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Management (MGH)

Chapter Six-Motivation in Practice Money as a Motivator Employees and managers underestimate the importance of pay as a motivator According to Maslow Pay can function to satisfy social, self-esteem and self-actualization need Expectancy theory: of pay can satisfy a variety of needs, it should be highly valent, should be a good motivator to the extent that it is clearly tied to performance Pay is most important and effective motivator of performance Ability to earn money for outstanding performance is competitive advantage for attracting, motivating and retaining employees Linking Pay to Performance on Production Jobs Piece-rate- individual workers are paid a certain sum of money for each unit of production they complete Usually for workers who are paid a basic hour wage ($8), and a piece-rate on top of hourly wage ie. $8.00hour & $0.30 for each unit produced Group incentives-when individual productivity is hard to measure ex. Monthly bonus for production over minimum quota Wage incentive plans-various schemes to link pay to performance on production jobs Wage incentives usually lead to substantial increases in productivity Potential Problems with Wage Incentives Lowered Quality wage incentives increase productivity at the expense of QUALITY especially hard to control for customer service, faster people process Differential Opportunity workers have different opportunities to produce at a high level raw materials or quality of product equipment varies from workplace to workplace 1
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