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What is Behavioral Performance Management

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Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 378 Chapter Twelve Behavioral Performance Management Learning Objectives • Define the theoretical processes of learning: behavioristic, cognitive, and social/ social cognitive. • Discuss the principle of reinforcement, with special attention given to the law of effect, positive and negative reinforcers, and punishment. • Analyze organizational reward systems, emphasizing both monetary and nonfinancial rewards. • Present the steps and results of behavioral performance management, or organi- zational behavior modification (O.B. Mod.). In a sense, this whole text on organizational behavior is concerned with the what and how of managing and leading people for high performance in today’s organizations. Certainly many of the chapters (e.g., Chapter 4 on reward systems, Chapter 6 on motivation, Chapter 7 on positive organizational behavior, and all of the chapters in Part Three) are directly, or at least indirectly, concerned with how to manage oneself and human resources more effec- tively. The same could be said of popular techniques that have strong consulting advocates such as the late Edwards Deming’s “Total Quality Management,” Steven Covey’s “The Seven Habits of Highly Effective People,” or Peter Senge’s “Learning Organizations.” As was pointed out in the Chapter 1 discussion of the evidenced-based approach taken by this text, purely academic approaches may not be directly applied enough, and the popular writ- ers’ techniques tend to be “quick fixes” and “fads” without research backup that come with a splash and then, unfortunately, go. In contrast, this last part of the text again takes an evidenced-based (theoretical foundation, research supported and sustainable, effective appli- cation techniques) approach to managing and leading for high performance. In particular, this chapter on behavioral management meets the evidence-based criteria. As one behav- ioral management advocate strongly points out: Behavior Performance Management is not a good idea to be tried for a while and then cast aside for some other good idea. It is a science that explains how people behave. It cannot go away anymore than gravity can go away. In a changing world, the science of behavior must remain the bedrock, the starting place for every decision we make, every new technology we 1 apply, and every initiative we employ in our efforts to bring out the best in people. The purpose of this chapter is to provide an overview of learning theory and evidence- based principles and guidelines that serve as a foundation and point of departure for pre- senting the behavioral management approach. The first section summarizes the widely 378Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 379 Chapter 12 Behavioral Performance Management 379 recognized theories of learning: behavioristic, cognitive, and social/social cognitive. Next, the principles of reinforcement and punishment are given attention, followed by a discussion of both monetary and nonfinancial rewards. The last part of the chapter is devoted specifically to behavioral management. Both the steps of organizational behavior modification, or O.B. Mod., and the results of its basic research and application are given attention. LEARNING THEORY BACKGROUND Although learning theory has not been as popular in organizational behavior as motivation or personality theories, both scholars and practitioners would agree on its importance to both the understanding and the effective development and management of human resources. In fact, practically all organizational behavior is either directly or indirectly affected by learning. For example, a worker’s skill, a manager’s attitude, a staff assistant’s motivation, a salesperson’s optimism and confidence, and an accountant’s mode of dress are all learned. With the application of learning processes and principles, employees’ 2 behavior can be analyzed and managed to improve their performance. The most basic purpose of any theory is to better understand and explain the phenome- non in question. When theories become perfected, they have universal application and should enable prediction and control. Thus, a perfected theory of learning would have to be able to explain all aspects of learning (how, when, and why), have universal application (for example, to children, college students, managers, and workers), and predict and control learning situations. To date, no such theory of learning exists. Although there is general agreement on some principles of learning—such as reinforcement—that permit prediction and control, there is still a degree of controversy surrounding the theoretical understanding of learning in general and some of the principles in particular. This does not mean that no attempts have been made to develop a theory of learning. In fact, the opposite is true. The most widely recognized theoretical approaches incorporate the behavioristic and cognitive approaches and the emerging social cognitive theory that Chapter 1 indicated serves as the conceptual framework for this text. An understanding of these learning theories is impor- tant to the study of organizational behavior in general and behavioral performance man- agement in particular. Behavioristic Theories The most traditional and researched theory of learning comes out of the behaviorist school of thought in psychology (see Chapter 1). Most of the principles of learning and organi- zational reward systems, covered in Chapter 4, and the behavioral performance manage- ment approach discussed in this chapter are based on behavioristic theories, or 3 behaviorism. The classical behaviorists, such as the Russian pioneer Ivan Pavlov and the American John B. Watson, attributed learning to the association or connection between stimulus and response (S-R). The operant behaviorists, in particular the well-known American psychologist B. F. Skinner, give more attention to the role that consequences play in 4 learning, or the response-stimulus (R-S) connection. The emphasis on the connection (S-R or R-S) has led some to label these the connectionist theories of learning. The S-R deals with classical, or respondent, conditioning, and the R-S deals with instrumental, or operant, conditioning. An understanding of these conditioning processes is vital to the study of learning and serves as a point of departure for understanding and modifying organizational behavior.Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 380 380 Part Four Managing and Leading for High Performance Classical Conditioning Pavlov’s classical conditioning experiment using dogs as subjects is arguably the single most famous study ever conducted in the behavioral sciences. A simple surgical procedure permitted Pavlov to measure accurately the amount of saliva secreted by a dog. When he presented meat powder (unconditioned stimulus) to the dog in the experiment, Pavlov noticed a great deal of salivation (unconditioned response). On the other hand, when he merely rang a bell (neutral stimulus), the dog did not salivate. The next step taken by Pavlov was to accompany the meat with the ringing of the bell. After doing this a number of times, Pavlov rang the bell without presenting the meat. This time, the dog salivated to the bell alone. The dog had become classically conditioned to salivate (conditioned response) to the sound of the bell (conditioned stimulus). Thus, classical conditioning can be defined as a process in which a formerly neutral stimulus, when paired with an unconditioned stimulus, becomes a conditioned stimulus that elicits a conditioned response; in other words, the S-R (i.e., bell-saliva) connection is learned. The Pavlov experiment was a major break- through and has had a lasting impact on the understanding of learning. Despite the theoretical possibility of the widespread applicability of classical condi- 5 tioning and its continued refinement and application to areas such as modern marketing, most contemporary learning theorists agree that it represents only a very small part of total human learning and behavior. Skinner in particular felt that classical conditioning explains only respondent (reflexive) behaviors. These are the involuntary responses that are elicited by a stimulus. Skinner felt that the more complex, but common, human behav- iors cannot be explained by classical conditioning alone. When explaining why he was abandoning a stimulus-response psychology, Skinner noted, “The greater part of the behavior of an organism was under the control of stimuli which were effective only 6 because they were correlated with reinforcing consequences.” Thus, Skinner, through his extensive research, posited that behavior was a function of consequences, not the classi- cal conditioning eliciting stimuli. He felt that most human behavior affects, or operates on, the environment to receive a desirable consequence. This type of behavior is learned through operant conditioning. Operant Conditioning Operant conditioning is concerned primarily with learning that occurs as a consequence of behavior, or R-S. It is not concerned with the eliciting causes of behavior, as classical, or respondent, conditioning is. The specific differences between classical and operant condi- tioning may be summarized as follows: 1. In classical conditioning, a change in the stimulus (unconditioned stimulus to condi- tioned stimulus) will elicit a particular response. In operant conditioning, one particular response out of many possible ones occurs in a given stimulus situation. The stimulus situation serves as a cue in operant conditioning. It does not elicit the response but serves as a cue for a person to emit the response. The critical aspect of operant condi- tioning is what happens as a consequence of the response. The strength and frequency of classically conditioned behaviors are determined mainly by the frequency of the elic- iting stimulus (the environmental event that precedes the behavior). The strength and frequency of operantly conditioned behaviors are determined mainly by the conse- quences (the environmental event that follows the behavior). 2. During the classical conditioning process, the unconditioned stimulus, serving as a reward, is presented every time. In operant conditioning, the reward is presented only if the organism gives the correct response. The organism must operate on the environ- ment (thus the term operant conditioning) in order to receive a reward. The response isLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 381 Chapter 12 Behavioral Performance Management 381 TABLE 12.1 Classical Conditioning Examples of Classical (S) (R) and Operant Stimulus Response Conditioning is stuck by a pin flinches The individual: is tapped below the kneecap flexes lower leg is shocked by an electric current jumps/screams is surprised by a loud sound jumps/screams Operant Conditioning (R) (S) Response Stimulus works is paid talks to others meets more people The individual: enters a restaurant obtains food enters a library finds a book increases productivity receives merit pay completes a difficult assignment receives praise and a promotion instrumental in obtaining the reward. Table 12.1 gives some simple examples of classical (S-R) and operant (R-S) conditioning. Operant conditioning has a much greater impact on human learning than classical con- 7 ditioning. Today, even though Skinner died in 1990, he remains somewhat controversial 8 and his views are commonly misrepresented, the operant theory is still being refined and 9 10 expanded, historical analyses recognize some limitations but also definite contributions, 11 and applications are being made in areas such as marketing and performance manage- 12 ment. Operant conditioning also explains, at least in a very simple sense, much of orga- nizational behavior. For example, it might be said that employees work eight hours a day, five days a week, in order to feed, clothe, and shelter themselves and their families. Working (conditioned response) is instrumental in obtaining the food, clothing, and shelter. Some significant insights can be gained directly from operant analysis. The conse- quences of organizational behavior can change the environmental situation and greatly 13 affect subsequent employee behaviors. Managers can analyze the consequences of orga- nizational behavior to help accomplish the goals of prediction and control. Some organiza- tional behavior researchers are indeed using the operant framework to analyze specific areas such as escalation of commitment (where a tendency of decision makers is to “throw 14 good money after bad”) as well as more generally the effectiveness of managers at 15 work. In addition, this theory serves as the framework for operationalizing much of behavioral performance management presented in this chapter. Cognitive Theories As was covered in Chapter 1 for understanding organizational behavior in general, the cog- nitive theories can also be used to understand learning and, especially as an input into social 16 and social cognitive theories, to better understand behavioral performance management. Edward Tolman is widely recognized as a pioneering cognitive theorist. He felt that cognitive learning consists of a relationship between cognitive environmental cues and expectation. He developed and tested this theory through controlled experimentation. In fact, even though behaviorists are mostly associated with animal subjects in their research, Tolman was one of the first to extensively use the now-famous white rat in psychological experiments. He found that a rat could learn to run through an intricate maze, with purpose and direction, toward a goal (food). Tolman observed that at each choice point in the maze,Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 382 382 Part Four Managing and Leading for High Performance expectations were established. In other words, the rat learned to expect that certain cogni- tive cues associated with the choice point might eventually lead to food. If the rat actually received the food, the association between the cue and the expectancy was strengthened, and learning occurred. In contrast to the S-R and R-S learning in the classical and operant approaches, Tolman’s approach could be depicted as S-S (stimulus-stimulus), or learning the association between the cue and the expectancy. In another early, classic study to demonstrate cognitive learning, Wolfgang Kohler used chimps presented with a problem of obtaining an out-of-reach suspended banana. At first the chimps attempted to jump for it, but soon gave up and seized a box that had been placed in another part of the room, dragged it under the object, mounted it, and took down the fruit. Kohler called this more complex learning “insight.” The solution to the problem appeared as a whole, not as a series, gradual shaping of new responses as the operant approach would suggest. At the time (1927), famous social philosopher/critic Bertrand Russell concluded, “there are two ways of learning, one by experience, and the other by 17 what Kohler calls ‘insight.’” Besides being the forerunner of modern cognitive theory, Tolman’s S-S connection and Kohler’s insightful learning also had a great impact on the early human relations move- ment. Industrial training programs starting after World War II (and in many respects still today) drew heavily on their ideas. Programs were designed to strengthen the relationship between cognitive cues (supervisory, organizational, and job procedures) and worker expectations (incentive payments for good performance). The theory was that the worker would learn to be more productive by building an association between taking orders or fol- lowing directions and expectancies of monetary reward for this effort. The same is true for the creativity, problem-solving groups that have been so popular over the years; they have drawn heavily from the notion of insightful learning. Today, the cognitive sciences focus more on the structures and processes of human com- petence (for example, the role of memory and information processing) rather than on the 18 acquisition and transition processes that have dominated learning theory explanations. In organizational behavior, the cognitive approach has been applied mainly to motivation theories. Expectations, attributions and locus of control, and goal setting (which are in the forefront of modern work motivation) are all cognitive concepts and represent the pur- posefulness of organizational behavior. Many researchers are currently concerned about 19 the relationship or connection between cognitions and organizational behavior. Social Learning and Social Cognitive Theory As brought out in Chapter 1, social learning theory served as the conceptual framework for the past several editions of this text. However, similar to the theory building in social psy- chology, primarily from the extensive work of widely recognized psychologist Albert 20 Bandura, this edition of the text and this overview of learning recognizes the evolution to the more comprehensive social cognition. After first recognizing social learning, the dis- cussion turns to social cognition and its derivatives of modeling and self-efficacy. Social Learning This theoretical approach to learning was the first to combine and integrate both behav- iorist and cognitive concepts and emphasized the interactive, reciprocal nature of cogni- tive, behavioral, and environmental determinants. It is important to recognize that social learning theory recognizes and draws from the principles of classical and operant condi- tioning. But equally important is the fact that social learning theory went beyond classi- cal and operant theory by recognizing that there is more to learning than direct learning via antecedent stimuli and contingent consequences. Social learning theory posits thatLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 383 Chapter 12 Behavioral Performance Management 383 learning can also take place via vicarious, or modeling, and self-control processes (see Chapter 1). Thus, social learning theory agrees with classical and operant conditioning processes, but says they are too limiting and adds vicarious, modeling, and self-control processes. Social Cognition This theory has emerged in recent years to go beyond social learning theory. Social cog- nitive theory extends learning and/or modifying behavior by giving more attention to the self-regulatory mechanisms. Specifically, as was presented in Chapter 1, social cognitive theory identifies five capabilities that people use to initiate, regulate, and sustain their behavior: (1) symbolizing, (2) forethought, (3) vicarious/modeling learning, (4) self- 21 regulation, and (5) self-reflection. These human capabilities recognize cognitive processes, social learning, and self-efficacy. A closer look at social learning through the social cognitive derivatives of modeling and self-efficacy can lead to the better under- standing of learning and contribute to the theoretical underpinning of behavioral per- formance management. Modeling Processes The vicarious, or modeling, processes essentially involve observational learning. “Modeling in accordance with social learning theory can account for certain behavior acquisition phe- 22 nomena that cannot be easily fitted into either operant or respondent conditioning.” Many years ago, Miller and Dollard suggested that learning need not result from dis- crete stimulus-response or response-consequence connections. Instead, learning can take place through imitating (i.e., modeling) others. Bandura states: Although behavior can be shaped into new patterns to some extent by rewarding and punish- ing consequences, learning would be exceedingly laborious and hazardous if it proceeded solely on this basis. . . . It is difficult to imagine a socialization process in which the language, mores, vocational activities, familial customs and educational, religious and politi- cal practices of a culture are taught to each new member by selective reinforcement of fortu- itous behavior, without benefit of models who exemplify the cultural patterns in their own behavior. Most of the behaviors that people display are learned either deliberately or inadver- 23 tently, through the influence of example. Bandura has done considerable research demonstrating that people can indeed learn 24 from others. This learning takes place in two steps. First, the person observes how oth- ers act and then acquires a mental picture of the act and its consequences (rewards and punishers). Second, the person acts out the acquired image, and if the consequences are positive, he or she will tend to do it again. If the consequences are negative, the person will tend not to do it again. These positive and negative consequences, of course, are where there is a tie-in with operant theory. But because there is cognitive, symbolic rep- resentation of the modeled activities instead of discrete response-consequence connec- tions in the acquisition of new behavior or modifying existing behavior, modeling goes beyond the operant explanation. In particular, Bandura concludes that modeling involves interrelated subprocesses, such as attention, retention, and motoric reproduction, as well as reinforcement. Self-Efficacy Although given detailed attention in Chapter 7 as a key positive construct in psychological capital, self-efficacy has also been recognized as a construct in behavioral performance 25 management. Bandura has defined self-efficacy as the “beliefs in one’s capabilities toLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 384 384 Part Four Managing and Leading for High Performance 26 organize and execute the courses of action required to produce given attainments.” In par- ticular, when faced with a specific task or job, an employee’s efficacy will determine whether the necessary behavior will be initiated, how much effort will be expended and sustained, and how much persistence and resilience there will be when there are obstacles or even fail- 27 ure. In other words, people who believe they can perform well on a task (high self-efficacy) do better than those who think they will fail (low self-efficacy). Importantly for the field of organizational behavior, a stream of research studies meta-analyzed has found a strong rela- 28 tionship between self-efficacy and work-related performance. Also, those with high self- 29 efficacy have the tendency to remain calm in a stressful situation. In other words, there is considerable evidence that those employees with high self-efficacy tend to persevere and end up doing a good job without suffering stress or burnout. Unlike predisposed personality traits, efficacy is a state that can be trained and developed. As discussed in detail in Chapter 7, the input into efficacy is recognized to be mastery experiences, vicarious/modeling learning, 30 social persuasion, and physiological/psychological arousal. Both managers and their employees who experience success, are trained through modeling, and are encouraged and aroused on a given task or job, will have their efficacy enhanced and will perform well. There seems to be considerable practical implications for understanding and developing 31 self-efficacy in managers and employees for performance improvement. PRINCIPLES OF LEARNING: REINFORCEMENT AND PUNISHMENT Reinforcement and punishment play a central role in the learning process and provide evidence-based principles for behavioral performance management. Most learning experts agree that reinforcement is more important than punishment and is the single most impor- tant concept and application principle. Yet there is still some controversy over its theoreti- cal explanation. The first theoretical treatment given to reinforcement in learning and the framework that still dominates today is pioneering psychologist Edward Thorndike’s clas- sic law of effect. Laws of Behavior In Thorndike’s own words, the law of effect is simply stated as follows: “Of several responses made to the same situation, those which are accompanied or closely followed by satisfaction reinforcement . . . will be more likely to recur; those which are accompanied or closely followed by discomfort punishment . . . will be less likely to occur.” From a strictly empirical standpoint, most behavioral scientists, even those with a strict cognitive orientation, generally accept the validity of this law. It has been demonstrated time after time in highly controlled learning experiments and is directly observable in everyday learn- ing experiences. Sometimes called the laws of behavior, desirable, or reinforcing, conse- quences will increase the strength of the preceding behavior and increase its probability of being repeated in the future. Undesirable, or punishing, consequences will decrease the strength of the preceding behavior and decrease its probability of being repeated in the future. Sometimes a third law is added: If the behavior is followed by no consequence (nei- ther a positive nor a negative contingent consequence) the behavior will extinguish over 32 time (thus this is called the extinction principle or law). Critique of Reinforcement Theory Although there is wide acceptance of the laws of behavior, there may be some occasions when a person’s cognitive rationalizations might neutralize them. For example, people with inaccurate self-efficacy beliefs may not be affected by the consequences of their actions. InLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 385 Chapter 12 Behavioral Performance Management 385 the workplace, this is a real problem for managers. Those with inaccurate or false self- efficacy beliefs who experience performance failures time after time will not learn from their mistakes or respond to the manager’s comments on how to correct the problem. They have high self-efficacy (they believe that their behaviors are appropriate to successfully 33 accomplish the task), but they are wrong. In addition to this type of cognitive processing that may neutralize the law of effect, there is some disagreement when it is carried a step further and used as an overall theory or an absolute requirement for learning. Both Tolman’s and Kohler’s classic studies providing initial support for cognitive theo- ries, presented earlier, discounted the need for incremental reinforcement as necessary for learning to occur. For example, Tolman conducted place learning, latent learning, and transposition experiments in an attempt to demonstrate that reinforcement was not a pre- condition for learning to occur. Specifically, in the place learning he trained a rat to turn right in a T maze in order to obtain the reward of food. Then he started the rat from the opposite part of the maze. According to operant theory, the rat should have turned right because of past conditioning. However, the rat turned toward where the food had been placed. Tolman concluded that the behavior was purposive; the rat had formed a cognitive map to figure out how to get to the food. Over time, the behaviorists were able to counter- act Tolman’s studies with more controlled (e.g., sterile mazes, etc.) experiments, and Kohler’s conclusions about insight were also explained away by a reinforcement history 34 alternative explanation. 35 36 More recently, Deci and Deci and Ryan, through their cognitive evaluation theory and laboratory research studies, have posited that external consequences (i.e., rewards) have a negative impact on intrinsically motivated (see Chapter 6) behavior dealing with task persistence and creativity. These findings generated considerable follow-up research with mixed findings. One review of about 100 studies found some rewards may have a 37 detrimental effect, but an equal number found no effect or a positive effect. The conclu- sion from this extensive review was that (1) the detrimental effects of rewards occur under highly restricted, easily avoidable conditions; (2) mechanisms of classical and operant con- ditioning are basic for understanding incremental and detrimental effects of reward on task motivation; and (3) positive effects of rewards on performance are easily attainable using 38 procedures derived from behavioral theory. Finally, a meta-analysis of 96 studies found that the only detrimental effect of rewards was the time spent carrying out laboratory activity following a performance-independent (i.e., a 39 noncontingent) reward. There is also systematic analysis that discounts cognitive evaluation 40 theory when compared to operant theory explanations. Yet, despite this considerable empir- ical and theoretical counterevidence, an unconvinced few such as popular author Alfie Kohn continue to write (not do research) with titles such as Punished by Rewards and “Why 41 Incentive Plans Cannot Work.” Based on his own assumptions and the now-countered Deci and Ryan theory and research, and in stark contrast to the large body of reinforcement theory and research, he makes unequivocal statements such as: “The bottom line is that any approach 42 that offers a reward for better performance is destined to be ineffective.” Unfortunately, Kohn’s largely unsupported statements do not fall on deaf ears in the real world. This is because practicing managers have indeed experienced some implementation 43 problems with pay-for-performance programs. For example, after an extensive review of the relevant literature, Lawler concluded that process/design problems, not the underlying theory of reinforcement or the supporting basic research, limit the effectiveness of pay for 44 performance. There is also a research study that found that highly dispersed reward sys- tems (i.e., very large differences between highest and lowest payouts) may have a negative effect on both individual and organizational performace, especially when collaborative 45 efforts (such as in teams) are important. Yet, once again, it is not that the theory/researchLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 386 386 Part Four Managing and Leading for High Performance on reinforcement is wrong, but rather it is the implementation that can cause problems. As Bandura points out, “To say that only thought guides action is an abbreviated statement 46 of convenience rather than a conferral of agency of thought,” because “if people acted. . . on the basis of informative cues but remained unaffected by the results of their actions, they 47 would be insensible to survive very long.” As a final summary statement, it can be said that the theory of reinforcement, like learning in general, is not perfect and still needs development. However, it can also be said that reinforcement does serve as an excellent theoretical foundation and evidence-based guiding principle, and the implementation issues need to be overcome by effective behavioral performance management. Reinforcement as Used in Behavioral Management The terms rewards and reinforcers are often used interchangeably and loosely, but in behavioral performance management have very precise definitions and usage. An often cited circular definition of reinforcement says that it is anything the person finds rewarding. This definition is of little value because the words reinforcing and rewarding are used inter- changeably, but neither one is operationally defined. A more operational definition can be arrived at by reverting to the laws of behavior. Specifically, reinforcement in behavioral management is defined as anything that both increases the strength and tends to induce rep- etitions of the behavior that preceded the reinforcement. A reward, on the other hand, is simply something that the person who presents it deems to be desirable. Reinforcement is functionally defined. Something is reinforcing only if it strengthens the behavior preceding it and induces repetitions. For example, a manager may ostensibly reward an employee who found an error in a report by publicly praising the employee. Yet on examination it is found that the employee is embarrassed and chided by coworkers, and the error-finding behavior of this employee decreases in the future. In this example, the “reward” of public praise is not reinforcing. Besides clearing up differences between rein- forcers and rewards, behavioral management also requires making the distinction between positive and negative reinforcers. Positive and Negative Reinforcers There is much confusion surrounding the terms positive reinforcement, negative reinforce- ment, and punishment. First of all, it must be understood that reinforcement, positive or negative, strengthens the behavior and increases the probability of repetition. But positive and negative reinforcers accomplish this impact on behavior in completely different ways. Positive reinforcement strengthens and increases behavior by the presentation of a desir- able consequence. Negative reinforcement strengthens and increases behavior by the threat of the use of an undesirable consequence or the termination or withdrawal of an undesir- able consequence. Figure 12.1 briefly summarizes the differences between positive and FIGURE 12.1 Consequence Reward Noxious stimuli Summary of the of (something desirable) (something aversive and undesirable) Operational Contingent Definitions of Positive POSITIVE and Negative PUNISHMENT Application REINFORCEMENT Behavior decreases Reinforcement and Behavior increases Punishment NEGATIVE PUNISHMENT Withdrawal REINFORCEMENT Behavior decreases Behavior increasesLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 387 Chapter 12 Behavioral Performance Management 387 negative reinforcement and punishment. Giving recognition and attention to an employee for the successful completion of a task could be an example of positive reinforcement (if this does in fact strengthen and subsequently increase this task behavior). On the other hand, a worker is negatively reinforced for getting busy when the supervisor walks through the area. Getting busy prevents or terminates being “chewed out” by the supervisor. Negative reinforcement is more complex than positive reinforcement, but it should not be equated with punishment. In fact, they have opposite effects on behavior. Negative rein- forcement strengthens and increases behavior, whereas punishment weakens and decreases behavior. However, both are considered to be forms of negative control of behavior. Negative reinforcement is really a form of social blackmail, because the person will behave in a certain way in order not to be punished. A clearer understanding of punishment will help further clarify how it differs from negative reinforcement. The Use of Punishment Punishment is one of the most used but least understood and badly administered aspects of behavioral management. Whether in rearing children or dealing with employees in a com- plex organization, parents and supervisors or managers often revert to punishment instead of positive reinforcement in order to modify or control behavior. Punishment is commonly thought to be the reverse of reinforcement but equally effective in altering behavior. However, this simple analogy with reinforcement is not warranted. The reason is that pun- 48 ishment is a very complex phenomenon and must be carefully defined and used. The Meaning of Punishment Punishment is anything that weakens behavior and tends to decrease its subsequent fre- quency. Punishment usually consists of the application of an undesirable or noxious conse- quence, but as shown in Figure 12.1, it can also be defined as the withdrawal of a desirable consequence. Thus, taking away certain organizational privileges from a manager who has a poor performance record could be thought of as punishment. Regardless of the distinction between punishment as the application of an undesirable consequence and as the withdrawal of a desirable consequence, in order for punishment to be effective, there must be a weakening of, and a decrease in, the behavior that preceded it. Just because a supervisor criticizes an associate and thinks this is a punishment, it is not necessarily the case unless the behavior that preceded the criticism weakens and decreases in subsequent frequency. In many situations when supervisors think they are punishing employees, they are in fact reinforcing them because they are giving attention, and atten- tion tends to be very reinforcing. This explains the common complaint that supervisors often make: “I call Joe in, give him heck for goofing up, and he goes right back out and goofs up again.” What is happening in this case is that the supervisor thinks Joe is being punished, when operationally, what is obviously happening is that the supervisor is rein- forcing Joe’s undesirable behavior by giving him attention and recognition. Punishment, like reinforcement, is defined and operationalized by its effects on behavior, not by what the person thinks is or should be punishment. Administering Punishment Opinions on administering punishment range all the way from the one extreme of dire warnings never to use it to the other extreme that it is the only effective way to modify behavior. As yet, research has not been able to support either view completely. However, there is little doubt that the use of punishment tends to cause many undesirable side 49 effects. Neither children nor adults like to be punished. The punished behavior tends to be only temporarily suppressed rather than permanently changed, and the punished personLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 388 OB in Action: The Struggle to Measure Performance Holiday shopping, yearend deadlines, and emotional Michigan at Ann Arbor. “Over time it gets people family dramas aren’t the only stresses in December. ‘Tis focused on competing with each other rather than col- the season for companies to embark on that dreaded laborating.” annual rite, the often bureaucratic and always time- Yahoo is looking for better dialogue and less demor- consuming performance review. The process can be alizing labels when it made substantial changes this year brutal: As many as one-third of U.S. corporations evalu- to its rating system, which compared employees’ per- ate employees based on systems that pit them against formance to an absolute standard rather than to each their colleagues, and some even lead to the firing of other. Libby Sartain, Yahoo’s senior vice-president for low performers. human resources, knew that review discussions at the Fans say such “forced ranking” systems ensure that Sunnyvale (Calif.) tech leader frequently included the managers take a cold look at performance. But the prac- wink-wink “I wanted to put you here, but I was forced tice increasingly is coming under fire. Following a string by human resources to do something different” com- of discrimination lawsuits from employees who feel they ment that discredits so many appraisals. This year, Yahoo were ranked and yanked based on age and not merely stripped away its performance labels, partly in hopes their performance, fewer companies are adopting the that reviews would center more on substance and less controversial management tool. Critics charge that it on explaining away a grade. unfairly penalizes groups made up of stars and hinders But that doesn’t mean Yahoo went all Pollyanna on collaboration and risk-taking, a growing concern for its employees. To do a better job of finding and shower- companies that are trying to innovate their way to ing top performers with the rewards necessary to keep growth. And a new study calls into question the long- them from jumping ship in talent-tight Silicon Valley, term value of forced rankings. “It creates a zero-sum the company also instituted a “stack-ranking” system game, and so it tends to discourage cooperation,” says this year to determine how compensation increases are Steve Kerr, a managing director at Goldman Sachs Group distributed. It asks managers to rank employees within Inc., who heads the firm’s leadership training program. each unit—a group of 20 people would be ranked 1 Even General Electric Co., the most famous propo- through 20, for example—with raises and bonuses dis- nent of the practice, is trying to inject more flexibility tributed accordingly. During reviews, employees are into its system. Former Chief Executive Jack Welch told how their increases generally compare to those of required managers to divide talent into three groups—a others. top 20%, a middle 70%, and a bottom 10%, many of Some Yahoo managers are livid about the new sys- whom were shown the door. Eighteen months ago, GE tem. “It’s going to kill morale,” laments one senior engi- launched a proactive campaign to remind managers to neering manager who says he’s getting a stronger use more common sense in assigning rankings. message to cull his bottom performers. Yahoo says its A recent study lends hard data to that theory. Steve new program doesn’t automatically weed out a bottom Scullen, an associate professor of management at Drake group and was designed specifically to reward its stars. University in Des Moines, found that forced ranking, Indeed, what Yahoo has introduced in place of its old including the firing of the bottom 5% or 10%, results in system shows how hard it is for companies to find ways an impressive 16% productivity improvement—but only to foster merit-driven cultures that coddle standouts over the first couple of years. After that, Scullen says, the while staying tough on low performers. Whether a com- gains drop off, from 6% climbs in the third and fourth pany calls it stack ranking, forced ranking, or differenti- years to basically zero by year 10. “It’s a terrific idea for ation, “there’s no magic process,” says Sartain. “We just companies in trouble, done over one or two years, but to want to make sure we’re making our bets and that we’re do it as a long-term solution is not going to work,” says investing in the people we most want to keep. That’s Dave Ulrich, a business professor at the University of what this is all about.” tends to get anxious or uptight and resentful of the punisher. There is growing research evi- dence that punishment has unintended negative effects on employees. For example, one recent study found that those who received rude, punishing feedback hurt their perfor- 50 mance on complex tasks requiring creativity, flexibility, and memory recall and another study found that over 90 percent of employees reported a negative outcome associated with 51 being punished. Thus, the use of punishment as a strategy to control behavior is a lose- lose approach. Unless the punishment is severe, the behavior will reappear very quickly, 388Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 389 Chapter 12 Behavioral Performance Management 389 but the more severe the punishment, the greater the side effects such as hate and revenge. As described in the accompanying OB in Action, “forced rankings” in annual performance appraisals can be interpreted as punishing, and have undesirable side-effects. To minimize the problems with using punishment, persons administering it must always provide an acceptable alternative to the behavior that is being punished. If they do not, the undesirable behavior will tend to reappear and will cause fear and anxiety in the person being punished. The punishment must always be administered as close in time to the unde- sirable behavior as possible. Calling subordinates into the office to give them a reprimand for breaking a rule the week before is not effective. All the reprimand tends to do at this time is to punish them for getting caught. The punishment has little effect on the rule- breaking behavior. When punishment is administered, it should be remembered that there is also an effect on the relevant others who are observing the punishment. While managers often believe those watching a coworker being punished can learn what not to do, a recent survey found that nearly a third of the observers reported a loss of respect for the manager 52 administering the punishment. Guidelines for Discipline A rule of thumb for effective behavioral management should be: always attempt to rein- force instead of punish in order to change behavior. Furthermore, the use of a reinforce- ment strategy is usually more effective in accelerating desirable behaviors than the use of punishment is for decelerating undesirable behaviors because no bad side effects accom- pany reinforcement. As one comprehensive analysis of punishment concluded: “In order to succeed, punishment must be used in an orderly, rational manner—not, as is too often the case, as a handy outlet for a manager’s anger or frustration. If used with skill, and concern 53 for human dignity, it can be useful.” In behavioral management, discipline should attempt to be a learning experience, never purely a coercive experience to prove mastery or control over others. Perhaps the best practical advice is the old red-hot-stove rule of discipline— like the stove, punishment should give advance warning (it is red) and be immediate, con- sistent, and impersonal (it burns everyone who touches it). In addition, most modern approaches stress that punishment should be situationally applied (a crew of nineteen-year- old high school dropouts should be treated differently from a team of 100,000-per-year professionals) and progressive. The progressive discipline may start off with a clarifying verbal discussion, then move to a written mutual agreement signed by the person being dis- ciplined, next move to time off with or without pay, and then only as a last step end in ter- mination. As a recent comprehensive analysis of discipline concluded, “Regardless of an employee’s infraction, managers must strive to maintain a positive working relationship by remaining open to dialogue and ensuring that the worker understands why he’s being repri- 54 manded. It’s no small task.” THE ROLE OF ORGANIZATIONAL REWARD SYSTEMS Because positive reinforcement consequences are so important to employee behavior, organizational reward systems become critical to behavioral performance management. The organization may have the latest advanced information technology, well-thought-out strategic plans, detailed job descriptions, and comprehensive training programs, but unless the people are reinforced for their performance-related behaviors, the “up-front” 55 variables (technology, plans, and so on) for the rules that govern or the establishing 56 operation (i.e., there is enough motivation) of their behavior, there will be little impact. In other words, going back to Skinner’s original conception, the antecedent cues (technology,Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 390 390 Part Four Managing and Leading for High Performance plans, and the like) have power to control or provide rules and establishing operation for behavior only if there are reinforcing consequences. As one behavioral management con- sultant points out: A company is always perfectly designed to produce what it is producing. If it has quality problems, cost problems, productivity problems, then the behaviors associated with those undesirable outcomes are being reinforced. This is not conjecture. This is the hard, cold 57 reality of human behavior. The challenge for performance management is to understand this behavioral reality, elimi- nate the reinforcers for the undesirable behaviors, and more importantly and effectively, reinforce the desirable behavior. Thus, organizational reward systems become a key, often- overlooked, factor in bringing about improved performance and success. Chapter 4 is specifically devoted to reward systems that are a vital part of the organiza- tional environment (along with structure and culture) in the social cognitive model for this text. As was pointed out, money (pay) dominates organizational reward systems. The fol- lowing sections analyze both monetary and nonfinancial reinforcers that can be used in behavioral performance management. Analysis of Money as a Reinforcer Unfortunately, about the only reinforcing function that traditional monetary reward sys- tems (covered in Chapter 4) such as base-pay techniques provide is to reinforce employees for walking up to the pay window or for opening an envelope and seeing their paycheck or direct deposit stub every two weeks or every month. These traditional pay plans certainly have come up short of having the intended impact on improving employee performance at 58 all levels. Yet, despite the problems with traditional pay approaches, money is still a very important reward to employees at all levels. For example, former GE head and now with his wife giving advice to managers in an online column, Jack Welch recently quipped, You surely have seen how effective money is in lighting a motivational fire—even in employees who claim money doesn’t matter to them. Plaques gather dust. Checks can be 59 cashed. And employees know the difference in their bones. Recent analyses of the research studies also conclude that money contingently administered 60 can have a positive effect on employee behavior. However, there are even shortcomings with merit pay mainly due to implementation issues such as poor measurement of perform- ance, lack of acceptance of supervisory feedback, limited desirability of merit increases that are too small, a lack of linkage between merit pay and performance, and potential unin- 61 tended consequences such as focusing only on merit-related activities and behaviors and 62 lingering inequalities on merit pay for women and minorities. Some compensation practi- tioners argue that merit pay only makes employees unhappy because they view it as an unfair way to reward for past performance instead of being geared to improved future perform- 63 ance. Also, a laboratory study of merit pay led to the following conclusions: 1. Unless a merit raise is at least 6 to 7 percent of base pay, it will not produce the desired effects on employee behavior. 2. Beyond a certain point, increases in merit-raise size are unlikely to improve performance. 3. When merit raises are too small, employee morale will suffer. 4. Cost-of-living adjustments, seniority adjustments, and other nonmerit components of a raise should be clearly separated from the merit component. 5. Smaller percentage raises given to employees at the higher ends of base-pay ranges are 64 demotivating. In other words, both the traditional base- and merit-pay plans have some problems.Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 391 Chapter 12 Behavioral Performance Management 391 The “New Pay” plans covered in Chapter 4 (e.g., pay for performance at both the indi- vidual and group levels, paying for customer and/or employee satisfaction, pay for knowl- edge, skill pay, competency pay, and broadbanding) have overcome many of the 65 problems. For example, a large study sponsored by the American Compensation Association was able to place a dollar value on the positive impact of pay-for-performance plans. The value of the performance improvement translates into a 134 percent net return on what is paid out to employees (excluding the costs associated with training, communi- 66 cations, and consulting), or, for every 1 of payout, a gain of 2.34 was attained. In terms of basic research, a field experiment conducted by Stajkovic and Luthans in the biggest credit card processing firm in the world found the following: 1. A traditionally administered pay-for-performance plan (i.e., announced through normal channels in terms of the amount of pay that would be received for various levels of per- formance) did increase performance by 11 percent; but 2. The same plan that was implemented through the behavioral performance management approach discussed next (i.e., specifying the critical performance behaviors that would lead 67 to monetary consequences) had a significantly higher 32 percent increase in performance. In other words, because the performance behaviors strengthened and increased, the theory and principles of reinforcement explain that money can indeed be a powerful reinforcer. Importantly, money may not be a reinforcer when administered through the traditional pay plans, but when made contingent on identified performance behaviors as in behavioral per- formance management, money can be a powerful reinforcer. The same could be said for the very expensive benefit plans in the organizational reward system (see Chapter 4). Flexible benefit plans and those that depend on performance may 68 have better intended results. Instead of benefits taking on an entitlement mentality, an increasing number of firms (18% according to an American Compensation Association sur- vey) are making the amount and choice of benefits dependent on employee performance. For example, under Owens-Corning’s “Rewards and Resources Program,” workers get to clearly 69 see how their work is reinforced with extra pay in the form of more benefit choices. Nonfinancial Rewards As Chapter 4 pointed out, money is the most obvious organizational reward, but the non- financial rewards are receiving increased attention. In fact, one comprehensive review of surveys that ask the value employees place on various rewards found that nonfinancial 70 rewards were ranked much higher than financial ones. For example, one study of 1,500 employees in a wide variety of work settings found personalized, instant recognition from managers as being the most important of the 65 types of rewards evaluated. However, more than half of these same employees reported that they seldom, if ever, received such personal 71 recognition from their managers. Also, a staffing company reported that the number-one 72 reason employees give for leaving companies is the lack of praise and recognition. Also in the same Stajkovic and Luthans research study cited previously, it was found that both social recognition (24%) and performance feedback (20%) had a significantly higher rela- tive performance increase than did the traditionally administered pay for performance 73 (11%). Finally, in a recently conducted study in the fast-food industry, we (Peterson and Luthans) found that financial incentives initially had a bigger effect on profit, customer service, and employee retention outcomes, but, over time, except for employee retention, 74 both financial and nonfinancial incentives had an equally significant impact. In other words, there is little doubt that the nonfinancials can be very powerful, but are often over- looked as a reinforcer in behavioral performance management. Table 12.2 summarizes some of the major categories of nonfinancial rewards. Notice that even though these are considered nonfinancial, they may still cost the organization.Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 392 392 TABLE 12.2 Categories of Nonfinancial Rewards Visual and Formal Performance Social Recognition Consumables Manipulatables Auditory Job Design Recognition Feedback and Attention Coffee-break treats Desk accessories Office with a Jobs with more Formal acknowl- Nonverbal performance Friendly greetings Free lunches Wall plaques window responsibility edgment of information Informal recognition Food baskets Company car Piped-in music Job rotation achievement Verbal performance Solicition of Easter hams Watches Internet and Special assignments Feature in house information suggestions Christmas turkeys Trophies e-mail for Cross training newsletter Written reports Solicitation of Dinners for the Commendations personal use Knowledge training Story in Performance evaluations/ advice family on the Rings/tie pins Redecoration Authority to schedule newspaper/TV appraisals (including Compliment of company Appliances and furni- of work own work Celebrations/ 360 degree) work progress Company picnics ture for the home environment Flexible hours banquets Performance charts and Pat on the back After-work wine PC for the home/ Company Flexible breaks Letters of graphs Smile and cheese personal use literature Job sharing commendation Meters/counters or Verbal or nonverbal parties Home shop tools Private office Participation in Acknowledgment/ performance recognition or Time off Garden tools Popular speakers decisions praise in front information praise Trips Clothing or lecturers Participation in teams of others Self-information from Entertainment/ Club privileges Book club Self-managed teams performance or Sports events Use of company discussions problem solutions Education classes recreation facilities Use of company convenience center Use of company facilities for per- sonal projectsLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 393 Chapter 12 Behavioral Performance Management 393 This is true of the consumables, manipulatables, and visual and auditory rewards. The job design category is a special case and is usually not, but could be, considered as an organi- zational reward. Chapter 6 was devoted to these, and they are not included here as part of behavioral performance management. On the other hand, the social recognition and attention and performance feedback categories are relatively easy to apply in behavioral performance management, cost nothing (except perhaps for preparing some of the perfor- mance feedback), and may be even more powerful than the cost-based nonfinancial rewards. These two are major reinforcers and deserve special coverage. Social Recognition and Attention Informally providing contingent recognition and attention (and praise, if genuine) tends to be a very powerful reinforcer for most people. In addition, few people become satiated or filled up with this; no one “suffers” from too much genuine recognition. However, similar to monetary reinforcers, social reinforcers should be administered on a contingent basis to have a positive effect on employee performance. For example, a pat on the back or verbal praise that is insincere or randomly given (as under the old human relations approach) may have no effect or even a punishing “boomerang” effect. But genuine social reinforcers, con- tingently administered for performance of the target behavior, can be a very effective pos- 75 itive reinforcer for most employees and improve their performance. The added benefit of such a strategy, in contrast to the use of monetary rewards, is that the cost of social rein- forcers to the organization is absolutely nothing. Importantly, this informal social recognition based on a valued person’s (e.g., boss, peer, subordinate, friend, spouse, etc.) attention and appreciation may have not only a bigger impact as a reinforcer in behavioral management than money, but also than formal recog- nition programs as detailed in Chapter 4. Unlike valued social recognition and attention, formal recognition programs, especially over time, can easily turn into being phoney, not valued by the recipient, or go against group and/or cultural norms. As Luthans and Stajkovic noted: A formal recognition award such as the “Golden Banana” at Hewlett-Packard or “Employee of the Month” given at many companies can initially be a reinforcer, but over time may cross the line and become an empty reward and be perceived even in a negative light. The first few Employee of the Month recipients may be very deserving instances that everyone would agree with, but over time selections become more and more controversial and subjec- tive, usually resulting in selecting less-qualified or not-qualified employees. At this point company politics often come into play and those who truly deserved the recognition feel betrayed. In this case, the program would actually produce negative effects (e.g., “rewarding A while hoping for B”). Also, from a (collectivistic) cultural values and individual differences standpoint, although everyone may like to be recognized for their efforts and achievements, not everyone likes to be singled out in the public way that usually goes along 76 with formal recognition. With the increasing use of teams, there is also recent evidence that they may be provid- ing social reinforcement to their members that yields organizationally desirable outcomes. For example, in the American Compensation Association research study cited earlier, team suggestion plans, under the umbrella of an organizational performance reward plan or operating independently, were found to be particularly powerful contributors to organiza- tional success. Importantly, the team suggestion plans, which typically used nonfinancial rewards, outperformed the individually based plans, which typically used financial 77 rewards, by 4 to 1. For example, the average value per idea adopted from team suggestion plans using nonfinancial rewards was an impressive 46,200 for a major airline, 14,500 78 for a manufacturer, 19,344 for a newspaper, and 19,266 for a bank.Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 394 394 Part Four Managing and Leading for High Performance Performance Feedback There is little question that despite the tremendous amount of data being generated by today’s advanced information systems, individuals still receive very little, if any, feedback about their performance. People generally have an intense desire to know how they are 79 doing; they engage in feedback-seeking behavior. Even though feedback has been found 80 to be complex in research studies, it is generally accepted that feedback enhances indi- 81 vidual performance in behavioral management. A comprehensive review (30 laboratory 82 and 42 field experiments) concluded that performance feedback had a positive effect. Also, as cited earlier, the Stajkovic and Luthans study found that, although not as high as contingently administered money and social recognition reinforcers, the performance feed- 83 back intervention still yielded a highly significant 20 percent performance improvement. Importantly, this was significantly higher than the traditionally administered pay for per- formance (11 percent). As a general guideline for behavioral management, the perfor- mance feedback should be as positive, immediate, graphic, and specific—thus, the 84 acronym PIGS—as possible to be effective. Despite the recognized importance, there is still disagreement among scholars as to 85 whether feedback per se is automatically reinforcing or too simplistic. For example, after reviewing the existing research literature on feedback, one researcher concluded that its impact is contingent on factors such as the nature of the feedback information, the process of using feedback, individual differences among the recipients of the feedback, and the 86 nature of the task. One study, for instance, found that self-generated feedback with goal setting had a much more powerful effect on technical or engineering employees than exter- 87 nally generated feedback with goal setting. Also, another study found subjects rated spe- cific feedback more positively than they rated nonspecific feedback and preferred feedback that suggested an external cause of poor performance to feedback that suggested an inter- 88 nal cause. An argument can also be made that “actionable feedback” (feedback that leads to learn- 89 ing and appropriate results) is more effective than just critical, negative feedback. And the 90 source of the feedback seems important as well. Not only are the amount and the fre- quency of feedback generated by a source important, but also the consistency and useful- ness of the information generated, as a study found. Individuals viewed feedback from formal organizations least positively, from coworkers next, then from supervisors and 91 tasks, with the best being self-generated feedback. Feedback from multiple sources may 92 be most effective, and the 360-degree feedback systems (the individual is anonymously appraised not only by the boss but also by subordinates, peers, and sometimes customers) can be automated on a software system to provide more timely, objective, and less-costly feedback. Also, studies have found that choice of reward interacting with feedback had a 93 positive impact on task performance in a laboratory exercise, but workers in highly rou- 94 tine jobs who received positive feedback did not improve their performance. Despite these qualifications and contingencies, a general guideline regarding performance feed- back is that it can be a very effective reinforcer for behavioral performance management. BEHAVIORAL PERFORMANCE MANAGEMENT, OR O.B. MOD. Behavioral performance management is based on behavioristic, social learning, and social cognitive theories, and especially the evidence-based principles of reinforcement as sum- marized above. Figure 12.2 graphically depicts the historical development and theory building up to the present influence of Bandura’s social cognitive theory. The full-blown organizational behavior modification, or O.B. Mod. model, is shown in Figure 12.3. TheLut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 395 Chapter 12 Behavioral Performance Management 395 FIGURE 12.2 Approximate Time Chronological 1900 PAVLOV “Classical Conditioning” Development of Conditioned Reflexes Conceptual THORNDIKE Foundation for “Law of Effect” O.B. Mod. The Impact of Consequences on Behavior WATSON “Behaviorism” The Study of Objective Behavior 1950 SKINNER “Operant Conditioning” Behavior Is a Function of Its Consequences; Distinction between Respondent and Operant Behavior 1975 Luthans and Kreitner INITIAL O.B. MOD. APPROACH Scott, Foresman, 1975 1977 BANDURA “Social Learning Theory” Operant Principles plus Modeling, Cognitive Mediating Processes, and Self-Control 1985 Luthans and Kreitner O.B. MOD. AND BEYOND Scott, Foresman, 1985 1986 BANDURA “Social Cognitive Theory” Social Learning (Reciprocal Relationship among Person– Environment–Behavior) and Cognitive Self-Regulation Processes Present Luthans and Stajkovic FULL, CURRENT O.B. MOD. MODEL Meta-Analysis, AMJ, 1997 Reinforce Perf, AME, 1999 Relative Effects of Interventions, ` AMJ, 2001 Meta-Analysis of All Behavioral Management and Test of Alternative Intervention Models, P-Psych, 2003Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 396 – Observable IDENTIFY: – Measurable must be Behaviors for change – Task related – Critical to the task % – Direct observation MEASURE: – Time sampling Baseline frequency use – Archival data of response – Historical data Time ANALYZE: Behavioral AB C Functional antecedents contingencies and consequences INTERVENE – Industry – Structure – Size Develop Consider org. – Processes intervention context – Technology – Positive reinforcement 2 – Financial Apply use – Nonfinancial intervention – Social 1 – Combination Measure posttest frequency Behavior No modified? FIGURE 12.3 Yes Luthans O.B. Mod. Application Model From Luthans and Kreitner, – Continuous Organizational Behavior Maintain the Schedules of – Intermittent Use Modification, Glenview Ill.: modification reinforcement – Ratio Scott, Foresman, 1975, 1985; – Interval Stajkovic and Luthans, “A Meta-Analysis of the Effects of O.B. Mod.” Academy of Management Journal, October 1997, p. 1123; and Luthans and EVALUATE: Stajkovic, “Reinforce for For perf. improvement Performance,” Academy of Management Executive, May 1999, p. 53. 396Lut30352_ch12_373-412.qxd 11/25/09 4:25 PM Page 397 Chapter 12 Behavioral Performance Management 397 FIGURE 12.4 1 IDENTIFY Performance-related behavioral events. Usually Major Steps of these have to do with quantity or quality of Luthans O.B. Mod. producing products or delivering service by operating employees. Approach to Behavioral Performance Management 2 MEASURE How often are the performance behaviors identified in step 1 occurring under existing conditions? This is called the baseline measure. 3 ANALYZE What are the antecedent (A) cues of the performance behavior (B), and what are the contingent consequences (C)? This A-B-C analysis is a necessary prerequisite to developing an effective intervention strategy. 4 INTERVENE This is the action step of O.B. Mod. The goal is to accelerate functional performance behaviors and decelerate the dysfunctional behaviors. Positive reinforcement strategies involving money, social recognition/attention, and feedback are most used. 5 EVALUATE This final step evaluates to make sure the intervention does in fact lead to performance improvement. If it doesn’t, then another analysis and/or intervention is made. simplified steps are depicted in Figure 12.4. There are also other systematic approaches 95 to behavioral performance management based on academic work and consultants. Our (Stajkovic and Luthans) most recent meta-analysis of all the available behavioral man- agement studies (including those using O.B. Mod.) found 72 studies that met the inclu- sion criteria (use of reinforcement interventions, task performance measures, and statistical information necessary to calculate effect sizes). We found an average of 16 96 percent improvement in performance from these behavioral management approaches. However, most relevant, consistent, and recognized in the organizational behavior field is the O.B. Mod. approach. In a meta-analysis on just O.B. Mod. studies (as generally followed in Figures 12.3 and 12.4), we identified 19 studies with 115 effect sizes, and a total sample size of 2,818 subjects met the O.B. Mod. inclusion criteria and found an average of 17 percent improvement in performance (see the meta-analytically based 97 principles at the end of the chapter for details and complete results). The following discussion summarizes the steps of applying the O.B. Mod. approach to behavioral per- formance management.