COMMERCE 1BA3 Lecture Notes - Lecture 6: Profit Sharing, Telecommuting, Merit Pay

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1BA3
• Professor: Mosey Nicholas J

Document Summary

Ongoing program designed to facilitate goal establishment. Well-designed mbo programs do result in productivity gains. Money as a motivator: need and expectancy theories. Also acts a signal that may satisfy social, self-esteem, and self-actualization needs. If highly valent due to needs it can meet, money can motivate if clearly tied to performance. Piece rate: money for each unit of production. Wage incentive plans: schemes to link pay to performance on production jobs. Not as many organizations use wage incentives as you might expect. Potential problems when wage incentives are not managed with care: lowered quality, differential opportunity, reduce cooperation, incompatible job design, restriction of productivity. Objective indicators of performance on white-collar jobs are often difficult to find. Performance in many such jobs is evaluated by the subjective judgment of the manager. Merit pay plans are systems that attempt to link pay performance on white- collar jobs. Merit can improve performance, but many merit pay systems are ineffective.