An evaluation research of the application of a reward
system within a holacratic organization.
Date:
07-10-2019
Author:
Cédric Cortenraad
Student number:
S1007352
Supervisor:
Waldemar Kremser
Second Examiner: Armand Smits
Acknowledgments
Dear readers,
Before you start reading my master thesis, I would like to make use of this opportunity to
express my gratitude to everyone who has helped me during this academic adventure. First, I
would like to thank Waldemar Kremser for his guidance and help during this thesis. I really
enjoyed our conversations and your enthusiasm for doing research, you inspired and motivated
me. Second, I would like to thank every employee of the organization concerned for their
hospitality and freeing up time for helping me during this research.
Furthermore, I want to express my gratitude to my dearest friends, Arno, Kevin and Roel for
their support during this thesis and my whole academic adventure. Next, I would like to thank
Iris for our motivational and helpful conversations. Last but not least, I would like to thank my
parents, sisters and brother for encouraging me during my whole educational road.
Abstract
Purpose– The purpose of this research is to explore how employees experience their current reward system, named the Baarda model, and rewarding aspects within a self-managing organization. From literature, little insights are known on reward systems within self-managing structures, resulting in organizations who need to develop their own reward system which suits their self-managing structure. This research is conducted in order to better understand the rewarding challenges holacratic organizations face and provides insight into one particular reward system, the Baarda model, and give a comprehensive description how this model and associated rewarding aspect are used and experienced. Methodology– In order to achieve this insight, a focus group and in-depth interviews were conducted. In addition, the fourth generation evaluation method proposed by Guba & Lincoln (1989) was used. By applying this method, knowledge could be structurally created, and insight was gained into which reward aspects employees in a holacratic organization are experienced and considered important. Eventually, these results were compared against five functions every reward system must fulfill in order to be effective. These functions are: attraction, retention, motivation, define and reinforce the organizational structure and define and reinforce the organizational culture.
Findings – The employees are primarily intrinsically motivated and are mainly attracted and retained by the challenging work and the enjoyable atmosphere within the organization. However, there is still room for improvement by recognizing the high-performance employees more. The Baarda model and associated rewarding aspects define the organizational structure because employees gained insight into what they can expect from their fellow colleagues. However, the organizational structure is not reinforced because employees linger in their profile for too long, resulting in being under- or overpaid. Finally, as the reward system is perceived as transparent and fair, the implemented Baarda model and the associated rewarding aspects make a positive contribution to the culture. However, this culture is not reinforced because the employees in the workplace do not provide each other informal feedback and there are few formal feedback mechanisms within the organization.
Table of Content
1 Introduction ... 7
2 Theoretical background ... 10
2.1. Self- managing organizations ... 10
2.1.1. Advantages and disadvantages of a self-managing organization. ... 11
2.2. Holacracy ... 12
2.2.1. The holacratic structure ... 12
2.2.2. Leadership & decision-making in holacracy ... 14
2.2.3. Challenges in a holacratic structure ... 14
2.3. Baarda model ... 16
2.3.1. Components of the Baarda model ... 16
2.3.2. The Baarda profiles ... 17
2.3.3. Using the Baarda model ... 17
2.4. Organizational reward systems ... 18
2.4.1. Introduction to organizational reward systems ... 18
2.4.2. Functions of an organizational reward system ... 19
2.4.3. The design of an organizational reward system ... 20
2.5. Theoretical conclusion ... 21
3 Methodology ... 23
3.1. Research design ... 23
3.1.1. Evaluation research ... 23
3.1.2. Fourth generation evaluation ... 24
3.2. Context description ... 25
3.3. Data collection ... 25
3.3.1. Orientation interview ... 25
3.3.2. Focus groups ... 26
3.3.3. In- depth interviews ... 28
3.4. Data analysis technique ... 29
3.5. Quality criteria ... 30
3.6. Research ethics ... 31
4.1. Reward practices ... 32
4.1.1. Pay level ... 32
4.1.2. Pay-raise and keeping the reward system up-to-date ... 33
4.1.3. Benefits ... 34
4.1.4. Negotiation space ... 34
4.1.5. Transparency ... 35
4.2. Baarda model ... 35
4.2.1. Plotting the employees into the Baarda profiles ... 35
4.2.2. Evaluation of the initial plotting ... 36
4.2.3. Diversity of the Baarda profiles ... 37
4.2.4. Allocation of Baarda profiles and levels ... 38
4.2.5. Fair compensation ... 39
4.3. Pay-for-performance vs. group-based performance ... 39
4.3.1. Reward structure experience ... 40
4.3.2. Bonus ... 41
4.4. Career advancement ... 42
4.4.1. Career path ... 42
4.4.2. Rewards for personal development ... 43
4.4.3. Baarda questionnaire ... 44
4.4.4. Re-evaluation ... 44
4.4.5. Rating by peers ... 46
5 Conclusion and discussion ... 47
5.1. Conclusion ... 47
5.1.1. Attraction & Retention ... 47
5.1.2. Motivation ... 48
5.1.3. Define and reinforce the organizational structure ... 49
5.1.4. Define and reinforce the organizational culture ... 50
5.1.5. Summary of the conclusion ... 51
5.2. Discussion ... 51
5.2.1. Practical contribution ... 52
5.2.1.1. Recognizing high performance employees ... 52
5.2.2. Scholarly contribution ... 54
5.3. Openings for future research ... 55
References ... 57
Appendices: ... 63
Appendix I: Interview guide orientation interview ... 64
Appendix II: Operationalization scheme focus group ... 66
Appendix III: Overview participants and respondents focus group and in-depth interviews ... 79
Appendix IV: Overview white-board notes focus group ... 80
Appendix V: Results focus group ... 82
Appendix VI: Interview guide in-depth interviews ... 92
Appendix VII: Initial template ... 97
Appendix VIII: Final Template with exemplary quotes ... 100
Appendix X: Overview result section ... 115
1
Introduction
Reward systems and how they affect employees have always been an important issue for scholars and practitioners alike. However, insights on reward systems for self-managing organizations, such as holacratic organization, are limited. Holacracy is a self-managing structure which replaces traditional hierarchies and eliminates managers. It assumes that every employee has the expertise to make their decisions regarding their roles and contributes to the fulfillment of the purpose of the organization (Robertson, 2015). However, holacratic organizations are facing challenges because most traditional reward systems do not fit their needs (Bernstein, Bunch, Canner & Lee, 2016; Adler & Heckscher, 2018).
The main reason for the mismatch is that most reward systems are based on traditional organizational structures which require clear job profiles, title, and job definitions. Consequently, employees within traditional organizational structures work within a single, broadly defined role definition (Bernstein et al., 2016). However, holacratic organizations do not work with clear-cut and stable functions, but with ever changing roles. Consequently, employees within a holacratic structure work within a collection of roles which they can create and withdraw themselves (Bernstein et al., 2016; Kamp, 2014). By defining roles, holacracy aspires to make the actual work which needs to be done in an organization more explicit. In addition, decision making is distributed throughout the organization by providing each role with its own responsibility and authority (Kamp, 2014). Furthermore, employees can create and withdraw a role at any given moment, resulting in employees who could have a completely different set of roles within two weeks. Due to the dynamics of holacracy, implementing traditional reward systems which reward employees based on responsibilities and performance (S. Kerr, 1975; Mahony, 1989; Honeywell-Johnson & Dickinson, 1999) could become a challenge, since responsibilities and working activities of employees within a holacracy are ever changing (Robertson, 2015). In addition, holacracy is a self-managing organizational framework which does not contain pre-defined reward systems nor describe clear guidelines on how organizations could implement reward systems. In addition, no comprehensive description about the application of reward systems in self-managing organizations are found. Due to the lack of insights on reward systems within self-self-managing structures, organizations that want to use a self-managing structure need to develop their own reward system.
This research is conducted within a software company1 which has been using holacracy for years and developed a reward system, a customized version of the Baarda model, themselves. The Baarda
model involves segmenting employees into different profiles and levels, with relevant rewards tied to whichever place in the matrix the employee is allocated. Within the organization, there was a need to improve their current version of the Baarda model reward system. Consequently, the aim of this research was: “To evaluate and help improve the Baarda model in such a way that it meets the needs of the employees of the organization researched”. In addition, due to the lack of insights on reward systems within self-managing organizations, holacratic organizations experience ambiguity and fuzziness about how their employees should be rewarded within their organizational structure. Consequently, the organization would also like to find out how their employees are actually experiencing the rewarding aspects within their organization, which resulted in the following research question:
"How do the employees of the organization studied experience the rewarding aspects used in terms of claims, concerns and issues as proposed by the fourth generation evaluation method".
This research question is answered conducting a qualitative evaluation research. The reason for a qualitative approach is to focus on understanding the experiences and life-world of employees through focus groups and interviews rather than measuring performance effects through questionnaires (Patton, 2015; Bleijenbergh, 2015). The results of this research provide in-depth insight on how employees experience the rewarding practices within their organization and outline potential pathways to further develop its current version of the Baarda model. The principles of the fourth generation evaluation of Guba & Lincoln (1989) are applied to structure the results based on claims, concerns and issues. By applying this method, it became apparent which unresolved issues need to be resolved to improve the implemented Baarda model and associated rewarding practices within the organization. In addition, this research provides an understanding of how the implemented Baarda Model is used within a holacratic organization and can lay the foundation for further research on how this could be applied into other holacratic organizations. By conducting this study, other organizations can benefit from this knowledge and therefore implementation of a reward system in a holacratic organization should become more accessible as difficulties in developing a reward system within a holacratic structure are further reduced. To scholars, this evaluation research will provide an extensive understanding of how this reward system is being used, developed and experienced within a self-managing structure. Moreover, this research illustrates how a specific reward system which works in a self-managing structure is implemented and creates knowledge on specific challenges that arise in self-managing organizations with regard to rewarding practices.
This master thesis continues by clarifying further the concept of holacracy, reward systems and the challenges that arise when developing a reward system within a holacratic structure. Furthermore, a case description and the Baarda model are discussed in detail after which the design of this study is explained. Next, the empirical data is analysed and discussed in which the claims, concerns and issues of the fourth
generation evaluation method were leading. Finally, the conclusion and discussion are presented, which provides an answer to the research question and a description whether the aim of the research is achieved.
2
Theoretical background
In this chapter the theoretical background of all relevant concepts within this research is described. First, self-managing organizations are explained, and it will become clear how this form differs from traditional organizational forms. An extensive description of holacracy, a form of a self-managing organization follows. This elaboration will make it clear which challenges an organization with a holacratic structure faces. One of these challenges is the development of an own organizational reward structure. Next, a specific organizational reward system, the Baarda model, is explained and later (chapter 4) evaluated. Eventually, organizational reward systems are elaborated upon, and insight is gained into the functions every reward structure must fulfill in order to be effective. Finally, this chapter will conclude by presenting a conceptual framework of the theoretical background.
2.1.Self- managing organizations
The business environment of organizations around the world have become increasingly dynamic due to rapid changes in the global business environment and technological improvements (Stiglitz, 2008). These developments have consequently put current hierarchical structures under pressure. Over the last half-century, limitations of the managerial hierarchy have become increasingly apparent. The traditional managerial hierarchy, with flows of directives from top to bottom, tends towards rigidity (Burns & Stalker, 1961; Hamel, 2007). Long-standing research suggest that hierarchy functions are more effectively in stable conditions but face serious challenges in dynamic conditions (Burns & Stalker 1961; Mintzberg 1979; Rishipal, 2014). Today’s fast- paced environment combined with limitations of rigid traditional hierarchical structures, stimulates the rise of self-managing organizations.
Self- managing organizations are defined as those that radically decentralize authority in a formal and systematic way throughout the organization. Self-managing organizations eliminate the hierarchical reporting relationship between manager and subordinate that serves as the core building block of the managerial hierarchy and constitutes its key mechanism of control (Lee & Edmondson, 2017). The elimination of the hierarchical reporting relationship between manager and subordinate results in employees and groups which must manage themselves. Furthermore, self-managing organizations emphasize that radically decentralized organizations necessarily operate through an ongoing dynamic process rather than by building a static operating structure (Lee & Edmondson, 2017). By eliminating the managerial controls and reporting relationships, an organization can rapidly adapt to the changing environment (Bernstein et al., 2016). It should be noted that eliminating managers as a formal role does not mean self-managing organizations lack managerial duties. The work of monitoring progress towards organizational goals, allocating resources or projects, designing tasks and
organizational structures, and providing feedback to employees remain fundamental to effectiveness in self-managing organizations. However, these authorities are formally distributed to individuals in a way that is not permanent, not bound and not vested in hierarchical rank (Lee & Edmondson, 2017).
The purpose of self-managing is to reduce the amount of sign-offs usually needed to make decisions in bureaucracies. In traditional organizations, a complex web of titles, job descriptions and reporting relationships makes it less transparent who decides what. In more recent organizational models, such as holacracy, every employee can see who holds each role and which responsibilities (Bernstein et al., 2016).
2.1.1. Advantages and disadvantages of a self-managing organization.
A self-managing organizational structure has a number of advantages. The fact that there are no managers and no hierarchical reporting relationship is built on the premise that employees will feel more involved with the organization and therefore show more initiatives. In addition, their capabilities are likely to increase because employees are motivated to invest in their skills, as they are responsible for the quality of their own work. Further, employees are able to respond rapidly, coming together in teams to tackle challenges and to experiment with new ideas which increases the flexibility. Employees are also able to make better decisions by pushing information and expertise down to the front lines as self-management promotes faster decisions (Hamel, 2011).
A self-managing organizational structure also has disadvantages. It requires employees to adapt to this new organizational structure and employees who have worked their entire lives in hierarchical organizations may not be able to cope with this change. In addition, there are also challenges with regard to accountability. Everyone is responsible for safeguarding quality, efficiency and teamwork by calling out colleagues who violate policies or norms. However, it can be a challenge for employees to deliver a strong message to colleagues who do not meet expectations. In addition, it is difficult for employees to see how they grow in the organization, as their progress relative to peers does not resemble a comparable corporate ladder to climb. Finally, it takes a while to fit in and employees might take a year before becoming fully functional in the system (Hamel, 2011).
Such advantages and disadvantages must be taken into account before an organization decides whether or not to apply a self-managing organizational structure. Organizations should also take into account that using the principles of self-management to design the whole organization only makes sense if the organization operates in a fast-changing environment in which the benefits of making quick alterations far outweigh the costs, the wrong alterations will not be catastrophic, and the need for explicit controls is not significant (Bernstein et al., 2016). Therefore, many smaller organizations and start-ups adopt the principles of a self-managing organizational structure (Bernstein et al., 2016; Velinov, Vassilev & Denisov, 2018).
2.2. Holacracy
The best- known and most fully specified variation of a self- managing organizations is holacracy (Bernstein et al., 2016; Lee & Edmondson, 2017; Velinov et al., 2018). Holacracy provides an adaptable organizational structure where authority is clearly distributed, and effective meetings are being held. In addition, it distributes power throughout the whole organization in order to achieve the organizational purpose (Robertson, 2015). Many authors express that holacracy is largely an integration and extension of existing models (Robertson, 2006; Kamp, 2014; Krasulja, Radojević & Janjušić, 2016). Some authors indicate that today’s holacracy is a refined version of sociocracy (Krasulja et al., 2016; Kamp, 2014). Sociocracy is a governance structure developed by a Dutch electrical engineer, Gerard Endenburg, who enhanced the model with principles from cybernetics, the science of steering and control (Robertson, 2006; Kamp, 2014; Krasulja et al., 2016). The structure of sociocracy is based on a hierarchy of circles and each circle is a policy-making unit of a group of people with a common objective (Kamp, 2014). The concept of Holacracy and the core practices for organizational structure and governance are elaborated further in this section. In addition, a comparison is made with traditional organizational structures.
2.2.1. The holacratic structure
The holacratic structure consists of circle organization and double linking. Which means that the organization is built out of semi-autonomous, self-organizing circles (Robertson, 2006) which are the essential building blocks of the organization and are illustrated in figure I. The super circle is the only circle which is not nested within another circle and form the boundary of the organization. A circle in a holacracy is not a group of fixed people, but a group
of roles which are established to fill a purpose (Bernstein et al., 2016). Each (sub-) circle has the authority and responsibility to execute, measure and control its own process to move toward that purpose (Robertson, 2006). However, these circles need to design and govern themselves within the guidelines provided in the constitution of the organization. The constitution is a living document which outlines the rules by which circles are created, changed, and removed. It does not specify how individuals should do their jobs but describes in a broad way how circles should be identified and how roles can be assigned. In addition, it describes what boundaries the roles should have, and how the circles should interact with each other (Bernstein et al., 2016).
The various circles synchronize information by applying the concept of double linking. Every circle incorporates the roles of a lead link and a representative link. The lead link represents the super circle and aligns the purpose of the sub-circle with the purpose of the organization within a sub-circle meeting. The representative link represents purpose of the sub-circle within this circle meeting (Robertson, 2015). Double linking means that during each circle meeting, one elected member from the super circle, the lead link, and one elected member from every sub-circle, the representative link, attends the meeting to ensure the circles decisions are
aligned with the needs of the super circle and perspectives of the sub-circles (Kamp, 2014). This process is illustrated in Figure II.
The structure of a holacratic organization differs from a traditional organization. In a holacracy, individuals do not carry job titles, but they acquire a collection of roles (Bernstein et al., 2016; Kamp, 2014; Robertson, 2015; Krasulja et al., 2016). Working with roles instead of job descriptions provides flexibility. This is due to the fact that managers do not coordinate the work of individuals, but individuals are to be directed by highly formalized, yet flexible, role definitions (Lee & Edmonson, 2017). Roles are dynamic and change over time, unlike traditional job descriptions, which are often ambiguous, theoretical, and soon outdated (Robertson, 2015). Holacratic roles are defined with a clear purpose through which they contribute to the organizational purpose and the aim of the circle. When a role does not contribute any more to this purpose or aim it is withdrawn (Kamp, 2014). Individuals can hold multiple roles which they craft and revise to address shifting organizational and their individual needs (Bernstein et al., 2016; Kamp, 2014). Each role is provided with its own responsibilities and authorities which can vary from each other.
By performing their roles, individuals sense opportunities to improve the organization to align better with its purpose (Kamp, 2014). These opportunities are called tensions, meaning the gap between how things are and how they could be (Robertson, 2015). These tensions are discussed in operational or governance meetings which are the mechanisms by which a holacratic structure can shape itself (Kamp, 2014; Robertson, 2015). Governance meetings have a particular function allowing employees to make fundamental changes in the organizational structure such as creating or dissolving (sub)circles, amending or removing roles and electing employees to fill certain roles. Operational meetings, sometimes called tactical meetings, are everything that happens outside of governance and is about using the structure defined in governance in order to get the work done (Robertson, 2015).
2.2.2. Leadership & decision-making in holacracy
In a holacratic organization, leadershipis distributed among roles and not individuals. The responsibility of leadership continually shifts as the work changes and as employees create and define new roles. These changes are made explicit and visible by using specific software which is accessible for every employee in the organization. In addition, this software provides insight into the purpose, accountability, and decisions right of every circle and role (Bernstein et al., 2016).
By providing roles with authorities and responsibilities, decision-making is distributed throughout the organization (Kamp, 2014). All decisions are made based on present understanding and refined as new information emerges. This is unlike traditional organizations which rely heavily on planning and control mechanism (Robertson, 2006). In addition, decisions in a holacracy are made based on consent which means that decisions are made when nobody has a reasoned objection against the proposed decision (Kamp, 2014). Reasoned objection means here that the decision might put the purpose of the organization or the aim of the circle at risk (Eckstein, 2016). The goal of consent-based decision-making is not to find the best decision, but to make small working decisions rapidly and let the best decision emerge over time (Kamp, 2014).
2.2.3. Challenges in a holacratic structure
Implementing a holacratic structure brings various challenges to an organization. This is because holacracy offers a framework to bring agility at an organizational level (Kamp, 2014) but it does not define certain general business processes like a reward system, a performance management system, a budgeting process or a hiring process. Moreover, the holacratic constitution does not define or specify these general business processes and it is therefore the task of the organization to develop these general business processes themselves (Robertson, 2015). This section will address challenges that holacratic organizations face with regard to this research.
2.2.3.1. Challenges in the evaluation process
A holacratic structure complicates the evaluation process of employees. One reason for this is that employees can adopt and withdraw from many different roles within a short period of time. The employees negotiate with one another about their individual strengths and interests in the work that needs to be done. As a result, they dynamically allocate roles to those best suited to carrying them out. (Bernstein et al., 2016). Consequently, the responsibilities and working activities of employees are ever changing which complicates the evaluation process. In traditional organizations, the process of evaluating employees is often done by means of performance management where a manager evaluates employees against various elements of the job descriptions (Boselie, 2014; Robertson, 2015). Performance management can be applied to inform, guide, monitor and evaluate employees to achieve organizational goals (Boselie, 2014). However, the downside of performance management is that
performance goals need to be installed which can have negative consequences in many ways; they can narrow focus, motivate risk taking, lure people into unethical behavior, inhibit learning, increase competition, and decrease intrinsic motivation (Ordóñez, Schweitzer, Galinsky & Bazerman, 2009).
There seems to be a fundamental difference between evaluating employees in traditional structures and a holacratic structure. In a traditional structure, only one manager is responsible for the evaluation of employee which are based on predetermined performance goals (Boselie, 2014). In a holacracy there are no predefined performance goals or managers, and expectations of the employees are dynamic because they can reshape their roles and change what they are really responsible for (Robertson, 2015). Consequently, a challenge arises about how a holacratic organization can evaluate their employees in an appropriate way whilst taking into account the dynamic responsibilities and ever-changing working activities of employees. Moreover, no particular person has the power or is in the position to assess someones performance.
2.2.3.2. Challenges in designing an organizational reward system
Another challenge organizations face when shifting to a holacratic structure is developing their own reward system which suits their business. However, organizations experience difficulties in implementing a reward system in a holacratic organization (e.g. Bernstein et al., 2016, Adler et al., 2018). These difficulties arise from the ever-changing nature of roles and the role description in a holacracy (Robertson, 2015). This means that activities which belong to a certain role can change quickly when an employee finds this justified and knows to sufficiently motivate the rationale during a governance or operational meeting.
Next to roles and role descriptions being ever changing, individuals in a holacracy collect their personal portfolios of roles which can also change quickly. This makes it challenging to determine salaries for the employees because of the many different activities they enact (Bernstein et al., 2016). In reward systems of traditional organizations benchmarking is used to determine the salary. This is possible because traditional organizations use job descriptions through which they can compare existing job descriptions and job evaluations with other organizations in comparable situations and thereby determine the salary (Boselie, 2014; Lawler, 1982). However, benchmarking is not possible in a holacratic organization because people collect different roles in multiple circles. For instance, an employee could divide her time between developing software, determining a marketing strategy, creating internal leadership training, community outreach, and planning informal events (Bernstein et al., 2016). As a result, holacratic organizations face a challenge to develop a reward system that fits in a holacratic structure and its business operations. Some companies (e.g. HolacracyOne & Zappos) are experimenting with a so-called skill badge system for rewarding their employees (Bernstein et al., 2016). Employees can earn badges which represents a specified skill, talent, or other capacity needed by the
context related, there are still many complexities (Bernstein et al., 2016) and it is questionable whether this system offers a solution for more holacratic organizations.
2.3. Baarda model
The Baarda model is a specific reward system which is implemented in many Dutch organizations, including holacratic organizations. It is devised by a Dutch consultant named Rolf Baarda and was originally developed and designed for organizations with a traditional organizational structure. However, this model seems to provide a viable solution to the challenges described in the previous section. This paragraph will elaborate on various elements and profiles of the Baarda model. In addition, the allrounder, specialist, professional and generalist profiles are described in detail, as these profiles are the main ones present in the organization researched. Figure III provides an overview of the Baarda model.
Issue
type
Components Profiles Explanation profiles
Strategic top Strategist Leader Generalist Professional
Manage portfolio product market combination Manage 1 product market combination Changes, direction, scope 2-3 years Conceptual problems, scope 1 year Change organization Specialist All- rounder General worker Assistant
Unique profession technical problems, analytical Procedures, flexible, communicating
Rules, accuracy, involvement 0 problems, obedient, reliable Routine
organization
Figure II: Summarization of the Baarda Model
2.3.1. Components of the Baarda model
The Baarda model is a reward system which divides an organization into three components, which are described below. These components are based on the work that must be performed within every organization.
• Routine organization: focusses on the execution of work. The employees in the routine organization work according pre-defined rules and procedures.
• Change organization: ensures that necessary innovations occur in the organization and employees are mainly concerned with more abstract issues.
A bs tr ac t i ss ue s C onc re te is sue s
• Strategic top: responsible for the entire business model and the strategic alignment within the market (Model Baarda, n.d.).
2.3.2. The Baarda
profilesEight profiles are distinguished within the three components mentioned above. These profiles are differentiated based on the complexity of issues which need to be solved and the problem-solving skills required to solve these issues. For example: profiles at the lowest level, the assistant, are responsible for solving the simplest problems which occur in an organization, while the strategist handles the most strategical and complex organizational issues (Model Baarda, n.d.).
The Baarda model also establishes the content of the profiles by taking into account concrete and abstract issues that must be resolved within an organization. Concrete issues are structured in such a way that solutions can be found on the basis of existing knowledge and experience profiles. Employees who are assigned to the assistant, the general worker, the all-rounder and the specialist profile solve these concrete issues. This is in contrast to abstract problems, which relate to important organizational processes which have a high risk of failure. Because of this, abstract issues must be viewed in their full context in order to solve them. The profiles of abstract issues are the professional, the generalist, the leader, and the strategist (Model Baarda, n.d.).
2.3.3. Using the Baarda model
Ultimately, the organization should subdivide each employee into one of these eight profiles which can be done through a profile description. The allrounder, specialist, professional and generalist profile will be briefly explained so the distinction between the profiles becomes clear. These profile descriptions can help organizations to plot their employees into a specific profile. An employee in the all-rounder profile solves practical issues daily. The employee must be able to anticipate, needs to have some professional knowledge, and is able to communicate effectively. An employee in the specialist profiles solves both the problems that are too difficult for employees in the routine organization and carries out the work in accordance with the lines established by the professional and generalist. The employee must have analytical skills and needs to be result-and -subject oriented. An employee in the professional profile is responsible for projects in which there is a constant weighing of interests from stakeholders. In addition, they need to be able to translate strategic goals into operational tasks. It requires conceptual ability, persuasiveness, and decisiveness to take on this profile. An employee in the generalist profile is responsible for a number of business processes within the organization and he or she needs to determine which products must be produced by the business processes. The employee in this profile must be able to think strategically, steer and influence colleagues in the desired direction, and have business development skills (Model Baarda, n.d.).
Next to the plotting of profiles, organizations must also determine the knowledge level of the employee. Within a profile there are different levels such as the junior, medior, core and senior level. An employee who needs to learn how to work independently is allocated at the junior level. The medior level represents employees who can work independently but still needs to find out which approach works best in order to give substance to the work which needs to be done. In the core position, an employee works pro-active and shows ownership of the assignment and supports the juniors and mediors when needed. An employee in the senior position knows the organization and works which need to be done within the profile well. In addition, colleagues and policymakers naturally go to the senior to ask for help (Model Baarda, n.d.).
When every employee is assigned a Baarda profile, the organization has the opportunity to reward their employees based on their problem-solving capacity. Rolf Baarda offers a salary indication which is based on current market developments so that the organization can make an estimate of the salary of an employee. However, this salary indication serves as advice and the organization itself still must develop their final salary distribution.
2.4. Organizational reward systems
In order to conduct research to a reward system in a holacracy, organizational reward systems should be explained in general. This paragraph provides an understanding of organizational reward systems and the functions it needs to fulfill to be effective. Finally, the design of an organizational reward system will be discussed.
2.4.1. Introduction to organizational reward systems
An organization has the potential to remain viable as long as its members choose to participate and engage in necessary behaviors (March & Simon, 1958). In order to obtain these behavioral contributions, an organization must provide its members inducements of value to them (Gerhart & Milkovich, 1992; March & Simon, 1958). This exchange process is at the core of the employment relationship and can be viewed as a type of contract, implicit or explicit, which imposes mutual obligations on the parties involved (Simon, 1951; Williamson, 1975; Rousseau, 1990). The foundation of that exchange process are decisions by employers and employees regarding the reward system (Gerhart & Milkovich, 1992; J. Kerr & Slocum, 1989; Barber & Bretz, 2000).
Reward systems are one of the most prominent and frequently discussed features of organizations (Lawler, 1982). An organizational reward system embodies the policies and mechanisms by which organizations administer employee reward outcomes (e.g. pay increases, periodic adjustments). In addition, the reward systems can be either performance or non-performance based. When performance oriented, employees are rewarded according to their contribution to the organization or how well they perform in their job. This type of system may use a variety of mechanisms, including
performance appraisal, as part of the reward decision process. A non-performance system rewards employee based on their seniority (e.g. years of service, rank, status), market conditions (e.g. cost of living adjustments), and other mechanisms (Chiang & Birtch, 2005).
2.4.2. Functions of an organizational reward system
The organizational reward system has several important functions (Gerhart & Milkovich, 1992). First, it plays a role in the attraction, retention and motivation of organization members (Barber & Bretz, 2000; Gerhart & Milkovich, 1992; Lawler, 1982). Thus, it shapes the composition of the organization in terms of its human capital and competencies. Secondly, decisions on reward systems have an influence on organizational culture and structure (Gerhart & Milkovich, 1992; Lawler, 1982). Moreover, an effective reward system is expected to influence these five factors which in turn influences the organizational effectiveness (Lawler, 1982). These factors are further elaborated below.
1. Attraction and (2) Retention: The functions attraction and retention are described together due to it substantial overlap in the psychological processes underlying attraction and retention (Barber & Bretz, 2000). Reward practices plays a primary role in the attraction and retention of (new) employees (Barber & Bretz, 2000). Research on job choice and turnover shows that the kind and level of rewards offered by an organization influences who is attracted to work for an organization and who will continue to work for the organization. In addition, those organizations which provides the highest rewards tend to attract and retain the most people (Lawler, 1982). Research also shows that high performers need to be rewarded more highly than poorer performers in order to be attracted and retained (Lawler, 1982; Barber & Bretz, 2000).
3. Motivation: Rewards are consistently acknowledged by organizations and managers as an important element in motivating employees (Cacioppe, 1999). However, the challenge of how to motivate employees by means of reward practices has been a primary concern of owners and managers (Bartol & Locke, 2000). Only those reward practices that individuals perceive as important can impact their motivation. In addition, Vroom (1964) argues that reward practices are more likely to motivate individuals when three conditions are met: (1) employees feel that they have been set achievable objectives; (2) that they can see a clear link between the rewards and the attainment of these objectives and (3) that they value the rewards. Furthermore, employees tend to behave in a way which they perceive leads to rewards they value (March & Simon, 1958; S. Kerr, 1975; Lawler, 1982). Thus, an organization which is able to tie valued rewards to the behaviors they need to succeed is likely to find that the reward system is a positive contributor to its effectiveness (Lawler, 1982).
4. Reinforce and define the organizational structure: The reward system of an organization can reinforce and define the organization’s structure (Lawler, 1982). In an organizational structure, individuals are ranked and paid according to their position in that structure. These positions are revised regularly so that desirable performances are rewarded by an advancement in the organizational structure (Auriol & Renault, 2001). In addition, the structure of an organization is not only established formally but it also develops informally (Magee & Galinsky, 2008). The reasoning behind this informal hierarchical differentiation is that individuals form assumptions about each other’s competence, merit pay, and influences within the organization which results in an informal hierarchical order that guides their interactions (He & Huang, 2011).
5. Reinforce and define the culture: Reward systems can define and reinforce the values and norms that compromise the organizational culture (J. Kerr & Slocum, 1987; Lawler, 1982). The organizational culture is concerned with controlling the behaviors and attitudes of organization members. It determines and reflects the values, beliefs, and attitudes of its members and is rooted in countless details of organizational life. These cultural values and beliefs foster norms which influence employees' behavior (J. Kerr & Slocum, 1987). The reward system is a primary method of achieving control. It defines the relationship between the organization and the employee by specifying the terms of exchange: it specifies the contributions expected from members and expresses values and norms to which those in the organization must conform, as well as the response individuals can expect to receive as a result of their performance (J. Kerr & Slocum, 1987).
2.4.3. The design of an organizational reward system
Next to the functions reward systems ought to fulfill, they are often a significant cost factor and its potential for significant effects on attitudes, behaviors, and ultimately organization effectiveness suggest that compensation is an area of strategic importance (Lawler, 1982; Milkovich & Newman, 1987; Mahony, 1989; Gerhart & Milkovich, 1992; Heneman, Eskew & Fox, 1998). The reward system may represent over 50% of the organization’s operating costs (Lawler, 1982) and as much as 90% in service organizations (Gerhart & Milkovich, 1992). Therefore, in designing the reward system it is important to focus on how high these costs should be (Lawler, 1982; Gerhart & Milkovich, 1992). Next to the costs, the reward system of an organization should be aligned with the organizational strategy (Allen & Kilmann, 2001; Mahony, 1989; Cacioppe, 1999; Bach, 2005; Boselie, 2014) and it should attract, motivate and retain individuals with the knowledge, skills and abilities required to realize the organizational strategic goals. Furthermore, it should create a supportive culture and structure (Allen & Kilmann, 2001; Galbraith, 1973; Kilmann, 1989;).
In order to design a reward system, it is important to identify organizational outcomes which are needed in order to be successful in the environment of the business and then to design the reward system
in a way which enables these outcomes to in fact be realized (Lawler, 1982). However, theory and academic research offer little guidance regarding the design of optimal reward systems (Gerhart & Milkovich, 1992). A reason for this might be that organizations similar in terms of types of employee and jobs, market size, organizational size and so on often have considerable discretion in the design and administration of how they reward their employees (Gerhart & Milkovich, 1992).
Although theory and academic research offers little guidance, Gerhart & Milkovich (1992) suggest that an organization needs to make four organizational decisions in designing a reward system which might fit their need. These organizational decisions are multidimensional, incorporating aspects such as, pay level, reward structure, systems for recognizing individual differences in pay and employee
benefits. The pay level includes only direct or indirect payments to employees, such as wages and
bonusses (Gerhart & Milkovich, 1992). The reward structure consists of the formal pay structures embedded in the organization and could be based on skills or on job evaluation which produces different behavior (Gerhart & Milkovich, 1992; Lawler, 1982; S. Kerr, 1975). Reward structures based on skills are believed to be instrumental in skill acquisition behavior. In contrast, job evaluation-based structures are believed to cause job or promotion seeking behaviors. Organization also need to recognize individual
differences in order to secure reward equality between employees. Employee benefits can be used as a
means of achieving important objectives like attraction and retention. Employees rely on benefits such as health care and pensions for economic and personal well-being. These benefits represent a large share of the total compensation, and therefore, have a potential to influence the organizational effectiveness (Gerhart & Milkovich, 1992).
Ideally these four organizational decisions could help the organization to design a reward system which promotes both productivity and satisfaction of organizational members (Bartol & Locke, 2000). However, as mentioned before, these decisions should be aligned with the organizational strategy (Cacioppe, 1999), but this alignment is not always realized. S. Kerr (1975) provides many examples of organizational reward systems which pay off for one behavior even though the organization hopes for another behavior. This results in a dysfunctional organizational reward system designed in such a way that behaviors which are rewarded are those which the rewarder is trying to discourage, while the behavior the rewarder desires is not being rewarded at all.
2.5. Theoretical conclusion
This chapter describes important theory creating a theoretical framework of the concepts that are being researched. By describing self-managing organizations and holacracy, an overview has been created of how these structures work and some differences with traditional organization structures have been detailed. In addition, the theory about the challenges of holacracy reinforces the relevance of this research.
these organizations with the concept of holacracy and the implementation of various business processes which suits a holacratic structure. The researcher attended several meetings of energized.org which specifically dealt with organizational reward systems within a holacracy structure. During these meetings, it became evident that these organizations give substance to holacracy in different ways; further complicating the standardization process and implementation of reward systems. For example, one organization fully implements holacracy and another organization just for one department. Therefore, many Dutch organizations tend to develop their own reward structure which better matches their specific business operations and the way they apply holacracy.
Because organizations tend to apply holacracy in a different way, the lack of empirical and theoretical evidence about holacracy and corresponding pre-defined business processes, the design and implementation of an organizational reward system in a holacracy still remain an issue. Theory about the functions and design of operational reward systems provide guidance to study the design of the Baarda model. This is achieved by conducting a focus group and interviews with the employees which determined to what extent the Baarda model fulfills the functions an organizational reward system must fulfill. Eventually it became clear whether the employees in a holacracy were satisfied with this specific reward system. Consequently, this theoretical framework supported the identification whether the Baarda model can be improved in a way that fits the structure of a holacracy better.
3
Methodology
This chapter describes how the research is conducted. This research applied a qualitative research approach which means the focus was on better understanding the experiences and life-world of employees through focus groups, interviews and observations rather than measuring effectiveness by means of questionnaires (Patton, 2015; Bleijenbergh, 2015). The choice for a qualitative study design is further explained in this chapter. The chapter discusses the research design, the context description, data collection methods and the data analysis technique. Furthermore, the ethical considerations and research limitations are elaborated. Lastly, figure IV provides a visualization of this research which includes important data collection methods as covered in this chapter.
Figure IV: Overview research
3.1. Research design
In order to answer the research question: “how do the employees of the organizations studied experience
the rewarding practices at the organization in terms of claims, concerns and issues proposed by the fourth generation evaluation method” a formative evaluation research is conducted and the principles
of the fourth generation evaluation are applied. These concepts are further elaborated on in the following subsections.
3.1.1. Evaluation research
Evaluation research is conducted to test the effectiveness of specific solutions and human interventions, and distinguishes between two quite different purposes of evaluation: (1): summative evaluations that judge overall effectiveness to inform decisions about whether a program should continue and (2) formative evaluations that aim to enhance programs (Patton, 2002).
product is effective (or not). This serves as the basis for deciding whether to continue the program, policy or product, and whether it has the potential of being generalizable to other situations. A summative decision implies summing- up judgement decisions based on quantitative data consisting of relatively large samples with statistical pre- post and follow up results (Patton, 2002). To gain a deep understanding of how the mechanisms of a reward system and if it accomplishes what it is designed for, a summative scale will provide too limited answers. However, formative evaluations serve the purpose of improving a specific program, policy, group of staff, or product and it relies on qualitative methods such as interviews, focus groups and observations (Patton, 2002). Consequently, a formative evaluation can be used to create a deep understanding of the mechanisms of a reward system where potential pathways for improvements can be identified.
3.1.2. Fourth generation evaluation
Fourth generation evaluation is a process for conducting evaluation research. The process is organized by claims, concerns, and issues of the participating stakeholders and it utilizes the methodology of the constructivist’s paradigm (Guba & Lincoln, 1989). A claim is any assertion a stakeholder may introduce that is favorable to the evaluand (the entity being evaluated). A concern is any assertion a stakeholder introduces that is unfavorable to the evaluand and an issue is any condition about which reasonable persons may disagree (Guba & Lincoln, 1989 p.40). Different stakeholders will harbor different claims, concerns and issues. It is the task of the evaluator to figure these out and to address them in the evaluation. Although there are always many different stakeholders, the fourth-generation evaluation makes a distinction between agents, beneficiaries and victims. The agents are the persons involved in producing, using and implementing the evaluand. The beneficiaries are those persons who profit in some way from the use of the evaluand and the victims are the persons who are negatively affected by the use of the evaluand (Guba & Lincoln, 1989 p.40-41).
Fourth generation evaluation begins with the assumption that realities are not objectively “out there” but are constructed by people. These constructions are influenced by a variety of social and cultural factors that lead to shared construction. Within this constructivist paradigm, participants who engage with each other have the opportunity to confront and develop criticisms of their own constructions as well as of the constructions of others. Each participant will receive more information than previously and is in a better position to understand and determine how to use that information. Finally, the constructivist position does not seek justification for anyone’s present position but rather seeks connections between the positions as a means to move to higher intellectual, moral and ethical ground (Guba & Lincoln, 1989). Because of this, boundaries and specifications of the evaluand are generated by the stakeholders themselves via a process of negotiation (Huebner & Betts,1999; Guba and Lincoln, 1989).
3.2. Context description
This research was conducted at a software-development organization that offers a telephony platform to other organizations. Every day, 60 employees work on applications to make personal communication between organizations possible. Since 2015, the organization has been working with holacracy and implemented the Baarda model in order to try and solve the challenge of rewarding practices in a holacracy. The Baarda model was implemented with the intention to ensure greater transparency and equality in the area of rewarding employees. However, as mentioned before, the Baarda model was not originally made to fit self- managing organizations or a holacracy structure. Nonetheless, the organization saw enough potential to adjust the model to make it work in a holacracy. Because of this, and the necessary courage, the organization became the first organization without a traditional hierarchical structure which adopted the Baarda model.
3.3. Data collection
The research applies a formative evaluation method based on qualitative data. In this section three technique are described that generate qualitative data. These are: exploratory interviews, focus groups, and in-depth interviews.
3.3.1. Orientation interview
Before conducting the focus groups, one orientation interview was conducted in order to establish an overview of the rewarding aspects at the organization and to create an understanding about how the rewarding aspects have been implemented and enacted during the years.
The orienting interview took place with an employee which can be seen as an agent stakeholder. This respondent was closely involved in the implementation of the Baarda model and is still one of the points of contact for this model. During this interview, the Baarda model was frequently discussed. The discussion made it clear why the organization had implemented the Baarda model and how they have adapted the model to the holacratic structure. In addition, it became clear that the organization did not formulate expectations with regard to the Baarda model. This meant that these expectations could not serve as evaluation criteria, and new evaluation criteria needed to be established. In addition, it was discussed how the employees responded to this new model in order to make an assessment of the ideas that prevailed about the Baarda model. After this interview an understanding of the dynamics and practices of the Baarda model in their specific holacratic structure was created. This served as a basis for the focus group and in-depth interviews. The interview guide with the exact topics are included in Appendix I.
3.3.2. Focus groups
In order to develop evaluation criteria, a focus group was conducted. The objective of the focus group was to figure out rewarding aspects that, according to the participants, are needed in order to fulfill the functions described in section 2.4.2.
A focus group is an interview with a small group of people on a specific topic (Patton, 2015) and can be used to provide in-depth insights into, for example, products, brands and policies (Symon & Cassell, 2012). When skilfully handled, focus groups can bring up how people feel about a given topic and it can be used when in- depth feelings and experiences of people are tried to be explored (Symon & Cassell, 2012). During a focus group, participants hear each other’s responses and have the opportunity to make additional comments beyond their own original responses as they hear what other people have to say (Patton, 2015; Guba & Lincoln, 1989). However, participants do not have to agree with each other or reach any kind of consensus (Patton, 2015; Guba & Lincoln, 1989), nor is it necessary for participants to disagree. The object of the focus group is to get high-quality qualitative data in a social context where people can consider their own views in the context of the views of others (Patton, 2015).
3.3.2.1. Challenges of a focus group
Focus groups are cost-effective, highlight diverse perspectives, interaction among participants enhances the data quality, and it tends to be enjoyable to the participants (Patton, 2015). Moreover, because it is a group interview, the interpersonal dynamics frequently bring out aspects of topics that would not have been anticipated by the researcher and would not have emerged from interviews with individuals (Babbie, 2013). However, organizing a focus group also comes with challenges. Guiding a focus group means interviewing and at the same time moderating or guiding the discussion. This combination is complex (Patton, 2015; Symon & Cassell, 2012). The challenge is to control the dynamics within the focus group because letting one person dominate the focus group will reduce the likelihood of other participants expressing their opinion (Babbie, 2013; Patton, 2015). In addition, the number of questions which can be asked is greatly restricted due to the group setting (Patton, 2015). In addition, a focus group is beneficial for identification of major themes but not so much for the micro analysis of subtle differences (Kreuger, 1994). Lastly, those participants who realize that their viewpoint is a minority perspective may not be inclined to speak up and risk negative reactions (Patton, 2015).
Another challenge is to identify, seek out and involve relevant participants who should attend the focus groups (Symon & Cassell, 2012; Guba & Lincoln, 1989). A focus group typically needs a sufficient number of participants to attend to make it effective (Symon & Cassell, 2012). Groups are typically 6 to 10 people with similar backgrounds and experiences, who participate in a group interview for one to two hours to discuss major issues affecting them (Patton, 2015).
3.3.2.2. The preparation of the focus group
The aim of the focus group was to formulate criteria by which, at a later stage, the Baarda model could be evaluated. The focus group concentrated on the functions that, according to theory, a reward system must fulfill. An operationalization scheme of the theory that was available about these functions is included in Appendix II and served as guidance during the focus group. The operationalization scheme provides insight into how existing theories further define the functions. This helped to structure the focus group and to have an indication whether participants were deviating too much from the topics.
After this operationalization scheme was finished, six employees were carefully selected to join the focus group. In order to bring together the different perspectives and opinions present within the organization it was decided to select representative employees from different circles who had been working for the organization for some time. Together they discussed the important aspects of a reward system which are needed to fulfill these functions. The participants are described in Appendix III.
In addition to the operationalization scheme and the selection of the participants, the researcher tried to capture the perspectives and opinions of the participants as good as possible. Therefore, the researcher reviewed a checklist prepared by Krueger & Casey (2015) which provided advice to structure and guide a focus group and explained common mistakes. In addition, the focus group was set up in a meeting room at their office to create an open-minded, non-threatening environment. The researcher clearly indicated in advance that participation was voluntary and that the employees could leave the room at any time if necessary. This setting encouraged participants to share perceptions and their points of view without pressuring the participants to vote or reach consensus (Krueger & Casey, 2015; Babbie, 2013). By taking this into account, the focus group was conducted in a way that is comfortable and even enjoyable for participants as they share their ideas and perceptions (Patton, 2015).
3.3.2.3. The results of the focus group
After this preparation and taking all the challenges into account, the focus group took place. However, facilitating and conducting a focus group requires considerable group process skills which go beyond simply asking questions. Therefore, an employee of the organization supported the researcher by taking on a facilitating role during the focus group interview. The facilitator wrote the discussed results concisely on a white board creating an overview of what was being said. This allowed the researcher to direct full attention to the interview and all the (sub) questions.
The focus group began by writing the theoretical functions of a reward system, attraction, retention, motivation, define and reinforce the organizational structure and define and reinforce the organizational culture, on a white board. The participants were then asked which aspects of a reward system were important for them to fulfill these functions. The Baarda model was disregarded during the focus group in order to create an atmosphere in which they could express their wishes with regard to a
reward system in an ideal world. The results of the topics written on the whiteboard are shown in Appendix IV and the transcript of the focus group is provided in Appendix XI.
After the focus group was fully transcribed, a context analysis took place. This method is used to extract main themes from the data by interpreting and categorizing the transcript (Stappers, 2012). By using this method, the topics which were written on the white-board were linked to the quotes that justified these topics. When this was done, the topics related to rewarding aspects were examined and four main categories were defined by the researcher, namely general rewarding practices, the Baarda model, pay-for performance vs group-based pay, and career advancement. These main categories were used to structure the in-depth interviews which included various aspects of a reward system which, according to the participants, are important to fulfill the functions of a reward system. Eventually, these results were then used as criteria by which the Baarda model could be evaluated. This process is expanded upon in Appendix V.
3.3.3. In- depth interviews
Interviewing individuals who work in an organization is an important form of data collection (Bleijenbergh, 2015). During the in-depth interviews, respondents were asked to share their own perspectives and experiences on the topic asked (Symon & Cassell, 2012). This research method was used to find out how the employees experienced the rewarding aspects. These rewarding aspects were identified during the focus group which formed the basis of the interview guide which can be found in Appendix VI and the transcripts of the in-depth interviews are provided in Appendix XI.
3.3.3.1. Preparing the in-depth interviews
The preparation started with the construction of an interview guide, which was constructed based on the results of the focus group. Various rewarding aspects were discussed during the focus group but not every aspect has been elaborated in the interview guide. This is because some topics were not related to the reward system of an organization. Ultimately, only the topics which were related to the theoretical background or the operationalization scheme were included in the interview guide.
This interview guide was constructed in a semi-structured way which means the open questions had been determined in advance. The sequence of the questions was also established beforehand and were not fixed. Therefore, it was possible to ask follow-up questions (Bleijenbergh, 2015). Consequently, this helped to keep on top of the important topics and to have an overview whether all important questions were answered within the time range of one hour.
As soon as the interview guide was completed, six different respondents were strategically selected to be interviewed. They were selected from different circles to capture different perspectives and opinions. In addition, the respondents were selected to such an extent that they gave representative
representations of the various issues present in the organization. The selected respondents and their corresponding dominant circles are shown in Appendix III
3.3.3.2. Results of the in-depth interviews
During the in-depth interviews, each respondent was asked how they experienced the rewarding aspect, whether they thought it was important, and whether they were satisfied with it. Taking this approach, the claims, concerns, and issues (as described in section 3.1.2) respondents had regarding the specific reward aspect were analysed and identified. These results are presented in Chapter 4.
3.4. Data analysis technique
At the start of the interviews, respondents gave permission to audio-record the whole interview. This allowed to create interview transcripts which were analysed in order to interpret the interview data. This was accomplished by means of a template analysis. This is an approach which is being used in organizational research to organize and make sense of rich, unstructured qualitative data (Patton, 2015; Brooks, McCluskey, Turley & King, 2015). It is a particular style of thematic analysis that balances a relatively high degree of structure in the process of analyzing textual data with the flexibility to adapt it to the needs of a particular study. Central to this technique is the development of a coding template, which summarizes the themes identified by the researcher (King, 2012).
As mentioned before, the results of the focus group served as a guide to construct the semi-structured interview guide and the themes were organized in the initial template, which is shown in Appendix VII. The initial template was expanded on a priori themes based on the interview questions. This resulted in codes which reflected how the respondents described the rewarding aspect, if the respondent considered the rewarding aspect as important and if the respondent was satisfied with the rewarding aspect. However, After the first two interviews were fully coded in accordance with this template, the researcher concluded that the results that followed provided insufficient insight into the extent to which the employees experienced the rewarding aspects. This was partly due to the fact that too little distinction was made as to whether the respondents were actually satisfied or were not satisfied with the rewarding aspect. As a result, the template was modified and the claims, concerns and issues associated with the fourth generation evaluation method were used as the codes. By means of these iterations, a final version was constructed and added in Appendix VIII. By modifying the template in this way, the rewarding aspects could be subdivided in a systematic way. Therefore, sufficient insight was gained into the claims, concerns and issues respondents had with regard to the rewarding aspects. The final template contains some exemplary quotes, providing insight into how the researcher systematically subdivided certain sections of the interview transcript. After this was done for every transcript, the results could be interpreted by examining all codes and corresponding quotes.
