UNIT-1 PMRS MBA-4 SEM

PERFORMANCE MANAGEMENT & RETENTION STRATEGIES

BRANCH - MBA SEMESTER – IV

UNIT – 2

BEHAVIOURAL PERFORMANCE MANAGEMENT

Behavioral performance management is the application of the reinforcement theory or operant
conditioning to exert a positive influence on the performance of employees. Robert Kreitner and
Fred Luthans coined the term ‘Organizational Behavior Modification’ or ‘O.B. Mod’ for
behavioral management .OB modification is a program where managers identify performance
related employee behaviors and then implement an intervention strategy to strengthen
desirable behaviors and weaken undesirable behavior.

The typical OB Modification program follows a five-step problem-solving model:

1. Identifying Critical Performance Behavior – Everything an employee does on his or her

job is not equally important in terms of performance outcomes. The first step in OB
Modification, therefore, is to identify the critical behaviors that make a significant impact
on the employee’s job performance. These are those 5 to 10 percent of behaviors that may
account for up to 70 or 80 percent of each employer’s performance.

2. Measuring critical performance behaviors (Developing Baseline Data) – The

second step requires the manager to develop some baseline performance data. This is
obtained by determining the number of times the identified behavior is occurring under
present conditions. The baseline measure can be determined either by observing when a
particular behavior is exhibited and counting such instances, or from the existing records.

3. Carrying out a functional analysis of the behavior (Identifying Behavioral

Consequence) – The third step is to perform a functional analysis of the behavior. A
functional analysis uses the A-B-C model, which has antecedent (A), behavior (B) and
consequence (C).

The antecedent represents the condition or cue which precedes a set of behavior
alternatives. In other words, an antecedent is a stimulus or circumstance which elicits a
particular behavior from an individual. Examples of antecedent conditions are the ringing of
an alarm clock, or a manager asking an employee for a particular report.

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Behavior is a person’s response to the antecedent. Getting out of bed rather than sleeping
longer or submitting a detailed report are desired behavior to the antecedent.

Consequence results from a particular behavior. One consequence could be positive

reinforcement, for example, public praise for presenting a good report. Sometimes, the
consequence could be negative reinforcement, which is designed to reduce or avoid a
particular negative outcome.

The main purpose of functional analysis is to identify the antecedents and consequences of a
specific behavior.

4. Developing & Implementing Intervention Strategy – Once the functional analysis is

complete, the manager is ready to develop and implement an intervention strategy to
strengthen desirable performance behaviors and weaken undesirable behaviors.

The most important intervention strategies for achieving this objective are positive
reinforcement and punishment-positive reinforcement.

In the OB mod process, punishment alone is never used as an intervention strategy. When
punishment becomes unavoidable, it is used in combination with positive reinforcement.

5. Evaluating Performance Improvement – The final step in OB modification is to evaluate

performance improvement. There are four levels of evaluation

- Reaction

- Learning

- Behavioral change

- Performance improvement

OB modification has been used by a number of organizations to improve employee

productivity, to reduce errors, absenteeism, tardiness, and accident rates and to improve
friendliness toward customers. For instance, a clothing manufacturer saved $60,000 in 1year
from fewer absences. A packing firm improved productivity 16 percent – resulting in savings
of over $1 million. A bank successfully used OB Modification to increase the friendliness of
its tellers, which led to a demonstrable improvement in customer satisfaction.

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Identify

Identify the critical behaviors which have a

significant impact on the individual’s
performance, and therefore, on the
organization’s performance

Measure

Determine the number of times a particular

behavior is exhibited before using any
managerial intervention to modify that
behavior

Analyze

Determine the antecedent cues responsible

for a particular behavior and also the
consequences that maintain the behavior

Intervene

Design an appropriate strategy to

encourage desirable behavior and
discourage undesirable behavior

Evaluate

Assess the effectiveness of the intervention

(Checking whether the intervention really
improved performance of the organization)
bases on various parameters

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PRINCIPALS OF LEARNING
Meaning: - Learning is a continuous process. It occurs all the time. Children learn to identify
objects at an early stage; teenagers may learn to improve study habits; and adults can learn to
solve complex problems. Learning is any relatively permanent change in behavior that occurs as
a result of experience. We can say that the change in the behavior indicates that the learning
has taken place.

Learning is a change in behavior through education and training, practice and experience. It is
accompanied by acquisition of knowledge, skills and expertise which are relatively permanent.

Definition:-

According to Watson and Skimmer

“Learning is a relation or an association between two types of incidents. Learning may be

defined as the process of acquiring, assimilating, and internalizing cognitive, motor, or
behavioral inputs for their effective and varied use when required, leading to an enhanced
capability for further self-monitored learning.”

According to Mitchell

“Learning is the process by which new behaviors are acquired. It is generally agreed that
learning involves changes in behavior, practicing new behaviors, and establishing permanency in
the change”.

Characteristics of Learning
Purposeful

Result of
Experience
Characteristics of
Learning
Multifaceted

Active Process

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Learning principles are the guidelines that help a manager to gain maximum efficiency in a
learning situation. These principles are:

1. Principle of Knowledge of Results: - It is stated that the knowledge regarding one’s own
performance is a necessary condition for learning. Feed back about the performance enables
the learner to know where he stands and the corrective action can be initiated if any
deviation from the expected goal has taken place.

2. Principle of Meaningfulness of the Subject: - A definite relationship has been

established between learning and meaningfulness of the subject learnt. More meaningful
the material better would be the learning. Acquisition of nonsense syllabus proceeds more
slowly than that of prose or poetry. On certain techniques that are meaningfulness
for trainees. Organizing meaningful units, creating association with already familiar terms,
and providing a conceptual basis or logical reason for the material are some of the practical
possibilities.

3. Principle of Schedules of Learning: - Probably one of the most well established and well
documented learning principles is that distributed or spaced practice is superior to
continuous or massed practice. This seems to be true both for simple laboratory tasks and
for highly complex tasks. Actually, schedules of learning can be manipulate in following three
different ways as:

a. Duration of practice session

b. Duration of rest session, and

c. Positioning of rest session

4. Principle of Motivation: - Motivation is related in several ways to learning. The extent to

which valued rewards follow high performance, for example, will affect an employee’s
willingness to work hard in future, and the cause and effect linkage needs to be clear. That
is, employees should recognize that certain behaviors cause certain outcomes. Similarly, if
rewards do not follow performance, the employee may be less inclined to work hard in
future.

5. Principle of Reinforcement: - Reinforcement is very important for learning because

behavioral response is conditioned by reinforcement. We may define reinforcement as
anything that increases the strength of response. Reinforcement strategies can be employed
by managers to influence the behavior of employee viz.,

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i. Positive reinforcement

ii. Negative reinforcement

iii. Extinction, and

iv. Punishment

6. Principle of Learning Curve: - The principle of learning involves the time factor and the
repeated efforts in order to gradually increase the strength of the response. This is especially
true when the behaviors to be learnt are comparatively complex such as skills that are
learnt, typing would execute awkward strokes in the beginning, but under guided
supervision, time and conscious repeated efforts, the skill is improved and as the person
gains confidence, the rate of typing speed increases until a maximum rate possible for him is
reached.

7. Principle of Readiness: - Individuals learn best when they are ready to learn, and they do
not learn well if they see no reason for learning. Getting students ready to learn is usually
the instructor’s responsibility. If students have a strong purpose, a clear objective, and a
definite reason for learning something, they make more progress than if they lack
motivation. Readiness implies a degree of single-mindedness and eagerness. When students
are ready to learn, they meet the instructor at least halfway, and this simplifies the
instructor’s job.

8. Principle of Exercise: - The principle of exercise states that those things most often
repeated are best remembered. It is the basis of drill and practice. The human memory is
fallible. The mind can rarely retain, evaluate, and apply new concepts or practices after a
single exposure.

9. Principle of Effect: - The principle of effect is based on the emotional reaction of the
student. It states that learning is strengthened when accompanied by a pleasant or satisfying
feeling, and that learning is weakened when associated with an unpleasant feeling.
Experiences that produce feelings of defeat, frustration, anger, confusion, or futility are
unpleasant for the student. If, for example, an instructor attempts to teach landings during
the first flight, the student is likely to feel inferior and be frustrated.

10. Principle of Primacy: - Primacy, the state of being first, often creates a strong, almost
unshakable, impression. For the instructor, this means that what is taught must be right the
first time. For the student, it means that learning must be right.

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11. Principle of Intensity: - A vivid, dramatic, or exciting learning experience teaches more
than a routine or boring experience. A student is likely to gain greater understanding of slow
flight and stalls by performing them rather merely reading about them. The principles of
intensity imply that a student will learn more from the real thing than from a substitute.

12. Principle of Recency: - The principle of recency states that things most recently learned
are best remembered. Conversely, the further a student is removed time-wise from a new
fact or understanding, the more difficult it is to remember. It is easy, for example, for a
student to recall a torque value used a few minutes earlier, but it is usually impossible to
remember an unfamiliar one used a week earlier. Instructors recognize the principle of
recency when they carefully plan a summary for a ground school lesson, a shop period, or a
post flight critique. The instructor repeats, restates, or reemphasizes important points at the
end of a lesson to help the student remember them. The principle of recency often
determines the sequence of lectures within a course of instruction.

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THEORIES OF LEARNING
Learning theory may be described as a body of principles advocated by psychologists and
educators to explain how people acquire skills, knowledge, and attitudes. Various branches of
learning theory are used in formal training programs to improve and accelerate the learning
process.

Learning Theories

Connectionist Cognitive Social Learning

S- Stimulus
Classical Conditioning (S-R)
Operant Conditioning (R-S) R- Response

1. Connectionist Theory (Behaviorist Theories) – Some learning theorists maintain that

learning involves the development of connections between a stimulus and some response to
it. That is, the association of a response and a stimulus is the connection that is learned.

i. Classical Conditioning or S-R Connections

Conditioning can be defined as “a learning process in which an organism’s behavior becomes

dependent on the occurrence of a stimulus in its environment.” Classical conditioning is said
to occur when a response to a particular stimulus is combined with another stimulus that
brings about the same response. Classical Conditioning states that behavior is learned by
repetitive association between a stimulus and a response (S-R association). The organism
learns to transfer a response from one stimulus to a previously neutral stimulus.

Iran Pavlov, conducted experiments to teach dogs to salivate in response to the ringing of a
bell. A simple surgical procedure allowed Pavlov to measure accurately the amount of saliva
secreted by a dog. When Pavlov presented the dog with a piece of meat, the exhibited a
noticeable increase in salivation. In this case, the piece of meat was the conditioned
stimulus, and the salivation the unconditioned response. Next, he just rang a bell, which

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naturally did not cause the dog to salivate. In subsequent experiments, he gave the dog a
piece of meat when a bell was rung. After this process was repeated several times, the dog
began to associate the ringing of the bell with meat. In subsequent experiments, Pavlov
found that the dog would start salivating at the mere ringing of the bell, even when it was
not given any meat. Thus the dog developed a conditioned response (i.e. salivation) to a
conditioned stimulus (i.e. the ringing of a bell), which was previously a neutral stimulus.
Classical conditioning is passive. Something happens and we react in a specific way.

Unconditioned Stimulus:

(US)
Unconditioned Response: (UR)
Meat Paste
Salivation

Conditioned Stimulus:

CS

Bell
Conditioned Response: (CR)
Conditioned Stimulus: CS
Salivation
Bell

Implications of Classical Conditioning

Classical conditioning, though offers explanation for learning, fails to explain total behavior of
human beings. For example, Robbins has observed that “classical conditioning is passive.
Something happens and we react in a specific or particular way. It is elicited in response to a
specific, identifiable event and, as such, it explains simple and reflective behaviors. But behavior
of people in the organizations is emitted rather than elicited, and it is voluntary rather than
reflective. Because of limitations of classical conditioning in explaining the learning process of
human beings, many psychologists did not agree with this concept. Skinner particularly feels
that classical conditioning explains only respondent’s reflexive behavior. People’s behavior
affects, or operates on the environment. This type of behavior is learned through operant
conditioning.

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ii. Operant Conditioning (Instrumental Conditioning) or R-S Conditioning:-

Operant conditioning or reinforcement theory has been associated with the work of B.F.
Skinner. Skinner designed an apparatus called the “Operant Chamber” or the “Skinner Box”
to understand learned behavior in animals (he used rats and pigeons). The Skinner box has a
lever, which on pressing, drops a pellet of food. A hungry rat was placed in the Skinner box.
Soon, it started exploring and sniffing around, looking for food. It eventually pressed the lever
by accident and received a pellet of food. The rat soon learned to associate pressing of the
lever with the reward of food. This reward acted as a reinforcing factor. This form of learning
which is based on trial and error is called operant conditioning.

According to the operant conditioning theory, consequences determine the behavior that
results in learning. People learn to behave in a particular manner in order to obtain
something they want or to avoid something they do not want. Operant conditioning focuses
on voluntary or learned behavior, as opposed to reflexive or unconditioned behavior (in
classical conditioning).

Skinner argued that creating pleasing consequences to follow specific forms of behavior
would increase the frequency of that behavior. He also argued that the effectiveness of
rewards is at its highest when they are given immediately after the desired behavior is
exhibited, similarly, when behavior is not rewarded or is punished, the chances of such
behavior being repeated are less

Implications of Operant Conditioning

Operant conditioning has much greater impact on human learning than classical conditioning.
Most behaviors in organizations are learned, controlled, and altered by consequences.
Management can use the operant conditioning process successfully to control and influence the
behavior of employees by designing the suitable reward system.

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Examples of Classical and Operant Conditioning:-

Classical Conditioning

(S) Stimulus----------------- (R) Response

Watches favorite tennis player winning a Jumps with joy

tournament
The Individual
Touches a hot vessel Moves away

Hears good music Hums and rocks gently

Steps on a nail Jumps and screams in pain

Operant Conditioning

(R) Response----------------------- (S) Stimulus

Browses the Internet Obtains desired information

Uses power carefully Saves money on electricity bill

Carries a credit card Finds it convenient for

shopping
The Individual
Pays loan installments promptly Attracts no penalty for
delayed payment

Achieves sales target Obtains incentives and gifts

Differences between Classical and Operant Conditioning

Classical Conditioning Operant Conditioning

Responses are elicited from a person Responses are emitted by a person. (Proactive)
(reactive)

Response are fixed to stimulus (no choice) Responses are variable in types and degrees
(Choice)

CS is stimulus such as sound, an object, a CS is a situation such as office, a social setting, a

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person specific set of circumstances

Conditioning is implemented before Conditioning is implemented after response

response

First we produce a stimulus and then we First we get a behavior pattern and then either
expect the desired behavior by reward or by avoidance of punishment we
reinforce that behavior.

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2. Cognitive Theory

Unlike behaviorism, the cognitive theory focuses on what is going on inside the student’s
mind. Learning is not just a change in behavior; it is a change in the way a student thinks,
understands, or feels.

Edward Tolman stated that cognitive learning consists of a relationship between cognitive
environmental cues and expectation. He tested this theory by conducting controlled
experiments on white rats. In these experiments, rats were allowed to run through a
complicated maze in search of food. The food was placed at certain points in the maze.
When the rats came across the food, they began to associate the presence of food with
certain cognitive cues. As a result, learning took place. Based on his research, he concluded
that rats and other animals developed ‘cognitive maps’ of their environment. They learn
where different parts of the environment are in relation with one another. Tolman therefore
considered learning as developing a pattern of behavior from bits of knowledge about and
cognition of the environment. This learning of the association between the cue and
expectation is termed as S-S (Stimulus-Stimulus) learning.

This theory influenced many industrial training programs in the 1940s and 1950s. The aim of
these programs was to strengthen the relationship between the cognitive cues (like
supervisory, organization and job procedures) and the expectations of employees (reward or
incentives for good performance)

3. Social Learning Theory:-

Individual can also learn by observing what happens to other people and just by being told
about something as well as by direct experience. For example, what we learn comes from
watching models i.e., our parents, teachers, peers, superiors, and so forth.

Modeling Processes:-The influence of models (model person) is central to the social

learning viewpoint. Four processes have been found to determine the influence that a model
will have on an individual. These are:

i. Attentional Processes: People only learn from a model when they recognize and pay
attention to its critical features. We tend to be most influenced by models that are
attractive, repeatedly available and we think are important or we see as similar to us.

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ii. Retention Processes: A model’s influence will depend on how well the individual
remembers the model’s action, even after the model is no longer readily available.

iii. Motor Reproduction Processes: After a person has seen a new behavior by observing
the model, the watching must be converted to doing. This process then demonstrates
that the individual can perform the modeled activities.

iv. Reinforcement processes: Individuals will be motivated to exhibit the modeled

behavior, if positive incentives or rewards are provided. Behaviors, that are reinforced,
will be given more attention, learnt better and performed more often.

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REINFORCEMENT AND PUNISHMENT

It is the crucial factor in the learning process which shapes employee’s behavior.

Reinforcement is defined as anything that tends to increase the intensity of a response and also
induces the person to repeat the behavior which was followed by reinforcement.

When reward is attached to behavior, it becomes a habit.

Types of Reinforcement: Four types of reinforcement strategies can be employed by

managers to influence the behavior of the employees:

1. Positive Reinforcement
2. Negative Reinforcement
3. Extinction
4. Punishment
Both Positive and Negative Reinforcement strengthen behavior while both Punishment
and Extinction weaken behavior.

1. Positive Reinforcement: It strengthens and increases behavior by the presentation of the

desirable consequence (reward). Positive reinforce is reward that follows behavior and is
capable of increasing the frequency of the behavior. Positive reinforcement occurs when a
reward, sometimes called a reinforcer, is given for a specific desired behavior.
In order to apply reinforcement procedures successfully, management must select
reinforces that are sufficiently powerful and durable.
Examples: - Manager praises an employ for the successful completion of a task on schedule,
this reinforcement encourages the employee and increases the likelihood of the employee
performing his tasks on time.
- Despite a driving phobia, Archana was able to drive to the mall in order to shop at her
favorite store. The experience of shopping was positive reinforcement for the act of
driving.

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2. Negative Reinforcement: Negative reinforcement also strengthens and increases the

probability of a particular behavior being repeated, but by withdrawing an undesirable
consequence. Negative reinforcement occurs when a behavior is reinforced by removal of a
stimulus. The word "negative" does not mean "unpleasant." It means a stimulus is removed
or "subtracted" from the situation as a form of reinforcement. Negative reinforcement is one
of the most misunderstood concepts in all of introductory psychology. Students commonly
assume that the word negative refers to something unpleasant, so they jump to the
conclusion that negative reinforcement is a form of punishment. But negative reinforcement
is not a form of punishment. Negative reinforcement is a form of reinforcement. It increases
the frequency or probability of a behavior by "taking away something bad." Positive means
something is added, while negative means something is taken away. Negative reinforcement
is the type of reinforcement in which something is taken away.
Examples: - if a worker is asked to get back to work when the supervisor notices him talking
to his colleagues, negative reinforcement is said to have taken place. In order to avoid being
singled out again by supervisor, the worker may not repeat this behavior and instead, focus
on the task at hand.
- Driving in heavy traffic is a negative condition for most of us. You leave home earlier than
usual one morning, and don't run into heavy traffic. You leave home earlier again the
next morning and again you avoid heavy traffic. Your behavior of leaving home earlier is
strengthened by the consequence of the avoidance of heavy traffic.

3. Extinction: It is an effective method of controlling undesirable behavior. It refers to non-

reinforcement. It is based on the principle that if the response is not reinforced, it will
eventually disappear. For example, a teacher ignores a noisy student; the student may drop
the attention getting behavior. Extinction is less painful than punishment because it does not
involve the direct application of an aversive consequence.

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4. Punishment: It is a control device employed in the organizations to discourage and reduce

annoying behaviors.
Punishment reduces the response frequency, it weakens behavior. The use of abrasive
control is the most controversial method of modifying behavior because it produces
undesirable by-products.

There are basically four kinds of punishment

 Physical punishment - Slapping, spanking, paddling, and using a belt or hair brush.
 Verbal punishment - Shaming, ridiculing, and using cruel words, saying "I don't love
you."
 Withholding rewards - "You can't watch TV if you don't do your homework."
 Penalties - "You broke the window so you will have to pay for it with money from your
allowance."

Examples:-

- Suspension of the employee

- No access to recreation facilities or e-mailing system for a week.

Learning theorists claim that punishment is not the most effective method of changing behavior.
Several reasons have been proposed to explain why punishment might not be effective.

1. Punishment indicates what is wrong but not what is right. One wrong response may be
replaced with another wrong response. For example, when students are criticized for coming
late to class, they might choose to avoid class criticized, for attempting to resolve
interpersonal conflicts, they may decide to quit talking, and the interpersonal conflict
continues to smolder.
2. Punishment may eliminate both good and bad behavior, if both behaviors are tied together.
For example, trying to help co-worker might be seen as ‘getting in the way and result in
punishment.’
3. Punishment is effective only when the threat of punishment is present. If the only reasons
why employees do not engage in horse play is because supervisor is there to discipline them.
The horseplay is likely to begin as soon as the supervisor leaves.

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4. Punishment creates negative feelings towards the punishing agents such as a supervisor, and
interferes with relationship regarding other issues. When supervisor is highly critical and
constantly criticizes children, they tend to create such a negative emotional feeling that even
friendly comments and legitimate requests are ignored.
5. Punishment may cause frustrated behavior because the individual’s thinking becomes fixed
on past errors rather than on searching for correct solutions. For example, a new employee
may be so humiliated in a public meeting after incorrectly giving the name of his new
department that he makes the same mistake again because the humiliation prevents him
from thinking anything else.

Reinforcement and Punishment: Summary

The terms reinforcement and punishment refer to a relationship between behavior and a
resulting environmental change, very much like the term reflex referred to a relationship
between stimulus and a resulting change in behavior. In this case, the term reinforcement
refers to a relationship between behavior and environment that results in an improvement of
conditions for the individual, and punishment refers to a relationship that results in a worsening
of conditions. If animals are hedonistic, then they should increase the frequency of acts that are
reinforced, and decrease the frequency of acts that are punished.

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ROLE OF ORGANIZATIONAL REWARD SYSTEMS

Reward management is about the development, implementation, maintenance,
communication, and evaluation of reward processes. These processes deal with the assessment
of relative jobs values, the design and management of pay structures, performance
management, paying for performance, competence or skill, the provision of employee benefits
and pensions, and management of reward procedures.

Objectives of Reward Management

The objectives of reward management are to:

1. Reward people according to what the organization values and what to pay for.

2. Reward people for the value they create for their organization.

3. Reward the right behaviors and actions of the employees in order to reinforcement
appropriate behaviors and outcomes.

4. Foster and maintain a high performance work culture.

5. Motivate employees in order to obtain their commitment and engagement.

6. Attract and retain talents the organization needs.

7. Emphasize the right mix of financial and non-financial rewards.

8. Develop a positive employment relation and psychological contract.

9. Align reward practices with the business strategy of the organization and communicate
business values and direction to employees.

10. Operate in ways that are fair, equitable, consistent, and transparent.

Components of Reward System

An organization’s reward system comprises three components – financial reward, non-financial

reward, and psychological satisfaction. In designing an effective reward and compensation
system, all three elements must be carefully considered, as detailed below.

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1. Financial Reward: Financial rewards are direct monetary rewards encompassing the
payment of cash compensation to employees for work accomplished or efforts expanded.
Examples are salary, wages, incentive, commission, etc.

2. Non-financial Reward: Non-financial rewards are indirect monetary rewards and include
those items of financial value the organization provides to employees that do not result
directly in employee’s receiving spend able cash. Examples are medical insurance, subsidized
canteen; subsidize transport, free uniform, interest-free loans, etc.

3. Psychological Satisfaction: This form of reward includes opportunities to perform

meaningful work, social interactions with others in the workplace, job training, career
advancement opportunities, recognition, employer brand, and a host of similar factors.

Psychological satisfaction emerges as a result of the meeting of expectations of an employee

with respect to his contributions to the organization, and the organization providing the
same in return.

Reinforcement/Reward Schedules

The timing of the reinforcement also influences the behavior. Reinforcement is most effective
when they occur immediately after a response but not necessarily after each response. A
reinforcement schedule refers to how often the correct response is reinforced. This schedule
should be properly decided for getting the full result. Reinforcement schedule can be following
types:

a. Continuous Reinforcement Schedule: A continuous reinforcement schedule reinforces

each correct response. Each time the person makes the correct response, it is reinforced.
Most of our day-to-day behavior is maintained on a continuous reinforcement schedule.

In training programmes, continuous reinforcement schedules are ideal during the early
training periods when learners are attempting to acquire a new response. Continuous reward
schedules provide immediate feedback on performance to help the learners evaluate their
performance and correct their mistakes.

b. Intermitted Reinforcement Schedule: An intermitted reinforcement can be of a ratio or

interval type. Ratio schedules depend upon how many responses the subject makes. The
individual is reinforced after giving a certain number of specific types of behavior interval
schedules depend upon how much time has passed since the last reinforcement. With

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interval schedules, the individual is reinforced on the first appropriate after a particular time
has elapsed.

Intermitted reinforcement schedule can be of four types:

i. Fixed Internal Schedule – When rewards are spaced at uniform time intervals, the
reinforcement schedule are fixed interval type. Here, the reinforcement is given after a
specific period of time. The time interval is fixed for a particular learning process. Since, there
are different learning processes. The fixed interval varies from one job to another job. At the
beginning of learning, a short interval is desirable which may extent further at a large stage of
learning. Monetary reinforcement is generally at fixed intervals. The time interval is fixed
after research to make the interval an effective and useful learning process and consequently
the result or response or reinforcement.

ii. Variable Interval Schedule – Reinforcement is given in an irregular or unsystematic

manner. Unlike fixed interval intermittent reinforcement, the time of reinforcement is not
known or certain in case of the variable interval. The time schedule is not fixed. The learner is
unaware as to when he will get the reinforcement. For example, the supervisor has told the
employees to work seriously. If anyone is found inactive at any time, he may be punished.
The supervisor reinforces his decision at random or at any time not known to the employees.
It makes employees aware of their functions and disciplines all the time, to avoid any
punishment during a random visit by the supervisor.

iii. Fixed Ratio Schedule – In a fixed ratio schedule, after a fixed or constant number of
responses are given, a reward is initiated. For example, a piece rate incentive plan is a fixed
ratio schedule; the employee receives a reward based on the number of work pieces
generated.

iv. Variable Ratio Schedule – When the reward varies relative to the behavior of the
individual he is said to be reinforced on a variable ratio schedule. Sales people on commission
represent examples, of individuals on such a reinforcement schedule. On some occasions,
they may make a sale after only two calls on potential customers. On other occasions, they
might need to make twenty or more calls to secure a sale. The reward, then, is variable in
relation to the number of successful calls the salesperson makes.

Role of Organizational Reward Systems

Reward are those privileges that are derived from working environment, which are valued
internally by an individual, and cover areas such as the opportunity for personal growth, quality

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of work life, job satisfaction, challenge, personal and professional development opportunities,
sense of belonging, freedom to act, visionary leadership, etc. Traditionally, reward system
consists of financial rewards such as basic pay, incentives and employees’ benefits, and non-
financial rewards such as the work itself, praise, recognition, etc.

Reward systems are expensive. Indeed, pay alone may represent over 50 percent of an
organization’s operating cost. Thus, it is important in designing the reward system to focus on
how high these costs should be, and how they will very as a function of the organization’s ability
to pay. Some people object to the use of the term ‘reward system’ because it seems to refer to
a set of mechanism that can be applied rigidly by organizations to guarantee the results they
require. Nevertheless, reward systems play a pivotal role in driving business strategy and
organization culture.

Hofstede’s study (1991) shows that national culture, organizational culture, and organizational
life-cycle influences the reward (and consequently compensation issues) system of an
organization.

National culture is governed by

 Power distance- the extent to which employees accept hierarchy in an organization.

 Individualism- the extent to which employees prefer personal independence or group

membership

 Uncertainty avoidance- the extent of risk taken by employees.

 Masculinity/Feminity- the extent of superiority of male versus female employees

 Time orientations the degree of emphasis given to long-term versus short-term planning.

The greater the degree of sharing of values and beliefs in the employees, the greater is the
cohesiveness of the organization culture. The last factor, organizational life-cycle influences the
importance attached to the reward system. For example, a profit making organization in growth
phase in an expanding market will tend to attach greater value to base compensation (more
cash; less incentive), while an organization in a tight market will give more emphasis on
performance-linked incentive (more incentive, less cash).

Thus, the reward system of an organization is linked closely to its business strategy. The greater
the fitment, the better will be the performance of the organization.

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Hence, performance management system must be attuned to the business strategy of the
organization for improved results. In today’s globally competitive environment, rewards are like
a tournament brought about by increasing alignment of reward with business strategies of an
organization. The higher the reward differentials, higher are the number of players (employees)
who are attracted to the tournament. Players must invest (i.e., performance) to enter the
tournament-organizations capture value from these players more than what it gives to the
winner for the prize (reward/compensation). This is called the Tournament Theory.

OB Models:
Organizational Behavior – Models

Organizational behavior reflects the behavior of the people and management all together, it is
considered as field study not just a discipline. A discipline is an accepted science that is based
upon theoretical foundation, whereas OB is an inter-disciplinary approach where knowledge
from different disciplines like psychology, sociology, anthropology, etc. are included. It is used to
solve organizational problems, especially those related to human beings.
There are four different types of models in OB. We will throw some light on each of these four
models.

Autocratic Model:

The root level of this model is power with a managerial orientation of authority. The employees
in this model are oriented towards obedience and discipline. They are dependent on their boss.
The employee requirement that is met is subsistence. The performance result is less.
The major drawbacks of this model are people are easily frustrated, insecurity, dependency on
the superiors, minimum performance because of minimum wage.

Custodial Model:

The root level of this model is economic resources with a managerial orientation of money. The
employees in this model are oriented towards security and benefits provided to them. They are
dependent on the organization. The employee requirement that is met is security.
This model is adapted by firms having high resources as the name suggest. It is dependent on
economic resources. This approach directs to depend on firm rather than on manager or boss.
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They give passive cooperation as they are satisfied but not strongly encouraged.

Supportive Model:

The root level of this model is leadership with a managerial orientation of support. The
employees in this model are oriented towards their job performance and participation. The
employee requirement that is met is status and recognition. The performance result is
awakened drives.
This model is dependent on leadership strive. It gives a climate to help employees grow and
accomplish the job in the interest of the organization. Management job is to assist the
employee’s job performance. Employees feel a sense of participation.

Collegial Model:

The root level of this model is partnership with a managerial orientation of teamwork. The
employees in this model are oriented towards responsible behavior and self-discipline. The
employee requirement that is met is self-actualization. The performance result is moderate zeal.
This is an extension of supportive model. The team work approach is adapted for this model.
Self-discipline is maintained. Workers feel an obligation to uphold quality standard for the better
image of the company. A sense of “accept” and “respect” is seen.

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