MGCR 222 Lecture Notes - Lecture 5: Job Satisfaction, Total Quality Management, W. M. Keck Observatory

• School: McGill University
• Department: Management Core
• Course: MGCR 222
• Professor: Jean- Nicolas Reyt

Document Summary

Managers can think that their employees are either motivated by: extrinsic factors. Incentive systems refer to how (tangible) extrinsic rewards are distributed within an organization. A way to communicate what the organization values: common types. The relative weight of these factors, and how they are measures, are key considerations. Individual employees are rewarded in proportion to their performance/contributions. Can also be implemented at the team-level. Variable: b = rate of reward contingent on performance. Often imperfect measure of effort and performance. A larger variable component "b" shifts risk to the employee. In order to bear additional risk, employees require higher expected compensation (similar to the risk-return relationship in the stock market) Also want to consider ease of measuring individual performance and variability of organizational outcomes. Individuals focused solely on their own performance. Particularly likely when payouts are based on relative performance. Emphasis on performing now rather than learning new skills, etc. Can lead to unethical behaviour, "fudging" the numbers.