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Ted Mock (8)

Chapter 6 Notes

5 Pages

Management (MGH)
Course Code
Ted Mock

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Lecture NotesChapter SixMotivation in PracticeMoney as a MotivatorPay can provide for lower order needs such as food and shelterIt can also help to satisfy higher order needs such as esteem and prestigeCan pay be linked to selfactualizationPay is potentially a good motivator to the extent it is clearly tied to performanceResearch indicates that financial incentives and pay for performance plans can increase performance and lower turnoverThe text suggests that pay may be the most important and effective motivator of performanceDo you agreePay for performancePiece rateworkers are paid a certain sum of money for each unit producedoften combined with a basic hourly rateOften tied to quotas ie piecework rate is paid for production over a certain standard quotaWage incentive plans is the general term for these types of plansPotential Problems with Wage Incentive PlansLowered qualityplans may increase productivity at the expense of quality and it may be more costly to correct mistakes than to do it right the first timeDifferential opportunityworkers may be disadvantaged not able to produce at a high level in comparison with other workers due to conditions beyond the workers control eg Production equipment raw material production rate of workers up the line unfair distribution of workReduced cooperationplans that reward individual productivity may decrease cooperation among workers that might slow them down and reduce their incomeIncompatible job designjob design may make it difficult to implement wage incentivesThe worker must have control over the process in order to reasonably tie wage incentives to individual productivityRestriction of productivityworkers come to an informal agreement among themselves as to what constitutes a fair days workReasonsWorkers fear that an increase in productivity will lead to staff reductionsWorkers fear that an increase in productivity will lead to lowering the rate of payment under the incentive plansee next pointNote the types of incentive plans discussed here are found in factory production environments Standard levels of productivity are established through time and motion studies that are carried out by Industrial EngineersPiece rate incentives are tied to the established standardsIf the standards are increased the workers must achieve higher levels of productivity to earn the same incentivesPay for Performance on White Collar JobsMerit paylinking annual salary increase percentage to annual performance ratingMerit bonuslinking annual bonus to annual performance rating Also called lump sum bonus
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