Textbook Notes (367,933)
Canada (161,513)
Commerce (379)
COMM 292 (97)
Chapter 5

COMM 292: Chapter 5

6 Pages
Unlock Document

COMM 292
Angela Kelleher

COMM 292: Observational Behaviour Chapter 5 From Theory to Practice: The Role of Money  There are personality traits and demographic factors that correlate with and individuals attitude toward money  People who value money highly score higher on competitiveness, materialism and control o Score higher on self-esteem, need for achievement and Type A personality measures  Organizations need to understand individuals' needs when rewarding Creating Effective Reward Systems What to Pay: Establishing a Pay Structure  The worth of the job in the organization and relative to the market determines job pay structure  Paying more may attract better qualified and more motivated employees  Firms that pay below market level may have high turnover or not be able to afford higher salaries How to Pay: Rewarding Individuals through Variable-Pay Programs  Variable-pay programs: a portion of an employee's pay is based on some individual and/or organizational measure of performance  Costs for organizations decline as productivity declines as pay is variable Individual-Based Incentives:  Piece-rate pay: employees are paid a fixed sum for each unit of production completed o Many firms modify this plan and add a base salary to the variable pay plan  Merit-based pay: based on performance appraisal ratings o Individuals perceive a strong relationship between performance and rewards o Separation between the most productive and blow average producers (lower pay increases)  Bonuses: rewards employees for recent performance rather than historical performance o Focus on the recent past, and rewards employees for high productivity or better work ethic o Rewarding individuals based on bonuses can cause problems (financial crisis 2008)  Skill-based pay: sets pay based on how many skills employees have/how many jobs they can do o Employees may top out and not be able to have any more pay increases o Employees may be paid for skills they may not need immediately or ever o Pay is not based on the level of performance which may vary Group-Based Incentives:  Gainsharing: improvements in group productivity determine the total amount of money to be shared o Focuses on productivity gains rather than profits o Rewards specific behaviours that are less influenced by external factors COMM 292: Observational Behaviour Organizational-Based Incentives:  Profit-sharing: employer shares profits with employees based on a predetermined formula o Employees may ignore customer service and employee development o Companies in cyclical industries would see varied results, thus varied profit-sharing o Best in organizations with more teamwork, and managerial philosophy encouraging participation  Stock options and employee stock ownership plans (ESOP): company-established benefit plan in which employees acquire stock as part of their benefits o Employees will think more about their actions if they have ownership in the organization  Teamwork: incentive pay to individuals can lead to problems in group productivity and cohesiveness o Organizations focused of teamwork must focus incentives on the team not individuals  Unions: employees are usually paid based on seniority and job categories, with little movement o Against variable pay as it may lead to competition and increased work stress  Public Sector Employees: difficult to link productivity as most of these jobs are service based o The goal setting theory is better applied to these types of employees Research Findings: ESOPs  Have the potential to increase job satisfaction and work motivation  Takes ownership and participative style to achieve improvements in the firm's performance Research Findings: Variable-Pay Programs  Variable-pay programs increase motivation and productivity o Does not mean this is true for all organizations or employees  Teamwork, unions, public sectors, and ethics are problems to the pay-for-performance program Flexible Benefits: Developing a Benefits Package  Different employees have different needs and ideas about their benefits  Flexible benefits: employees put together a benefits package individually tailored to their own needs  Modular plans: predesigned packages of benefits that fit a specific group of employees  Core-plus plans: consist of a core benefits package with other added options available  Flexible spending accounts: given money to purchase of package of benefits Intrinsic Rewards: Employee Recognition Programs  Recognition given to employees may not be enough in some jobs, organizations Linked Employee Recognition Programs and Reinforcement Theory:  Recognition is the best motivator in the workplace according to employees  Team celebrations can enhance group cohesiveness and motivation Employee Recognition in Practice: COMM 292: Observational Behaviour  Recognition programs are attractive to organizations as they are cost effective  Recognition may reduce turnover, particularly in good employees Caveat Emptor: Apply Motivation Theories Wisely Motivation Theories are Culture-Bound:  Being a member of a successful team with shared goals and values, rather than financial rewards, drives Japanese sales representatives to succeed  Countries with high uncertainty prefer pay based objective, because it is guaranteed  Countries with high value on individualism place emphasis on individual responsibility to perform  Countries with high humane orientation offer social benefits and programs to employees and families Evaluating Motivation Theories Cross-Culturally:  Other cultures focus on motivating a group of employees rather than individuals  Different cultures/countries place different benefits and needs above others  Employees expect that outputs will be greater than their inputs  It is important to determine the internal norms of a country when developing an incentive plan Provide Performance Feedback:  Employees need to be given performance feedback to determine if rewards are equitable  Managers are often uncomfortable discussing weakness with employees  Many employees become defensive when their weaknesses are pointed out  Organizations must train managers to provide and give employee feedback Beware the Signals that are sent by Rewards:  Individuals are unable to break out of old ways of thinking about reward and recognition practices  Organizations often don't look at the big picture of their performance system o Units often end up competing against each other, instead of working together  Both management and shareholders often focus on short-term results o They don't reward employees for longer-range planning  This all happens when organizations hope for one thing but then reward for something else Can We Just Eliminate Rewards?  Employee commitment benefits organizations as they work harder, and have more devotion, rather than waiting to be rewarded for each action or success Creating a Motivating Work Environment:  Must determine if employees have the adequate tools, equipment, materials, and supplies o Working conditions, helpful co-workers, supportive work rul
More Less

Related notes for COMM 292

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.