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  1. Define the term performance management, distinguish between learning goals and performance outcome goals, and explain the three-step goal-setting process. Performance management is a continuous cycle of improving individual job performance with goal setting, feedback and coaching, and rewards and positive reinforcement. Learning goals encourage learning, creativity, and skill development. Performance outcome goals target specified end-results. The three-step goal-setting process includes (1) set goals that are SMART—specific, measurable, attainable, results oriented, and time bound; (2) promote goal commitment with clear explanations, participation, and supportiveness; (3) provide support and feedback by providing information, needed training, and knowledge of results.

  2. Identify the two basic functions of feedback, and specify at least three practical lessons from feedback research. Feedback, in the form of objective information about performance, both instructs and motivates. Feedback is not automatically accepted as intended, especially negative feedback. Managerial credibility can be enhanced through expertise and a climate of trust. Feedback must not be too frequent or too scarce and must be tailored to the individual. Feedback directly from computers is effective. Active participation in the feedback session helps people perceive feedback as more accurate. The quality of feedback received decreases as one moves up the organizational hierarchy.

  3. Define 360-degree feedback, and summarize how to give good feedback in a performance management program. A focal person receives anonymous 360-degree feedback from subordinates, the manager, peers, and selected others such as customers or suppliers. Good feedback is tied to performance goals and clear expectations, linked with specific behavior or results, reserved for key result areas, given as soon as possible, provided for improvement as well as for final results, focused on performance rather than on personalities, and based on accurate and credible information.

  4. Distinguish between extrinsic and intrinsic rewards, and explain the four building blocks of intrinsic rewards and motivation. Extrinsic rewards—including pay, material goods, and social recognition—are granted by others. Intrinsic rewards are psychic rewards, such as a sense of competence or a feeling of accomplishment, that are self-granted and experienced internally. According to Thomas’s model, the four basic intrinsic rewards are meaningfulness, choice, competence, and progress. Managers can boost intrinsic motivation by letting employees work on important whole tasks (meaningfulness), delegating and trusting (choice), providing challenge and feedback (competence), and collaboratively celebrating improvement (progress).

  5. Summarize the reasons why extrinsic rewards often fail to motivate employees. Extrinsic reward systems can fail to motivate employees for these reasons: overemphasis on money, no appreciation effect, benefits become entitlements, wrong behavior is rewarded, rewards are delayed too long, use of one-size-fits-all rewards, one-shot rewards with temporary impact, and demotivating practices such as layoffs.

  6. Discuss how managers can generally improve extrinsic reward and pay-for-performance plans. They need to be strategically anchored, based on quantified performance data, highly participative, actively sold to supervisors and middle managers, and teamwork oriented. Annual bonuses of significant size are helpful.

  7. State Thorndike’s law of effect, and explain Skinner’s distinction between respondent and operant behavior. According to Edward L Thorndike’s law of effect, behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear. B F Skinner called unlearned stimulus–response reflexes respondent behavior. He applied the term operant behavior to all behavior learned through experience with environmental consequences.

  8. Define positive reinforcement, negative reinforcement, punishment, and extinction, and distinguish between continuous and intermittent schedules of reinforcement. Positive and negative reinforcement are consequence management strategies that strengthen behavior, whereas punishment and extinction weaken behavior. These strategies need to be defined objectively in terms of their actual impact on behavior frequency, not subjectively on the basis of intended impact.
    Every instance of a behavior is reinforced with a continuous reinforcement (CRF) schedule. Under intermittent reinforcement schedules—fixed and variable ratio or fixed and variable interval—some, rather than all, instances of a target behavior are reinforced. Variable schedules produce the most extinction-resistant behavior.

  9. Demonstrate your knowledge of behavior shaping. Behavior shaping occurs when closer and closer approximations of a target behavior are reinforced. In effect, the standard for reinforcement is made more difficult as the individual learns. The process begins with continuous reinforcement, which gives way to intermittent reinforcement when the target behavior becomes strong and habitual.

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