Notes: Q2 – Human Resources Management (Performance Management & Goal Setting)
Q2 – Human resources management: Performance management and goal setting (Anna Sonnenschein)
Overall focus: how managers guide employees to achieve organizational goals efficiently and effectively. Key areas: leadership, goal setting, conflicts management, performance mechanics, etc.
Core model: Locke & Latham’s Goal Setting Theory (GST)
GST as a foundation for performance management; empirical support exists, but can be extended with additional theory for complexity.
Basis: setting clear goals to elicit high performance; goals tell employees what is expected and how to direct effort.
Practical mechanism: set targets (e.g., increase sales by 10% by year-end) and evaluate outcomes against them.
Risks of not setting goals: three adverse outcomes:
1) workers wait (passive); 2) workers do what they want (mission drift) — diverse interpretations can divert the mission; analogy: if goals drift, the organization’s purpose can dilute (the doctor/activist analogy used to illustrate mission drift and “cold turkey” as a quick, imperfect fix);
3) workers guess what you want — ambiguity leads to misalignment; need specificity.
1.1 Challenging SMART goals
SMART stands for Specific, Measurable, Achievable/Attainable, Relevant, Time-bound (context implies measurable targets and deadlines).
Challenging/stretch goals: ambitious yet attainable; intended to push growth and skill development without risking burnout.
Balancing act:
Level 1 (too easy): under-motivating; risks boredom and no growth.
Level 2 (optimal): challenging but attainable; fosters growth and motivation.
Level 3 (too hard): likely to fail; causes low motivation and burnout.
Example dynamics: hiring a candidate who is slightly overqualified can lead to boredom (level 1), while an overly challenging role may reduce effort or lead to burnout (level 3).
1.2 Target setting pitfalls and related concepts
Peter Principle: employees rise to their level of incompetence; pushing promotions without sustainability can lead to demotions or departures when people cannot perform at higher levels.
Forced growth: managers pushing employees into tasks beyond current capabilities to force development; often backfires by lowering performance and self-confidence.
Market conditions matter: challenges are not constant; external factors (e.g., a pandemic) can render targets unrealistic (e.g., 10% growth when market is down). Goals must reflect real conditions.
Up/Out culture (consulting firms): some organizations promote aggressively, causing a cascade where people feel compelled to accept promotions to avoid holding back others; can cause burnout and turnover. Goals should be set near the curve’s top but not so high as to cause burnout.
1.3 Discretionary behavior and engagement
Goal mechanisms map to performance but can be enhanced by discretionary behavior: extra effort beyond the basic requirements.
Discretionary vs non-discretionary behavior:
Non-discretionary: perform as required, even if external factors limit performance (e.g., delays due to weather/suppliers).
Discretionary: go the extra mile (extra hours, creative workarounds) to achieve goals.
Engagement: a form of discretionary behavior where employees invest extra effort because they want to (not just because they are paid to).
1.4 Job crafting (Forms of job crafting)
Job crafting emerges when employees tailor their job to fit their needs and strengths.
Four forms:
Task crafting: add, remove, or change tasks beyond the formal job description.
Relational crafting: adjust the quality/volume of interactions with others.
Cognitive crafting: change the interpretation/meaning of the job (e.g., seeing one’s role as contributing to a larger mission).
Contextual crafting: alter the work environment or context (e.g., telework setup, office design).
Engagement vs job crafting:
Engagement aims to improve outcomes for the organization (organization-centric).
Job crafting aims to improve outcomes for the individual (self-centric) while still benefiting the organization.
Pareto optimality: changes should ideally improve outcomes for all involved; excessive crafting by some can burden others unless aligned.
38-point working week (Walkers): a concept where tasks are scored by estimated effort, and workers pick tasks to fit a 38-hour week; aims to maximize job satisfaction and efficiency.
Advantages of task-based crafting: clear task points, faster completion when workers select tasks they enjoy; fosters autonomy.
Disadvantages: yearly reallocation of tasks; new hires create dynamic changes; complex to oversee; potential misalignment with client needs.
Collaboration matters: when many craft their jobs, coordination is essential to avoid Pareto inefficiencies; collaboration can help reach Pareto improvements.
2. How do you optimize employee performance?
2.1 Target mechanisms and performance
Setting goals directs attention, energy, strategies, and persistence to reach targets.
The relationship between goal setting and performance relies on alignment with the external environment and internal capabilities.
1. Discretionary behavior: going the extra mile (repeated)
Engagement vs job crafting: engagement is organization-focused (go to the extra mile for the organization), while job crafting is self-focused but can yield organization-wide benefits.
2. Forms of targeted performance management
Emphasis on balance between task demands, employee capabilities, and external conditions; avoid overloading employees with unattainable goals; acknowledge that different team members have different goals and performance baselines.
2.2 Discretionary behavior in practice
Constructive engagement: employees willingly exceed basic requirements to fix issues or improve outcomes when external pressures (e.g., delays) threaten deadlines.
Non-discretionary behavior can be insufficient in the face of external obstacles; managers should encourage discretionary efforts where feasible.
2.3 Job crafting and its consequences
Job crafting is common but not universal; some employees prefer their job as-is, some lack motivation, and some lack time to craft due to deadlines.
To foster craft, managers can encourage collaborative crafting and align individual crafting with organizational goals; consider Pareto efficiency when multiple workers craft differently.
2.4 The 38-point approach and task packaging
Task scoring and self-selection can improve efficiency and satisfaction if managed carefully; ensure tasks are completed and coordinate with others to avoid bottlenecks.
3. How is performance optimized? Theoretical foundations and practical implications
3.1 Distributive and Procedural justice in rewards
Distributive justice: fairness of outcomes relative to input (equal pay for equal work; fair distribution of rewards).
Procedural justice: perceived fairness of the processes used to determine rewards (e.g., how performance is measured and how promotions are decided).
HR practices influence perceived fairness and motivation.
3.2 Performance and satisfaction relationship
Job satisfaction alone does not guarantee performance; employees can be satisfied yet underperform if not challenged.
Managers should provide new goals and challenges to sustain performance over time.
There is a feedback loop between satisfaction, motivation, and performance.
3.3 Reward systems and goal regulation
Reward systems influence goal regulation; the more valuable the reward, the more effort employees may invest, up to legal and ethical limits.
The link between reward and performance can be complex; misaligned rewards can demotivate if perceived as unfair or not tied to actual results.
3.4 Vroom’s Expectancy Theory (a key model used)
Performance is predicted by the multiplicative model: Motivation = Expectancy imes Instrumentality imes Valence
Expectancy (E): belief that effort will lead to performance; if the perceived chance is too low, motivation collapses.
Instrumentality (I): belief that performance will lead to a reward; if rewards are perceived as unpredictable or biased, motivation drops.
Valence (V): value the rewards hold for the individual; rewards must be valued to motivate.
If any component is zero, motivation collapses: E imes I imes V = 0
3.5 The cafeteria plan (flexible benefits)
Employees can choose among a set of benefits (car, bonus, vacation, etc.) to maximize personal value (valence).
Pros: increased perceived value of rewards, customization, potentially tax advantages.
Cons/risks: administrative burden, higher costs, tax considerations, potential inequities, and loss of economies of scale; legal and social implications (e.g., energy-cost cafeteria plans and tax avoidance concerns).
Economic critique: cafeteria plans can reduce tax revenue and raise distributional costs; sometimes not socially optimal.
3.6 Motivation, capability, and supervisor role
Effort alone is not enough; employees must have the capability (skills) and opportunity; leadership should ensure clear goals and provide necessary resources.
Supervisors should avoid blaming employees solely for failures; assess whether goals were clear and aligned with capabilities and resources.
3.7 The Self-Determination Theory (SDT)
Three universal needs underpin intrinsic motivation and well-being:
Autonomy: decision-making freedom and alignment with personal values.
Competence: belief in one’s ability to perform tasks successfully; linked to expectancy in Vroom.
Belongingness (relatedness): sense of being part of a supportive work community.
Universalism without uniformity: the same needs can be satisfied through different means because individuals have diverse paths to fulfillment.
SDT supports that motivation is not simply intrinsic vs extrinsic; regulation types exist along a continuum (see below).
3.8 Regulation types (Self-Determination Theory continuation)
Extrinsic motivation spectrum (Regulation types): External regulation, Introjected regulation, Identified regulation, Integrated regulation; moving from controlled to autonomous regulation.
Intrinsic motivation corresponds to fully self-determined engagement (Self-Determination) when activities are inherently enjoyable or aligned with values.
3.9 The 다양한 regulation types in practice
Introjected regulation example: work demands create internal pressure (e.g., a Sunday investors’ day; you’re offered a day off but feel compelled to work to avoid guilt or shame, or to maintain pride).
Identified regulation: tasks are not inherently pleasant but aligned with personal goals (e.g., nurses performing tasks because they see the importance of cleanliness and patient safety).
Integrated regulation: task alignment with personal values; actions feel like part of one’s identity (e.g., a nurse who internalizes care as part of who she is).
3.10 The danger of extrinsic rewards (crowding-out effect)
Over time, extrinsic rewards can crowd out intrinsic motivation: people focus on the reward and lose interest in the task itself.
Example: vaccination campaigns with monetary incentives can erode intrinsic motivation to get vaccinated for health reasons; when incentives end, motivation may drop.
Caveat: while extrinsic rewards can anchor motivation, excessive reliance can undermine long-term intrinsic motivation and lead to overjustification effects.
3.11 Feedback and the performance cycle (target interview to evaluation)
The cycle typically involves: 1) Target interview: agree on goals; sign off on the plan. 2) Ongoing monitoring and adjustments; mid-year review. 3) End-year evaluation: three parallel evaluations:
Performance evaluation (outcomes and deliverables): connection to pay or bonuses; what was accomplished.
Process evaluation (how results were achieved): ensure sustainable, ethical, and proper methods.
Potential assessment: readiness for promotion or role expansion; training needs and development plans.
The supervisor bears responsibility for the team’s outcomes; accountability extends to leadership and process, not just individual performers.
3.12 The intensity of follow-up and situational leadership (Blanchard/Blanchart concepts)
Leadership styles depend on two factors: task mastery (competence) and commitment (motivation).
Four leadership styles:
Directing (Directing manager): strong commitment/low task mastery; need explicit instructions, more planning, frequent feedback.
Coaching (Coaching manager): low commitment/low task mastery; high guidance with development focus; frequent feedback and mentoring.
Supporting (Supporting manager): low commitment/high task mastery; provide social support, keep motivation high, less task direction.
Delegating (Delegating manager): high commitment/high task mastery; minimal direction; empower and let the team self-organize.
Change of leadership style should reflect evolving competencies and commitment over time for the same employee; avoid rigid one-size-fits-all approaches.
3.13 In-group/out-group dynamics
In-group members receive more attention and support; out-group members tend to be marginalized; this dynamic can undermine team performance and fairness.
Leaders should actively mitigate in-group/out-group biases to maintain fairness and collaboration across the team.
3.14 The importance of feedback and avoiding common pitfalls
Feedback should be constructive, timely, and focused on development rather than blame.
Use of corrective feedback to align performance with goals; avoid rumors and personal attacks; ensure procedural justice in evaluations.
3.15 The role of time, autonomy, and team dynamics in job design
Autonomy and discretion can drive performance but must be balanced with organizational needs and team collaboration.
Some employees require higher autonomy; others need more direction; adapt leadership style accordingly.
Autonomy must be supported by adequate resources and clarity around goals to avoid misalignment.
4. Notable concepts and models cited
Peter Principle: people get promoted to their level of incompetence; may require demotion rather than further promotion.
Up or out culture: promotion above current level or departure; impacts motivation and promotions dynamics.
38-point week concept: a task-packing and point-assignment system to optimize workload and reduce time pressure while maintaining productivity.
Pareto Optimality: improving one actor’s outcome without harming another is not always possible; collaborative craft should aim for Pareto improvements where possible.
Reality of market conditions: challenging goals must reflect external market realities (e.g., COVID, economic downturns) to avoid demotivation.
Communication and ownership: goals should be agreed upon and documented; employees should sign off on calculation and evaluation methods to prevent disputes.
Legal/ethical constraints: rewards and practices must comply with law and organizational ethics; avoid exploitative or illegal targets.
5. Summary takeaways
Goals are a prerequisite for performance: clear, challenging, SMART goals align effort with organizational aims.
Balance is essential: avoid under-stretching (boring) and over-stretching (burnout); tailor goals to individual curves and market realities.
Discretionary behavior and job crafting can boost performance but require alignment with team goals and organizational context.
Motivation is multi-faceted: intrinsic vs extrinsic, regulation types, SDT needs (Autonomy, Competence, Belongingness) explain how people regulate behavior.
Reward systems can motivate, but misalignment (crowding-out, excessive focus on outcomes, or unfair processes) hurts long-term performance; procedural and distributive justice matter.
Leadership style should adapt to the employee and situation (situational leadership; intensity of follow-up; in-group/out-group awareness).
The performance cycle (target interview, ongoing monitoring, end-year evaluation) integrates goal setting, feedback, and development; ownership and transparency are key to acceptance.
Real-world constraints (market conditions, resource limits, legal considerations) must shape goal setting and performance management strategies.
E imes I imes V is the core expectancy model for motivation, where E = Expectancy, I = Instrumentality, V = Valence. The model shows that motivation collapses if any factor is zero.
Note: This notes compilation follows the transcript content closely, capturing major and minor points, examples, and practical implications across goal setting, motivation, job design, performance management, and leadership dynamics.