Management and Organizational Studies 2181A/B Chapter Notes - Chapter 6: Frederick Winslow Taylor, Merit Pay, Motivation

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2181A/B
• Professor: Victoria Digby

Document Summary

The money that employees receive in exchange for organizational membership is usually a package made up of pay and various other fringe benefits that have dollar values, such as insurance plans, sick leave, and vacation time. We are mainly concerned with the motivational characteristics of pay. Employees and managers, however, seriously underestimate the importance of pay as a motivator. Motivation theories suggest that money can be a motivator to the extent that it satisfies a variety of needs, is highly valent, and it is clearly tied to performance. Research has found that financial incentives and pay-for-performance plans increase performance and lower turnover. In general, the ability to earn money for outstanding performance is a competitive advantage for attracting, motivating, and retaining employees: linking pay to performance on production jobs. The prototype of all schemes to link pay to performance on production jobs is piece-rate.