IRE367H1 Lecture Notes - Lecture 3: Equity Theory, Job Evaluation, Phosphofructokinase
23 Nov 2020
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Varies as a 1% of total compensation due to job type, organization, or industry. Often a good choice even when output-based pay (obp) forms are feasible and look more efficient. Not many jobs with the full set of characteristics to make obp pay work properly. Can use in situations where business environments are very stable. Obp can lead to serious/fatal unintended consequences. Lots of flexibility because you"re essentially buying the employee"s time which can within certain legal limits be directed in any way the manager wants. Prevents attention from being restricted to only a few behaviors. If you"re being compensated for obp you really only get compensated for a few tasks at a time. Long held connection between amount of pay and its relevant contribution to the organization/the relevant importance it has. What jobs are worth more than others. Can create sense of positive reward valence.
