Category Archives: Rewards
When Retailers Screw Up: How Can they Win Customers Back? (IO Psychology)
Retailers aren’t perfect. When they screw up, how do they try to get you to fall in love with them again?
Science to the rescue! In this study, researchers investigated customers’ spending after filing of a customer service complaint to a grocery retailer. Some customers received a coupon after complaining. Some didn’t. Some customers received a quick response from the retailer. Others received a slower response. Overall, they found that those who received the coupon actually spent less after filing their complaint, and those who received a quick response spent more in the time following.
Upon further digging, they found that for customers who received a slower response, the coupon made a big difference; a slow response AND a coupon reduces future spending greatly. This tells retailers to respond quickly to all customer complaints. However, if you can’t respond fast, giving a coupon may hurt your bottom line even more.
When you think about a coupon versus a quick response solution, it makes me think of being in a relationship. Ladies, when your man screws up, he might immediately apologize. He might buy you flowers. He might do both. (He might do neither; let’s be real.) If he chooses to buy you flowers, but never apologizes, you constantly look at those crappy, unattractive flowers as the cheesy substitute “thing” you got… the thing that now represents his second mistake. The flowers represent what you really wanted but didn’t get: your man immediately owning up to his mistake and sincerely apologizing for it. The flowers become undesirable in your eyes. Unhappy customers see the coupon as a reminder of being treated like crap.
But when your man immediately owns up to his mistake, apologizes, and you talk it through, ladies feel better. They feel listened to; they feel their point of view matters; they feel understood, attended to, and cared for. (This is starting to sound like a Lifetime movie…) It’s the timing and the care that matters, and this treatment impacts how you feel and act going forward.
This is a common “how” versus “what” scenario. The “how” you treat me is much more important that the “what” you give me. Coupons don’t fix the mistake. When not apologized for in a timely fashion, they represent the mistake. And they don’t help.
So apologize. Quickly. (And white tulips certainly don’t hurt…!)
The Predictive Power of Grit: How to Select Successful People
Topic: Selection, Human Resources
Publication: Journal of Personality and Social Psychology (2007)
Article: Grit: Perseverance and passion for long-term goals
Authors: Angela L. Duckworth, Christopher Peterson, Michael D. Matthews, and Dennis R. Kelly
Reviewed By: Scott Charles Sitrin
Imagine that you are the head of Human Resources, and are tasked with hiring your Fortune 500 Company’s next CEO. You have narrowed the applicant pool down to 10 men and women who are smart (e.g., have high IQs), have previous experience (e.g., CEOs of other Fortune 500 Companies), and come with stellar letters of recommendation (e.g., amazingly, the Dali Lama has endorsed two, President Obama three others, and Warren Buffet one). How do you differentiate between these candidates, and select the individual that will successfully lead your company to the land of milk and honey? True grit.
Duckworth, Peterson, Mathews, and Kelly define grit as perseverance and passion for long-term goals. These investigators found that an individual’s level of grit affected performance in a variety of domains, including educational attainment, grade point average, military retention, and ranking in the National Spelling Bee. Six studies were performed. The first two explored the
relationship between levels of educational attainment and amount of grit among of nearly 3,000 adults; the third looked at grit and grade point averages of 139 undergraduates at an Ivy League College; the fourth and fifth investigated levels of grit and rates of retention of 1,218 West Point Undergraduates; and the sixth examined the relationship between grit and performance of 175 finalists in the 2005 Scripps National Spelling Bee. On average, grit accounted for 4% of the variance in success outcomes in the six studies.
These results suggest that an individual’s personality, and specifically their level of grit, will
affect their performance in academics, the military, and competitions. Grit’s predictive power does not appear to be domain specific, and though it was not shown to predict success among CEOs of Fortune 500 Companies, it seems likely that it could differentiate the great from the good. True grit.
human resource management,organizational industrial psychology, organizational management
Life Isn’t Always Fair: Using Inducements & Contributions to Predict Employee Satisfaction
Topic: Employee Satisfaction, Evidence-Based Management, Rewards
Publication: Journal of Applied Psychology (JUL 2011)
Article: Promised and Delivered Inducements and Contributions: An Integrated View of Psychological Contract Appraisal
Authors: Lambert, L. S.
Reviewed By: Thaddeus Rada
One of the most common complaints an employee may have with their employing organization is that they are not be fairly or adequately compensated for the contributions that they are putting into the company. A complaint of this type gets down to the concept of a psychological contract, which consists of inducements and contributions. Both of these come in two “varieties,” promised and delivered. Promised inducements or contributions are commitments that an organization or an employee, respectively, commit to providing to the other. Delivered inducements or contributions are what the organization or employee actually provide to the other, which may deviate from the promised inducement or contribution.
Together, the balance, or lack thereof, between these four components determines the overall quality of the psychological contract between an employee and the organization they work for. The current study, by Lisa Schurer Lambert, addresses a gap in the psychological contract literature: the comparison, by employees, of inducements to contributions, particularly with respect to the weight that employees give to each component.
What do Job Ads Say About Your Organizational Culture?
Topic: Compensation, Culture, Motivation, Rewards, Organizational Reputation
Publication: The International Journal of Human Resource Management
Article: Compensation as a Signal of Organizational Culture: The Effects of Advertising Individual or Collective Incentives
Author: K. Kuhn
Reviewed By: Lit Digger
It is commonly assumed that compensation and rewards systems reflect the cultures of the organizations that implement them, but what type of message is being received by your organization’s job applicants?
Kristine Kuhn (2009) conducted an experimental study to investigate how job advertisements’ simple statements about an organization’s compensation structure would affect applicant perceptions of organizational culture. In the same article, Kuhn conducted an additional study to see how job advertisement differences in compensation structure statements would affect applicants when they were forced to choose one organization over another. (Yes, this article was two-for-one – jam-packed with researchy goodness!)
Kuhn found that applicants were more likely to perceive an organization’s culture as individualist when that organization’s compensation structure statement suggested that employees would be rewarded for individual performance or skill. In contrast, applicants were more likely to view an organization’s culture as collectivist when that organization included a compensation structure statement suggesting that employees would be rewarded with profit sharing across the company or from taking part in a high-performing team. This is a notable finding because, aside from commonly held assumptions, little empirical research exists on this topic.
Kuhn also noted that some job seekers may be more likely to be high on idiocentrism, meaning that they would view themselves as, in her words, “independent entit[ies]” such that personal achievements would naturally take precedence over group achievements. (For you curious cats, the alternative to this would be allocentrism, which involves viewing yourself in relationship to others and having a more interdependent worldview). Regarding this idea, Kuhn found that the relationship between idiocentrism and the applicant’s attraction to a company was affected by the applicant’s perceptions of the company’s culture in the following way:
· If I perceive the company’s culture to be highly individualistic, and the more idiocentric I am in my worldview, the more likely I am to be attracted to that company.
· On the other hand, if I perceive the culture as not very individualistic, and the less idiocentric I am in my worldview, the chances are greater that I will be attracted to that
company.
So perceptions of organizational culture MATTER, especially when job applicants are forced to choose one organization over another (Sound like the real world to you? Sure does to me). And if perceptions of organizational culture are affected in part by the language used in job advertisements, editors beware! If you’re sending the wrong message to your job applicants, you’ve just missed your first (fairly inexpensive and easy) opportunity to give that potential newbie a realistic job preview, and you’re risking one more head on your end-of-the-year turnover count.
So think of this as an opportunity. Consider your organization’s compensation structure, the message it’s sending to your current employees, and the message that’s being received by your job applicants. If all of the above are in alignment with your organization’s values and intentions, proclaim away… and may the best applicant win.
A more personal “length of service award” makes a difference
Topic: Motivation, Rewards, Strategic HR,
Publication: HR Magazine
Article: Length-of-Service Awards Becoming More Personal.
Author: R.R. Hastings
Featured by: Sarah Bowen
Length-of-service awards (the small gold pin or certificate at the bottom of your junk drawer) can be truly rewarding when managed in the proper way. However, when carelessness is evident in such gestures, employees do not feel valued. So, how can we make these gestures count?
Employees respond best when given the option to choose what kind of benefits to receive from their company. And, yes, awards such as vacations to Hawaii or a new Rolex can increase an employee’s sense of pride in working for a company. Regardless of the price of the award, however, it is important to specifically address the employee on his/her anniversary through direct communication or a letter and also to share with the company the accomplishments of the individual. Employees respect the time and effort their company invests in recognizing individuals.
Managers should actively participate in recognizing employees and personally present their awards. When recognizing employees, specific achievements and accomplishments should be highlighted to distinguish employees and emphasize how they have contributed to the company’s mission. Awards programs do not have to be expensive. Bells and whistles aside, employees respect their employers for acknowledging their service to the company even if they simply receive a ‘thank you’—although a trip to Hawaii is always nice!
Quarter past nine, I’m late again!
Topic: Compensation, Motivation, Rewards, Strategic HR
Publication: Research and Practice in Human Resource Management
Article: A Mathematical Model to Monitor Late Arrivals at Work.
Author: S.A. Oke, T.M. Ezenachkwu
Featured by: Sarah Bowen
In their recent article, Oke and Ezenachukwu embark on an ambitious journey to prove that timeliness is improved through rewards and recognition in the workplace. The authors conduct their research in a beer and soft drink production company to test their model and assumptions. Educational commitments, monotony of work, and poor welfare provisions were three key reasons workers gave as reasons for their tardiness.
The researchers proposed that work tardiness issues can be resolved through the use of rewards to employees who arrive early to work. In order to alleviate lateness, the company implemented a computer system to supervise the arrival and departure times of workers and calculate the additional compensation for arriving early. Adjusting for a variety of commuting differences, the results showed that most workers will arrive early to work when additionally compensated for their timeliness.
Maintaining proper records of employees’ daily arrival and departure times, informing employees about the program’s benefits, and giving feedback to employees and managers contributed to the effectiveness of this approach.
Electronic displays installed as part of this program served as reminders to employees about their responsibilities to the company and aided in motivating workers to achieve a better work culture. In addition to directly affecting the bottom line, on-time arrival impacts the culture of the organization: when workers arrive on time, a company acquires a more positive image and employees become more confident in management.
Who is holding the glass ceiling in place?
Topic: Compensation, Organizational Justice, Motivation, Rewards
Publication: Journal of Human ResourcesArticle: Who is holding the glass
ceiling in place?
Author: N. Fortin
Featured by: Benjamin Granger
Many 21st century women still earn less than their male counterparts. However, this injustice may not be due fully to chauvinists and stereotypes. In her article, The Gender Wage Gap among Young Adults in the United States: The Importance of Money versus People , Nicole Fortin investigates influences that women themselves exhibit which may contribute to their smaller paychecks. As women more often choose to volunteer with organizations that are altruistic in nature, and tend to place more importance on workplace success rather than rolling in the dough, it is easy to follow Fortin’s argument that such noncognitive factors inevitably influence the gender wage gap.
Using data from the National Longitudinal Study of the High School Class of 1972 and the National Educational Longitudinal Study of 1988/94, Fortin explores the possible impacts on the gender pay gap by examining four noncognitive functions:
· The importance of money and work
· The importance of people and family
· Self-esteem
· Locus of control (the extent to which a person feels they- rather than their environment have control over their own success).
In addition to human capital and cognitive factors, Fortin argues that these noncognitive qualities significantly influence the discrepancy in wages among men and women.
Fortin finds that lower locus of control and higher importance of people and family tend to widen the gender wage gap, while higher self-esteem and importance of money and work tend to lead to more equitable wages for workers in their early thirties. Although the research shows that the differences due to these noncognitive factors are largely insignificant over time, the importance of work and money should not be overlooked, as it plays the largest role of the four noncognitive factors.
Pay-for-performance: Helping those that help themselves?
Topic: Compensation, Motivation, Rewards
Publication: The Wall Street Journal
Article: When schools offer money as a motivator.
Blogger: James Grand
Long gone are the days when Mom and Dad would offer a few bucks for an “A” on your report card to buy some candy from the grocery store. Now, the schools are starting to provide the incentives—and they aren’t just offering up bubble gum and lollipops.
A recent article from The Wall Street Journal (August 21, 2008) reported that a number of schools around the country are implementing new pay-for-performance (PFP) systems as means of encouraging high school students to enroll and pass Advanced Placement (AP) courses. The performance rewards (in some cases, upwards of$1000) are given to the top performing students on the various AP exams. With a great sigh of relief from its investors, longitudinal analyses of the PFP systems have shown mostly positive results—higher enrollment in AP classes, higher test scores and more graduating seniors moving on to college (whew).
But should schools (and other organizations, for that matter) be wary of the PFP reform? Research from organizational psychology, management and education indicates that although PFP is generally linked to higher overall performance and satisfaction across a variety of domains, there are a number of consequences that should be carefully considered before they are used (Rynes, Gerhart, & Parks, 2005, provide an excellent review of the issues associated with PFP systems).
For example, there is evidence to suggest that PFP is more attractive to individuals’ with greater need for achievement and self-efficacy, which are often related to characteristics such as education level and even gender or race in many work domains. Thus PFP systems have the potential to create discriminative compensation practices or entirely homogenous workforces if not carefully monitored. Furthermore, in jobs/tasks where units of performance are not clearly established (i.e., subjective supervisor ratings, etc.), the benefits of PFP are often difficult to determine and may actually be detrimental.
Time will tell if PFP catches on in our nation’s schools—in the meantime, I suppose a bag of M&M’s never hurt anybody.
