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Performance Management – Fall 2000 (90-808)

Professor Denise M. Rousseau
Carnegie-Mellon University
Heinz School of Public Policy and Management
Campus phone # 268-8470 Fax 268-5338
E-Mail: rousseau@andrew.cmu.edu

Creating results by individuals, groups, and organizations involves integrating goals, measurements, rewards and support. The purpose of this course is to develop the manager's skills in facilitating performance, learning, teamwork, and customer/client responsiveness. A central theme will be developing and managing an effective psychological contract between organization and members, peers and clients. Cases from public and private organizations are used with particular emphasis on managing in public and volunteer organizations.

Topics include:

  • Contracting for high performance--managing the psychological contract
    • Goals -- defining and measuring performance
    • Rewards and consequences -- incentives, feedback, and feedforward (with special emphasis on non-financial rewards)
    • Individual differences -- distinct contracts for different workers, equity, fairness, consistency
  • The performance paradox -- why organizations sometimes perform poorly even when their people are competent
  • Managing interdependence -- teamwork, group performance
  • Organizational culture, human resource strategy and practices
  • Cross-national differences in motivation

Class style:

  • Problem-oriented -- focusing on cases, managerial dilemmas and organizational experiences provided by class participants
  • Hands-on -- group problem solving and decision making will be used to demonstrate key principles

Behavioral Norms

(1) Individual Participation: You are expected to come prepared to ask questions that add to your understanding of the course materials as well as that of your fellow students. Several assignments are non-graded. Nonetheless, these must be completed and turned in. If they are not turned in, you will receive an incomplete in the course. If they are turned in, you will be one step further along on your personal journey toward enlightenment. What an incentive system!

(2) "New Business": Each class will begin with a poll of new business items. These are brief ("sound bite") reports on events (in the news--front page, business, or sports section; Heinz; your personal experiences) pertinent to human behavior in organizations. I expect each class member will make at least one contribution to New Business during the mini term.

(3) Readings: You are expected to read all the materials and in your reading, you should continually ask yourself the following two questions:

(a) Do I understand the theory and/or principles of this material?

(b) So what? What are its implications? How would I apply this as a manager?

You are asked to actively participate by raising these questions as well as others during our class time.

All assigned readings should be completed prior to the class for which they are specified. Readings will be briefly reviewed to check for understanding at the beginning of each class. Be prepared to answer questions regarding the readings and more importantly to ask them.


Course Pack (CP)--cases and managerial readings

Book (PCO)--Denise Rousseau: Psychological contracts in organizations (Sage: paperback)


Your grade will be determined based upon:

  • Reading log: One paragraph summary of insights from each assigned reading (turned in within one week of assignment): 15%
  • Group Project #1 (Bob Chen): 40%
  • Group Project #2 (Organizational performance analysis): 40%
  • Individual participation: 5%

Reading log

For each reading assigned you will receive a point for turning in a one page summary of your thoughts and insights.

  • If you agree, tell us with what. If you dispute the author, indicate how and why.
  • What practical applications can you identify from the reading?

You will receive one point for each successfully completed summary.

Term Papers

Two group papers (maximum length 7 pages) are required in this course. Their purpose is to give you an opportunity to apply class concepts in the solution of practical problems.

Paper #1 Due September 21

Bob Chen

Identify the key performance problems in Bob Chen. What are the causes of these problems? How should these problems be solved? Please use class concepts in your analysis and solution. Your grade will be based on (1) Logic and clarity of description and analysis, (2) Appropriate use of concepts, (3) Integration and writing style.

Issues to consider in analyzing Bob Chen:

(1) How would Bob Chen describe his own approach to achieving his performance and career goals? How do you believe David Shorter would describe Bob's approach?

(2) What factors would explain discrepancies in their views?

(3) What are the organization's own goals? What role might Bob play in helping achieve the organization's goals?

(4) How would David Shorter evaluate Bob's performance, and what factors would influence his evaluation? How would you evaluate Bob's performance?

(5) What are particular challenges and dilemmas in managing subordinates who have different cultural backgrounds and working styles from yours?

(6) What organizational actions would you recommend to resolve the performance problems in this case?

Paper #2 Due October 12

An Organization of Your Choosing

The Case: Write a case (2-3 pages) describing a performance problem in an actual organization. Performance problems refer to any situation in which the performance of an individual or a group is below that expected of them by the organization (could include poor work quality, failure to work effectively with others, chronic absenteeism or unreliability, etc. etc.). The emphasis here is on your development of assessment skills (please systematically consider the range of situational factors necessary to understand what happened).

The Analysis: Using class concepts analyze the causes (organizational and individual) of the problem(s) you describe (2-3 pages). Be sure to carefully apply theory and research in a manner consistent with the meanings specified for each OB concept you use. Here is your chance to develop and exercise diagnostic skills.

The Problem Solution: Based on your analysis, develop a strategy for effectively implementing changes to improve performance (2-3 pages). Be detailed, specific, and realistic (no "pie in the sky"). Consider not only the results you wish, the levers you would use to produce those results, but also the process (timing, preparation) needed to effectively carry out these changes.


August 31 Week 1: Introduction/Syllabus

Basic issues in Performance Management

Attribution biases

Multilevel effects: "It's not only the person or the organization, but maybe the person, the organization, their workgroup..."

Readings: Syllabus (CP)

PCO: ch 1

Exercise: Tenagram

September 7 Week 2: Contract making and performance


  • Role of values
  • Psychological contracts
  • Complete: Psychological Contract Inventory

    Readings: PCO: ch 2

    Schaeffer: Demand better results and get them (CP)

    Discussion Questions: When a new manager stumbles: Who’s at fault? (CP)

    1. What is the psychological contract Goldstone has at Bulwark? What’s missing? How is the contract incomplete?

    2. Do other managers share the same expectations as held by Goldstone? How do they differ and why?

    3. What is the potential influence of unfulfilled contracts on the attitudes and commitment of organizational members?

    4. What should Goldstone do now to manage the situation?

    September 14 Week 3: Performance measures and rewards:

    "If you don't measure it, you can't reward it. If you don't reward it, you won't get it"


  • Goal setting
  • Rewards
  • Case: Hausser (CP)

    Readings: PCO: ch 3

    Kerr: "On the folly of rewarding A, while hoping for B"

    Latham and Locke: "Goal setting a motivational technique that works"

    Pfeffer: "Six Dangerous Myths about Pay"

    September 21 Week 4: Feedback, Coaching and Counselling


  • Waterman et al.: "Toward a career resilient workforce" (CP)
  • Drucker: "What business can learn from nonprofits" (CP)
  • Rousseau: "Managing diversity for high performance" (CP)
  • Westman & Massero: Seven steps to successful performance management
  • (CP – skim/no log)

    Exercise: Lou and Chris

    Case: Debrief Bob Chen (CP)

    Case writeup #1: Due September 21

    September 28 Week 5: Culture, high performance, and learning


  • The performance paradox: why organizations sometimes perform poorly even when their people are high performers
  • Linkages between culture and organizational results
  • Readings:

  • Rousseau: "Teamwork: Inside and Out" (skim)
  • CISCO Systems: The acquisition of technology is the acquisition of people (no log)
  • PCO: ch 7
  • Discussion Questions for CISCO:

    1. What are the problems that organizational culture presents when CISCO grows through acquisition? CISCO’s culture? The culture of acquirees?

    2. What performance indicators does CISCO focus on? How do these affect its approach to acquisitions?

    October 5 Week 6: Cross-cultural issues


    Motivational and value differences cross-nationally


  • Hofstede:"Cultural dimensions in people management: The socialization perspective"
  • PCO: ch 8 (skim - no log)
  • Case: Revisit Bob Chen

    Film: New China Experiences

    WRAP UP: Sound Bite on your Case (5 minutes)

    Final: Case #2 due October 12

    Case Analysis Feedback Sheet

    Sample Team Expectations/Contract

    Resource Material

    Home Vita pdf Professional Summary
    Classes Reports Web page at Heinz
    Photo Gallery Links Web page at Tepper (GSIA)

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