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Chapter 6

MGHB02H3 Chapter 6: Ob-ch-6

Course Code
Phani Radhakrishnan

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Chapter 6: Motivation in practice
Money as a motivator
Linking pay to performance on production jobs
piece-rate - a pay system in which individual workers are paid a certain sum of money for each unit of
production completed
wage incentive plans - various systems that link pay to performance on production jobs
Potential problems with wage incentives
Lowered quality
Differential opportunity
Reduced cooperation
Incompatible job design
Restriction of productivity
othe artificial limitation of work output that can occur under wage incentive plans
Linking Pay to Performance on White-collar jobs
clerical, professional, and managerial
merit pay plans - systems that attempt to link pay to performance on white-collar jobs
potential problems with merit pay plans
olow discrimination - managers might be unable or unwilling to discriminate between good
performers and poor performers
osmall increases - merit increases are too small to be effective motivators
lump sum bonus - merit pay that is awarded in a single payment and not built into base
opay secrecy - extreme secrecy that surrounds salaries in most organizations
employees who receive merit increases do not discuss these increases with their co-
Using pay to motivate teamwork
people somethings end up pursuing their own agendas (and pays) at the expense of the goals of their
work group, department, or organization
oprofit sharing - the return of some company profit to employees in the form of a cash bonus or a
retirement supplement
oemployee stock ownership plans (ESOPS) - incentive plans that allow employees to own a set
amount of a company’s shares and provide employees with a stake in the company’s future
earnings and success

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ogainsharing - a group pay incentive plan based on productivity or performance improvements
over which the workforce has some control
oskill-based pay (pay for knowledge) - a system in which people are paid according to the number
of job skills they have acquired
Job design as a motivator
job design - the structure content, and configuration of a person’s work tasks and roles
Job scope and motivation
job scope - the breadth and depth of a job
breadth - the number of different activities performed on a job
depth - the degree of discretion or control a worker has over how work tasks are performed
obroad jobs require workers to do a number of different tasks, while deep jobs emphasize freedom
in planning how to do the work
outility worker - performs a number of tasks, but involves little discretion as to when or how the
worker performs the task
oquality control - perform single repetitive task, but are required to exercise a fair degree of
judgement in performing the task

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Increase scope of job:
assign employees stretch assignments, something that many organizations have begun to do
ostretch assignments offer employees challenging opportunities to broaden their skills by working
on a variety of tasks with new responsibilities
job rotation - rotating employees to different task and jobs in an organization
oworking in different functional areas and departments
The Job Characteristics Model - J.Richard Hackman and Greg Oldham
Core job characteristics: skill variety, task identity, task significance, autonomy, and job feedback
skill variety - the opportunity to do a variety of job activities using various skills and talents
task identity - the extent to which a job involved doing a complete piece of work, from beginning to end
task significance - the impact that a job has on others
autonomy - the freedom to schedule one’s own work activities and decide work procedures
feedback - information about one’s performance effectiveness
Job diagnostic survey (JDS) - measure the core characteristics of jobs
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