Role of Money and Mistakes in Rewards
04 February 2013 19:54
- The Role of Money:
○ Money is the most commonlyused reward, but it may not play a large role in motivation.
An effective reward system links pay to performance,which is consistent with
expectancy theory predictions.
○ Variable-pay programs: Portionof an employee'spay is based on some
individual/organizational measure of performance
○ Price-rate pay plan: An individual-based incentive plan in which employeesare paid a fixed
sum for each unit of production completed.
○ Gain sharing: A group based incentive plan in which improvementsin group productivity
determines the total amount of money to be shared
○ Profit-sharing plan: An organization wide plan in which the employershares profits with
employeesbased on a predetermined formula.
○ Employeestock ownership plan (ESPO): A company-establishedbenefit plan in which
employeesacquired stock as part of their benefits (gain ownership).
○ Skill-based pay: Based on how many skills an employeehas or how many jobs they can do.
- Mistakes made in reward systems:
○ Do not reward performance that is expected
○ Do not recognize rewards are culture bound
○ Rewards are not always necessary because in the right contextindividuals motivate
themselvesintrinsically and can achieve high levels of performancein this way. Rewards in
this case will decrease motivation.
○ Inflexible work schedules: Flexible work schedules can motivateby providing for the need for
flexibility. Screen clipping taken: 04/02/2013 20:55 Designing Motivating Jobs
04 February 2013 21:50
- Job Characteristics Model -> Five core job dimensions and their relationship to personal and work
○ Job enrichment (application of JCM) -> vertical expansion of jobs.
○ Core job dimensions:
Skill variety:degree of job variety -> use a number of different skills
Task identity: degree of completionrequired
Task significance : impact on lives/workof others.
Autonomy:degree of independence and discretion in procedures used.
Feedback: degree of direct/clear informationabout effectivenessof one's performance.
○ Critical psychological states:
Experienced meaningfulness: meaningful-> combine core dimensions-> employeeviews job as
Experienced responsibility for outcomes: greater autonomy->greater responsibility
Knowledge of the actual results: feedback-> e