Part IV: Reward Systems, Legal Issues, and
Team Performance Management
◼
◼
Chapter 10: Performance
Management, Rewards, and the Law
Chapter 11: Team Performance
Management
Copyright © 2019 Chicago Business Press
10-1
Chapter 10
Performance Management,
Rewards, and the Law
Copyright © 2019 Chicago Business Press
10-2
Overview
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◼
Definition of Reward Systems
Traditional and Contingent Pay (CP)
Plans
Reasons for Introducing CP Plans
Possible Problems Associated with
CP Plans
Selecting A CP Plan
Putting Pay in Context
Copyright © 2019 Chicago Business Press
10-3
Overview (Continued)
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◼
Performance Management and the
Law
Some Legal Principles Affecting
Performance Management
Laws Affecting Performance
Management
Copyright © 2019 Chicago Business Press
10-4
Definition of Reward Systems
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◼
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◼
◼
Base Pay
Cost of living adjustments
(COLA) and Contingent Pay
Short-Term incentives
Long-Term incentives
Income Protection
Work-Life Focus
Allowances
Intangible Returns
Copyright © 2019 Chicago Business Press
10-5
Company Spotlight
◼
◼
◼
Colorado Business Group teamed up with
multiple companies to develop a short-term
incentive rewards program
Program rewarded doctors for reducing
future expensive treatments by focusing on
preventative measures
Overall, the program used short-term
incentives as part of the performance
management system to motivate physicians
to focus on treatments that enhanced
patient health on an ongoing basis
10-6
Copyright © 2019 Chicago Business Press
Traditional Pay
◼
Salary and salary increases
are based on
• Position
• Seniority
Copyright © 2019 Chicago Business Press
10-7
Contingent Pay (CP)
◼
Salary and salary increases are
based on:
• Job performance
◼
◼
Also called: Pay for
Performance
If not added to base pay, called:
• Variable pay
Copyright © 2019 Chicago Business Press
10-8
Reasons for Introducing CP (1)
◼
◼
Performance management is
more effective when rewards
are tied to results.
CP Plans force organizations to:
• Clearly define effective
performance
• Determine what factors are
necessary
Copyright © 2019 Chicago Business Press
10-9
Reasons for Introducing CP (2)
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◼
Supervisors and employees
are better able to understand
what really matters.
CP plans enhance employee
motivation to accomplish
goals that match
organizational needs.
Copyright © 2019 Chicago Business Press
10-10
Reasons for Introducing CP (3)
◼
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CP plans help to recruit and
retain top performers.
CP plans projects good
corporate image.
Copyright © 2019 Chicago Business Press
10-11
CP Plans Help Improve Motivation
When:
•
•
•
Employees see clear link between their
efforts and resulting performance.
(Expectancy)
Employees see clear link between their
performance level and rewards received.
(Instrumentality)
Employees value the rewards available.
(Valence)
motivation =
expectancy x instrumentality x valence
Copyright © 2019 Chicago Business Press
10-12
Reasons Why CP Plans Fail
Copyright © 2019 Chicago Business Press
10-13
Selecting a CP Plan: Issues to
Consider
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◼
Culture of organization
Strategic direction of
organization
Copyright © 2019 Chicago Business Press
10-14
Culture of Organization: Types of
Organizations
◼
Traditional
• Top-down decision making
• Vertical communication
• Jobs that are clearly defined
◼
Involvement
• Shared decision making
• Lateral communications
• Loosely defined roles
Copyright © 2019 Chicago Business Press
10-15
CP Systems for Different
Organizational Cultures
◼
Traditional organizations
• Piece rate
• Sales commissions
• Group incentives
◼
Involvement organizations
• Profit sharing
• Skill-based pay
Copyright © 2019 Chicago Business Press
10-16
CP Plans Recommended for Various
Strategic Business Objectives
Copyright © 2019 Chicago Business Press
10-17
Company Spotlight
◼
◼
◼
Google has long used contingent pay as part
of its compensation system
Emphasizes “fairness” over “equality”
• Don’t pay everyone the same, but make
sure that pay is commensurate with
contribution
Leads to cases where star performers at
more junior levels make far more than
average performers at more senior levels
10-18
Copyright © 2019 Chicago Business Press
Putting Pay in Context
A reward increases the chance
that:
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◼
Specific behaviors and results will be
repeated, or
Employee will engage in new
behavior and produce better results.
Copyright © 2019 Chicago Business Press
10-19
Rewards Can Include:
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Pay
Recognition
• Public
• Private
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Status
Time
Sabbaticals
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Trust and
Respect
Challenge
Responsibility
Freedom
Relationships
Copyright © 2019 Chicago Business Press
10-20
Relational (Intangible Rewards)
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◼
https://www.youtube.com/watch?v=
zfnFanLCmp8
Which kinds of rewards does Edward
Jones provide?
Copyright © 2019 Chicago Business Press
10-21
How to Make Rewards Work
Copyright © 2019 Chicago Business Press
10-22
Using Recognition and Relational
Incentives as Rewards
◼
Non-monetary rewards can be
powerful if they enhance the
chances that specific results and
behaviors will be repeated
Copyright © 2019 Chicago Business Press
10-23
Using Recognition and Relational
Incentives as Rewards (continued)
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Formal commendations and awards
Public recognition, including praise,
certificate of accomplishment, and letters of
appreciation
Status indicators, such as a new and
enhanced job title, larger work area,
improve
Extra time off, with or without pay
More challenging work environment,
responsibility, and freedom
Copyright © 2019 Chicago Business Press
10-24
Company Spotlight
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◼
Graniterock uses both financial and nonfinancial rewards to reward performance
Employees can earn bonuses of up to US$1,000
for performance that goes “above and beyond”
normal job expectations; and supervisors often
buy lunch for employees who are putting forth a
strong effort
Company holds “recognition days” where
employees give presentations before the CEO,
executive management, and coworkers; and
publishes stories about special efforts in a
weekly newsletter
10-25
Copyright © 2019 Chicago Business Press
Legal Issues: Overview
◼
◼
◼
Performance Management and
the Law
Some Legal Principles Affecting
PM
Laws Affecting PM
Copyright © 2019 Chicago Business Press
10-26
Performance Management and the
Law
◼
Performance management
systems are usually legally
sound if…
• Procedures are standardized
• Same procedures are used with
all employees
Copyright © 2019 Chicago Business Press
10-27
Some Legal Principles Affecting
PM: Overview
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Employment-at-will
Negligence
Defamation
Misrepresentation
Adverse Impact
Illegal Discrimination
Copyright © 2019 Chicago Business Press
10-28
Employment-at-Will
◼
Employment relationship can
be ended at any time by:
• Employer
• Employee
◼
Exceptions:
• Implied contract
• Possible violation of legal rights
Copyright © 2019 Chicago Business Press
10-29
Negligence
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◼
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If organization documents
describe a system
and
It is not implemented as
described,
Employee can challenge
evaluation, charging negligence.
Copyright © 2019 Chicago Business Press
10-30
Defamation
◼
Disclosure of performance
information that is
•Untrue and
•Unfavorable
Copyright © 2019 Chicago Business Press
10-31
Misrepresentation
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Disclosure of
performance information
that is
•Untrue and
•Favorable
Copyright © 2019 Chicago Business Press
10-32
Adverse Impact / Unintentional
Discrimination
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◼
PM system has unintentional impact on
a protected class.
Organization must demonstrate:
• A specific KSA is a business requirement for
the job
• All affected employees are evaluated in the
same way
◼
Organization should review ongoing
performance score data by protected
class to implement corrective action as
necessary.
Copyright © 2019 Chicago Business Press
10-33
Illegal Discrimination or Disparate
Treatment
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Raters assign different scores to
employees based on factors that
are NOT related to performance.
Employees receive different
treatment as result of such
ratings.
Employees can claim they were
intentionally and illegally treated
differently due to their status.
Copyright © 2019 Chicago Business Press
10-34
Employee Claim of Illegal
Discrimination
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Direct evidence of
discrimination, or
Evidence regarding the
following:
• Membership in protected class
• Adverse employment decision
• Performance level deserved
reward/different treatment
• How others were treated (not
in protected class)
Copyright © 2019 Chicago Business Press
10-35
Employer Response to Claim of
Illegal Discrimination
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Legitimate and nondiscriminatory
reason for action
Related to performance
Note: Good performance
management system and
subsequent performance-related
decision, used consistently with all
employees, provide defense
Copyright © 2019 Chicago Business Press
10-36
Difference Between
Legal and Illegal Discrimination
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◼
LEGAL discrimination discriminates
among employees based on their
level of performance.
ILLEGAL discrimination is based on
variables that should not usually be
related to performance.
Copyright © 2019 Chicago Business Press
10-37
Legal Principles Affecting
Performance Management
◼
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◼
https://www.youtube.com/watch?v=l
yDACfix7pA
http://fortune.com/2018/02/06/uber
-gender-pay-gap-study/
What legal principles does Susan
Fowler allege Uber violated?
From a performance management
perspective, what could Uber have
done to avoid this lawsuit?
Copyright © 2019 Chicago Business Press
10-38
Laws Affecting PM
◼
During past few decades,
several countries have passed
laws prohibiting discrimination
based on:
•
•
•
•
•
•
•
Race or Ethnicity
Sex
Religion
National Origin
Age
Disability status
Sexual orientation
Copyright © 2019 Chicago Business Press
10-39
Laws in the United States of
America
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Equal Pay Act of 1963
Civil Rights Act of 1964
Age Discrimination in Employment
Act of 1967 (as amended in 1986)
Americans with Disabilities Act of
1990
Copyright © 2019 Chicago Business Press
10-40
Laws in Canada
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Canadian Human Rights Code of 1985
Section 15 of the Charter of Rights
and Freedoms (1982)
Federal Employment Equity Act (2004)
Federal Contractors Program
Copyright © 2019 Chicago Business Press
10-41
Laws in Australia
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The Crimes Act (1914)
Racial Discrimination Act (1975)
Sex Discrimination Act (1984)
Human Rights and Equal Opportunity
Commission Act (1986)
Disability Discrimination Act (1992)
Workplace Relations Act (1996)
Equal Opportunity for Women in the
Workplace Act (1999)
Age Discrimination Act (2004)
Copyright © 2019 Chicago Business Press
10-42
Characteristics of Legally Sound
PM Systems
Copyright © 2019 Chicago Business Press
10-43
Legal Principles Across Borders
Four questions to ask:
What is the work geographic location?
2.What is the employer status (e.g., U.S.based firm or not)?
3.What is the employee status (e.g., U.S.
citizenship status)?
4.Are there international law defenses (i.e.,
international treaties)?
1.
Copyright © 2019 Chicago Business Press
10-44
Legal Issues: Summary
◼
◼
◼
Performance Management
and the Law
Some Legal Principles
Affecting PM
Laws Affecting PM
Copyright © 2019 Chicago Business Press
10-45
Quick Review
◼
◼
◼
◼
◼
◼
Definition of Reward Systems
Traditional and Contingent Pay
Plans
Problems with Contingent Pay Plans
Selecting Contingent Pay Plans
Putting Pay in Context
Performance Management and the
Law
Copyright © 2019 Chicago Business Press
10-46
Chapter 11
Team Performance
Management
Copyright © 2019 Chicago Business Press
11-47
Overview
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Definition and Importance of Teams
Types of Teams and Implications for
PM
Purposes and Challenges of Team PM
Including Team Performance in the PM
System
Rewarding Team Performance
Copyright © 2019 Chicago Business Press
11-48
Definition of Team
Two or more people
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Interact
•
◼
Dynamically
• Independently
Share common and valued
•
Goal, Objective, or Mission
Copyright © 2019 Chicago Business Press
11-49
Importance of Teams
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◼
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Increased pressure, including global
competition
Flexibility in flatter organizations
Complexity of products and services
Rapidly changing business
environments
Copyright © 2019 Chicago Business Press
11-50
Performance Management and
Teams
◼
PM systems should target:
• Individual performance
• Individual’s contribution to team
performance
• Performance of entire team
Copyright © 2019 Chicago Business Press
11-51
General Principles of PM Relating
to Teams
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◼
Design and implement best
system possible
Consider dangers of poorly
implemented system
Copyright © 2019 Chicago Business Press
11-52
Managing for Improved Team
Performance
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◼
◼
Don’t limit team processes with other
task or organizational requirements
Provide good team design and
organizational support
Give feedback only on processes that
the team members can control
Copyright © 2019 Chicago Business Press
11-53
Types of Teams
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Classified by
• Complexity of task
• Membership configuration
Copyright © 2019 Chicago Business Press
11-54
Complexity of Task Ranges
From:
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Routine
• Well-defined
• Few deviations in how work is done
• Outcomes are easily assessed
◼
- to Non-Routine
• Not defined well
• No clear specifications on how to do the
work
• Outcomes are long term and difficult to
assess
Copyright © 2019 Chicago Business Press
11-55
Membership Configuration Includes
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Length of time team expects to
work together
Stability of team membership
Static
Dynamic
Copyright © 2019 Chicago Business Press
11-56
Types of Teams Based on
Membership Configuration and Task
Complexity
Copyright © 2019 Chicago Business Press
11-57
Types of Teams
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Work or Service Teams
Project Teams
Network Teams
Copyright © 2019 Chicago Business Press
11-58
Work or Service Teams
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Intact
Routine tasks
Share similar skill sets
Copyright © 2019 Chicago Business Press
11-59
Project Teams
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Assembled for specific purpose
Tasks outside core product or
service
Members from different functional
areas
Copyright © 2019 Chicago Business Press
11-60
Network Teams
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Membership not constrained by:
• Time or space
• Organizational boundaries
◼
Teams may include:
• Temporary or full-time workers
• Customers
• Vendors
• Consultants
◼
Work is extremely non-routine
Copyright © 2019 Chicago Business Press
11-61
Examples of PM Approaches by
Type of Team
Type of Team
Type of PM Approach
Work and Service Team
Peer ratings
Project team
Ongoing measurements
Network Team
Development of competencies
Copyright © 2019 Chicago Business Press
11-62
Company Spotlight
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◼
A multinational aerospace firm had to
manage the performance of 17
expatriate teams
Systems had to be devised to
accommodate a multi-stakeholder
perspective:
• Local client
• Home company
• Other on-site teams
Copyright © 2019 Chicago Business Press
11-63
Benefits of Virtual Teams
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Reduce expenditure on travel
Minimizes personal and professional
disruptions due to travel
Minimizes commuting time by
allowing employees to telecommute
Reduces the need for large brick-andmortar office space
Copyright © 2019 Chicago Business Press
11-64
Challenges of Virtual Teams
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◼
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May lack clear performance
standards and team identity
Lack of training on how to improve
performance within virtual teams
Difficult for team members to keep
up with group developments
Copyright © 2019 Chicago Business Press
11-65
Virtual Teams
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◼
◼
Managing Virtual Teams
How does virtuality affect team
performance?
What can managers do to increase the
effectiveness of virtual teams?
Copyright © 2019 Chicago Business Press
11-66
Company Spotlight
◼
◼
MySQL adapted their performance
management system to manage their
many virtual teams
Changes include:
• Internet Relay Chat for virtual meetings
• Software to mark off completed tasks
• Focus on outputs and results
• Reduced emphasis on chain-of-command
structure
• Weekly reviews of performance and
accomplishments
Copyright © 2019 Chicago Business Press
11-67
Purposes of Team PM
◼
◼
Traditional goals of any PM system
Specific to team performance:
• Make all team members accountable
• Motivate all team members to have a
stake in team performance
Copyright © 2019 Chicago Business Press
11-68
Challenges of Team PM
◼
◼
◼
How do we assess relative
individual contribution?
How do we balance individual and
team performance?
How do we identify individual and
team measures of performance?
Copyright © 2019 Chicago Business Press
11-69
Six Basic Principles for Designing a
PM System
That Includes Team Performance
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Make sure your team is really a team
Make the investment to measure
Define measurement goals clearly
Use a multi-method approach to
measurement
Focus on process as well as outcomes
Measure long-term changes
Copyright © 2019 Chicago Business Press
11-70
Performance Management Process
Copyright © 2019 Chicago Business Press
11-71
Prerequisites
◼
Knowledge of mission
• Organization
• Team
◼
Knowledge of job to be performed by
the team, including KSAs
Copyright © 2019 Chicago Business Press
11-72
Prerequisites
Team Charters
◼
◼
Summarize job duties, needed KSAs,
and working conditions for a team
Similar to individual job descriptions,
but also include information on withinteam processes such as
communication
Copyright © 2019 Chicago Business Press
11-73
Prerequisites
Team Charters: Components
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Strategic alignment
Team purpose
Team objectives,
goals, and priorities
Key stakeholders
Team customers
Team leader and
sponsor
Team member roles
and responsibilities
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◼
◼
◼
Team member time
commitments
Team communication
plan
Team ground rules
In/out of scope
elements
Key deliverables
Performance
analytics
Copyright © 2019 Chicago Business Press
11-74
Prerequisites
KSAs conducive to high teamperformance:
◼
◼
◼
◼
◼
Communication
Decision-making
Collaboration
Team leadership
Self-control
Copyright © 2019 Chicago Business Press
11-75
Performance Planning
◼
◼
◼
Results expected of the team
Behaviors expected of team
members
Developmental objectives to be
achieved by team and its members
Copyright © 2019 Chicago Business Press
11-76
Performance Planning
◼
◼
◼
Facilitate adaptive learning
• Encourage new behaviors
Facilitate generative learning
• Provide best practices recommendations
Facilitate transformative learning
• Deep learning by, for example, bringing
in members of other teams into the team
to work temporarily
→ Innovation and change
Copyright © 2019 Chicago Business Press
11-77
Performance Execution
Team Responsibilities
◼
◼
Commit to goal achievement
Seek feedback from
•
•
◼
◼
One another
Supervisor
Communicate openly and regularly
Conduct regular and realistic peer
appraisals
Copyright © 2019 Chicago Business Press
11-78
Performance Execution
Supervisor Responsibilities
◼
Observe and document
• Team performance
• Relative contribution of team members
◼
◼
Update team on any changes in
goals of the organization
Provide resources and reinforcement
Copyright © 2019 Chicago Business Press
11-79
Performance Assessment
Types of Assessments
◼
◼
◼
◼
Self-appraisals
Peer evaluations
Supervisor evaluation
Outsider appraisals (if appropriate)
Copyright © 2019 Chicago Business Press
11-80
Performance Assessment
Kinds of Performance to be Assessed
◼
◼
◼
Individual task performance
Individual contextual performance
Team performance
Copyright © 2019 Chicago Business Press
11-81
Performance Assessment
Dimensions
◼
◼
◼
◼
Effectiveness
Efficiency
Learning and growth
Team member satisfaction
Copyright © 2019 Chicago Business Press
11-82
Performance Review
◼
Two meetings with supervisor or
review board
• Team meeting
• Individual meeting
◼
Emphasis on past, present, and
future
Copyright © 2019 Chicago Business Press
11-83
Team Meeting
◼
Discuss overall team
• Performance
• Results
◼
Information comes from:
• Team members
• Other teams/outsiders
• Supervisor’s evaluation
Copyright © 2019 Chicago Business Press
11-84
Individual Meeting
◼
◼
Discuss how individual behavior
contributed to team performance
Information comes from:
• Self-appraisal
• Peer ratings
• Supervisor’s evaluation
Copyright © 2019 Chicago Business Press
11-85
Company Spotlight
◼
Wikipedia is an example of how to
manage the performance of a large,
virtual, and volunteer community:
• Volunteers monitor one another
• Policies governing team interactions,
along with clearly spelled out
consequences
• Established escalation and disputeresolution process
Copyright © 2019 Chicago Business Press
11-86
Rewarding Team Performance
◼
◼
Consider team rewards and individual
rewards together
Variable Pay System
• Individual is eligible for a bonus if
team achieves specific results
Copyright © 2019 Chicago Business Press
11-87
Rewarding Team Performance
◼
◼
All employees should be eligible
Rewards should be:
• Visible
• Contingent
• Reversible
◼
Avoid factors which cause reward
systems to fail
Copyright © 2019 Chicago Business Press
11-88
Rewarding Team Performance
◼
◼
◼
Rewarding Team Performance
How does cooperation vs. competition
affect team performance rewards?
What does the “folly of rewarding A,
while hoping for B” refer to in terms of
rewarding team performance?
Copyright © 2019 Chicago Business Press
11-89
Quick Review
◼
◼
◼
◼
◼
Definition and Importance of
Teams
Types of Teams and Implications
for PM
Purposes and Challenges of Team
PM
Including Team Performance in
the PM System
Rewarding Team Performance
Copyright © 2019 Chicago Business Press
11-90
All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the United
States of America.
Copyright © 2019 Chicago Business Press
Copyright © 2019 Chicago Business Press
1-91
Part IV: Reward Systems, Legal Issues, and
Team Performance Management
◼
◼
Chapter 10: Performance
Management, Rewards, and the Law
Chapter 11: Team Performance
Management
Copyright © 2019 Chicago Business Press
10-1
Chapter 10
Performance Management,
Rewards, and the Law
Copyright © 2019 Chicago Business Press
10-2
Overview
◼
◼
◼
◼
◼
◼
Definition of Reward Systems
Traditional and Contingent Pay (CP)
Plans
Reasons for Introducing CP Plans
Possible Problems Associated with
CP Plans
Selecting A CP Plan
Putting Pay in Context
Copyright © 2019 Chicago Business Press
10-3
Overview (Continued)
◼
◼
◼
Performance Management and the
Law
Some Legal Principles Affecting
Performance Management
Laws Affecting Performance
Management
Copyright © 2019 Chicago Business Press
10-4
Definition of Reward Systems
◼
◼
◼
◼
◼
◼
◼
◼
Base Pay
Cost of living adjustments
(COLA) and Contingent Pay
Short-Term incentives
Long-Term incentives
Income Protection
Work-Life Focus
Allowances
Intangible Returns
Copyright © 2019 Chicago Business Press
10-5
Company Spotlight
◼
◼
◼
Colorado Business Group teamed up with
multiple companies to develop a short-term
incentive rewards program
Program rewarded doctors for reducing
future expensive treatments by focusing on
preventative measures
Overall, the program used short-term
incentives as part of the performance
management system to motivate physicians
to focus on treatments that enhanced
patient health on an ongoing basis
10-6
Copyright © 2019 Chicago Business Press
Traditional Pay
◼
Salary and salary increases
are based on
• Position
• Seniority
Copyright © 2019 Chicago Business Press
10-7
Contingent Pay (CP)
◼
Salary and salary increases are
based on:
• Job performance
◼
◼
Also called: Pay for
Performance
If not added to base pay, called:
• Variable pay
Copyright © 2019 Chicago Business Press
10-8
Reasons for Introducing CP (1)
◼
◼
Performance management is
more effective when rewards
are tied to results.
CP Plans force organizations to:
• Clearly define effective
performance
• Determine what factors are
necessary
Copyright © 2019 Chicago Business Press
10-9
Reasons for Introducing CP (2)
◼
◼
Supervisors and employees
are better able to understand
what really matters.
CP plans enhance employee
motivation to accomplish
goals that match
organizational needs.
Copyright © 2019 Chicago Business Press
10-10
Reasons for Introducing CP (3)
◼
◼
CP plans help to recruit and
retain top performers.
CP plans projects good
corporate image.
Copyright © 2019 Chicago Business Press
10-11
CP Plans Help Improve Motivation
When:
•
•
•
Employees see clear link between their
efforts and resulting performance.
(Expectancy)
Employees see clear link between their
performance level and rewards received.
(Instrumentality)
Employees value the rewards available.
(Valence)
motivation =
expectancy x instrumentality x valence
Copyright © 2019 Chicago Business Press
10-12
Reasons Why CP Plans Fail
Copyright © 2019 Chicago Business Press
10-13
Selecting a CP Plan: Issues to
Consider
◼
◼
Culture of organization
Strategic direction of
organization
Copyright © 2019 Chicago Business Press
10-14
Culture of Organization: Types of
Organizations
◼
Traditional
• Top-down decision making
• Vertical communication
• Jobs that are clearly defined
◼
Involvement
• Shared decision making
• Lateral communications
• Loosely defined roles
Copyright © 2019 Chicago Business Press
10-15
CP Systems for Different
Organizational Cultures
◼
Traditional organizations
• Piece rate
• Sales commissions
• Group incentives
◼
Involvement organizations
• Profit sharing
• Skill-based pay
Copyright © 2019 Chicago Business Press
10-16
CP Plans Recommended for Various
Strategic Business Objectives
Copyright © 2019 Chicago Business Press
10-17
Company Spotlight
◼
◼
◼
Google has long used contingent pay as part
of its compensation system
Emphasizes “fairness” over “equality”
• Don’t pay everyone the same, but make
sure that pay is commensurate with
contribution
Leads to cases where star performers at
more junior levels make far more than
average performers at more senior levels
10-18
Copyright © 2019 Chicago Business Press
Putting Pay in Context
A reward increases the chance
that:
◼
◼
Specific behaviors and results will be
repeated, or
Employee will engage in new
behavior and produce better results.
Copyright © 2019 Chicago Business Press
10-19
Rewards Can Include:
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Pay
Recognition
• Public
• Private
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Status
Time
Sabbaticals
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Trust and
Respect
Challenge
Responsibility
Freedom
Relationships
Copyright © 2019 Chicago Business Press
10-20
Relational (Intangible Rewards)
◼
◼
https://www.youtube.com/watch?v=
zfnFanLCmp8
Which kinds of rewards does Edward
Jones provide?
Copyright © 2019 Chicago Business Press
10-21
How to Make Rewards Work
Copyright © 2019 Chicago Business Press
10-22
Using Recognition and Relational
Incentives as Rewards
◼
Non-monetary rewards can be
powerful if they enhance the
chances that specific results and
behaviors will be repeated
Copyright © 2019 Chicago Business Press
10-23
Using Recognition and Relational
Incentives as Rewards (continued)
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Formal commendations and awards
Public recognition, including praise,
certificate of accomplishment, and letters of
appreciation
Status indicators, such as a new and
enhanced job title, larger work area,
improve
Extra time off, with or without pay
More challenging work environment,
responsibility, and freedom
Copyright © 2019 Chicago Business Press
10-24
Company Spotlight
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Graniterock uses both financial and nonfinancial rewards to reward performance
Employees can earn bonuses of up to US$1,000
for performance that goes “above and beyond”
normal job expectations; and supervisors often
buy lunch for employees who are putting forth a
strong effort
Company holds “recognition days” where
employees give presentations before the CEO,
executive management, and coworkers; and
publishes stories about special efforts in a
weekly newsletter
10-25
Copyright © 2019 Chicago Business Press
Legal Issues: Overview
◼
◼
◼
Performance Management and
the Law
Some Legal Principles Affecting
PM
Laws Affecting PM
Copyright © 2019 Chicago Business Press
10-26
Performance Management and the
Law
◼
Performance management
systems are usually legally
sound if…
• Procedures are standardized
• Same procedures are used with
all employees
Copyright © 2019 Chicago Business Press
10-27
Some Legal Principles Affecting
PM: Overview
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Employment-at-will
Negligence
Defamation
Misrepresentation
Adverse Impact
Illegal Discrimination
Copyright © 2019 Chicago Business Press
10-28
Employment-at-Will
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Employment relationship can
be ended at any time by:
• Employer
• Employee
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Exceptions:
• Implied contract
• Possible violation of legal rights
Copyright © 2019 Chicago Business Press
10-29
Negligence
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◼
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If organization documents
describe a system
and
It is not implemented as
described,
Employee can challenge
evaluation, charging negligence.
Copyright © 2019 Chicago Business Press
10-30
Defamation
◼
Disclosure of performance
information that is
•Untrue and
•Unfavorable
Copyright © 2019 Chicago Business Press
10-31
Misrepresentation
◼
Disclosure of
performance information
that is
•Untrue and
•Favorable
Copyright © 2019 Chicago Business Press
10-32
Adverse Impact / Unintentional
Discrimination
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PM system has unintentional impact on
a protected class.
Organization must demonstrate:
• A specific KSA is a business requirement for
the job
• All affected employees are evaluated in the
same way
◼
Organization should review ongoing
performance score data by protected
class to implement corrective action as
necessary.
Copyright © 2019 Chicago Business Press
10-33
Illegal Discrimination or Disparate
Treatment
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Raters assign different scores to
employees based on factors that
are NOT related to performance.
Employees receive different
treatment as result of such
ratings.
Employees can claim they were
intentionally and illegally treated
differently due to their status.
Copyright © 2019 Chicago Business Press
10-34
Employee Claim of Illegal
Discrimination
◼
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Direct evidence of
discrimination, or
Evidence regarding the
following:
• Membership in protected class
• Adverse employment decision
• Performance level deserved
reward/different treatment
• How others were treated (not
in protected class)
Copyright © 2019 Chicago Business Press
10-35
Employer Response to Claim of
Illegal Discrimination
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◼
Legitimate and nondiscriminatory
reason for action
Related to performance
Note: Good performance
management system and
subsequent performance-related
decision, used consistently with all
employees, provide defense
Copyright © 2019 Chicago Business Press
10-36
Difference Between
Legal and Illegal Discrimination
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◼
LEGAL discrimination discriminates
among employees based on their
level of performance.
ILLEGAL discrimination is based on
variables that should not usually be
related to performance.
Copyright © 2019 Chicago Business Press
10-37
Legal Principles Affecting
Performance Management
◼
◼
◼
◼
https://www.youtube.com/watch?v=l
yDACfix7pA
http://fortune.com/2018/02/06/uber
-gender-pay-gap-study/
What legal principles does Susan
Fowler allege Uber violated?
From a performance management
perspective, what could Uber have
done to avoid this lawsuit?
Copyright © 2019 Chicago Business Press
10-38
Laws Affecting PM
◼
During past few decades,
several countries have passed
laws prohibiting discrimination
based on:
•
•
•
•
•
•
•
Race or Ethnicity
Sex
Religion
National Origin
Age
Disability status
Sexual orientation
Copyright © 2019 Chicago Business Press
10-39
Laws in the United States of
America
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Equal Pay Act of 1963
Civil Rights Act of 1964
Age Discrimination in Employment
Act of 1967 (as amended in 1986)
Americans with Disabilities Act of
1990
Copyright © 2019 Chicago Business Press
10-40
Laws in Canada
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◼
◼
Canadian Human Rights Code of 1985
Section 15 of the Charter of Rights
and Freedoms (1982)
Federal Employment Equity Act (2004)
Federal Contractors Program
Copyright © 2019 Chicago Business Press
10-41
Laws in Australia
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The Crimes Act (1914)
Racial Discrimination Act (1975)
Sex Discrimination Act (1984)
Human Rights and Equal Opportunity
Commission Act (1986)
Disability Discrimination Act (1992)
Workplace Relations Act (1996)
Equal Opportunity for Women in the
Workplace Act (1999)
Age Discrimination Act (2004)
Copyright © 2019 Chicago Business Press
10-42
Characteristics of Legally Sound
PM Systems
Copyright © 2019 Chicago Business Press
10-43
Legal Principles Across Borders
Four questions to ask:
What is the work geographic location?
2.What is the employer status (e.g., U.S.based firm or not)?
3.What is the employee status (e.g., U.S.
citizenship status)?
4.Are there international law defenses (i.e.,
international treaties)?
1.
Copyright © 2019 Chicago Business Press
10-44
Legal Issues: Summary
◼
◼
◼
Performance Management
and the Law
Some Legal Principles
Affecting PM
Laws Affecting PM
Copyright © 2019 Chicago Business Press
10-45
Quick Review
◼
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◼
◼
◼
◼
Definition of Reward Systems
Traditional and Contingent Pay
Plans
Problems with Contingent Pay Plans
Selecting Contingent Pay Plans
Putting Pay in Context
Performance Management and the
Law
Copyright © 2019 Chicago Business Press
10-46
Chapter 11
Team Performance
Management
Copyright © 2019 Chicago Business Press
11-47
Overview
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◼
◼
◼
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Definition and Importance of Teams
Types of Teams and Implications for
PM
Purposes and Challenges of Team PM
Including Team Performance in the PM
System
Rewarding Team Performance
Copyright © 2019 Chicago Business Press
11-48
Definition of Team
Two or more people
◼
Interact
•
◼
Dynamically
• Independently
Share common and valued
•
Goal, Objective, or Mission
Copyright © 2019 Chicago Business Press
11-49
Importance of Teams
◼
◼
◼
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Increased pressure, including global
competition
Flexibility in flatter organizations
Complexity of products and services
Rapidly changing business
environments
Copyright © 2019 Chicago Business Press
11-50
Performance Management and
Teams
◼
PM systems should target:
• Individual performance
• Individual’s contribution to team
performance
• Performance of entire team
Copyright © 2019 Chicago Business Press
11-51
General Principles of PM Relating
to Teams
◼
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Design and implement best
system possible
Consider dangers of poorly
implemented system
Copyright © 2019 Chicago Business Press
11-52
Managing for Improved Team
Performance
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Don’t limit team processes with other
task or organizational requirements
Provide good team design and
organizational support
Give feedback only on processes that
the team members can control
Copyright © 2019 Chicago Business Press
11-53
Types of Teams
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Classified by
• Complexity of task
• Membership configuration
Copyright © 2019 Chicago Business Press
11-54
Complexity of Task Ranges
From:
◼
Routine
• Well-defined
• Few deviations in how work is done
• Outcomes are easily assessed
◼
- to Non-Routine
• Not defined well
• No clear specifications on how to do the
work
• Outcomes are long term and difficult to
assess
Copyright © 2019 Chicago Business Press
11-55
Membership Configuration Includes
◼
◼
Length of time team expects to
work together
Stability of team membership
Static
Dynamic
Copyright © 2019 Chicago Business Press
11-56
Types of Teams Based on
Membership Configuration and Task
Complexity
Copyright © 2019 Chicago Business Press
11-57
Types of Teams
◼
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Work or Service Teams
Project Teams
Network Teams
Copyright © 2019 Chicago Business Press
11-58
Work or Service Teams
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◼
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Intact
Routine tasks
Share similar skill sets
Copyright © 2019 Chicago Business Press
11-59
Project Teams
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Assembled for specific purpose
Tasks outside core product or
service
Members from different functional
areas
Copyright © 2019 Chicago Business Press
11-60
Network Teams
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Membership not constrained by:
• Time or space
• Organizational boundaries
◼
Teams may include:
• Temporary or full-time workers
• Customers
• Vendors
• Consultants
◼
Work is extremely non-routine
Copyright © 2019 Chicago Business Press
11-61
Examples of PM Approaches by
Type of Team
Type of Team
Type of PM Approach
Work and Service Team
Peer ratings
Project team
Ongoing measurements
Network Team
Development of competencies
Copyright © 2019 Chicago Business Press
11-62
Company Spotlight
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◼
A multinational aerospace firm had to
manage the performance of 17
expatriate teams
Systems had to be devised to
accommodate a multi-stakeholder
perspective:
• Local client
• Home company
• Other on-site teams
Copyright © 2019 Chicago Business Press
11-63
Benefits of Virtual Teams
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Reduce expenditure on travel
Minimizes personal and professional
disruptions due to travel
Minimizes commuting time by
allowing employees to telecommute
Reduces the need for large brick-andmortar office space
Copyright © 2019 Chicago Business Press
11-64
Challenges of Virtual Teams
◼
◼
◼
May lack clear performance
standards and team identity
Lack of training on how to improve
performance within virtual teams
Difficult for team members to keep
up with group developments
Copyright © 2019 Chicago Business Press
11-65
Virtual Teams
◼
◼
◼
Managing Virtual Teams
How does virtuality affect team
performance?
What can managers do to increase the
effectiveness of virtual teams?
Copyright © 2019 Chicago Business Press
11-66
Company Spotlight
◼
◼
MySQL adapted their performance
management system to manage their
many virtual teams
Changes include:
• Internet Relay Chat for virtual meetings
• Software to mark off completed tasks
• Focus on outputs and results
• Reduced emphasis on chain-of-command
structure
• Weekly reviews of performance and
accomplishments
Copyright © 2019 Chicago Business Press
11-67
Purposes of Team PM
◼
◼
Traditional goals of any PM system
Specific to team performance:
• Make all team members accountable
• Motivate all team members to have a
stake in team performance
Copyright © 2019 Chicago Business Press
11-68
Challenges of Team PM
◼
◼
◼
How do we assess relative
individual contribution?
How do we balance individual and
team performance?
How do we identify individual and
team measures of performance?
Copyright © 2019 Chicago Business Press
11-69
Six Basic Principles for Designing a
PM System
That Includes Team Performance
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Make sure your team is really a team
Make the investment to measure
Define measurement goals clearly
Use a multi-method approach to
measurement
Focus on process as well as outcomes
Measure long-term changes
Copyright © 2019 Chicago Business Press
11-70
Performance Management Process
Copyright © 2019 Chicago Business Press
11-71
Prerequisites
◼
Knowledge of mission
• Organization
• Team
◼
Knowledge of job to be performed by
the team, including KSAs
Copyright © 2019 Chicago Business Press
11-72
Prerequisites
Team Charters
◼
◼
Summarize job duties, needed KSAs,
and working conditions for a team
Similar to individual job descriptions,
but also include information on withinteam processes such as
communication
Copyright © 2019 Chicago Business Press
11-73
Prerequisites
Team Charters: Components
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Strategic alignment
Team purpose
Team objectives,
goals, and priorities
Key stakeholders
Team customers
Team leader and
sponsor
Team member roles
and responsibilities
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◼
Team member time
commitments
Team communication
plan
Team ground rules
In/out of scope
elements
Key deliverables
Performance
analytics
Copyright © 2019 Chicago Business Press
11-74
Prerequisites
KSAs conducive to high teamperformance:
◼
◼
◼
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Communication
Decision-making
Collaboration
Team leadership
Self-control
Copyright © 2019 Chicago Business Press
11-75
Performance Planning
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Results expected of the team
Behaviors expected of team
members
Developmental objectives to be
achieved by team and its members
Copyright © 2019 Chicago Business Press
11-76
Performance Planning
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Facilitate adaptive learning
• Encourage new behaviors
Facilitate generative learning
• Provide best practices recommendations
Facilitate transformative learning
• Deep learning by, for example, bringing
in members of other teams into the team
to work temporarily
→ Innovation and change
Copyright © 2019 Chicago Business Press
11-77
Performance Execution
Team Responsibilities
◼
◼
Commit to goal achievement
Seek feedback from
•
•
◼
◼
One another
Supervisor
Communicate openly and regularly
Conduct regular and realistic peer
appraisals
Copyright © 2019 Chicago Business Press
11-78
Performance Execution
Supervisor Responsibilities
◼
Observe and document
• Team performance
• Relative contribution of team members
◼
◼
Update team on any changes in
goals of the organization
Provide resources and reinforcement
Copyright © 2019 Chicago Business Press
11-79
Performance Assessment
Types of Assessments
◼
◼
◼
◼
Self-appraisals
Peer evaluations
Supervisor evaluation
Outsider appraisals (if appropriate)
Copyright © 2019 Chicago Business Press
11-80
Performance Assessment
Kinds of Performance to be Assessed
◼
◼
◼
Individual task performance
Individual contextual performance
Team performance
Copyright © 2019 Chicago Business Press
11-81
Performance Assessment
Dimensions
◼
◼
◼
◼
Effectiveness
Efficiency
Learning and growth
Team member satisfaction
Copyright © 2019 Chicago Business Press
11-82
Performance Review
◼
Two meetings with supervisor or
review board
• Team meeting
• Individual meeting
◼
Emphasis on past, present, and
future
Copyright © 2019 Chicago Business Press
11-83
Team Meeting
◼
Discuss overall team
• Performance
• Results
◼
Information comes from:
• Team members
• Other teams/outsiders
• Supervisor’s evaluation
Copyright © 2019 Chicago Business Press
11-84
Individual Meeting
◼
◼
Discuss how individual behavior
contributed to team performance
Information comes from:
• Self-appraisal
• Peer ratings
• Supervisor’s evaluation
Copyright © 2019 Chicago Business Press
11-85
Company Spotlight
◼
Wikipedia is an example of how to
manage the performance of a large,
virtual, and volunteer community:
• Volunteers monitor one another
• Policies governing team interactions,
along with clearly spelled out
consequences
• Established escalation and disputeresolution process
Copyright © 2019 Chicago Business Press
11-86
Rewarding Team Performance
◼
◼
Consider team rewards and individual
rewards together
Variable Pay System
• Individual is eligible for a bonus if
team achieves specific results
Copyright © 2019 Chicago Business Press
11-87
Rewarding Team Performance
◼
◼
All employees should be eligible
Rewards should be:
• Visible
• Contingent
• Reversible
◼
Avoid factors which cause reward
systems to fail
Copyright © 2019 Chicago Business Press
11-88
Rewarding Team Performance
◼
◼
◼
Rewarding Team Performance
How does cooperation vs. competition
affect team performance rewards?
What does the “folly of rewarding A,
while hoping for B” refer to in terms of
rewarding team performance?
Copyright © 2019 Chicago Business Press
11-89
Quick Review
◼
◼
◼
◼
◼
Definition and Importance of
Teams
Types of Teams and Implications
for PM
Purposes and Challenges of Team
PM
Including Team Performance in
the PM System
Rewarding Team Performance
Copyright © 2019 Chicago Business Press
11-90
All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the United
States of America.
Copyright © 2019 Chicago Business Press
Copyright © 2019 Chicago Business Press
1-91
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