Blended Learning


Learn how members can effectively self-design and self-manage the reward policies and practices in their organization
Designing Reward Systems for Organizations

How to combine this online course with live discussions

The members of the same work group (whether a department, task force, project group, cross-functional team, or process improvement team) will gain extra benefits from taking any of our online courses AS A GROUP. Rather than members of an organization taking our online courses separately and thus independently, learning key principles and practices with your workplace colleagues will not only enhance what every member learns from our online courses, but will also make it much easier to apply what is learned back on the job—where it counts.

Basically, when all group members (1) learn the same language and the same concepts, (2) review the same assessment tools and their personalized results, (3) analyze and discuss the same business cases, and (4) follow the same guidelines for effective behavior—BECAUSE all these principles are fully shared in the group, they are more likely to be put into practice when challenging problems and conflicts appear in the workplace.

On this page, I outline how a work group can take full advantage of all the valuable materials in the Strategy-Structure Course. The unnumbered paragraphs describe what members are asked to do on their own, such as watch the course videos, take assessment tools, or complete work sheets in their course manual. Meanwhile, the numbered paragraphs provide the detailed steps for learning the material through face-to-face or virtual group meetings. Depending on the unique circumstances and needs of each group, this process for blended learning can be adjusted or expanded.


All members—on their own—watch the first two video sections in the course, which covers pages 1 to 15 in the Course Manual for Reward Systems. In a thirty-minute meeting, members address these numbered paragraphs:

1. As a group, members share their understanding of the Big Picture, including the eight tracks that are intended to transform all identified barriers to success into channels for success—across all the systems and processes in the organization. Members remind themselves of the particular sequence of eight tracks and how each earlier track sets the foundation for successfully completing the next track. Since the strategy-structure track and the reward system track address the formal systems in the organization, members discuss why the first three tracks must already have removed the barriers in the informal organization (the quantum infrastructure) before the work on the formal systems can be effective. In addition, the members share their understanding of the five stages of quantum transformation and why it’s so important that a critical mass of leaders/managers, who have initiated the eight-track program, must ensure that a systematic, thorough, and impartial diagnosis be conducted. The resulting diagnostic findings then allows the eight tracks to be scheduled and implemented in a manner that will effectively address the specific needs and expectations of both internal and external stakeholders.

2. Members then examine the differences between the two dueling paradigms (on page 7 in the manual) and how each paradigm leads to a very different kind of organization. So that everyone in the group understands the huge impact that each paradigm has on seeing, thinking, feeling, and behavior, the members can give examples of how each organization is likely to design very different kinds of strategies, structures, and reward systems, based on very different assumptions about human beings and what leads to organizational success. In particular, by understanding the Newtonian vs. the quantum approach to reward systems, members will have a better idea of how to first design and then implement revitalized reward systems in their own organization.

3. To reinforce the point about paradigm shifts, members discuss the many implications of the timeline that’s shown on page 8, which suggests when the world dramatically changed as never before—due to deregulation in many industries, transformation in many nations, and the emergence of the World Wide Web and the Internet. As a result, members can discuss why traditional Newtonian organizations (especially their formal systems) will be severely challenged in today’s world—if those systems are still designed for yesterday’s world. As group members discuss the meaning of this timeline, they can appreciate the importance of rewarding the observable behaviors that have been emphasized during the first three tracks of quantum transformation, instead of making the false assumption that conventional short-term results (such as quarterly profitability and current market share) will automatically—in a linear manner—lead to future success. Members can be asked to provide several examples of why relying primarily on short-term results in a Newtonian organization is, in fact, a perilous approach in today’s fast-paced, chaotic, interconnected, global marketplace—as highlighted on page 9 in the manual.

4. Members discuss the reasons why broad participation in self-designing and self-managing the formal systems is essential for expanding the self-aware consciousness of all employees (in a quantum organization)—rather than their surrendering to some external force, whether senior consultants or top managers, who dictate changes in the formal systems from above to the disempowered workers below them (in a Newtonian organization).

5. Since the reward system track must support the work in the strategy-structure track (as shown on pages 10 and 11 in the manual), members review the goals of strategy-structure and the importance of establishing crystal-clear SST links between each job and the strategic plan of the organization. The discussion then focuses on one of the key interfaces between strategy-structure and the reward system: the job interface. In particular, group members can discuss how establishing clear strategy-structure links throughout the organizations sets the stage for self-designing jobs and self-managing objectives that are most suited to self-aware participants in a quantum organization. As members discuss the material on pages 12 and 13 in the manual, they can better appreciate the unique job characteristics that actively support a well-functioning performance-based reward system. This discussion concludes as the members acknowledge the nature and goals of the reward system for quantum organizations in today’s world, as presented on pages 14 and 15, respectively.

On their own, group members view the next video section of the course, The Reward System at Work, on pages 16 to 28 in the course manual. In a forty-five-minute meeting, members discuss these numbered paragraphs:

6. Group members review how each of the earlier tracks creates the essential ingredients for a performance-based reward system, in which self-aware participants are inspired to high performance and satisfaction, as illustrated on page 16. Then members discuss the reward system logic on pages 17 to 19, which helps them see the dire, long-term consequences of maintaining a reward system that treats high performers and low performers pretty much the same. Over time, the organization will continue to lose its best talent, while it retains employees who only do the minimum to get by.

7. Next, members discuss the most fundamental questions that allow them to create either a performance-based or a non-performance-based reward system. Regarding the material on pages 20 to 28 in the manual, members thoughtfully discuss: “How does the organization motivate high performance—measured accurately and reliably—with its intrinsic and extrinsic rewards?” Naturally, to answer this question, the members must understand the nature of several basic concepts: performance, measurement, motivation, and rewards.

8. Members now discuss the key distinction between the rat model and people model of motivation, since that distinction captures the major difference between the Newtonian vs. the quantum approach to human nature and, therefore, reward systems. Since either very low stress or very high stress usually results in people unconsciously reacting to problems and conflicts like rats, members consider how to keep stress in their organization in the moderate range: stimulating, but not overwhelming. With moderate stress, people are more likely to be conscious and proactive, rather than unconscious and reactive. Obviously, the former leads to high performance, while the latter does not. By discussing these two models of motivation, members will develop a better understanding of how extrinsic rewards (e.g., an external stimulus to do something) are experienced very differently than intrinsic rewards (e.g., an internal desire to accomplish a goal). Ultimately, it’s the intrinsic rewards that are most engaging in the workplace for self-aware participants, so long as each person’s “lower-order” needs are being adequately addressed with the available extrinsic rewards.

On their own, members review the next two video sections: Modeling Performance Cycles (pages 29 to 35) and Key Questions About Performance Cycles (pages 36 to 41). In a forty-five minute meeting, members discuss these numbered paragraphs:

9. Group members discuss the key concepts and phases that have been arranged into an integrated model of performance cycles. It is vital that all members understand this dynamic model, since it is the basis for understanding how a reward system can produce either a growth cycle or a vicious cycle. The growth cycle represents the best the organization can achieve, whereby every person believes the reward system provides the rewards it promises, while it also creates the conditions so employees have the best chance of being successful and thus receiving both intrinsic and extrinsic rewards. Members share their understanding of each concept and phase in the full model, shown on pages 33 and 34, including how personality styles (S vs. N and T vs. F) and the prior tracks (culture, skills, team, and strategy-structure) all play a role in each performance cycle. Most important, to appreciate the differences between a growth cycle and a vicious cycle, members review how the results of one performance cycle (which either validate—or revise—each employee’s initial perceptions and expectations) have a major impact on the next performance cycle.

10. Members next discuss the key questions about performance cycles (pages 36 to 38), which are organized according to the phase from motive to effort, from effort to performance, and from performance to satisfaction. By discussing each of these questions, members can realize the many ways in which the reward system track can use the performance model to foster growth cycles and thereby avoid vicious cycles.

11. Group members are now ready to address whether employees believe that their reward system is credible—and how they make such a crucial decision. Referring to pages 39 to 41 in the course manual, members consider what particular information employees need to have in order to judge for themselves if they can believe their reward system is not only fair, but will also deliver what it promises, as specified through various reward policies, appraisals, and practices. This leads to the controversial topic of whether to have an open or a closed reward system, and to consider both the short-term and long-term consequences from having an open vs. a closed reward system. Of all the topics in the reward system track, this discussion is usually the most emotional and complex, since it raises sensitive issues of fairness and privacy. Nevertheless, members soon realize that it’s not a matter of having to choose one extreme or the other, but, instead, how to develop an integrated solution that gives employees the necessary information to judge the credibility of their reward system, while also ensuring adequate privacy on the extrinsic rewards that they have previously accumulated in the organization (such as their annual salary).

On their own, group members watch the video, Differentiation and Integration in Reward System Policies, which covers pages 42 to 47 in the course manual. In a thirty-minute meeting, members discuss these numbered paragraphs:

12. Members confirm what they learned in the Strategy-Structure Course: The more than subunits face different external settings, the more they need to be designed differently, so their different members and structures can match the attributes of their task environment. And the more that the various subunits have been designed differently, the more that integrative mechanisms are needed to join their efforts into a functioning whole. Similarly, members discuss the need for different reward practices for different subunits, so each subunit can customize the reward system to inspire its members to achieve their unique job objectives. And yet, the more that different reward practices exist within an organization, the more important it is to have organization-wide reward policies that establish a consistent—integrated—approach to delivering intrinsic and extrinsic rewards for the organization’s self-aware, human resources. This integrated reward system for the whole organization would promote feelings of equity, fairness, and accountability, which would further perpetuate a collective—cultural—belief in credible reward practices in every subunit, for every employee.

On their own, members watch the next video section, Revisiting Problem Management, on pages 48 to 59 in the course manual. If members have recently completed ADVANCED Training in Conflict Management (or have recently watched the same review of problem management during the Strategy-Structure Course) and have already discussed their understanding of the five steps and errors of problem management, along with decision trees, problem forests, and the Problem Management Organization (PMO), they can skip to the next video section, Exploring the RST Forest, as described below. Otherwise, in a thirty-minute meeting, the members discuss these numbered paragraphs:

13. Members review their understanding of the five steps and errors of problem management, with particular focus on the two most complex steps and errors: defining problems and implementing solutions. The members should appreciate why these two steps can only be conducted successfully if the collaborating mode is used on the integrative dimension on the TKI Conflict Model. To demonstrate their understanding, members provide examples of how different errors in problem management have previously derailed their efforts, wasted their time, and undermined the results.

14. Members review the crucial differences between a simple vs. a complex problem, by making use of decision trees, including the entangled roots (assumptions) below the surface. Such a discussion then sets the stage for appreciating a problem forest of many trees (especially for a very complex problem, such as redesigning and implementing new reward policies and practices). Members then discuss two different systems for determining which trees in the forest are worthy of consideration: the Lockean Inquiring System (based on agreement) and the Hegelian Inquiring System (based on disagreement). Members should look at the two kinds of problem forests, on pages 54 and 55, respectively, to make sure they understand the crucial differences between quickly focusing on the common (obvious) trees in the middle of the problem forest and actively debating the extreme (unusual) trees by the edges of the problem forest.

15. Members next discuss why only a Problem Management Organization (PMO) can succeed in exploring the whole forest of decision trees for an organization’s most complex and important problems (such as strategy-structure and the reward system), which will allow the formation of C-Groups (Conclusion Groups) and an S-Group (Synthesis Group) to conduct a thorough assumptional analysis, especially for designing and implementing a new reward system. The meeting in this section ends when members acknowledge that the first three tracks of quantum transformation must already have established the behavioral—quantum—infrastructure before any PMO can possibly function as intended.

On their own, group members watch the next video sections, Exploring the RST Forest, Organizing the RST Groups, Closing Reward System Gaps, and Reviewing Assumptional Analysis, on pages 60 to 139 in the course manual. If members will be going through the actual process of the reward system track within a PMO, a facilitator will guide the process and schedule the time for group meetings, as needed. But if members are going through this material to learn how the process will possibly be conducted at some point in the future, they’ll now participate in a sixty-minute meeting to review these numbered paragraphs:

16. Members discuss how the reward system track would proceed by first having everyone review the diagnostic report developed by external consultants during Stage 2 of quantum transformation. Members also consider what additional reward system gaps might have emerged since the time the diagnostic interviews were first conducted. Members then acknowledge that top management would be asked to stipulate if there are any constraints or restrictions that the participants in the reward system track must honor. Sometimes, existing union contracts or other legal requirements must be met in the short term. But in the long term, almost every aspect of the reward system is potentially negotiable—and thus changeable.

17. Members review the six steps for a group discussion, which is shown on page 62. With these steps in mind, members review the Work Sheets on Exploring the RST Forest, which are on pages 63 to 70 in the manual. These work sheets provide the space for members to identify the most important reward system gaps, which conclude with a set of integrating categories that will be assigned to the designated C-Groups in the PMO. At this time, members can also review the Process Observer Form, on pages 71 to 74, which is used during a number of RST Group discussions in order to ensure that all the diverse wisdom and talent in the C-Groups and the S-Group are fully available for all complex subjects.

18. Members review the official guidelines for developing each C-Group into a well-functioning team, as shown on page 77, followed by the mission of the S-group on page 78. Then the members review the Work Sheets on Organizing the RST, which concludes with each C-Group choosing its primary representative to the S-Group, including, just in case of need, a backup representative. Members share their understanding of these action steps and work sheets.

19. Members review and discuss the Work Sheets on Closing Reward System Gaps with Assumptional Analysis. Again the purpose is for members to make sure they understand how the process would work, if they filled out these work sheets during an actual assumptional analysis—pertaining to an “initial conclusion” about a reward system, or relating to the implementation of new reward policies and practices in subunits throughout their organization. Since these work sheets, on pages 89 to 112, are rather extensive and detailed, sufficient time should be taken in the group meeting to understand all the steps in the process of assumptional analysis.

20. Regarding the latter, if members have not taken the Critical Thinking Course, or if it has been a while since that course was taken and discussed as a group, members should discuss the last major section of this course, Revisiting Assumptional Analysis, which is on pages 113 to 139 in the manual. Indeed, discussing both the “Work Sheets on Closing Reward System Gaps” along with the pages on “Revisiting Assumptional Analysis” should provide members with a solid foundation for understanding the most complex aspects of conducting the reward system track.

On their own, members watch the closing video, which is covered on page 140 in the manual. At that time, they can test their knowledge of the key principles by taking the optional Final Exam for Reward Systems. Although Kilmann Diagnostics does not award a “certificate of achievement” for this course, receiving a score of 88 or more points (out of 100 possible points on twenty-five, multiple-choice questions) signifies that members have passed the exam and have thus learned the material.

NOTE: The optional Final Exam for every course can be taken as many as five times, since its purpose is to encourage members to learn the material—not to add stress to their life. However, if someone else purchased these courses for the group, the sponsor (for example, the employer) might require group members to pass each exam as an indication that they’ve learned the material. But Kilmann Diagnostics will not share any exam results if a member happens to score less than 88 points on any occasion for any course. We’ll only inform the sponsor when members pass their exams. Click to see Sample Questions on Each Final Exam.

Questions about blended learning?