MOTIVATING OTHERS CHAPTER 6 337
The relevant diagnostic question here is, “Do
subordinates feel being a high performer is more
rewarding than being a low or average performer?”
Our discussion of this important element of an effec-
tive motivational program is based on two related
principles: (1) in general, managers should link
rewards to performance, rather than seniority or mem-
bership; and (2) managers should use discipline to
extinguish counterproductive behaviors and use
rewards to reinforce productive behaviors.
Use Rewards as Reinforcers
Here is the key to encouraging high performance:
behaviors that positively affect performance should be
contingently reinforced, using highly desirable rewards.
When rewards are linked to desired behaviors, they
reinforce (strengthen; increase the frequency of) that
behavior (Luthans & Stajkovic, 1999; Stajkovic &
Luthans, 2001). If an organization rewards all people
identically, or on some basis other than performance,
then high performers are likely to feel they are receiving
fewer “rewards” than they deserve. Obviously, high per-
formers are the key to the success of any organization.
Therefore, motivational schemes should be geared to
keeping this employee group satisfied. This observation
has led some organizational consultants to use the per-
formance ratings of individuals leaving an organization
as an index of the organization’s motivational climate.
Ed Lawler, one of the foremost authorities on
reward systems, underscored this point when he said,
“Often the early reward systems of an organization are
particularly important in shaping its culture. They
reinforce certain behavior patterns and signal how
highly valued different individuals are by the organiza-
tion. They also attract a certain type of employee and
in a host of little ways indicate what the organization
stands for and values” (Lawler, 2000a, p. 39).
The principle that rewards should be linked to per-
formance points to a need for caution regarding the prac-
tice in some organizations of minimizing distinctions
between workers. Some “progressive” organizations
have received considerable publicity for motivational
programs that include providing recreational facilities,
library services, day care, and attractive stock option pro-
grams for all employees. These organizations work hard
to reduce status distinctions by calling everyone “associ-
ates” or “partners,” eliminating reserved parking places,
and instituting a company uniform. Although there
are obvious motivational benefits from employees feel-
ing they are receiving basically the same benefits
(“perks”) regardless of seniority or level of authority, this
motivational philosophy, when carried to an extreme or
implemented indiscriminately, runs the risk of under-
mining the motivation of high performers. In an era of
egalitarianism, managers often overlook the vital link
between performance and rewards and as a conse-
quence find it difficult to attract and retain strong per-
formers (Pfeffer, 1995).
Fortunately, many firms recognize this pitfall. In a
survey, 42 percent of 125 organizations contacted indi-
cated they had made changes in their compensation
plan during the previous three years to achieve a better
link between pay and performance (Murlis & Wright,
1985). These respondents reported an interesting set
of pressures were prompting them to move in this
direction. Hard-charging, typically younger managers
were insisting on tighter control over employee perfor-
mance; executives were determined to “get more bang
for the buck” during periods of shrinking resources;
personnel managers were trying to reduce the number
of grievances focusing on “unfair” pay decisions; and
employees were trying to eliminate what they consid-
ered to be discrimination in the workplace.
A sampling of the creative methods firms are using
to establish closer connections between individual per-
formance and pay includes sales commissions that
include follow-up customer satisfaction ratings; pay
increases linked to the acquisition of new knowledge,
skills, and/or demonstrated competencies; compensat-
ing managers based on their ability to mentor new
group members and resolve difficult intergroup rela-
tionships; and linking the pay of key employees to the
accomplishment of new organizational goals or strate-
gic initiatives (Zingheim & Schuster, 1995).
In an attempt to examine the impact of one of
these innovative compensation programs, a study was
conducted in which the productivity, quality, and labor
costs of companies using skill-based pay were com-
pared with comparable firms. The results indicated
that firms using this type of pay plan benefited from
58 percent greater productivity, 16 percent lower
labor costs per part produced, and an 82 percent better
level of quality (Murray & Gerhart, 1998).
Technological constraints sometimes make it diffi-
cult to perfectly link individual performance with indi-
vidual rewards. For example, people working on an
automobile assembly line or chemists working on a
group research project have little control over their
personal productivity. In these situations, rewards
linked to the performance of the work group will foster
group cohesion and collaboration and partially satisfy
the individual members’ concerns about fairness
(Lawler, 1988, 2000b). When it is not possible to