Comprehensive lecture notes from the course Advanced Human Resources: Appraisal and Reward (P_MADVHR) written in English. This course is part of the Master's degree in Work & Organizational Psychology. Examples and images are used to make the text/terms clearer.
Advanced Human Resources: Appraisal and Reward
Lecturer: Kilian Wawoe
Lecture 1: 02 sep 2024
Introduction
For decades, job appraisals and rewards have been used as a mean to an end. It is used to
increase motivation, engagement, attracting talent and more.
However, work has changed and so have the workers. As a result, appraisal and reward
nowadays do not yield the same results as before. So, if reward/appraisal doesn’t lead to better
performance or happy employees, what does?
Why would you reward employees? Mostly to increase satisfaction, performance, motivation,
retention, appreciation, fairness and talent management.
A reward is a financial compensation for employment (cash and non-cash)
Definitions:
Performance appraisal/evaluation refers to a formal process, which occurs
infrequently, by which employees are evaluated by some judge or supervisor who
assess the employee’s performance along a given set of dimensions, assigns a score to
that assessment and then usually informs the employee of his or her formal rating
Performance management refers to the wide variety of activities, policies,
procedures and interventions designed to help employees improve their performance,
can be seen as a circle
Strategy is a high-level plan to achieve one or more goals under
conditions of uncertainty, for example, managers use money to
achieve something
Variable pay is a non-fixed monetary reward paid by an
employer to an employee that is contingent on discretion,
performance or results achieved, the most common forms of
variable pay are bonuses and incentives
According to Karl Marx, the world is divided in the bourgeois democracy (the richest 1% of
the world) and the proletariat (the poorest people that had nothing but their children). The rich
become richer and the poor become poorer. However, he was partly right, the rich became
richer indeed, but so did the poor people.
Karl Marx was the first philosopher to think of being paid to work in terms of fairness. Marx
holds that the work has the potential to be something creative and fulfilling.
Scientific management is a management theory that analyzes workflows to improve
economic efficiency, especially labor productivity
1
, Taylorism is a method of industrial management design to increase efficiency and
productivity, processes are examined and optimized precisely and systematically in
order to reduce costs and increase quality
Taylorism: simple, easy to measure, individualistic, low intrinsic motivation (people
are lazy), employees are easy to replace, poor employees and low skilled people
Professional: complex, people work in groups, high intrinsic motivation, employees
are difficult to replace, affluent and high skilled people
Frederick Taylor assumed that productivity could increase by making jobs simpler and
optimizing them, he believed people are naturally lazy, so making people work as hard as they
could was not as efficient as optimizing the way the work was done.
Four principles of Taylorism:
Develop a scientific approach for each element of
one’s work
Scientifically select, train, teach and develop each
worker
Cooperate with workers to ensure that jobs match
plans and principles
Ensure appropriate division of labor
Scientific management is the management of a business, industry or economy, according to
principles of efficiency derived from experiments in methods of work and production,
especially from time-and-motion studies. Money > motivation > performance.
Lecture 2: 04 sep 2024
Performance Management
Important points in the article of Denisi & Murphy, 2017:
Rating scales, an overview of certain categories that are used to rate performances, all
of these categories have a certain weight attached to them (how important they are), a
rating format used to make an appraisal
Evaluating the quality of rating data/scale, there is always a bias by the rater
Training, it does help to provide training, however, it does not work when you train
people not to do something (for example, do not discriminate!), it does help when you
educate people on what is good/expected behavior vs what is bad behavior
Purpose for appraisal
Rating sources
Demographic effects, performance measurement vs real life reward
Cognitive processes, the recency effect is a cognitive bias in which those items, ideas
or arguments that came last are remembered more clearly than those that came first, so
recent events are remembered better, the primary effect is opposite
Performance management research, does a performance appraisal lead to better
performance and is there a difference in individual/team/organizational performances?
2
, Performance appraisal does not necessarily improve performances, on the individual level
there is a little effect, but on the macro levels there is not. Mainly because it tells you what
you are already doing and what you should do (facts), it does not help you learn.
Coaching on the other hand does work, because it helps you to find solutions to the problems
you are facing
It is a form of development in which an experienced person supports a learner or client
in achieving a specific personal or professional goal by providing training and
guidance
It helps you learn and achieve goals and look at the future to become a better version
of yourself, instead of stating what you already know
Coaching is based on your potential and searches for ways to improve
SMART stands for specific, measurable, attainable, result, time-bound. It is a way to measure
performance.
Training works when consistent conceptions of what represents good versus poor
performance are explained and what behaviors and competencies constitute performance to be
beneficial, trainings need to be specific and focused on wanted behavior to work.
Idiosyncratic means that it is a personal/individual opinion (eigenaardig), for example with
performance appraisal, the outcome says more about the person appraising than about the
person being appraised
This is an example of the idiosyncratic rater effect (IRE), a psychological
phenomenon that occurs when multiple evaluators perceive the same piece of work or
individual differently, we are not fully objective
There is a lot of bias when looking at certain people, for example, ingroup members
are favored over outgroup members
Data that is found in studies can be really different than the situations we see in real life.
On the folly of rewarding A, while hoping for B (Steven Kerr, 1995). This means that it is
foolish to reward certain behavior, while you want to achieve something else. He states that
the society is focused on rewarding the wrong things which leads to unwanted behavior.
For example, universities focus on students getting their diploma, while they actually want
students to learn something they like rather than graduating. The means do not match with the
end.
Lecture 3: 09 sep 2024
Motivation
3
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