Organizational Reward SystemsTO THE POINTWhat should managers do to improve job performance with intrinsic and extrinsic rewards?

Rewards are an ever-present and always controversial feature of organizational life. (Think of the ongoing debate over CEO compensation packages in the hundreds of millions of dollars.)55 Some employees see their jobs as the source of a paycheck and little else. Others derive great pleasure from their jobs and association with co-workers. In fact, according to a Gallup survey, 55% of American workers said “they would continue to work even if they won a lottery jackpot to the tune of $10 million.”56 (How about you?) Even volunteers who donate their time to charitable organizations, such as the Red Cross, walk away with rewards in the form of social recognition and pride of having given unselfishly of their time. Hence, the subject of organizational rewards includes, but goes far beyond, monetary compensation.57 This section examines key components of organizational reward systems to provide a conceptual background for discussing the timely topic of pay for performance.Despite the fact that reward systems vary widely, it is possible to identify and interrelate some common components. The model in Figure 9–2 focuses on three important components: (1) types of rewards, (2) distribution criteria, and (3) desired outcomes. Let us examine these components.

figure 9–2A General Model of Organizational Reward Systems

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 real WORLD // real PEOPLESeventy-one-Year-Old Judith Van Ginkel Loves 60-Hour WorkweeksJudith Van Ginkel is 71 years old and works 50 to 60 hours a week. And yet, “I'm the luckiest person I know,” she says.Here's why: Well beyond what many people consider retirement age, Van Ginkel (whose career has mostly been in medical administration) runs Every Child Succeeds, a home visitation program overseen by Cincinnati Children's Hospital. Over the past decade, the dozens of social workers on her team have checked in on 17,000 at-risk pregnant women and their children, ensuring that these growing families get proper medical care and support. As a result, the infant

mortality rate among participant families is well below the national average, despite their poverty rates—an outcome that Van Ginkel finds more exciting than playing golf. And so, “I'm going to continue doing this as long as I can do it well,” she tells me.

What role does intrinsic motivation play in this situation?SOURCE: L Vanderkam, “This Isn't Grandpa's Retirement,” USA Today, January 5, 2011, p 7A.

Types of Rewards

 LO.4Financial, material, and social rewards qualify as extrinsic rewards because they come from the environment. Psychic rewards, however, are intrinsic rewards because they are self-granted. An employee who works to obtain extrinsic rewards, such as money or praise, is said to be extrinsically motivated. One who derives pleasure from the task itself or experiences a sense of competence or self-determination is said to be intrinsically motivated (see Real World/Real People). The relative importance of extrinsic and intrinsic rewards is a matter of culture and personal tastes.58

Back to the Chapter-Opening CaseWhy is volunteering so intrinsically rewarding?

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Reward Distribution CriteriaAccording to one expert on organizational reward systems, three general criteria for the distribution of rewards are as follows: Performance: results. Tangible outcomes such as individual, group, or organization

performance; quantity and quality of performance. Performance: actions and behaviors. Such as teamwork, cooperation, risk taking, creativity. Nonperformance considerations. Customary or contractual, where the type of job, nature of

the work, equity, tenure, level in hierarchy, and so forth are rewarded.59

One trend today is toward performance criteria and away from nonperformance criteria such as seniority. Another trend involves mixing reward distribution criteria: Westinghouse Electric is a recent case in point: “To ensure the rank and file get in gear, managers are now being graded not just on the dollars they generate but also on how many customers they've spoken to and how many proposals they've sent out.”60

 Go to www.mcgrawhillconnect.com for a video case to test your knowledge on the foundations of motivation at Hot Topic.

Desired Outcomes of the Reward SystemAs listed in Figure 9–2, a good reward system should attract talented people and motivate and satisfy them once they have joined the organization. Further, a good reward system should foster personal growth and development and keep talented people from leaving. A prime example is Tulsa-based QuikTrip: “Employees are treated so well at this 24-hour convenience chain—wages, benefits, and training—that they stay around for the long haul. More than 200 have been here more than 20 years.”61

The Building Blocks of Intrinsic Rewards and MotivationAs defined earlier, intrinsic rewards are self-granted. But this does not leave management out of the picture. Indeed, there is a great deal managers can do to create situations in which employees are more likely to experience intrinsic rewards and be intrinsically motivated. Kenneth Thomas's model of intrinsic motivation provides helpful direction.62 His model combines elements of job design (discussed in Chapter 8), the concept of empowerment (discussed in Chapter 15), and Edward Deci and Richard Ryan's cognitive evaluation theory. Deci and Ryan contend that people must satisfy their needs for autonomy and competence when completing a task for it to be intrinsically motivating.63 Thomas uses the concept of building blocks to show managers how to construct the right conditions for four basic intrinsic rewards: meaningfulness, choice, competence, and progress (see Figure 9–3). Let us examine management's leadership challenges for each building block.

figure 9–3Thomas's Building Blocks for Intrinsic Rewards and MotivationSOURCE: Reprinted with permission of the publisher. From K Thomas, Intrinsic Motivation at Work: Building Energy and Commitment. Copyright © 2000 by K Thomas, Berrett-Koehler Publishers, San Francisco, CA. All rights reserved.www.bkconnection.com.

Unpaid community service volunteers are intrinsically rewarded with the satisfaction of expanding their comfort zone while helping others. Are you a volunteer?

Leading for Meaningfulness Managers lead for meaningfulness by inspiring their employees andmodeling desired behaviors. Figure 9–3 reveals how managers can accomplish this by helping employees to identify their passions at work and creating an exciting organizational vision employees feel connected to. In support of this recommendation, results from Gallup poll surveys show that employees are more engaged and productive when they see the connection between their work and the organization's vision.64 This connection creates a sense of purpose for employees. Some jobs are so vital that they inherently foster a strong sense of meaningfulness. For example, consider this unique job at America's largest nuclear power plant near Phoenix:

Page 252Example. By 6 am, Michelle Catts is making her way to the office past guards armed with automatic weapons, ultrasensitive X-ray machines, electronic gates and sensors that sniff out explosives.…Catts is one of four Nuclear Regulatory Commission inspectors at the plant serving as government watchdogs to make sure Arizona Public Service Co finds problems before they affect safety.…“My job every day is to make sure this plant is operating safely,” Catts said. “That's a pretty important job. It's a good feeling at the end of the day to know I found important things to ask about.”65

Page 253Leading for Choice Managers lead for choice by empowering employees and delegating meaningful assignments and tasks. This is how Gail Evans, an executive vice president at Atlanta-based CNN, feels about leading for choice.Example. [She] says delegating is essential. If you refuse to let your staff handle their own projects, you're jeopardizing their advancement—because they aren't learning new skills and adding successes to their resume—and you're wasting your precious hours doing someone else's work.66

Leading for Competence This involves supporting and coaching employees. Figure 9–3 lists key factors and actions for enhancing a sense of competence. Managers first need to

make sure employees have the knowledge needed to successfully perform their jobs. Deficiencies can be handled through training and mentoring. Providing positive feedback and sincere recognition can also be coupled with the assignment of a challenging task to fuel employees' intrinsic motivation.Leading for Progress Managers lead for progress by monitoring and rewarding others. Douglas R Conant, CEO of Campbell Soup Company, has engineered a remarkable turnaround and is a good role model in this regard:Example. The turnaround has been catalyzed by cost-cutting, smart innovations, and a concerted effort to reinvigorate the workforce.…Conant hasn't shaken up a complacent 137-year-old company by being in-your-face. He happily gives others credit and deflects praise. He's not brash.… In his time at Campbell, he has sent out more than 16,000 hand-written thank-you notes to staffers, from the chief investment officer to the receptionist at headquarters—notes often found hanging in people's offices or above their desks. “[In business] we're trained to find things that are wrong, but I try to celebrate what's right,” says Conant.67

We now direct our attention to extrinsic rewards—money, opportunities, and recognition granted by others.

Why Do Extrinsic Rewards Too Often Fail to Motivate?

 LO.5Despite huge investments of time and money for monetary and nonmonetary compensation, the desired motivational impact often is not achieved. A management consultant/writer offers these eight reasons:1. Too much emphasis on monetary rewards.2. Rewards lack an “appreciation effect.”3. Extensive benefits become entitlements.4. Counterproductive behavior is rewarded. (For example, “a pizza delivery company focused

its rewards on the on-time performance of its drivers, only to discover that it was inadvertently rewarding reckless driving.”)68

5. Too long a delay between performance and rewards.6. Too many one-size-fits-all rewards.7. Use of one-shot rewards with a short-lived motivational impact.8. Continued use of demotivating practices such as layoffs, across-the-board raises and cuts,

and excessive executive compensation.69

These stubborn problems have fostered a search for more effective extrinsic reward practices. While a thorough discussion of modern compensation practices is way beyond our present scope, we can explore a general approach to boosting the motivational impact of monetary rewards—pay for performance.

Pay for PerformancePay for performance is the popular term for monetary incentives linking at least some portion of the paycheck directly to results or accomplishments. Many refer to it simply as incentive pay, while others call it variable pay. “Broad-based variable pay programs are offered by 80% of US companies.”70 The general idea behind pay-for-performance schemes—including but not limited to merit pay, bonuses, and profit sharing—is to give employees an incentive for working harder or smarter. Pay for performance is something extra, compensation above and beyond basic wages and salaries. Proponents of incentive compensation say something extra is needed

because hourly wages and fixed salaries do little more than motivate people to show up at work and put in the required hours.71 The most basic form of pay for performance is the traditional piece-rate plan, whereby the employee is paid a specified amount of money for each unit of work. For example, 2,500 artisans at Longaberger's, in Frazeyburg, Ohio, are paid a fixed amount for each handcrafted wooden basket they weave. Together, they produce 40,000 of the prized maple baskets daily.72 Sales commissions, whereby a salesperson receives a specified amount of money for each unit sold, is another long-standing example of pay for performance.73 Today's service economy is forcing management to adapt creatively and go beyond piece rate and sales commission plans to accommodate greater emphasis on product and service quality, interdependence, and teamwork.

These folks not only make really cool picnic baskets, they actually work inside one! Longaberger's headquarters building in Frazeyburg, Ohio, is a giant replica of the firm's famous maple wood baskets. Each day, 2,500 employees—who are paid on a piece-rate basis—weave 40,000 hand-crafted baskets. This team of Longaberger employees won a prestigious quality award for cutting waste and improving productivity.

Page 254Modern Incentive Pay Plans With everything from on-the-spot cash awards to team-based pay to skill-based pay, today's incentive compensation practices are still very much in the experimental stage. Much remains to be learned from research and practice. Meanwhile, the major take-away lesson is that it is foolish to even contemplate a one-size-fits-all approach to incentive compensation.Research Insights According to available expert opinion and research results, pay for performance too often falls short of its goal of improved job performance. “Experts say that roughly half the incentive plans they see don't work, victims of poor design and administration.”74 In fact, one study documented how incentive pay had anegative effect on the performance of 150,000 managers from 500 financially distressed companies.75 A meta-analysis of 39 studies found only a modest positive correlation between financial incentives and performancequantity and no impact on performance quality.76 Other researchers have found only a weak statistical link between large executive bonuses paid out in good years and subsequent improvement in corporate profitability.77 Also, in a survey of small business owners, more than half said their commission plans failed to motivate extra effort from their salespeople.78 Linking

teachers' merit pay to student performance, a highly touted school reform idea, has had mixed results.A study of variable pay plans by Hewitt Associates, a leading human resources consulting firm, uncovered this instructive pattern:Example. [M]ore than one-third (41%) of the companies with single-digit revenue growth said the cost outweighed the benefits for them. Not only have the plans failed to improve business results for a quarter of these organizations, they have actually led to adverse results for 26% of those surveyed.The situation was reversed, however, for companies experiencing double-digit revenue growth. These companies reported that their programs achieved positive outcomes and contributed to business results. “We've found that companies achieving high-revenue growth have successful programs because they provide the appropriate amount of administrative, communication and monetary support,” says Paul Shafer, a business leader for Hewitt. If not implemented well, he says, variable pay “will be seen as an entitlement by employees and a substantial loss to employers.”79

Page 255Clearly, the pay-for-performance area is still very much up in the air.

Getting the Most Out of Extrinsic Rewards and Pay for Performance

 LO.6Based on what we have learned to date, here is a workable plan for maximizing the motivational impact of extrinsic rewards: Tie praise, recognition, and noncash awards to specific results. Make pay for performance an integral part of the organization's basic strategy (e.g., pursuit

of best-in-the-industry product or service quality). Base incentive determinations on objective performance data. Have all employees actively participate in the development, implementation, and revision of

the performance-pay formulas. Encourage two-way communication so problems with the incentive plan will be detected

early. Build pay-for-performance plans around participative structures such as suggestion systems

or problem-solving teams. Reward teamwork and cooperation whenever possible. Actively sell the plan to supervisors and middle managers who may view employee

participation as a threat to their traditional notion of authority. If annual cash bonuses are granted, pay them in a lump sum to maximize their motivational

impact. Selectively use creative noncash rewards to create buzz and excitement.80

Positive Reinforcement LO.7

Feedback and extrinsic reward programs too often are ineffective because they are administered in haphazard ways.81 For example, consider these scenarios: A young programmer stops e-mailing creative suggestions to his boss because she never

responds. The office politician gets a great promotion while her more skilled co-workers scratch their

heads and gossip about the injustice.In the first instance, a productive behavior faded away for lack of encouragement. In the second situation, unproductive behavior was unwittingly rewarded. Feedback and rewards need to be handled more precisely. Fortunately, the field of behavioral psychology can help. Thanks to the pioneering work of Edward L Thorndike, B F Skinner, and many others, a behavior modification technique called positive reinforcement helps managers achieve needed discipline and desired effect when providing feedback and granting extrinsic rewards.

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Thorndike's Law of EffectDuring the early 1900s, Edward L Thorndike observed in his psychology laboratory that a cat would behave randomly and wildly when placed in a small box with a secret trip lever that opened a door. However, once the cat accidentally tripped the lever and escaped, the animal would go straight to the lever when placed back in the box. Hence, Thorndike formulated his famous law of effect, which says behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear.82 This was a dramatic departure from the prevailing notion a century ago that behavior was the product of inborn instincts.

Skinner's Operant Conditioning ModelSkinner refined Thorndike's conclusion that behavior is controlled by its consequences. Skinner's work became known as behaviorism because he dealt strictly with observable behavior.83 As a behaviorist, Skinner believed it was pointless to explain behavior in terms of unobservable inner states such as needs, drives, attitudes, or thought processes.84 He similarly put little stock in the idea of self-determination.In his 1938 classic, The Behavior of Organisms, Skinner drew an important distinction between the two types of behavior: respondent and operant behavior.85 He labeled unlearned reflexes, or stimulus–response (S–R) connections, respondent behavior. This category of behavior was said to describe a very small proportion of adult human behavior. Examples of respondent behavior would include shedding tears while peeling onions and reflexively withdrawing one's hand from a hot stove.86 Skinner attached the label operant behavior to behavior that is learned when one “operates on” the environment to produce desired consequences. Some call this the response–stimulus (R–S) model. Years of controlled experiments with pigeons in “Skinner boxes” helped Skinner develop a sophisticated technology of behavior control, or operant conditioning. For example, he taught pigeons how to pace figure-eights and how to bowl by reinforcing the under-weight (and thus hungry) birds with food whenever they more closely approximated target behaviors. Skinner's work spawned the field of behavior modification and has significant implications for OB because the vast majority of organizational behavior falls into the operant category.87

Renowned behavioral psychologist B F Skinner and your co-author Bob Kreitner met and posed for a snapshot at an Academy of Management meeting in Boston. As a behaviorist, Skinner preferred to deal with observable behavior and its antecedents and consequences in the environment rather than with inner states such as attitudes and cognitive processes. Professor Skinner was a fascinating man who left a permanent mark on modern psychology.

Contingent ConsequencesContingent consequences, according to Skinner's operant theory, control behavior in four ways: positive reinforcement, negative reinforcement, punishment, and extinction. The term contingent means there is a systematic if-then linkage between the target behavior and the consequence. Remember Mom (and Pink Floyd) saying something to this effect: “If you don't finish your dinner, you don't get dessert”? (See Figure 9–4.) To avoid the all-too-common mislabeling of these consequences, let us review some formal definitions.

figure 9–4Contingent Consequences in Operant Conditioning

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 LO.8Positive Reinforcement Strengthens Behavior Positive reinforcement is the process of strengthening a behavior by contingently presenting something pleasing. (Importantly, a behavior is strengthened when it increases in frequency and weakened when it decreases in frequency.) A software engineer who volunteers for overtime because of praise and recognition from the boss is responding to positive reinforcement. In a recent field study, university fundraisers increased their number of calls after hearing a message of gratitude from their manager.88 Indeed, busy managers need to be reminded about the powerful positive reinforcement effect of a simple “thank you,” expressions of gratitude, and praise. When 388 administrative professionals were asked to rank their “most preferred forms of recognition in the workplace,” verbal recognition came in number one at 42%. (Cash bonuses trailed at 19%.)89

A corporate culture built on positive reinforcement can foster loyalty, hard work, and creativity. This is especially true in hard economic times, as exemplified by JM Family Enterprises in Deerfield Beach, Florida:Example. Amid falling sales, many intensely loyal employees at this privately held Toyota distributor volunteered to forgo bonuses. CEO Colin Brown rejected their offers and paid out bonuses, but asked for their support in cutting costs elsewhere in the company.90

Negative Reinforcement Also Strengthens Behavior Negative reinforcement is the process of strengthening a behavior by contingently withdrawing something displeasing. For example, an army drill sergeant who stops yelling when a recruit jumps out of bed has negatively reinforced that particular behavior. Similarly, the behavior of clamping our hands over our ears when watching a jumbo jet take off is negatively reinforced by relief from the noise. Negative reinforcement is often confused with punishment. But the two strategies have opposite effects on behavior. Negative reinforcement, as the word reinforcement indicates, strengthens a behavior because it provides relief from an unpleasant situation.

 Go to www.mcgrawhillconnect.com for an interactive exercise to test your knowledge of positive reinforcement.

Page 258Punishment Weakens Behavior Punishment is the process of weakening behavior through either the contingent presentation of something displeasing or the contingent withdrawal of something positive. A manager assigning a tardy employee to a dirty job exemplifies the first type of punishment. Docking a tardy employee's pay is an example of the second type of punishment, called response cost punishment. Legal fines involve response cost punishment. Salespeople who must make up any cash register shortages out of their own pockets are being managed through response cost punishment. Ethical questions can and should be raised about this type of on-the-job punishment.91

Extinction Also Weakens Behavior Extinction is the weakening of a behavior by ignoring it or making sure it is not reinforced. Getting rid of a former boyfriend or girlfriend by refusing to take his or her calls is an extinction strategy. A good analogy for extinction is to imagine what would happen to your houseplants if you stopped watering them. Like a plant without water, a behavior without occasional reinforcement eventually dies. Although very different processes, both punishment and extinction have the same weakening effect on behavior.

Schedules of ReinforcementAs just illustrated, contingent consequences are an important determinant of future behavior. The timing of behavioral consequences can be even more important. Based on years of tedious laboratory experiments with pigeons in highly controlled environments, Skinner and his colleagues discovered distinct patterns of responding for various schedules of reinforcement.92

Although some of their conclusions can be generalized to negative reinforcement, punishment, and extinction, it is best to think only of positive reinforcement when discussing schedules.Continuous Reinforcement Every instance of a target behavior is reinforced when a continuous reinforcement (CRF) schedule is in effect. For instance, when your iPhone is operating properly, you are reinforced with a screen display and sound every time you turn it on (a CRF schedule). But, as with any CRF schedule of reinforcement, the behavior of turning on the device will undergo rapid extinction if it is unresponsive.Intermittent Reinforcement Unlike CRF schedules, intermittent reinforcement involves reinforcement of some but not all instances of a target behavior. Four subcategories of intermittent schedules are fixed and variable ratio schedules and fixed and variable interval schedules. Reinforcement in ratio schedules is contingent on the number of responses observed. Interval reinforcement is tied to the passage of time. Some common examples of the four types of intermittent reinforcement are as follows:1. Fixed ratio. Piece-rate pay; bonuses tied to the sale of a fixed number of units.2. Variable ratio. Slot machines that pay off after a variable number of lever pulls; lotteries that

pay off after the purchase of a variable number of tickets.3. Fixed interval. Hourly pay; annual salary paid on a regular basis.4. Variable interval. Random supervisory praise and pats on the back for employees who have

been doing a good job.Page 259

Scheduling Is Critical The schedule of reinforcement can more powerfully influence behavior than the magnitude of reinforcement. Although this proposition grew out of experiments with pigeons, subsequent on-the-job research confirmed it. Consider, for example, a field study of 12 unionized beaver trappers employed by a lumber company to keep the large rodents from eating newly planted tree seedlings.93

The beaver trappers were randomly divided into two groups that alternated weekly between two different bonus plans. Under the first schedule, each trapper earned his regular $7 per hour wage plus $1 for each beaver caught. Technically, this bonus was paid on a CRF schedule. The second bonus plan involved the regular $7 per hour wage plus a one-in-four chance (as determined by rolling the dice) of receiving $4 for each beaver trapped. This second bonus plan qualified as a variable ratio (VR-4) schedule. In the long run, both incentive schemes averaged out to a $1-per-beaver bonus. Surprisingly, however, when the trappers were under the VR-4 schedule, they were 58% more productive than under the CRF schedule, despite the fact that the net amount of pay averaged out the same for the two groups during the 12-week trapping season.Work Organizations Typically Rely on the Weakest Schedule Generally, variable ratio and variable interval schedules of reinforcement produce the strongest behavior that is most resistant to extinction. As gamblers will attest, variable schedules hold the promise of reinforcement after the next try. For example, the following drama at a Laughlin, Nevada, gambling casino is one more illustration of the potency of variable ratio reinforcement:Example. An elderly woman with a walker had lost her grip on the slot [machine] handle and had collapsed on the floor.“Help,” she cried weakly.

The woman at the machine next to her interrupted her play for a few seconds to try to help her to her feet, but all around her the army of slot players continued feeding coins to the machines.A security man arrived to soothe the woman and take her away.“Thank you,” she told him appreciatively. “But don't forget my winnings.”94

Organizations without at least some variable reinforcement are less likely to prompt this type of dedication to task. A good example is Zappos, the Las Vegas–based online retailer, where “any employee can give any other employee a $50 bonus for a job well done.”95

Unfortunately, time-based pay schemes such as hourly wages and yearly salaries that rely on the weakest schedule of reinforcement (fixed interval) are still the rule in today's workplaces. In fact, according to the US Bureau of Labor Statistics, “59 percent of US workers are paid by the hour.”96 While a steady paycheck is always welcome, it lacks the “surprise effect,” something akin to drawing a winning “full house” in a poker game. Creative managers know how to tap the power of variable reinforcement. For example,

Page 260Example. Ami Dar, who founded and runs idealist.org, picks one day a year to declare a Sun Day. He waits for the weatherman to alert him to a Tiffany-blue sky, cool breezes, and sunshine—and then he alerts his staff that the doors to the office will be closed and they'd better spend some time outside. A few people may panic at the thought of rescheduling meetings and missing emails, but Ami … [says] that they come back to work the next day with a little more … bounce in their steps. One of the keys to the success of a Sun Day? The element of surprise. It jars folks out of their routines and gives a (pleasant) shock to their senses. It also makes them feel doubly appreciated, in a way that you don't when a gift is expected.97

Back to the Chapter-Opening CaseIs there any form of variable reinforcement in NuStar's compensation plan that could boost employees' motivation with a surprise effect?

Behavior Shaping

 LO.9Have you ever wondered how trainers at aquarium parks manage to get bottle-nosed dolphins to do flips, killer whales to carry people on their backs, and seals to juggle balls? The results are seemingly magical. Actually, a mundane learning process called shaping is responsible for the animals' antics.Two-ton killer whales, for example, have a big appetite, and they find buckets of fish very reinforcing. So if the trainer wants to ride a killer whale, he or she reinforces very basic behaviors that will eventually lead to the whale being ridden. The killer whale is contingently reinforced with a few fish for coming near the trainer, then for being touched, then for putting its nose in a harness, then for being straddled, and eventually for swimming with the trainer on its back. In effect, the trainer systematically raises the behavioral requirement for reinforcement.98Thus, shaping is defined as the process of reinforcing closer and closer approximations to a target behavior.

Okay, so what's the trick? Actually, a rather simple process called behavior shaping by trainers can get killer whales to eventually perform complex stunts. The whales like fish, lots of it. So they will learn progressively more difficult tasks to be positively reinforced with some fish.

Shaping works very well with people, too, especially in training and quality programs involving continuous improvement. Praise, recognition, and instructive and credible feedback cost managers little more than moments of their time. Yet, when used in conjunction with learning goals and a behavior-shaping program, these consequences can efficiently foster significant improvements in job performance. The key to successful behavior shaping lies in reducing a complex target behavior to easily learned steps and then faithfully (and patiently) reinforcing any improvement. For example, Continental Airlines used a cash bonus program to improve its on-time arrival record from one of the worst in the industry to one of the best. Employees originally were promised a $65 bonus each month Continental earned a top-five ranking. Now it takes a second- or third-place ranking to earn the $65 bonus, and a $100 bonus awaits employees when they achieve a number one ranking.99 (Table 9–3 lists practical tips on shaping.)

table 9–3Ten Practical Tips for Shaping Job Behavior

1. Accommodate the process of behavioral change. Behaviors change in gradual stages, not in broad, sweeping motions.

2. Define new behavior patterns specifically. State what you wish to accomplish in explicit terms and in small amounts that can be easily grasped.

3. Give individuals feedback on their performance. A once-a-year performance appraisal is not sufficient.

4. Reinforce behavior as quickly as possible.

5. Use powerful reinforcement. To be effective, rewards must be important to the employee—not to the manager.

6. Use a continuous reinforcement schedule. New behaviors should be reinforced every time they occur. This reinforcement should continue until these behaviors become habitual.

7. Use a variable reinforcement schedule for maintenance. Even after behavior has become habitual, it still needs to be rewarded, though not necessarily every time it occurs.

8. Reward teamwork—not competition. Group goals and group rewards are one way to encourage cooperation

in situations in which jobs and performance are interdependent.

9. Make all rewards contingent on performance.

10. Never take good performance for granted. Even superior performance, if left unrewarded, will eventually deteriorate.