...Kerr’s (1995) classic article “On the Folly of Rewarding A, While Hoping for B” of central point is that we can expect people to rationally do the things that are rewarded rather than the things we say they should do. There has been a sentence said, “Put your money on self interest. At least you know the jockey is trying” (Kerr, 1995). When this concept reflected on my past work experience, I fell so pleasure I worked in such an enjoyable work environment before. In our company, we do not follow the normal reward line. We reward through the creative way when we do things differently. Most of people from our company will not get clear instructions what they will do in office, and then stick to that once the rule selected. In fact, we have a reward system that encourages contrary behavior. The above is example of reward systems which encourage behavior contrary to what is wanted. In Kerr’s article, it also pointed out that business is not immune to this folly. For instance, espousing long term growth and profitability while rewarding short term or asking people to take challenge of stretching objectives but rewarding those who meet minimum budget even though those budgets consist of little stretch (Kerr, 1995). This scenario happens in any real work situation. In my previous workplace, there are team rewards as well. But honestly, I really have to admit that the team tem reward is not appropriately working here to improve the team performance. Under our organizational...
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...To Make Right Things Happen in Appropriate Time In the article On the Folly of Rewarding A, While Hoping for B, the author Steven Kerr represents his theory about the Fouled Ups Systems. In another word, we rewarding the individuals while hoping for collaboration. The essential point of high-efficient employee execution is about doing the right thing in the appropriate time. To get the most from the employee, we do need to develop the right reward system. Furthermore, Kerr states the causes of the folly rewarding system that has been widely and commonly applied in the business and public field. Based on his experiences, the author reveals the examples of the explanation of why the fouled-up system seems to be so prevalent, basically is the overemphasis of visible performance but not the efficiency. In author’s opinion, it is easy to point the finger of blame at employees. But in most companies and organizations, the reward system causes poor attitudes and performance that discourage desired behaviors while rewarding the very action that will make the executive crazy. At the end of the article, the author gives method of improving the reward system. The most significant point is to expand the scope of the behaviors should be rewarded. To create an efficient reward system, executive must first clarify the behaviors, or performance, to help the employee better understand how they can support what to accomplish. Secondly, to devise an effective performance appraisal system...
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...Article: On the Folly of Rewarding A, While Hoping for B Author: Steven Kerr Situation # 2 Every year bonuses are given only to employees who have reached a certain level of education (which includes industry trainings). Once this education level has been reached you are guaranteed this bonus for as long as you work for my company. Concept # 2 Reward systems are to be created to reinforce good performance/ behavior. Rewards should be frequent and immediate. You should never use punishment to train someone. Experience # 2 Since the current reward system rewards only the few who are able to sit through two 10-hour long courses on a weekend; I do not feel as though it is a goal that should be reinforced. If training is of importance to a company, it should be provided at a convenient time. If we want to increase employee training, then we should reward continued training participation (this one time achievement should not be rewarded every year). Instead, a good measure in the cafeterias for performance is percentage of participation. In certain areas of the district is it very easy to have 90% participation when other schools just meet 30%. I have recently proposed a reward system for increased participation. Schools will post district-wide the increase of participation based on percentage. The district will be divided into 4 sections based on starting participation and the schools within those sections with the highest increase each week, gets a recognition letter sent to...
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...Management: The final frontier. These are the stories of the company ACCO. Its lifelong mission (77 years and going): to explore new cities and states, to seek out new ways of cooling and heating the world, and to boldly become a billion dollar company before the year 2020. To achieve these goals, ACCO will be required to have not only the best management personal in place, but the men and woman in these roles must be great leaders’ not just managers. It has been said that “The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee,” (Taylor, 1911, p. 3). As Frederick Taylor (1911) also wrote, “Scientific management fundamentally consists of certain broad general principles, a certain philosophy, which can be applied in many ways.” (p. 13). It is my opinion that at least one of the executives that works for ACCO Engineered Systems (Bill), could greatly benefit from most if not all of the theories of scientific management. According to Henry Mintzberg (1975), “Managers are responsible for the work of the people of their unit. Their actions in this regard constitute the leader role.” (p. 15). Bill always seems far too involved in his own personal accomplishments to take the time to encourage someone or give credit for a job well done. Warren Bennis's understanding into the characteristics that make great leaders has changed modern management processes and methods a great deal...
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...Exam #4 Study Guide MGT 311 –Spring 2011 Chapters 11 and 12 – Compensation 1. What is compensation? What are the two main categories of compensation? “All forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.” Direct: Base pay (wages, salaries); Variable pay (bonuses, incentive, stock options) Indirect: Health/Medical insurance; life/disability insurance; paid time off; retirement/pension plans; educational assistance 2. What are the factors that affect how much someone gets paid? (This was an in-class activity) Economic influence on pay; 3. What is equity theory? What are the consequences of inequity? • People measure outcomes such as pay in terms of their inputs. Fairness of pay relative to that of other employees (Op/Ip < = > Oo/Io) • Op/Ip = Oo/Io => balance – no change • Op/Ip > Oo/Io => overreward inequity (Re-evaluate to make = ) • Op/Ip < Oo/Io => underreward inequity (Reducing one’s inputs (not working as hard); Increasing one’s outcomes (theft); leaving( withdraw by leaving the organization or refusing to cooperate) 4. What are the three pay level policies we discussed in class? What are the advantages and disadvantages of using each type? P319. Lead, Match, or Follow (>the rate set by market force) 5. What are compensable factors? Why are they important for an organization? “Job attributes that provide...
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...Financial Management & Control – IM07CC CEMS Dr. Marcel van Rinsum Associate Professor RSM Erasmus University Department Accounting & Control mrinsum@rsm.nl Introduction Financial Management Control Systems (FMCS) form the bridge between the organization’s strategy and its operations. Their purpose is to align managerial behaviour and decision making with organizational goals. Although management controls are typically embedded in the organization’s financial management and accounting systems, their design and use should be based on a thorough understanding of how managerial behaviour is influenced by typical control system elements, such as target setting, performance measurement and rewarding. Indeed, while the proper design of management control systems is paramount for organizational performance, organizational failure can often be attributed to poor design of the organizations management control system. Such poor design may result from a limited understanding of the drivers of managerial behavior in complex organizations. Our challenge thus lies in understanding what are crucial design elements of control systems, what design options are feasible, and how the design and use of control systems should match the organizational context in which they operate. This understanding, rather than the straightforward arithmetic often associated with financial management, forms the core of this course. Course design in a nutshell This course consists of a combination of lectures, articles...
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...success (Lawler, 2003, 587). In order to help Stone Finch, you must become a leader as a teacher and steward (Senge, 1990, 102), which points the way towards the vision that can bring the future paradox into the present (Nanus, 1996, 462). Having an appropriate vision allows you to see the actions taking place within the company, bringing change to improve the efficiency of your organization (Kotter and Cohen, 2002, 701). Employees usually respond positively to rewards based on certain tasks they complete. When talking about the proper ways of rewarding an employee you must know their preference of rewards (Kirkman & Hartog, 2004, 615). Additionally, employees must have the ability to lead self-managed teams that focus on goals for the team and the broader organization (Druskat & Wheeler, 2004, 338). In order to motivate employees, alter your reward system to challenge them to strive for creativity and new ideas, in addition to rewarding employees who start their own subsidiaries (Kerr, 1995, 613). Finally, to create a superior work environment, focus each...
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...Lincoln Electric Case Analysis Situation: Through the year 1974, the Lincoln Electric Company experienced rapid growth in net income and overall sales. Though a small company, Lincoln Electric was able to dominate the welding market by focusing on reducing costs and raising quality. These goals were achieved by rewarding employees with an innovative financial incentive program. Lincoln Electric paid their employees a base salary that was slightly lower than market. However, all employees were included in a merit-based profit sharing program. This program rewarded hard-working, efficient, and quality-conscious employees with big bonuses that could potentially equal up to 100% of their full-time salary. After having gone through an initial work probation period, all employees were guaranteed employment. One of the founders of the company, James F. Lincoln, believed that competition was a fundamental foundation of employee development. He set up a system that would reward the hardest working and most efficient workers with large financial prizes. The workers were encouraged to skip smoking breaks, take short lunches, and work as quickly as possible, while still paying attention to quality standards. Though challenging, the work environment was viewed favorably by the employees who were interviewed for this case. All respondents admitted that there were serious deficiencies in the system, but that it was generally favorable. The employees accepted that the system...
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...The Hidden Traps of Decision making | x | 3 | Control in the age of empowerment | x | 3 | The Real Budget Crisis: Stop Rewarding Forecasting and Negotiating Instead of Real Performance | x | 3 | Note on flexible budgeting and variance analysis | x | 3 | Borealis Case | | 4 | Note on Organization Structure | | 4 | Note on Organization Culture | | 4 | Designing Organizations for Performance: The Alignment of Design and Strategy | | 5. | On the folly of rewarding A, While hoping for B | | 5 | Incentives within Organizations | | 5 | Strategy to implementation: Seeking alignment | | 5 | Measuring performance | | 7 | GE’s growth strategy: The Immelt inititative | | Week 3 Control in Age of Empowerment Creativity and control don’t have to conflict Failure to control employees appropriately Managers can encourage innovation among employees while ensuring adequate control by using four powerful management systems or levers. 1- Diagnostic control systems Traditional monitors of critical performance outcomes such as costs and revenues 2- Belief systems Encompass the company’s values, mission and other statements of philosophy 3- Boundary systems Based on power of negative thinking Tell your employees what not to do 4- Interactive control systems Sharing market information and encouraging creative responses while helping people avoid pitfalls When used in concert, these four levers can give you the control you need without sacrificing...
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...CHAPTER 1 Folly of Rewarding “A” while hoping for “B” – Giving the employees rewards for hoping more work is done. Intrinsic/Relational – satisfy higher level needs for self-esteem and development. Recognition & status, employment security, challenging work, learning opportunities Extrinsic/Transactional – Satisfy basic needs for survival and security. Benefits include income protection, allowances, and work/life focus. Cash compensation includes long-term incentives, short-term incentives, and merit costs of living. Before a company starts developing its compensation system, it needs to establish a reward strategy. This is a mix of rewards both extrinsic and intrinsic, that the organizations intend to provide. It is the blue print for creating the reward system. Compensation system has 3 main components: 1) Base pay – the foundation pay component for most employees and is generally based on some unit of time. (Per hour, week, month) 2) Performance Pay – relates employee monetary rewards to some measure of individual, group or organizational performance. 3) Indirect Pay – noncash items or services that satisfy a variety of specific employee needs such as health protection. The first step in a compensation strategy is to determine the role that compensation will play in the reward system. Since most organizations want to minimize compensation costs wherever possible, you have to identify what other rewards are being provided and determine...
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...towards attracting and retaining excellent human resources. The compensation plans serve multiple purposes for NIKE. The compensation plan for executives is determined through a compensation committee and largely relies on long term equity-based compensation to ensure that the executives make decisions in line with the long term objectives of NIKE. For its managers, the company’s compensation plan is focused on exceeding market rates, while ensuring a rich benefits offering, and even a fully paid health plan. This plan is geared towards retaining and motivating the best sales and management staff, to ensure health and continuity of its key human resources. For its agents and suppliers, NIKE ensures that the work environments are sustainable and pay rates are at par with industry standards. This ensures that the cost of production remains under control. Since the wages of these agents are at par with market levels, the company offers its goods at a subsidized rate to its employees, as a form of benefit. Based on its strategy to breed excellence, while ensuring the health and sustainability of its markets, the current strategy of NIKE is very effective in its ability to retain its workforce. The current compensation strategy gives a higher total rewards package to more strategic employees, and prefers to pay at or above market levels in order to retain the best talent in the apparel industry. NIKE operates in the apparel industry, and is therefore subject to market comparisons with...
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...Debunking the Goal Setting Theory Presented to Trudy Dunson, Instructor MGMT 2125, Performance Management By Andrea Smith 10/13/2014 Often times in the business world, organizations become so fixated on the goals they set, that when they begin to go wrong, an organization will invest more into that goal instead of looking for a different path. Oliver Burkeman’s book, “The Antidote: Happiness for People Who Can’t Stand Positive Thinking” devotes a whole chapter to the importance or lack thereof of setting goals. In his book, he tells a story of Chris Kayes who was on the foothills of Mt. Everest at the same time the tragedy that took the lives of eight climbers depicted in the book, “In Thin Air.” Kayes observed even through this tragedy, that the climbers did everything correct based on the goal setting theory; they had a clear goal and worked to achieve it above all else however the results were devastating still. In this example, the climbers ignored the evidence that told them that they should turn away from their goal an instead invested more time and energy which led to their deaths. According to Locke and Latham (2006) as long as a person is committed to their goal and does not have any other conflicting goals, there is a positive relationship between the goal and performance. Unfortunately though, goal setting has been prescribed and not monitored. Therefore, like all prescription abuse, organizations fail to recognize the harm that goals can caused due to creating...
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...European Management Journal VoI. 14, No. 6, pp. 596--611, 1996 ~ Pergamon S0263-2 373(96)00056-4 Copyright © 1996 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0263-2373/96 $17.00 + 0.00 Effective Organizational Control'. A Framework, Applications, and Implications ERIC FLAMHOLTZ, Professor of Management, University of California at Los Angeles This article by Eric Flamholtz provides a framework for understanding the nature, role, functioning, design, and effects of organizational control systems. It represents a model of control which can be used to make this process more visible in organizations. It illustrates the practical applications of the model, and suggests its implications for corporate and human resource management as well as for scholars. Copyright © 1996 Elsevier Science Ltd Introduction All organizations (businesses, universities, governments, hospitals) are concerned with channeling human efforts toward attainment of organizational objectives. Regardless of their formal purposes, organizations are composed of people with their own personal interests. Even if these individuals and groups wish to help attain organizational goals, the organization of which they are ,~=r~ must integrate their efforts and direct them toward goals. Thus, organizations must influence or the behavior of people, if they are to fulfil their nd achieve their goals. To help gain control over the behavior of people in formal organizations, most enterprises...
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...NATIONAL UNIVERSITY OF SINGAPORE NUS Business School Department of Management and Organization BMA5004 Management & Organization (2 mc, intensive format) FM1, 7-9 January 2013 FM3/FM4, 10-12 January 2013 Dr. Daniel J. McAllister Dr. Matthias Spitzmuller BIZ 1#08-58 BIZ1 #08-46 +65 6516 1009 +65 6516 7230 bizdjm@nus.edu.sg bizms@nus.edu.sg ABOUT THE COURSE Managers often express surprise when they find that people are more difficult than numbers to understand. Recruiters often indicate that they wish new managers possessed stronger people skills. Alumni often affirm that they too wish they had stronger people skills. The aim of this course is to provide you with some of these skills so that you can become a more effective manager and leader. However, management is not a science. Nor is it a profession. It is an art – a craft that is developed over a lifetime. This course is therefore not designed to offer you a magic formula for how to manage an organization. It is designed to provide tools to help you better understand why people in organizations do the things they do and how to influence these behaviors. We will use theories of management, economics, sociology, psychology, and philosophy to help us discuss individual-, team-, and organizational-level behaviors. The format for this course will be highly interactive in order to provide a rich learning experience. We will do this through the use of debates, role-playing, simulations, and case studies...
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...HADM 7820 Readings Assignment # 1 Due January 28 Significance of Human Resources Reading: Hammonds, K. H. (2005). Why we hate HR. Fast Company, August 2005, Issue 97, 41-47. Klimoski, R., & Amos, B. (2012). Practicing Evidence-Based Education in Leadership Development. Academy of Management Learning & Education, 11(4), 685-702. Assignment: 1. Based on your experience, what do you think of HR? 2. Describe an experience that you had with HR people from a previous employer. Do you think they did a good job? Or, what should they have done? Provide your answer based on the reading – “how to do HR right” in page 46. 3. Given the goal of the MMH program is to help develop you to be the future leaders of the hospitality industry, how does an HR course help accomplish this? (Or perhaps, does it not?) 4. Why do you think I gave you both of these readings together? HADM 7820 Readings Assignment # 2 Due January 30 Legal Environment Reading: Sherwyn, D. (2010). How employment law became a major issue for hotel operations. Cornell Hospitality Quarterly, 51, 118-127. Slobodien, A., & Peters, E. (2012). Beyond harassment prohibitions. HRMagazine, November 75-78. Assignment: 1. What aspects of employment law do you think are important protections for you, personally? 2. What aspects of employment law do you...
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