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Lecture

BUS 272 Lecture Notes - Job Evaluation, Job Design, Golden Handcuffs


Department
Business Administration
Course Code
BUS 272
Professor
Graeme Coetzer

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Chapter 6
Applied Performance Practices
Making of Money in the Workplace
- Money means different things to people
o Symbol of success
o Reinforce and motivator
o Reflection of performance
o Source of less/more anxiety
- Differences in meaning of money by gender and culture
- Money is an important motivation
Membership/Seniority Based Rewards
- Fixed wages, seniority increases
- Advantages
o Guaranteed wages may attract job applicants
o Seniority-based rewards reduce turnover
- Disadvantages
o Doesn’t motivate job performance
o Discourages poor performers from leaving
o May act as golden handcuffs (the people to the job)
Job Status-Based Rewards
- Includes job evaluation and status perks
- Advantages
o Job evaluation tries to maintain fairness
o Motivates competition for promotions
- Disadvantages
o Employees exaggerate duties, hoard resources
o Reinforces status
o Encourage hierarchy, might undermine cost-efficiency and responsiveness
Competency-Based Rewards
- Pay increases with competencies acquired and demonstrated
- Skill-based pay: pay increases with skill modules learned
- Advantages
o More flexible work force, better quality, consistent with employability
- Disadvantages
o Potentially subjective, higher training costs

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Performance-Based Rewards
- Individual rewards
o Salespeople earns commission
o Earn bonuses for specific task or exceeding annual performance goals
- Team rewards
o Gainsharing plans: calculate bonuses from the work units cost savings and
productivity improvement
- Organizational rewards
o Organizational bonuses (company trips)
o Employee share ownership plans (ESOPS)
Encourage employees to buy company shares
o Share options
Give employees the right to purchase company shares at a future date
at a predetermined price
o Profit-sharing plans
Pays bonuses to employees on the basis of the previous years level of
corporate profits
o Evaluating organizational rewards
Creates an ownership culture
Adjusts pay with firms prosperity
Weal link between individual effort and rewards
Rewards affected by external forces
Improving Reward Effectiveness
- Link rewards to performance
- Ensure rewards are relevant
- Team rewards for interdependent jobs
- Ensure rewards are valued
- Watch out for unintended consequences
Unintended Consequences of Rewards
- Transit bus drivers in Santiago, Chile, were paid by the number of passengers
o Motivated attendance, shorter breakers, efficient driving, passengers pay fares
- Unintended results
o Reckless driving to next passenger stop
o Cut off competing buses
o Passenger injuries/deaths because doors left open and busses departed before
everyone was on board
o Drove past stops where only one person was waiting
o Caused many traffic accidents
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