "nvolved in Motivating High1Per.orman'e /. +eoples motivation to perform well may be enhanced by using one or more of the following reward systems" informal, profit(sharing, s1ill(based pay, and flexible benefits programs ;see +ower +oint :.3? which duplicates Table :.?<. CHAPTER 7: P #ER P "%T 7:2>
Chapter 7: Motivation: Goal Setting and Reward Programs | 2AB Common Reward Programs .or "mproving Per.orman'e 6Ta2le 7:>8 '.
PAGE 2;7: Informal programs.

5. PAGE 2;7: "n.ormal rewards refer to those that result from interactions between people. 3. Informal rewards are designed to encourage continuous improvement. ?. Informal rewards are effective when ;see +ower +oint :.3D<" a. directly reinforce desired behavior, b. given immediately, c. delivered personally, and are d. valued by the individual.
CHAPTER 7: P #ER P "%T 7:2A "n.ormal Reward Programs
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PAGE 2;7: +rofit($haring programs.

5. 3. Pro.it1sharing programs provide employees with a portion of the companys earnings. +rofit sharing may have a limited impact on employee behavior because employees may feel that they can do little to influence the organizations overall profitability. Recommendations for profit sharing ;see +ower +oint :.3F<" a. Involve line managers and employees in the programs creation to ensure
?. their support.
b. $et clear goals for the program.

2AC | Chapter 7: Motivation: Goal Setting and Reward Programs c. measuring. d. e. Tie the program to the companys strategies. Give the program time to succeed. #nsure that the employees understand the metrics that the program is
f. +rovide up(to(date information that allows employees to see how well they are performing against their goals. CHAPTER 7: P #ER P "%T 7:2B Pro.it1Sharing Programs D. The following 'hange 'ompetency feature illustrates how 7ucor uses its profit( sharing plan to reward employees ;see +ower +oint :.3I<.
CHAPTER 7: P #ER P "%T 7:2C Change Competen'( %)'or<s Pro.it1Sharing Program $earning "nsights > goals are 'lear and )nderstood > 2on)ses are paid on wee4l( 2asis > not meeting I)alit( goals has .inan'ial 'onseI)en'es .or emplo(ees
Change Competen'(: 7ucors +rofit($haring +rogram 7ucor has developed a profit(sharing plan that wor1s and is easy to understand. The average 7ucor steelwor1er earns more than M:4,444 per year, but only one(third of that amount is guaranteed. -im 'oblin, human resources vice president, believes that paying a low base salary, but paying high bonuses on a wee1ly basis will 1eep employees focused on 7ucors goals of Euality and customer satisfaction. The bonuses are paid based on the Euality and tons produced and shipped by a team. The average base pay is between MK and M54 an hour, but with the bonuses employees can ma1e an additional M5F to M34 an hour. 7ucors profit(sharing plan also has some penalties. If employees catch a bad load of steel before it is shipped, they lose their
Chapter 7: Motivation: Goal Setting and Reward Programs | 2A7
bonus for that shipment. If that bad batch is shipped to a customer, the team loses three times its usual bonus. To learn more about 7ucor, go to www:n)'or:'om:
Change
comp e t e n c y
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PAGE 2;9: $1ill(/ased pay.
5. S4ill12ased pa( programs are based on the number and level of =ob( related s1ills that an employee has learned. 3. $1ill(based pay compensates employees for the s1ills they can use in the organization, rather than for the specific =obs they are performing. ?. $1illed(/ased +ay +rograms are effective when ;see +ower +oint :.3:< a. b. c. employees can learn and apply new s1ills to =obs. there is little emphasis on seniority. leaders spend resources to train and promote employees. CHAPTER 7: P #ER P "%T 7:27 S4illed17ased Pa( Programs D. &imitations of s1ill(based pay include" a. Topping(out with respect to s1ill acEuisition and the upper end of the pay scale for a particular =ob.
b. InadeEuate commitment from management to the plan, conflicts between employees included and excluded from the plan, inadeEuate training of managers and employees, and poor program designs. .
PAGE 2;9:
lexible benefit plans.
5. 3le-i2le 2ene.it plans allow employees to choose the benefits they want, rather than having management choose for them.
2A+ | Chapter 7: Motivation: Goal Setting and Reward Programs 3. lexible benefit plans are called PAGE plans. ?. :.3G<" a. employees are given a choice. b. employees ma1e smart decisions about program selection. c. leaders 1eep costs to less than ?4 percent of total compensation pac1age. CHAPTER 7: P #ER P "%T 7:2+ 3le-i2le 7ene.its Plans D. )dvantages and limitations of flexible benefit plans. a. )dvantages" ;5< ;3< ;?< #mployees ma1e decisions about personal finances and match needs with benefit plans. 0elps organizations control costs. 0ighlights economic value of employee benefits.
2;9: 'a.eteria1st(le 2ene.it
lexible /enefit +rograms #ffective when ;see +ower +oint
b. &imitations" ;5< ;3< Record 1eeping becomes more complicated. Jrganizations cant predict number of employees who choose each benefit which affects costs.
G.
PAGE 2?;: Insights for &eaders.
5. Important practices to improve effectiveness are shown in igure :.? ;see +ower +oint :.3K<. 3. &eaders need to lin1 rewards to performance and set a measurement system in place that measures the behaviors that lead to effectiveness. ?. &eaders need to ma1e sure that rewards are relevant and valued by
Chapter 7: Motivation: Goal Setting and Reward Programs | 2A9 employees. D. &eaders need to watch out for unintended conseEuences.
CHAPTER 7: P #ER P "%T 7:29 ,e'iding Among Alternative Reward S(stems 63ig)re 7:>8
E%R"CHME%T M ,&$E EI)al "snJt Alwa(s 3air %o you have employees who complain that you arenNt treating everyone the sameL If so, here are some reasons why treating all employees the same is a bad decision. E-pe'tations sho)ld var( O $uppose you have two employees doing the same =ob. Jne has been on the =ob for five years and another five months. .ould you expect them to be performing at the same levelL +robably not. +articularly if they are performing wor1 where experience should improve performance. This means that you should have higher expectations regarding the wor1 performed by the more experienced employee than you would of the less experienced person. )re you treating them eEuallyL 7o. 0owever, you are treating them fairly. Pa( sho)ld var( O Jne of the biggest complaints I hear from employees is that someone is doing the same =ob that they are doing and that person is receiving more pay. )fter further investigation, we see that the person receiving more pay has more education ;perhaps a college degree< or more experience than the person who is doing the complaining. .ould it be fair if we raised this persons salary to match the other employeeL I dont thin1 so.
2B; | Chapter 7: Motivation: Goal Setting and Reward Programs Promotions O *a1ing people wait six(months or one year before they can be promoted ma1es little sense. This =ust encourages people to maintain their level of performance rather than continually shooting for the stars. Pet, we do this all the time because we believe this is fair. $et expectations, manage performance and promote those who reach the established milestones, regardless of how long it has ta1en them to get there. This enrichment module is adapted from" Roberta *atuson, #Eual IsnNt )lways air, ast !o"pany retrieved on -uly D, 344K from, http"HHwww.fastcompany.comHblogHroberta( matusonHmanagement(escalatorHeEual(isnt(always(fair
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PAGE 2?2: Reward +ractices in %ifferent 'ultures.

5. Jrganizations in various countries utilize different reward systems ;see +ower +oints :.?4 and :.?5, which duplicate Table :.D<.
3. 'ultural values learned in childhood are passed down from one generation to the next and serve to differentiate one country from another. a. In high po#er distance cultures, rewards are based on ones level within the managerial hierarchy. b. In indi$idualistic cultures, organizations expect individuals to loo1 out for their own personal interests. c. In cultures that do not have a strong gender role orientation, eEuality among members is stressed. d. seniority. CHAPTER 7: P #ER P "%T 7:>; C)lt)re and Reward S(stems in ,i..erent Co)ntries 6Ta2le 7:A8 In high uncertainty a$oidance cultures, reward programs emphasize
CHAPTER 7: P #ER P "%T 7:>? C)lt)re and Reward S(stems in ,i..erent Co)ntries 6Ta2le 7:A8 ;Contin)ed8
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Chapter 7: Motivation: Goal Setting and Reward Programs | 2B?
"%STR&CT R<S % TES:===================================================== ============================================================================= ============================================================================= ============================================================================= ============================================================================= ============================================================================= ============================================================================= ============================================================================= ============================================================================= ============================================================================= ========= CHAPTER 7: P #ER P "%T 7:>2 ,is')ssion @)estions
CHAPTER 7: P #ER P "%T 7:>> ,is')ssion @)estions 6Contin)ed8 CHAPTER 7: P #ER P "%T 7:>A ,is')ssion @)estions 6Contin)ed8
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5. %isit Enterprise at ###&enterprise&co"& !lick on '!areers,( on ')ur !ulture,( then on ')ur %alues&( *o# does Enterprise use goal-setting+
2B2 | Chapter 7: Motivation: Goal Setting and Reward Programs
Goal setting is the process of developing, negotiating, and establishing targets that challenge the individual. #nterprise uses goal setting as outlined by the goal setting model. +erformance is li1ely to be high when" challenging goals have been set Enterprise is a .)n and .riendl( pla'eD where teamwor4 r)les .e wor1 hard to meet our goals for growth and success. /ut we wor1 =ust as hard to 1eep our wor1place en=oyable. .e are 1nown for our enthusiasm, high energy, competitive drive and team spirit. )nd, as we continue to grow, we understand we can best fuel the competitive success of the entire company with a wor1force thats upbeat, motivated and highly committed to each others success. the moderators ;ability, goal commitment, feedbac1, and tas1 complexity< are present #e wor4 hard ::: and reward hard wor4 &earning how to run a successful business from the ground up and delivering our high standard of service is hard wor1. Its wor1 that demands a deep personal commitment from each employee. #nterprise rewards that commitment personally, professionally and financially by providing employees with many different career opportunities. Jur business model provides a solid foundation in business operations and true entrepreneurship that few, if any, companies offer. That ma1es #nterprise a great fit for career(minded individuals who ta1e real ownership of, and responsibility for, their goals and aspirations. the mediators ;direction, effort, persistence, and tas1 strategy< are operating
C)stomer servi'e is o)r wa( o. li.e .e maintain an uncompromising focus on customer service, from our distinctive professional dress and courteous demeanor, to our practice of directly lin1ing career advancement opportunities to the actual customer service we provide. 'ustomers see1 out O and stay with O #nterprise because our people believe in and deliver courteous, personalized service every day. Jur goal is to exceed every customers expectations. 3. What are so"e ethical proble"s associated #ith perfor"ance-based re#ard progra"s+ What abuses ha$e you seen+ *o# can leaders correct such abuses+ The ethical problems associated with performance(based reward programs pertain to whether or not the rewards are given fairly. Procedural ,ustice refers to the perceived fairness of rules and procedures. In pay and evaluation situations, the individual cant control the decision but can react to the procedures used to ma1e it. #mployees assessments of procedural =ustice are related to" trust in management and =ob satisfaction.
Chapter 7: Motivation: Goal Setting and Reward Programs | 2B> or example, conflicts arise as to the fairness of including some employees and excluding others from s1ill(based pay programs. $1ill(based pay programs also reEuire a heavy investment in training, as well as measurement systems capable of assessing when employees have learned the new s1ills. If the s1ills tests are not perceived as fair by employees, ethical problems arise. In the 5KG4s the +uerto Rican &egal %efense and #ducation und brought several discrimination lawsuits that sought to scrap the results of =ob tests because too few 0ispanics scored well. The civil rights group represented sanitation wor1ers in 7ew Por1 'ity who wanted to stop white employees from getting promotions because, they argued, the Eualifying exams unfairly disadvantaged minorities. ;$ource" $otomayor was in a group that sued over tests, )dessa A"erican, -uly D, 344K, p. G).< &eaders can correct abuses by testing the Euestions used on exams to be sure mechanisms that are fair and applicable to the s1ills needed for a specific =ob. )lso, 0ispanics could be given tests in $panish to avoid language barriers. ?. What factors influenced your le$el of goal co""it"ent to this course+ Did your le$el of co""it"ent change after recei$ing feedback on an assign"ent or test+ E-plain& Goal commitment refers to the individuals determination to reach a goal, regardless of whether the goal was set by the person or a manager. )ccording to the text, goal commitment is li1ely to be stronger when the employee" *a1es a public commitment to achieve the goal. 0as a high need for achievement. /elieves sHhe can control the activities that will help in goal attainment. +articipates in goal setting unless sHhe does not expect or want to participate. /elieves that positive outcomes are contingent on achieving goals. #xpects to be punished for not achieving goals. +erceives that rewards are distributed eEuitably.
In discussing this Euestion, students should explore the extent which each of the above factors has influenced hisHher commitment to the course. +erformance is li1ely to be high when goal commitment is strong. $tudents should be encouraged to consider this relationship relative to the strength of goal commitment and the level of performance in the course. They should complete the Euestionnaire at the end of the chapter. D& .se the goal-setting "odel to analy/e Ste$e Letarte0s 1AS!A2 tea", the 2ainbo# Warriors& Why is it so effecti$e+ This Euestion refers to the Teams 'ompetency,7)$')R Racing. &etartes 7)$')R team was effective because it successfully implemented the goal(setting model. The team
2BA | Chapter 7: Motivation: Goal Setting and Reward Programs members were divided into two groups based on tas1s performed,mechanics and the pit crew ;relates to goal clarity and direction<. 0ighly effective teamwor1 is crucial for minimizing the amount of time a car spends in the pits during a race ;pertains to self-efficacy, ability, direction, effort, and persistence<. Therefore, the pit crew was trained in teamwor1 s1ills. In addition, all pit crew members were trained on all tas1s so that the members could be rotated easily and effectively ;pertains to self-efficacy, ability, direction, effort, and persistence<. The pit crew established the goal of getting the car out of the pits in 53(5? seconds or less ;reflects goal difficulty, goal clarity, and goal co""it"ent<. +rior to a race, the pit crew discusses the strategy to be used and then, at each pit stop, decides what needs to be done within the context of that strategy,as well as when pit stops should occur ;concerns task strategy<. )ll members of the mechanics team and the pit crew share a percentage of the money from race winnings, &etartes personal service contracts, and autograph signings ;reflects re#ards<. F. Sandra S#ann, $ice president of hu"an resources at %ie#!ast, said that "any ti"es, leaders co""it the error of "easuring the #rong beha$iors #ith e-cruciating accuracy& What i"plications does this pose for "anagers using "anage"ent by ob,ecti$es+ *anagement by ob=ectives involves managers and employees =ointly setting goals for performance and personal development, periodically evaluating the employees progress toward achieving these goals, and then rewarding the employee. !nrealistically high goals may not be accepted, may lead to high performance only in the short run, or lead to employees fudging results to avoid not reaching the goal. $wann is interested in long(term behaviors for its employees, which in turn 1eeps $wann a competitive company. !nder the management by ob=ectives system, individuals eventually get discouraged and stop trying, as predicted by the expectancy model. This is exactly the opposite behavior that $wann is see1ing in an employee. I. 3ay 4eck, general "anager at 4enefit Partners, a co"pany that speciali/es in hu"an resource "anage"ent, said: '5f you cannot define it and "easure it, you are not going to get it&( What i"plications does this state"ent ha$e for setting goals+ or "easuring the"+ Goal clarity is the 1ey goal(setting idea that applies to this statement. Goal clarity reflects the notion that a goal must be clear and specific if it is to be useful in directing employee effort. ) goal that is clear and specific reflects both a sound definition of the phenomenon and a solid way of measuring it. /asically /ec1 is saying that without goal clarity, neither effective goal setting nor effective evaluation of goal attainment is very feasible. :. What are so"e of the negati$e issues associated #ith goal-setting progra"s+ Impossible goals reduce motivation because people do not li1e to fail. !nrealistically high goals may not be accepted or may lead to high performance only in the short run. Individuals eventually get discouraged and stop trying, as predicted by the expectancy model ;see 'hapter I<.
Chapter 7: Motivation: Goal Setting and Reward Programs | 2BB Individuals who set high goals perform at a high level when they also have high self efficacy. ) persons self(efficacy is dependent on the tas1. or example, a golfer with a low handicap has high self(efficacy on the golf course, might have low self(efficacy when meeting sales goals on the =ob. There are three potential limitations to goal setting. irst, when employees lac1 the s1ills and abilities needed to perform at a high level, goal setting doesnt wor1. $econd, successful goal setting ta1es longer when employees are given complicated tas1s that reEuire a considerable amount of learning. Third, goal setting can lead to ma=or problems when it rewards the wrong behaviors. G. Why does the di$ersity progra" at Lockheed 6artin #ork+ The diversity program at &oc1heed *artin wor1s because" 'lear goals to be achieved stated by leaders.
The goals were ;5< to engage employees understanding and acceptance of inclusive behavior and ;3< to set the stage for greater employee involvement in both diversity communication and the companys efforts to create a diverse, inclusive wor1 environment. Teams decided how to reach diversity goals.
The team designed 53 different postcards that explored themes such as generational differences cultural and religious traditions, and military experience. The intent was to explore the beliefs and bac1grounds that contribute to an inclusive wor1 environment by presenting realistic scenarios. #mployees provided feedbac1 on diversity goals.
The team learned that D? percent felt the diversity messages were new, different, and made them thin1C and F4 percent believed that the messages would cause them to change their behavior. urthermore, more than GF percent of employees strongly agreed that *$3 was serious about its commitment to have a diverse, inclusive wor1 environment. K. What are so"e proble"s that e"ployees "ight face in an organi/ation that has adopted a skill-based pay progra"+ $1ill(based pay wor1s particularly well with employees who set high but attainable goals, want to manage themselves, and participate in decisions that affect their performance. #mployees who do not have these characteristics probably would not perform as well under a s1ill(based pay system. )lso, they would probably be somewhat dissatisfied with the s1ill(based pay system. .hether or not employees have the previously mentioned characteristics, they may become frustrated when no =ob openings are available in areas for which they have learned new
2BC | Chapter 7: Motivation: Goal Setting and Reward Programs s1ills. 54. 4ella 7oren, $ice president for !usto"er Ser$ices Planning in Asia for A"erican Airlines, is transferring a "anager fro" A"erican Airlines based in Dallas to 3apan& What cultural issues "ight he encounter #hen re#arding e"ployees in 3apan+ This Euestion refers to Table :.D, 'ulture and Reward $ystems. The reward system choice is influenced by cultural attributes, including ris1 propensity, individualism versus collectivism, Euality of life orientation, and pay for performance attitudes. Ris1(avoiding cultures li1e -apan tend to use ris1(minimizing reward systems, based on company not individual performance or team efforts. 'ultures that embrace ris1 li1e the !nited $tates are more li1ely to use more ris1y forms of reward systems, based on individual performance rather than team performance. )lso, women have fewer management positions in -apan than in the !nited $tates. /ella might face problems from male subordinates who are not used to receiving performance rewards from a female manager. In -apan, employees receive their annual pay raise on their anniversary date ;the day they =oined the company<. Instead of dismissing an employee for poor performance, managers move people from one department to another or into a @window seat,A a =ob with little authority and responsibility. These practices allow the employee to save face, which is very important in -apanese culture. In high po#er distant cultures li1e -apan, rewards are based on ones level within the managerial hierarchy. There are wide salary ranges between the top and lower level employees. +rofit sharing and other forms of variable compensation systems are relied to motivate employees. $ubordinates are motivated by the threat of sanctions.
CHAPTER 7: P #ER P "%T 7:>B E-periential E-er'ise Sel.1Competen'(KGoal Setting
ELPER"E%T"A$ ELERC"SE A%, CASE PAGE 2?A: E-periential E-er'ise: Sel. Competen'(MMGoal1Setting
This Euestionnaire consists of ?4 statements for rating goal setting in a current or previously held =ob. $tudents are to indicate, on a five(point scale ;5 Q almost never and F Q almost always<, the extent to which each of the statements best describes goal setting in the referent =ob. The Euestionnaire is scored by totaling the responses for the ?4 items. $cores of 534(5F4 indicate a high(performing, highly satisfying wor1 situation. Pour goals are challenging, and you are committed to achieving them. .hen you achieve your goals, you are rewarded for attaining them.
Chapter 7: Motivation: Goal Setting and Reward Programs | 2B7 $cores of G4(55K suggest a highly varied wor1 situation with motivating and satisfying attributes on some dimensions and =ust the opposite on others. $cores of ?4(:K suggest a low(performing, dissatisfying wor1 situation. 9uestionnaire results could be used as the basis for a small group discussion. +articipants could compare their scores and discuss what differences in those scores might mean in terms of goal setting within the students employing organizations. CHAPTER 7: P #ER P "%T 7:>C Case: ,iversit( Competen'(KAllstate "ns)ran'e Compan(
PAGE 2?B: Case: ,iversit( Competen'(KAllstate "ns)ran'e Compan(

5. .sing the "odel on page 89:, e$aluate Allstate;s goal-setting process& *o# does it #ork+ Goal setting is the process of developing, negotiating, and establishing challenging targets. )llstates goal is as follows" @%iversity is )llstates strategy for leveraging differences in order to create a competitive advantage.A Challenges" 7oal Difficulty(((()llstates internal and external goals are challenging but not impossible to achieve. The strategy has two ma=or points" ;5< an internal focus of @unloc1ing the potential for excellence in all wor1ers by providing them with the tools, resources, and opportunities to succeedAC and ;3< an external focus of ma1ing certain the wor1force matches the experiences, bac1grounds, and sensitivities of the mar1ets it serves. 7oal !larity(((()llstates goals are specific and clear so that they are useful in directing the implementation effort. )llstate has outlined four specific steps" succession planning, development, measurability, and accountability and reward. Self-efficacy((((()llstate believes that the company can implement these goals at a certain level.
our factors moderate the strength of the relationship between goals and performance. Moderators" Ability---)llstates management information system enables it to trac1 and measure 1ey drivers of career development and career opportunities for all of its more than D4,444 employees, ensuring that the companys future wor1forces will be diverse at all levels.
2B+ | Chapter 7: Motivation: Goal Setting and Reward Programs 7oal co""it"ent(((In the past, the company focused more on affirmative action and diversity awareness through education and training. 7ow, however, to escalate its commitment to diversity goals, )llstate lin1s recruitment, development and retention strategies to business performance. To lin1 compensation to the companys diversity goals, 3F percent of each managers merit pay is base on the diversity index and the 9uarterly &eadership *anagement $ystem. eedback----Through )llstates employee development process, all employees receive an assessment of their current s1ills and a road map for developing the critical s1ills necessary for advancement. &eaders are provided employee feedbac1 to base future development plans. )llstate conducts an online employee survey called the %iversity Index, communicates the results of the survey, and solicits feedbac1 from employees to solve problems. Task !o"ple-ity---- or simple tas1s, effort encouraged by challenging goals leads directly to high tas1 performance. or succession planning, )llstate has a minority recruitment program that focuses on colleges and universities with the most diverse enrollments. $electing and targeting these colleges is a simple tas1. or complex tas1s, effort does not lead directly to effective performance. %ecisions must be made where and how to allocate effort. or succession planning, a diverse slate of candidates must be identified and developed for each 1ey position. Pet, targeting colleges doesnt always yield the desired number of =ob candidates because other organizations are also trying to attract diverse employees. )llstate has challenging goals and moderating factors to support their achievement, but four mediators((((direction of attention, effort, persistence, and tas1 strategy(((affect performance. Mediators: Direction of attention--- or )llstate, recruiting at colleges with diverse enrollments is an activity expected to result in goal achievement((((filling vacancies with diverse employees. Effort---)llstate had put forth a significant effort to accomplish its diversity goal by conducting an online survey regarding the success of its programs and soliciting feedbac1 from its D4,444 employees to ma1e necessary changes. Persistence----)llstate has been willing to continue developing its diversity program since it began as an affirmative action program in 5KIK. Task Strategy----Through experience, )llstate has continued to develop its diversity program, focusing at first on affirmative action and diversity awareness. The program has evolved into a specific four(step program that is tied to )llstates business strategy.
Chapter 7: Motivation: Goal Setting and Reward Programs | 2B9 .hen the aforementioned factors are operating, performance is li1ely to be high. Per.orman'e" $uccession +lanning has made a difference in a way that is easy to measure. #mployment of women and minorities has grown at a rate far surpassing national averages. Today, I4 percent of )llstates executives and managers are women and of that percent 3K percent are 0ispanics or people of color. .hen there is such a high level of performance, rewards can become important inducements for a continuation of such performance. Rewards: )llstate helps employees advance in their careers by developing critical s1ills through education, coaching, mentoring, and classroom training. *erit pay for managers is based on the diversity index and the 9&*$ to send a clear signal that excellent management of people is really important. *any of the factors mentioned in the model influence satisfaction on the =ob. Satis.a'tion: In addition to rewards, )llstate increases =ob satisfaction for employees through a number of programs designed to maintain wor1(life balance. The company provided on(site child care, dry cleaning, flexi(time, and assists those with disabilities. These benefits increase the satisfaction of wor1ing at )llstate. 3. )n page 89<, #e list so"e of the di"ensions of an effecti$e goal setting progra"& Does Allstate "eet these criteria+ ) goal(setting system is effective when ;5< challenging goals have been set, ;3< the moderators ;ability, goal commitment, feedbac1, and tas1 complexity< are present, and ;?< the mediators ;direction, effort, persistence, and tas1 strategy< are operating. )llstate meets these criteria. )llstates program provides concrete advice to managers on how to create a high(performance, diverse wor1 environment. ?. What type of high-perfor"ance re#ard syste" should Allstate choose to "oti$ate its e"ployees to reach its di$ersity goals+ $tudents should answer this Euestion by referring to igure :.? on p. 355 in the text. The scenario provides insufficient information for answering nearly all of the diagnostic Euestions. $tudents may need to ma1e some assumptions to do a reasonable diagnosis when using these Euestions for deciding among alternative reward systems. Given the information that is available, an individual plan should be used. )llstate uses merit pay for managers based on the diversity index and the 9&*$. $1ill(based pay, which is one of the available individual plans, was in fact used to foster employee growth and development. lexible benefit programs offer )llstate employees a wide array of services. There are on(site child(care centers which offer discount programsC on(site dry cleaning, oil change, postal and catering servicesC flexible wor1 arrangementsC and The )llstate 'enter for )ssistive Technology ;)')T< which helps employees with disabilities.
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Chapter 7: Motivation: Goal Setting and Reward Programs | 227

Motivation: Goal Setting and Reward Programs

/E0 TERMS A%, C %CEPTS

2>; | Chapter 7: Motivation: Goal Setting and Reward Programs

3 G A$ SETT"%G A%, PER3 RMA%CE

Importance of goal setting ;see +ower +oint :.?<.

CHAPTER 7: P #ER P "%T 7:> "mportan'e o. Goal Setting

Chapter 7: Motivation: Goal Setting and Reward Programs | 2>?

This enrichment module is adapted from an exercise developed by *. 8. *c'uddy.

Chapter 7: Motivation: Goal Setting and Reward Programs | 2>>

PAGE ?9A: 'hallenge

PAGE ?9B: Goal di..i')lt( means that a goal should be

2>A | Chapter 7: Motivation: Goal Setting and Reward Programs

CHAPTER 7: P #ER P "%T 7:7 "mpa't o. Goals on Per.orman'e 6Ta2le 7:?8

Chapter 7: Motivation: Goal Setting and Reward Programs | 2>B

PAGE ?97: *oderators

CHAPTER 7: P #ER P "%T 7:?? #hen "s Goal Commitment StrongH

CHAPTER 7: P #ER P "%T 7:?> Mediators in the Goal1Setting Model

PAGE 2;;: +erformance.

2>+ | Chapter 7: Motivation: Goal Setting and Reward Programs

A'ross C)lt)res Competen'(: 0ewlett(+ac1ard

Chapter 7: Motivation: Goal Setting and Reward Programs | 2>9 Across F.

PAGE 2;?: Rewards.

PAGE 2;?: $atisfaction

PAGE 2;2: 'onseEuences

PAGE 2;2: E33ECTS

CHAPTER 7: P #ER P "%T 7:?C Conditions .or E..e'tive Goal Setting

PAGE 2;>: Impact on +erformance.

PAGE 2;A: &imitations to goal setting ;see +ower +oint :.34<.

CHAPTER 7: P #ER P "%T 7:2; $imitations to Goal Setting

PAGE 2;B: Insights for &eaders

c. $hows factors affecting the achievement of high performance.

PAGE 2;B: RE#AR, S0STEMS 3

R H"GH PER3 RMA%CE

PAGE 2;7: Informal programs.

CHAPTER 7: P #ER P "%T 7:2A "n.ormal Reward Programs

PAGE 2;7: +rofit($haring programs.

b. $et clear goals for the program.

Chapter 7: Motivation: Goal Setting and Reward Programs | 2A7

PAGE 2;9: $1ill(/ased pay.

lexible benefit plans.

2;9: 'a.eteria1st(le 2ene.it

lexible /enefit +rograms #ffective when ;see +ower +oint

PAGE 2?;: Insights for &eaders.

PAGE 2?2: Reward +ractices in %ifferent 'ultures.

PAGE 2?>: S&MMAR0

Chapter 7: Motivation: Goal Setting and Reward Programs | 2B?

PAGE 2?A: ,"SC&SS" % @&EST" %S A%, S&GGESTE, A%S#ERS

2B2 | Chapter 7: Motivation: Goal Setting and Reward Programs

CHAPTER 7: P #ER P "%T 7:>B E-periential E-er'ise Sel.1Competen'(KGoal Setting

PAGE 2?B: Case: ,iversit( Competen'(KAllstate "ns)ran'e Compan(

2C; | Chapter 7: Motivation: Goal Setting and Reward Programs

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This enrichment module is adapted from an exercise developed by . 8. c'uddy.