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Chapter 6


Department
Management (MGH)
Course Code
MGHD27H3
Professor
Joanna Heathcote
Chapter
6

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Chapter 6- Motivation in Practice
MONEY AS A MOTIVATOR
Pay is important as it can fulfill lower-level needs as well as higher level needs such
as social and self-esteem
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 For example a toy factory, more toys would be made so that
employees can earn more yet they no longer have quality as their top priority
DIFFERENTIAL OPPORTUNITY for example, if the worker had two type of
stations for the toys (one with the newest models of equipment and one with the
older ones) they will feel disadvantaged when they must work with the one
REDUCED COOPERATION May reduce the cooperation between workers when
the pay systems reward individuals
INCOMPATIBLE JOB DESIGN Where wage incentives may be better suited to
reward group productivity rather than individual performance
oHowever as the team increases then the pay would decrease even though
there would be an increase of productivity
RESTRICTION OF PRODUCTIVITY The artificial limitation of work output that
can occur under wage incentive plans
oIE people are afraid to be very productive because they fear that their
employers will think that labour costs will be too high and will choose to cut
labour hours or the workforce
LINKING PAY TO PERFORMANCE ON WHITE-COLLAR JOBS
MERIT PAY PLANS Systems that attempt to link pay to performance on white
collar jobs
POTENTIAL PROBLEMS WITH MERIT PAY PLANS
LOW DISCRIMINATION Managers are unwilling or unable to discriminate
between good performers and poor performers
SMALL INCREASES too small to motivate
oSome companies have used the lump sum bonus which is paid out at one time
and not built into base pay
PAY SECRECY because other people do not know about others pay then the
effectiveness of the merit pay plans is nullified by the secrecy
USING PAY TO MOTIVATE TEAMWORK
PROFIT SHARING The return os some company profit to employees in the form
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oUnlikely that it is highly motivational as profits are affected by other factors
as well as work performance
Employee Stock Owner Plans 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
oSense of ownership, attracting and retaining talent, motivating employee
performance, focusing employee attention, creating culture of ownership,
educating employees about the business, and conserving cash by substituting
options for cash
GAINSHARING A group pay incentive plan based on productivity or performance
improvement over which the workforce has some control
SKILL-BASED PAY A system in which people are paid according to the number of
job skills they have acquired
oUsed to encourage flexibility
JOB DESIGN AS A MOTIVATOR
TRADITIONAL VIEWS OF JOB DESIGN
Focus on specialization
JOB SCOPE AND MOTIVATION
JOB SCOPE The breadth and depth of the job
BREADTH Number of different activities performed on a job
DEPTH The degree of discretion or control a worker had over how work taks s are
to be performed
The more breadth and depth a job is the more its suited for intrinsic motivation
oOne way to increase the scope of the job is to assign stretch assignments
where they offer employees challenging opportunities to broaden their skills
by working on a variety
oAnother way is JOB ROTATION rotating employees to different tasks and
jobs in an organization
JOB CHARACTERISTICS MODEL
J. RICHARD HACKMAN AND GREG OLDHAM, motivational properties of jobs
CORE JOB CHARACTERISTICS Shows that there are five core job characteristics
that have particularly strong potential to affect worker motivation, 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
AUTONOMY The freedom to schedule ones own work activities and decide work
procedures
TASK SIGNIFICANCE The impact that a job has on other people
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