1 1. Should employers select candidates to fit with the job, or to fit with the organization?

Explain and defend you answer. Be sure to provide examples of selecting for the organization and selecting for the job. Suggest three attributes/traits that predict performance across all jobs and all organizations. (10 points) Traditionally, employers have focused their hiring efforts on maximizing personjob fit --- matching the profile of the candidate to the profile requirements of the job. Today, however, it is becoming increasingly common to give as much (equal) attention to person-organization fit. Here, organizations identify a number of "core competencies" that compliment their mission and culture. These "core competency" requirements transcend all jobs within the organization. For example, Microsoft has identified three core competencies that they look for in all candidates: (1) Critical and creative thinking, (2) passion for learning, and (3) capable of grasping new knowledge quickly. Today, many employers look for person-job fit and person-organization fit. Person-organization fit aims to fit the requirements of the specific job with the skills, abilities, knowledge and experiences of the individual. Some organizations will actually give greater weight to person-organization fit (e.g. "technical job skills can be trained quite easily , but it is much more difficult to train people on the core competencies"). This particularly makes sense in environments where the employee is likely to experience many job changes throughout his/her tenure with the organization. It is most important for an organization facing a dynamic and changing environment, and requiring employees who are able to readily change tasks and move fluidly between teams. Three attributes: Emotional Stability Conscientiousness Adaptability General Intelligence

2. You have an employee who repeatedly leaves his work station dirty and unsafe. You have been given the task to improve his behavior. Equipped with your new-found knowledge from MGTO 121, describe an effective strategy for bringing about effective behavioral change in this employee. Be specific. Scores will be given on the basis of appropriateness (likely effectiveness) of your response. The response you give should also be practical (realistic). Any program you come-up with must be sensitive to treating all employees fairly (for example, it would be unfair to reward Jim for keeping a clean work station, but not to reward his peers for keeping their work stations clean). (10 points) A good answer might include: Educate all workers on the importance of keeping their work station clean -training Set up clear expectations on what it means to keep a work station clean Develop a check-list that can be used for assessing work station cleanliness based on agreed-upon objective criteria Establish a means of randomly monitoring work stations. No need to do every day. Daily monitoring is an overkill, and administratively costly. Perhaps once or twice weekly would be sufficient. The workers who meet the standard X% of the time would qualify for entry into a monthly lottery. The lottery would allow for 3-5 winners (not just one winner). At the end of the year, persons who qualified for all monthly draws would become eligible for a year-end lottery (bigger prize). The lottery would be like a variable ratio schedule (in that winners of the lottery are not guaranteed to win every fixed number of lotteries; one could win two in a row, or win one in March, and not another one until February of the next year). Slowly (once every two months) increase the standard for eligibility for the lottery (move from meeting standard 60% of the time to 70% of the time, then 80% of the time etc.). Also, you could hang posters throughout the workplace encouraging cleanliness, in an effort to build a work culture for workplace cleanliness. You might also use peer pressure. A subtle means of using peer pressure is to put "star" beside the name of each worker meeting the cleanliness standard, following each inspection. This raises the visibility of the program, and one can see how they compare to their peers. Another means of creating peer pressure

3 is to create a system where teams must quality for eligibility for the lottery. That is, you could form 3-member teams. Presumably, the peer pressure of other team members would encourage all to ensure a clean work place. Here, you have two forces at play. The ongoing peer pressure, and the incentive of eligibility to participate in a lottery. Goal setting theory would suggest establishing clear, challenging, measurable and realistic goals for cleanliness of the workplace. Here, the goal should be established (perhaps in consultation with the employee), and this goal must be realistic and attainable. So, perhaps you might first set the objective of improved cleanliness of the work station, where improvement is somewhat short of the final standard you wish to achieve (e.g. empty trash can and clear sweep floor before leaving shift). Start in small achievable steps. Ideally, some praise or recognition should be given as the employee achieves each incremental goal. Expectancy theory would tie-in with goal setting theory, where you would need to determine a reward (something of value to the employee), make clear to the employee how they can achieve that reward (e.g. improved work station cleanliness), and ensure that you raise the person's self-confidence and skills to enable them to behave in the way required to achieve the goal (they must believe that if they put forth the effort, they will be capable of achieving the goal). Accordingly, perhaps providing some clear instruction/training on how to keep the work station clean would raise the self-confidence and expectancy level of the employee. Here, you are expected to show how you would apply expectancy theory to motivating behavioral change and performance outcomes. Of course, students may wish to discuss reinforcement theory/operant conditioning. Desired behavior is increased through providing rewards, and some reinforcement schedules are more effective than others. For example, perhaps an example of a variable ratio reinforcement schedule could be given.

3. Describe how multiple levels of reward can be used to improve the performance of bank service representatives at HSBC. Be very clear (explicit) in providing examples of how rewards are to be earned at each level. Secondly, explain the organizational benefits of using multiple levels of rewards. (10 points) Multiple levels of rewards refer to a multi-layered reward structure. Specifically, we wish to reward individuals for their job proficiency, and for their contributions to their team, branch office and overall organization (bank). Basically, you wish to ensure that there are goals and rewards associated with individual performance, team performance, unit/departmental performance, and overall organizational performance. For individual job proficiency, we might reward bank tellers with bonus dollars, public recognition (employee of month), or entry into a lottery. Such rewards can also be given for high attendance, correct cash balances for most successive days, fewest mistakes in processing financial transactions etc. Reward here is being tied to individual task performance. We could also link some reward (recognition pin) for being rated highest by ones peers for assisting other team members (awarded monthly). Here we are trying to reward for team contributions. We might also make available (monthly?) a pool of funds to allocate among service staff for achieving the highest branch-office customer satisfaction ratings, or fewest branch office transaction errors, compared to other bank branches (or distribute t-shirts rather than a cash bonus, which will promote branch cohesiveness). Here the reward is targeted to the branch-office level. Finally, we could employ a profit sharing scheme to reward employees for their overall contributions to the profit-level of the entire organization (e.g. the banks annual profit). By using rewards at multiple levels we are seeking to enhance performance at all levels (individual, team, branch office, and overall bank). This is a multiple level performance management system that aims to motivate people to contribute individually, and collectively, towards the overall objectives of the organization.

4. In the South China Morning Post, Thursday April 4, 2002, it was reported that
PCCW employees who "escaped the axe" in the recent lay-offs may soon receive bonuses of up to two month's wages. The bonus system is tied to profitability, but the amount allocated to each employee will depend on their individual performance contributions. This performance-based pay system is replacing the existing "13-month wage system". Terry Ip Ngok-fung, Chairman of the 2000 strong PCCW Staff Association is reported as having said "the bonus system will have no impact on morale". Question (s) 4.1 Do you think that management's intention of introducing the bonus system was specifically to "improve morale", or is PCCW's objectives likely to have been broader than this? Defend you position. If the objectives were broader, what broader objectives might PCCW have had in mind ? (2pts)

Possible "broader objectives" include:

To signal the institution of a high-performance culture To realize dollar savings in moving from a fixed salary structure to a partially variable one To financially protect the company from having to make pay-outs in nonprofitable years To provide greater accountability to the shareholders To establish a strong link between performance and rewards To introduce a more equitable compensation system To align employee interests with corporate interests (motivational technique and to enhance employee loyalty) To reward and retain high-achievement employees and encourage them to stay with PCCW To motivate the workforce toward quality, efficiency and overall performance improvements To make a public statement that PCCW is seriously involved in a longer term, and systematic change initiative, rather than simply "one-off" cost-cutting downsizing

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In making a strong and clear statement to the public about PCCW going to a performance based bonus system, coinciding with downsizing, shows increasing accountability to the stockholder, and may boost share price To be able to identify "low-performance" employees in the event of later downsizing To distract attention of the "survivors" from the layoff to "getting on with business" -- focusing on performance and associated financial incentives To remain competitive in a very competitive market

4.2 What types of employees are likely to respond most favorably to the replacement of the 13th month bonus with the pay-for-performance bonus scheme? (e.g. in terms of personality profile). (2 pts.).

Individuals who are high achievers (high in achievement motivation), who prefer to receive direct feedback in way of pay, for their individual performance contributions. Typically, pay for performance systems are more widely accepted in individualistic cultures than in collectivist cultures (e.g. West versus East). Accordingly, some students may have mentioned this (e.g. employees educated in the West, or Expatriates from the West). Also, individuals high in internal-locus of control are likely to respond favorably to a pay-for-performance bonus scheme.
4.3 What is the primary employee complaint about pay for performance systems,

and how can this be addressed? (2 pts.) The primary complaint is that the pay is not closely linked to performancethat performance measurement systems are not well developed, thereby not measuring objectively performance contributions. Some complain that performance ratings are overly influenced by subjective biases and preferences of the supervisor. This issue can be addressed by developing a transparent, fair, outcomes-based, or behaviorally-based performance evaluation process. One that employees can trust. Individuals on a purely pay-for-performance system may not like the unpredictability associated with such system (e.g. real estate agent or cell phone sales agent may never know what their salary will be). One way to deal with this is to have a fixed salary + performance-based bonus pay scheme. The benefits of a pay-for-performance scheme can also be discussed in reference to equity theory or reinforcement theory.

4.4 Would a "gain sharing" program be a good idea for PCCW? Define gain

sharing and defend your position (2 pts.). One of the most common of plant-wide pay plans is "gain sharing" . Gain sharing involves the sharing of the gains resulting from savings realized by cutting back costs on parts, materials and labour. Usually 75% of the costsavings go to the workers, and 25% goes to the organization. Gain sharing promotes cooperation, a sharing of common goals, and a focus on quality enhancement. Disadvantages of gain sharing include: protection of low performers (as they also benefit from distributed cost-savings); problems in costing out the savings; and management-labour conflict (over how best to put a dollar figure on savings). Conditions favouring gain sharing plans include: smaller firm size, technology that allows for enhancement of efficiencies, the availability of historical performance records (against which to benchmark any efficiency enhancements and cost-savings), a corporate culture of cooperation and quality enhancement, and a stable product market. Stable product markets are important. This is because in unstable markets, when products are not selling, the company is not brining in revenue. Yet, with gain sharing plans, employers are still committed to distributing cost-savings associated with enhanced efficiencies in manufacture of the product. Enhanced efficiencies may create more product, in less time, and at less cost, but if the product is not selling, these products are not generating revenue (and are "stock piled"). Accordingly, with a gain sharing plan, organizations may be caught with having to pay employees for the enhanced efficiencies, and yet be suffering on the revenue generation side. This is why gain sharing is most appropriate for organizations operating in stable markets. Accordingly, a gain-sharing plan is not likely to work well at PCCW. PCCW, does not have, nor have they had, a corporate culture of cooperation and quality enhancement (they are striving to build this now). Certainly, they do not have a stable product market, and this is a key reason for the recent mass layoffs. Gains-sharing programs are most suitable to manufacturing environments, whereas PCCW is more into providing services. Developing quantifiable metrics of efficiency improvements and coming up with clear benchmarks for these metrics, would be very challenging for PCCW.

4.5 Drawing from your knowledge of motivation theories and principles, defend the decision to replace the 13th month bonus with the new incentives-based bonus scheme at the PCCW. Be specific when making reference to the motivation theory/principle. (4 pt.)

Advantages/benefits may include:

The incentive bonus immediately focuses attention of survivors on performance (and away from the "negatives" of downsizing). Coupled with the downsizing, there is a very clear message to employees that it is not "business as usual" -- but a change to a new high-performance based culture Will assist in quickly restoring morale. Will clearly communicate a broader, longer-term and systemic change effort is underway Encourages the retention of high performers who might otherwise be tempted to search out alternative employment To build the company's image as a performance-driven company amidst public criticism, to develop confidence of stock holders Enhances public image in as much as it shows that the company is willing to share profits with its highest performing contributors Bringing in the performance-based bonus system at this time leverages "the momentum" of the downsizing toward "organizational renewal" -- it is best to get on with the new way of doing business as early as possible.

Based on motivation theories: Clearly, linking pay to performance is consistent with goal theory and expectancy theory. Where employees see a clear connection between their performance contributions, and the financial bonuses they receive (valued outcome), and given that they receive the training and other resources enabling them to meet the performance standards required for the financial bonuses (establishing expectancy that should they put forth the effort they can meet the performance standard), this should motivate them to high levels of performance (according to expectancy theory). With respect to goal setting theory, management should make sure that the performance standards that are required for the bonus are realistic, and moderately challenging, and provide for quick and transparent feedback (easily measurable and understood by employees).

4.6 What does the PCCW need to do to ensure that the bonus scheme is implemented in a way that maximizes its effectiveness in motivating high levels of employee performance? (Defend your recommendation(s) in terms of a specific motivation theory). (4 pts.).

PCCW must make certain that the performance standards required for the financial bonus are well defined, measurable, realistic, achievable, fair and objective. The performance measurement system must be perceived by employees as objectively administered, and related to their performance contributions. I've shown in 4.5 above how to link each of these aspects of the program to motivation theories.
4.7 Would providing for stock ownership be a good idea for: (a) PCCW

(employer) and (b) the employees? (Defend your position). (4 pts.) Sure, as you want people working together for the collective interest of PCCW. This is one way in which you could do this, while at the same time sharing financial risk between employees and PCCW during unstable markets. So, from the perspective of the employer, a stock ownership plan can serve as an incentive for collective performance among employees, while sharing financial risks with employees. From the employee perspective, it provides opportunity for financial gain when PCCW profits increase, and provides a reason to cooperate with other employees to advance efficiencies, productivity and profit of PCCW. Stock ownership links the interests of the employee with the collective interests of PCCW. Finally, for the employee, they pay taxes only on capital gains of their stock when they cash-in their stocks (deferred taxes), and taxes paid on capital gains is less than taxes paid on base income. For the employer, they don't actually have to make payouts until employees cash their stocks (deferred payment), allowing for cash flow (access to cash) during difficult economic times. Note that employee stock options are always given on top of a base salary, so employees do have some predictability in what they will earn in any given year.