Question 1:

According to the text organizational behavior is a field of study devoted to understanding, explaining, and ultimately improving the attitudes and behaviors of individuals and groups in organizations.
Organizational behavior is related to human resources, which focuses on the applications of organizational behavior, because if used effectively human resource management is responsible for molding the perceptions of employees to help an organization reach their mission. It is the responsibility of human resources to manage the concerns and issues of the well-being of its employees, ultimately leaving employees with a positive attitude and being more productive so that they are eager to adequately perform and fulfill their duties.
Not only is organizational behavior related to human resource management, but it is also related to organizational strategy, which according to the book is devoted to exploring the product choices and industry characteristics that affect an organization’s profitabailtiy. Organizational behavior is related to organizational strategy because the job performance of employees affects the overall success of an organization. Also, it is related because organizational behavior should focus on organizing and managing the employees knowledge and skills so that they can implement the organization’s strategy in their daily task so that the organization can compete.
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Question 2:
Ex #1)
The Rule of one eighth can be described simply as: 1/8 or 12% of organizations will actually do what is necessary to succeed to build economic success, by putting their staff first before economic success. It is known that when you have a better-treated and better trained staff, you will in the end receive a better product, ultimately increasing total revenue. If you want to explore the rule further, you would come to find out that one half of companies won’t see a relation between managing their employees and profits. Of those entities, only one half of those that see a relation, make a single change to solve their problems when it’s often several issues. Out of those companies left only about half of those companies will continue to enforce their practices to see a change. I believe that organizational behavior practitioners can influence organizations to increase profits by putting their employees first. If practitioners show examples of companies and their previous success by implementing this method, things might steadily change.

Ex #2)
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The rule of One-Eighth basically means that only 12% of organizations will actually do what is required to build profits by putting people first. This rule that states that one half (the largest portion of non-adapters) of organizations won't believe the connection between how they manage their people and the profits they earn. These organizations need to be educated, they need to be shown how an organizational behavior approach can be implemented and then also shown the impact it can have, especially on the bottom line. I feel that most companies are driven and judged on their profits, so their first option is always a way for them is to either increase sales or cut costs. So adding any type of costs related to organizational behavior does not seem beneficial to them, especially if they do not see the value added by implementing these actions. They need to see actual proof that investing in your employees can pay off and add value to their company through improved job performance and employee retention. Unproductive employees as well as the cost of replacing and training new employees can be avoided thus saving costs to the organization.

Question 3:
Ex #1)
Correlation is the statistical relationship between two variables. Ranging anywhere from -1 to 1, correlation can provide insight on the strength of the relationship between the two variables. The closer to 0, the less correlated the two variables. However, just because the variables have a high correlation does not mean that one “causes” the other. In order to have causation, three things must be established: 1) the two variables are correlated 2) the “cause” occurs before the “effect” 3) no alternative explanation exists for the relationship. Because OB requires a comprehensive and systematic approach, many factors simultaneously influence each other. If a leader makes an assumption based on correlation, he or she could make changes to the organization that actually only apply to one or two employees or products. As the group said in their L/M exercise on motivation, “Employee satisfaction correlates with customer satisfaction (.32) and loyalty (.33)”. We can see that correlation exists, but other potential factors for customer satisfaction and loyalty include past experience with the company, product quality, and/or the company’s reputation.

Ex #2)
There is a wide belief that correlation implies causation, but in fact correlation does not imply causation. The difference between the two is that causation is when one action causes anotherr event to occur. On the contrary, correlation is the statistical relationship between two variables. For instance, when someone has a cold there is a correlation of congestion and a sore throat because those are similar symptoms that show up in individuals, but that doesn’t mean that congestion leads to sore throat or vice versa.
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Understanding the difference between causation and correlation in an organization is important because it is important when it comes to making organizational decisions. Leaders have the tendency to see the relationships of employees’ behaviors and the events that may follow around the same time in an organization. It is important for them to know and understand that the variables may be correlated but does not necessarily cause a certain outcome. A leader should not make a organizational decision because he/she believes that one variable caused an event to happen without exploring casual inference, in which that establishes that one variable really does cause another.
Question 4:

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While arriving to an interview right after being released from jail with no time to change, Gardner is placed with a hindrance stressor that deals with his negative life events that lead all the way up to his interview. The interview itself is an example of a challenge stressor of personal development, which can be seen as a positive stressor since he is trying to do something in hopes of bettering himself and his career. Chris manages to find two different cognitive methods to cope with the fact that he was arrested for unpaid parking tickets, by self-motivating and looking at the positive aspects in relevance to the situation he is in. Through utilization of humor, confidence, and honesty, he displays an emotion-focused coping method in the interview that shows how he can transform a negative situation into a positive event all by changing his attitude. He fulfills the self-motivating problem-focused method by pushing through the hardship and continuing forward with the interview and showcasing how dedicated he was to the opportunity and to his career goals.

Question 5:
Ex #1)
Employees who experience higher levels of challenge stressors are also likely to have higher levels of job performance. An example of the work challenge stressor, "work complexity", can be seen in my first marketing internship experience. Still a senior at UCF, I started an internship, working with the regional marketing director for a local healthcare company. Instead of shadowing the regional director or another experienced marketing professional, I was given the task to increase members for a large breast cancer awareness program, which included developing content for marketing materials, securing local business partners, planning events, etc. And because the regional director was rarely in the office, I had very little to no help accomplishing this task.
The task given was out of my scope of knowledge, skills, and abilities, and it created a great deal of stress. However, because the task created the opportunity for me to develop my current marketing skills and to prove to the regional director that I had what it took to work for the company as marketing professional, it pushed me to work harder than I've ever worked before, enhancing my job performance. The benefits the task created outweighed the stress.
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Question 6:

When I think back to my past experiences of stress, the main one that comes to mind is a situation that happened only two weeks ago at my job. Our company recently implemented the release of quarterly financials to our investors as a new policy as opposed to just annual financials that had been done in the past. While in theory, the goal of this method was to create transparency with investors and also to disburse the year-end burden process of accounting into four parts, it hasn’t been the case. Financial deadlines were moved up an additional three days each month from the initial deadlines that were already a struggle for our department to meet. Tensions rose, and I witnessed my manager cry about three times that week, which I had never seen before. In addition to that, daily hassles arose, as other departments bothered us with silly nuances that could have easily been handled at a later date, or by another department altogether. Needless to say, we were victims of work-hindrance stressors. Role overload was apparent when our accounting team felt as if we were entirely hopeless at certain times, and yearned for the chance to rewind time itself. We coped with this stressful time through open communication. We let each other know where we were at on our progress constantly. We even developed a couple of efficient methods of work delegation based on the utilization of each accountant’s strengths and skill sets, in hopes of a less stressful environment for next quarter.

Question 7:
To reduce incidence of withdrawal behaviors in an organization, leaders can do the following: 1. Celebrate a diverse and bonded team. The greater the variation among team members, the less likely anyone will feel as though they do not “fit in.” By strengthening team member relationships (ex. Intra office social media forum) affective commitment is established. 2. Provide financial and lifestyle accommodation incentives. Keep pay competitive and provide annual raises tied to performance reviews. Make the time that an employee invests yield a financial gain so that there is greater motivation to perform well and substantial risk associated with leaving the job. Provide opportunities to use unique talents and skills as well as benefits to employees to embed them in the organization. While it isn’t likely to inspire citizenship behaviors, continuance commitment does result in loyalty. -------------------------------------------------
3. Finally, bring in new grads and give them opportunities to develop their skill set. Provide mentor relationships for employees and you will inspire a sense of “debt” to the organization. This method of establishing normative commitment will promote loyalty derived from a sense of obligation to repay the company for their investment in the employee as an individual.
Question 8:

According to the book, moods are states of feeling that are often mild in intensity, last for an extend period of time and are not explicitly directed at or caused by anything. Moods can be categorized in two ways: pleasantness and activation. Emotions are states of feeling that are often intense, only last for only a few minute and are clearly directed at (and caused by) someone or some circumstance. The difference between moods and emotions is how we describe them to other people. Moods are stated as self reflection, "I am feeling grouchy". Where as, emotions are directed, "I am angry at my boss."
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Question 9
It is important for service workers to control their emotions by the idea of emotional contagion. The idea that people can "catch" the feelings of others. This is very evident by the restaurant industry and servers. If a server is polite, friendly, and smiles, the customer is more likely to reciprocate, making the environment and meal more enjoyable for everyone. The customer is happier, and thus, the server isn't getting yelled at by an angry customer. Also, an angry or rude server can ruin the meal, and have a customer not return to the restaurant, no matter how good the food (product) is. This is why companies like Amazon prioritize and value customer service, because it can have a great affect on sales, no matter how good the products actually are.
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As an example, especially in today's society, as evident by recent police shootings, the theory of emotional labor is very important when it comes to police officers. If officers "lose their cool," or become angry, it will lead the suspect or victim to be come more angry through emotional contagion. This can lead to a more stressful, violent situation than if the officer had remained calm. Vice versa, if a police officer remains calm, it will likely de-escalate the situation by calming the victims and suspects.

Question 10 (Some of these examples may be missing a few biases and may not have received full credit, but were more on track in terms of what the question was asking and the checklist-type format I was looking for)

Ex #1) * Projection Bias - "Would my employee react to this situation the same way I would?" * Be objective, don't assume they will act the same way you do, ask questions * Social Identity Theory - "Am I not being objective enough because they are also _____?" * Treat the person like this is the first time you've ever met them. Ignore any prior knowledge you have of them. Pretend that you're blindfolded so you can't make any assumptions based on visual information. * Stereotype - "Am I making this decision because they are _____?" * The blindfold tactic would work well here so there is no visual info to go off of. If auditory info can affect your bias, perhaps communication via electronic means negate that. * Heuristics - "Am i making this decision because this is how I always handle this situation?" * Attempt to make the same decision without going by your usual process and see if you come to the same conclusion * Availability Bias - "Am I making this decision because this is what I'm used to seeing or hearing?" * Ask yourself if you'd make the same decision if you were knew nothing of the subject and were an amateur. * Anchoring - "Am I focusing too much on one thing while making this decision or looking at all the info?" * If time allows, do more research on the problem at hand before deciding. Sleep on it and see if you come to the same conclusion again. * Framing - "Am I making this decision because of the way it was presented?" * Look at the question or situation and rephrase it in a couple different ways and see if it sounds as appealing/unappealing as it initially did. * Representativeness - "Am I making this decision because something similar turned out negatively/positively?" * Step back and look at the situation as a stand-alone event. * Contrast - "Am I making this decision because it's the most/least attractive option out of the rest?" * Similar to earlier methods, look at the situation as an isolated event and see if you come to the same conclusion. * Recency - "Am I making this decision based on everything that's happened up until now?" * Take into account all past issues/events and see if you come to the same conclusion. * Ratio Bias Effect - "Am I making this decision based on the correct ratios?" * Reduce each ratio to the lowest common denominator mathematically and make your decision based on those numbers * Self-Serving Bias - "Am I making this decision fairly? Have I been critical enough?" * Be critical on yourself and see if you come to the same conclusion. * Escalation of Commitment - "Am I making this decision because I'm already so heavily invested in it?" * Introspect and determine if you're sticking to the current course of action because you don't want to admit that you were wrong or because you feel that you need to see it through to the end.
Ex #2)
- Seek a second opinion - this minimizes Selective Perception in that you can get someone from outside of your direct environment to take a fresh look at the decision that needs to be made and possibly provide different alternatives that were "outside the box" of your selective thinking.
- Account for every possible outcome - do not assume that previous behavior or trends will happen again or provide the same result, this assumption is a form of projection bias just as Representativeness is similar except with event trends as opposed to behavior trends
- Treat individuals or events as unique on their own - do not try to group them together with their group memberships, there is no end to the number of subgroups that people can come up with to categorize someone. Leaders need to shy away from this Social identity theory when making decisions because a group theme does not apply or define the individuals within it. This is also a form of Stereotyping which is sort of similar to Representativeness in assuming that the likelihood of an event by comparing it to a similar event and assuming it will be similar. In the same realm of thought, we want to treat things individually and not compare and Contrast to other things, this will alter our decision because the range in differences will be magnified in contrast thus influencing our perception of the reality.
- If making rules of thumb, do not define them so specifically and have them as loose suggestions, not definitive measures.Heuristics can be beneficial when making decisions but do not need to be the basis of the decision making process.
- Perform proper research - This will help to avoid the availability bias which is going with the information that is most easily available, which is not always accurate or skewed correctly. Proper research will help prevent this Availability biasfrom occurring by taking into account a wider array of information. This will also prevent Recency as well, by not just taking into account the most current information, we should do the proper research and take into account past trends as well
- Don't always assume what you think you know, allow the facts of the case to be presented to you before making an assumption - we don't want to fall victim to the Fundamental attribution error by judging others behaviors as due to internal factors, same as we wouldn't want someone to put the same blame on us, or conversely if we take our errors too lightly and judge ourselves less harshly through the Self-serving bias.
- Gather multiple sources of information to avoid Anchoring, which is the tendency to rely too heavily on one trait or piece of information when making decisions
- Rephrase a question or try to boil it down to figure out exactly what a question is trying to ask without having the influence of Framing alter the decision you make
- Take into account all of the probabilities and percentages of certain events before making decisions as to avoid the Ratio Bias Effect which can skew our perception of an outcome by the ratio that is presented to us, we must factor in percent of probabilities before assuming that it is necessarily a higher or lower probability of outcome off of our initial reaction.
Ex #3) 1. Do your research and weigh information equally. Upon identifying the problem at hand, investigate the subject matter to minimize the effects of bounded reality. By reducing the limitations of the information available to you, you can curb your predisposition to over simplify the problem and satisfice for the answer. Also, by taking all information into equal consideration, you prevent anchoring, or relying too heavily upon one piece of information. 2. Contemplate the impact of the decision and involve all stakeholders. This eliminates your projection bias and allows contributions from other involved parties to prevent the assumption that others think, act, and feel the same way you do. Also, you can avoid the fallacy of selective perception by integrating input from others in your choice of an outcome. 3. Generate a list of all possible choices for the decision at hand and weigh them equally. By covering all bases in terms of outcome options, you prevent heuristics and think beyond status quo. By evaluating each outcome, you disregard the tendency to assume the likelihood of and outcome based on recent or similar events (representativeness ad recency). 4. Choose your decision but be willing to reconsider. After identifying the decision that maximizes value, stay tuned for indications of the success of failure of the choice. In the event that the decision begins to go wrong, do not stay committed to a failing course of action out of pride. Escalation of commitment is generally pride driven in an attempt to avoid embarrassment. Know when to cut your loses. 5. When gathering information, repeat back what you heard and your interpretation of why this information is important. This practice will help you avoid FRAMING the information based on the words used to present it to you. It will help you identify if you are falling victim to PROJECTION BIAS or AVAILABILITY BIAS as it will encourage you to analyze others' motivations (rather than assume) and to dig deeper into the information than you might if you just listened and recalled easy-to-remember facts. 6. Examine data carefully for true meaning. Don’t fall victim to RATIO BIAS. Dig into data to find the true meaning and only use data that has true value for decision making. 7. Interview those impacted by your decision. This will help you avoid STEREOTYPES of those impacted as well as help you identify similarities between your social group and others', thereby decreasing the impact of SOCIAL IDENTITY THEORY. 8. Seek contrasting opinions. Seeking opinions from people known to have different opinions or decision-making processes or priorities will help ensure your decision isn’t falsely attributed to ANCHORING, REPRESENTATIVENESS, or HEURISTICS as the other people with whom you compare your decisions are not likely to have the same experience-based biases. 9. Delay a decision. When your instinct is telling you to jump on a decision, tell it to wait for a reasonable amount of time (based on the decision). A pause in your process will lessen the effects of CONTRAST and RECENCY.
Ex #4) Decision-Making Bias | Definition of Decision-Making Bias | Method to Minimize Riskof Falling Victim to Bias | Confirmation that potential Bias has been Addressed(Yes/No) | Projection Bias | As defined in our book, the idea that others think, feel, and act the same way we do | Remember, what you think is right or wrong could be entirely different to someone else, remember to respect the opinions and criteria of others when making decisions just as much as you would respect your own | | Social Identity Theory | As defined in our book, people identify themselves by the groups to which they belong and perceive and judge others by their respective group memberships | Remember, there is no end to the number of groups we can come up with to lump people, issues, or scenarios in, so treat topics and individuals as such and avoiding grouping at all! | | Stereotype | As defined in our book, occurs when assumptions are made about others on the basis of their membership in a social group | Remind yourself, don't judge a book by its cover! | | Heuristics | As defined in our book, the process of making a decision more easily based on simple and efficient rules of thumb | Using the rule of thumb rule is dangerous when making an important organizational decision. Don't be afraid to step out of the box! | | Availability Bias | As defined in our book, the tendency for people to base their judgments on information that is easier to recall | Remind yourself that even though something is wrong, think of all the times it went right before you base your judgment on the wrong. For example, we have quality issues randomly for tower sections, and we focus on that and make assumptions about the quality of our suppliers without taking into account the hundreds of sections they have fabricated flawlessly because we don't hear about those sections, we hear about the bad sections | | Anchoring | As defined in our book, the tendency to rely too heavily, or "anchor' on one trait or piece of information when making decisions even when the anchor might be unreliable or irrelevant. | Pull in an additional person to assess the situation that is needing a decision. A fresh set of eyes and ears could open the leader to potential alternatives that were not seen before. | | Framing | As defined in our book, the tendency to make different decisions based on how a question or situation is phrased. | Ask the question or pose the situation from different angles, different perspectives. For example, ask the question, "If I were the Customer...", and then ask the same question but from the Supplier's perspective, "If I were the Supplier...". Some would even consider playing Devil's Advocate and opposing a particular question just for the sack of argument a good tactic to avoid falling victim to Framing. | | Representativeness | As defined in our book, the tendency to assess the likelihood of an event by comparing it to a similar event and assuming it will be similar. | Evaluate previous related, similar events and the decision made for each event. Ask yourself, "Does this work for this event?" Am I making assumptions here or can I prove my decision effectively through data and evaluation using the Rational Decision-Making model for this specific event at hand. | | Contrast | As defined in our book, the tendency to judge things erroneously based on a reference that is near to them | I would use the same method as mentioned above for Anchoring. Sometimes we are buried too deep into a topic, too close to it, and we have our "blinders" on, if you will, and pulling in support for a new perspective is just what we need. | | Recency | As defined in our book, the tendency to weigh recent events more than earlier events | A deep dive into the history, a complete investigation of the history will go a long way in avoiding falling victim to this bias. For example, if you were hiring an employee into your group and looked only at the number of years with the current employer versus the employee's experience before the current employer, you could misjudge the amount of money or level of position that is honorable by missing valuable experience because of only looking at recent experience. | | Ratio Bias Effect | As defined in our book, the tendency to judge the same probability of an unlikely event as lower when the probability is presented in the form of a ratio of smaller rather than of larger numbers | A method to avoid falling victim to this bias would be to right out your targets, for example, from top down and from bottom up. So for example, an NCC (non-conformance cost) reduction of 30% or maintaining no more than 70% of this year's NCC - phrase the question from both sides of the spectrum to ensure you don't misinterpret what is expected of you or what is expected that the decision for a particular issue or situation should result in. | |
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Question 11:

Ex #1)
Your Answer:
COMPENSATION SYSTEM FOR FULCRUMCA, INC. FULCRUMCA, Inc. is a company that focuses on the management of Commercial Properties. The organization counts with six Property Managers, four Building Engineers, eight Accountants, two Brokers, one Office Manager and 3 Executives. In order to mitigate the big turnover rate that the company is facing and the low job performance that the company is experiencing, it is important to focus our efforts in the work force to improve the company’s profitability. Motivation To increment Organizational Commitment and keep employees motivated, the company will create Valence in the employees by improving the current benefits and creating new benefits in the course of 3 years: Health, Vision and Dental Insurance: The insurance package will get better. The paycheck contribution will reduce in about 15% per year in 3 years going from $150.00 per insured to $83 per insured at the end of the 3-year period. Tuition Reimbursement will be added as a benefit in order to give opportunities to our employees to advance in life and return the investment to the company with knowledge and new ideas. All employees will have access to the new webpages that provides discounts for a wide variety of items and services, like technology gadgets, vacation packages among others. The company will implement more extrinsic motivation with quarterly bonuses, awards and recognitions based on the achievements of the employees. For Brokers the bonuses will be based on the amount of offices and warehouses they were able to lease; for property managers will be based on the feedback from tenants; for building engineers it will be based on how well the properties are maintained. Every year the company will award the best specialist in the area with Dinner or Shopping gift cards; or even a trip to a nice resort. All the awards will be granted during a special ceremony that will make the employees feel appreciated. As intrinsic motivations, Fulcrumca, Inc. will organize several in-site trainings to improve the employee’s skills as well as events in different locations to improve the teamwork and healthy camaraderie. The company is also implementing counseling for people that may need to vent their non-work hindrance and challenges as well as implementing perks such as free back massages in the office every quarter to reduce the anxiety and stress of quarterly reports. Learning By providing more benefits, salary increases, bonuses and recognitions on fixed time periods, like in a yearly basis and on a quarterly basis Fulcrumca, Inc. is using the positive reinforcement theory. And will use extinction by not reinforcing behaviors that the company does not want the employee to repeat. All executives and supervisors will be trained to provide a good example of work ethics to their employees, in order to use behavioral modeling since the Social Learning Theory dictates that employees tend to the observation of others.

Justice: Fulcrumca, Inc. believes in being fair with the employees. Hence we will provide equal benefits to all the employees. The company will follow Distributive Justice to allocate assignments, promotions, and salary increases using proper norms, such as making those decisions based on employee’s skills and abilities and not deciding by preference. In order to decide who deserves a promotion, increase in salary or award; each position will have goals to meet and guidelines to follow. This will create fairness or Procedural Justice when making a decision. Authorities will have guidelines on how to treat their employees and how to impart information in the office.

At the end of the 3-year plan, the employees will gain Affective Commitment with the organization because the company will hopefully create healthy camaraderie between co-workers, as well as abolish all type of gossip and withdrawal behavior. Employees will have a big amount of Continuance Commitment since all the benefits and perks we will provide will create a need for them to stay in the company. Lastly employees who have a sense of respect for their superiors and employees that have received assistance such as tuitions assistance will have a hard time to leave the company by feeling they owe their expertise and knowledge to the company.

Compensation should be something very basic and simple to follow. A simple system would involve total compensation based on position level and/or years of experience. Each position would be assigned a total compensation level A, B, C, D, etc. All employees of each level will receive the same number of paid time off days, same medical package, and same base salary adjusted each year for inflation. New hires will receive the same as those already at the position level. Employees will have the option to select 3-5 trainings per year from a "master list" that encompasses as many positions/titles as possible. That will ensure employees have access to training that is beneficial for the career path that they intend on choosing. Employees will automatically be bumped to a new pay level after 5 years in the same position. However, that will be discouraged as discussed later on. The only variance will be bonuses. All positions will be eligible for a 10% bonus depending solely on company performance. An additional 5% bonus is available based on individual performance.
The thought behind this process is keeping everyone on the same playing field while de-emphasizing extrinsic motivation. The 5% bonus, while minor, should satisfy expectancy, instrumentality, and valence by offering monentary (extrinsic) incentives to employees who go above and beyond and expect to be compensated. Compensation will reflect the intrinsic outcomes of knowledge gain and skill development through the trainings offered to all employees. This also exerts personal expression by allowing employees to chose their career paths and follow their interests.
As mentioned, employees will be discouraged from remaining in one position for more than 5 years. Per Goal Setting Theory, employees will be given the goal upon hire of moving to a new position within their 5 year term. All new hires/transfers will setup career plans and assign trainings accordingly during their term. Employees will be given new challenges based on those career paths to encourage growth and future development. This hopefully will allow employees to self-set goals and ultimately lead to better task performance.
Since all employees of each compensation level receive the same base benefits, distributive justice should be perceived throughout the organization. The 10% bonus goal will be set at a corporate level, and guidelines for each 5% bonus will be set at the beginning of each year. That way full transparency is in effect. Procedural justice could be an issue for the individual bonus since those targets are more flexible. HR and management will have to outline position (not compensation) level objectives that employees can meet in order to be compensated further. The biggest hurdle will be the process used to determine which position falls into which compensation level. Each available position will have to meet certain criteria defined by management and HR in order to determine which compensation level. For example, a list of 20 items may be required for senior management, while an entry level position might have 3-4 requirements (college degree, 2 years experience, etc.). Those will be drafted for all to see, including those in those positions currently. The hope is that since employees are encouraged to move every 5 years, most will feel comfortable with the criteria that was used to select them being used to select a new hire. With flat pay levels and extrinsic packages, interpersonal justice should not be a factor. No employee can state he/she makes more than another at their same level. All policies, pay and benefits will be posted openly within the organization to ensure informational justice.
The goal of system is to turn explicit knowledge into tactic knowledge. While admittedly this system works best for office environments where duplicate positions exist and overlap, since compensation is level, the desire is to have employees willing open up and share knowledge. By eliminating the internal competition factor, all positions should have updated training manuals, cross-training, and accessible information available. By having transparency into everyone else, employees can focus on the tactic knowledge they gain and how that knowledge can be then turned into explicit knowledge for everyone else. Positive reinforcement will be justified by the individual bonuses, but the goal will be continuous reinforcement. Some would say it is costly, but how much cost goes into arguing salaries, bonuses, vacation days, etc.? Those "costs" could easily be transferred over without effecting the profitability.
By removal of extrinsic motivators, the focus is on adaptive task performance and creative task performance through training. Since all positions are transparent, employees are encourage to pursue new and creative solutions to problems faced by the organization. This leads to profitability, which is then given back to employees in their 10% bonuses. Many organizations face counterproductive behavior by having employees "silo" their positions. When someone is out sick or not helpful, the problem is escalated causing more time and money loss. The focus of this compensation plan is to be transparent while encouraging employees to constantly move around. This prevents the withdrawal behavior or silo effect and allows employees to focus on the organization as a whole. Employees know they are being well taken care of, thus leading to higher organization commitment. It will be known upfront the organization is looking for star employees, and thus, employees are compensated fairly and openly for their successes. While some would argue this hinders innovation by leveling everyone, the goal here is to eliminate the internal conflicts that arise and ultimately distract the organization from its main goal: meeting customer expectations.
Ex #2)
Compensation should be something very basic and simple to follow. A simple system would involve total compensation based on position level and/or years of experience. Each position would be assigned a total compensation level A, B, C, D, etc. All employees of each level will receive the same number of paid time off days, same medical package, and same base salary adjusted each year for inflation. New hires will receive the same as those already at the position level. Employees will have the option to select 3-5 trainings per year from a "master list" that encompasses as many positions/titles as possible. That will ensure employees have access to training that is beneficial for the career path that they intend on choosing. Employees will automatically be bumped to a new pay level after 5 years in the same position. However, that will be discouraged as discussed later on. The only variance will be bonuses. All positions will be eligible for a 10% bonus depending solely on company performance. An additional 5% bonus is available based on individual performance.
The thought behind this process is keeping everyone on the same playing field while de-emphasizing extrinsic motivation. The 5% bonus, while minor, should satisfy expectancy, instrumentality, and valence by offering monentary (extrinsic) incentives to employees who go above and beyond and expect to be compensated. Compensation will reflect the intrinsic outcomes of knowledge gain and skill development through the trainings offered to all employees. This also exerts personal expression by allowing employees to chose their career paths and follow their interests.
As mentioned, employees will be discouraged from remaining in one position for more than 5 years. Per Goal Setting Theory, employees will be given the goal upon hire of moving to a new position within their 5 year term. All new hires/transfers will setup career plans and assign trainings accordingly during their term. Employees will be given new challenges based on those career paths to encourage growth and future development. This hopefully will allow employees to self-set goals and ultimately lead to better task performance.
Since all employees of each compensation level receive the same base benefits, distributive justice should be perceived throughout the organization. The 10% bonus goal will be set at a corporate level, and guidelines for each 5% bonus will be set at the beginning of each year. That way full transparency is in effect. Procedural justice could be an issue for the individual bonus since those targets are more flexible. HR and management will have to outline position (not compensation) level objectives that employees can meet in order to be compensated further. The biggest hurdle will be the process used to determine which position falls into which compensation level. Each available position will have to meet certain criteria defined by management and HR in order to determine which compensation level. For example, a list of 20 items may be required for senior management, while an entry level position might have 3-4 requirements (college degree, 2 years experience, etc.). Those will be drafted for all to see, including those in those positions currently. The hope is that since employees are encouraged to move every 5 years, most will feel comfortable with the criteria that was used to select them being used to select a new hire. With flat pay levels and extrinsic packages, interpersonal justice should not be a factor. No employee can state he/she makes more than another at their same level. All policies, pay and benefits will be posted openly within the organization to ensure informational justice.
The goal of system is to turn explicit knowledge into tactic knowledge. While admittedly this system works best for office environments where duplicate positions exist and overlap, since compensation is level, the desire is to have employees willing open up and share knowledge. By eliminating the internal competition factor, all positions should have updated training manuals, cross-training, and accessible information available. By having transparency into everyone else, employees can focus on the tactic knowledge they gain and how that knowledge can be then turned into explicit knowledge for everyone else. Positive reinforcement will be justified by the individual bonuses, but the goal will be continuous reinforcement. Some would say it is costly, but how much cost goes into arguing salaries, bonuses, vacation days, etc.? Those "costs" could easily be transferred over without effecting the profitability.
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By removal of extrinsic motivators, the focus is on adaptive task performance and creative task performance through training. Since all positions are transparent, employees are encourage to pursue new and creative solutions to problems faced by the organization. This leads to profitability, which is then given back to employees in their 10% bonuses. Many organizations face counterproductive behavior by having employees "silo" their positions. When someone is out sick or not helpful, the problem is escalated causing more time and money loss. The focus of this compensation plan is to be transparent while encouraging employees to constantly move around. This prevents the withdrawal behavior or silo effect and allows employees to focus on the organization as a whole. Employees know they are being well taken care of, thus leading to higher organization commitment. It will be known upfront the organization is looking for star employees, and thus, employees are compensated fairly and openly for their successes. While some would argue this hinders innovation by leveling everyone, the goal here is to eliminate the internal conflicts that arise and ultimately distract the organization from its main goal: meeting customer expectations.
Ex #3)
My compensation system is a lump-sum bonus for every successfully commissioned wind farm completed by a project engineer. The total lump-sum bonus available is a fixed amount. The distribution of the lump-sum bonus among project engineers is a percentage determined by a number of factors: the customer (high-profile (high potential for public visibility for Siemens vs. low-profile (low potential for public visibility for Siemens)), the number of turbines (therefore also the power generation in megawatts), the type of wind turbine, whether the project was commissioned on time, ahead, or behind schedule, and the total cost of non-conformances.
The first theory of motivation I am using to design my system is the Goal-Setting Theory. By providing the project engineers with a specific goal, with a specific list of criteria that affects the percent compensation for achieving that goal, I am creating a challenge for them but still stretching them in their boundaries of ability. The criteria listed above, for example, number of turbines, sometimes taking on projects with fewer wind turbines is "easier" or less time-consuming, less of a challenge, but by including the number of turbines as an impacting factor to the percent bonus, it encourages and motivates project engineers to take on the challenge of a wind farm with more wind turbines and also encourages healthy competition among peers. The goal here, the driver, is the successfully commissioned wind farm. This goal is specific, it is measureable, it is confined by a project schedule (time sensitive), it is achievable no doubt, and is results-based. If in achieving this goal, it is laid out to project engineers that a 15% bonus or even 20% bonus is a potential for them, it drives them to excel in their job tasks and their commitment to the project, thereby, commitment to the organization, which shapes our organizational behavior. The goal-setting theory approach also encourages task strategy. Every wind farm is different: third-party companies, locations, challenges and the unique nature of each challenge triggers the project engineers to engage in creative and strategic planning. Furthermore, by adding criteria like non-conformance costs and project schedule as impacting factors to the percent bonus, I am using what could be potential project financial risks as leverage for personal financial gain. In other words, by paying attention to things like project schedule and non-conformance costs, we are potentially minimizing the hazards and financial risks of delays or unexpected events ultimately hurting our project and our customer, by paying close attention to them for personal financial gain. In addition, the specific, and challenging goal set will help shape each project engineer's self-set goals to measure and track their progress.
The second theory of motivation I am using to design my system is the Expectancy Theory. This theory suggests that the project engineer's choice depends on three specific beliefs based on past learning and experience. Expectancy, which according to our text, ((Organizational Behavior, Colquitt, Lepine, Wesson, Pgs. 169), is the belief that exerting a high level of effort will result in the successful performance of some task. For this compensation system, that means that the project engineer believes, because of past experience, self-confidence, otherwise known as self-efficacy, that they can achieve the outcome. The higher this belief, the higher the levels of effort. The project engineers also trust in the fact that the outcome, because of their hard work and effort, will result in a completed wind farm. Whether history proves this for them, or their own knowledge and experience, it is known, and this is referred to as Instrumentality. Finally, the third evident belief for this compensation system is Valence, which according to the same section of our text referenced above in this section, is the anticipated value of the outcomes associated with the performance. This lump-sum bonus is an extrinsic motivator, which is positively valenced for the project engineers.
The project engineers can judge the fairness of the compensation system along four dimensions: Distributive Justice, Procedural Justice, Interpersonal Justice, Informational Justice. For example, looking at Distributive Justice, if the project engineers don't think a commissioned wind farm is a fair outcome, they may perceive the compensation system as unfair or unjust. However, in this case, they commission hundreds of wind turbines a year, so the goal here is not out of reach, and the challenge is to maximize efficiency (large wind farms commissioned on time results in generation of power (megawatts), on time means a happy customer and no cost to Siemens and a good reputation in the public eye for Siemens) and to minimize financial risk (keeping non-conformance cost to a minimum). One judgment of fairness that could be used on this compensation system would be Procedural Justice. Is it fair to have the size of the wind farm an impacting factor for the percent of the lump sum bonus you receive when some project engineers are prevented from certain wind sites because of a language barrier or travel restriction and perhaps those wind sites are larger? Or perhaps it is unfair to have the nonconformance costs a factor in determining the percent of the lump sum bonus you receive because some regions are, simply put, not as mature in the wind industry and pose strains that other locations do not, and therefore those strains result in higher non-conformance costs? These are fair questions. There are some factors of wind farm sites that are not controlled by any amount of task performance or persistence in execution and therefore is it fair to include them as impacting factors on distribution of bonuses? These examples lead to the fact that the procedure for commissioning a wind farm is inconsistent depending on region, and perhaps does not consider the needs of all regions (Representativeness).
The theories of learning my compensation system apply to are both tacit and explicit learning. There is a certain level of degree required for this position. You must have an engineering bachelor's degree and therefore a certain level of explicit knowledge is assumed. Tacit knowledge is based on experience, the number of wind farms completed by each project engineer varies and for each completed wind farm, the project engineer learns new things because of those differences mentioned above (customer, region, challenges, etc.). In addition to the two types of knowledge, employees can also learn by observation and reinforcement. Observation, or the Social Learning Theory, is key here, as project engineers learn a lot from each other. For example, one wind farm could be experiencing similar issues as another and if project engineers didn't work together or observe each other's behaviors, to address these issues together, they could potentially duplicate efforts, make different decisions for the same problem, and ultimately hurt their project more by falling for the Anchoring bias. This compensation system applies also positive reinforcement, a positive outcome, a lump-sum bonus, follows the desired behavior of successfully commissioning a wind farm.
I expect this compensation system to have a strong positive effect on job performance. The fact that this system follows the Goal-Setting Theory, which research argues, according to our text, that specific and difficult goals result in higher levels of performance, as well as the extrinsic motivator, the job satisfaction of success (the work itself and pay), and the moderately correlated relationship between learning and job performance, it is clear this would be true.
I would also expect the compensation system to have a moderate positive effect on organizational commitment. We know that trust has a strong positive effect on commitment. The project engineer's trust in not only the outcome, but also the compensation, leads to a trust in the organization and therefore a commitment to the organization. It is also known that learning has a weak positive effect on affective commitment. It is difficult to measure tacit knowledge and because tacit knowledge is so relevant in the workplace, this correlation may appear lower than reality.
The positive effect that this compensation system has on both job performance and organizational commitment represents the positive effect on organizational behavior. We know the effective management of organizational behavior can help Siemens become more profitable.