Ch 6-Motivation in Practice.docx

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Management and Organizational Studies
Management and Organizational Studies 2181A/B
Bill Irwin

Ch 6: Motivation in Practice Piece-rate: pay system in which individual workers are paid a certain sum of money for each unit of production produced Wage incentive plans: various systems that link pay to performance on production jobs. Being paid hourly wage and a monthly bonus for producing over quota Problems with Wage Incentives:  Lowered quality  Differential opportunity: threat to the establishment of wage incentives exists when workers have different opportunities to produce at a high level  Reduced Cooperation among workers  Incompatible Job design: assembly line it is impossible to identify and reward individual contributions to productivity  Restriction of productivity: artificial limitation of work output that can occur. Employees limit productivity after they feel they’ve accomplished a fair day’s work Merit pay plans: linking pay to performance on white collar jobs. Problems  Low discrimination: managers unable and unwilling to discriminate between good and bad performers  Small Increases: merit increase are too small to be effective motivators. Lump sum bonus: paid out all at one time and not built into base pay  Pay Secrecy: managers have a tendency to overestimate the pay of their peers and underestimate the pay of their superiors Using Pay to Motivate Teamwork  Profit sharing: return of some company profit to employees in the form of a cash bonus or retirement supplement. Works best in small firms  Employee Stock Ownership Plans (ESOPs): incentive plan that allows employees to own a set amount of company shares. Increases employee loyalty and motivation  Gainsharing: a group pay incentive based on productivity and performance improvements over which the workforce has some control. (decreasing costs  employees directly receive some of these savings)  Skill-Based Pay: system in which people are paid according to the number of job skills they have acquired. Pay for knowledge Job Design as a Motivator  Specialization is was the key to efficient productivity  Job scope: breadth and depth of a job. High scope=prof Low scope=assembly. Can be increased by assigned stretch assignments- working on variety of tasks with new responsibilities. Job rotation also increases scope  Breadth: number ofdifferent activityes performed on the job  Depth: refers to degree of discretion or control worker has over how tasks are performed. Deep is they have a lot of con
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