Chapter 6 - Motivation in Practice

6 Pages
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Department
Management (MGH)
Course Code
MGHB02H3
Professor
Joanna Heathcote

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Chapter 6Motivation in PracticeMoney as a MotivatorAccording to Maslow and Alderfer pay should prove especially motivational to people who have strong lower level needsBesides being able to satisfy psychological needs can also gain prestige among friends signal competence as a worker and demonstrate boss cares about you it satisfies social self esteem and self actualization needs tooExpectancy theory if pay can satisfy a variety of needs it should be highly valent it should be a good motivator to the extent that it is clearly tied to performanceLinking Pay to Performance on Production JobsPieceratea pay system in which individual workers are paid a certain sum of money for each unit of production completedWage incentive plansvarious systems that link pay to performance on production jobsUsually leads to substantial increase in productivityPotential Problems with Wage IncentivesLowered qualitysacrificed quality for increased productivityDifferential Opportunityworkers have different opportunities to produce at a high level quality of equipment or supply of materials varies from workplace workers at disadvantageReduced Cooperation Incompatible Job Designhard to track productivity as a team as the size of the team increase relationship between any individuals productivity and his or her pay decreasesRestriction of Productivitythe artificial limitation of work output that can occur under wage incentive plansoOccurs bc increased productivity might lead to reductions in the workforce or reductions in rate of paymentLinking Pay to Performance on Whitecollar JobsMerit pay planssystems that attempt to link pay to performance on whitecollar jobsPeriodically managers are to evaluate the performance of employees on some form of rating scale evaluations are used to recommend some amount of merit pay to be awarded to individuals over and above their basic salariesPotential Problems with Merit Pay PlansLow discriminationmanagers might be unable or unwilling to discriminate between good performers or bad performersIn absence of performance rating systems to control these problems managers might rate most employees as equal performersSmall Increasesmerit increases too small to be effective motivatorsLump sum bonusmerit pay that is awarded in a single payment and not built into base payPay Secrecyif merit pay is administered fairly employees have no way of knowing therefore it damages motivational impactIn absence of better info employees are inclined to invent salaries for other membersManagers have tendency to overestimate the pay of their employees and their peers and to underestimate the pay of their superiors these tendencies will reduce satisfaction with 1
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