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Chapter 6 on Applied Performance Practices.docx

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Business Administration
BUS 272
Graeme Coetzer

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 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 unit’s 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 year’s level of corporate profits o Evaluating organizational rewards  Creates an “ownership culture”  Adjusts pay with firm’s 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 Job Design - Assigning tasks to a job, including the interdependency of those tasks with other jobs - Organization’s goal – to create jobs that can be performed efficiently yet employees are motivated and engaged Job Specialization - Dividing work into separate jobs, each with a subset of tasks required to complete the product/service - Scientific management o The practice of systematically partitioning work into its smallest elements and standardizing tasks to achieve maximum efficiency.  Frederick Winslow Taylor  Champion of job specialization  Taylor also emphasized person-job matching, training, goal setting, work incentives Evaluating Job Specialization Advantages Disadvantages Less time changing activities Job boredom Lower training costs Discontentment pay Job mastered quickly Higher costs Better person-job matching Lower quality Lower motivation Job Design and Work Motivation - Motivator-hygiene theory o Frederick Herzberg states that employees
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