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Chapter 6

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School
Wilfrid Laurier University
Department
Business
Course
BU288
Professor
Ping Zhang
Semester
Fall

Description
Chapter 6: Motivation in Practice 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 Wage incentives are very attractive to workers for motivation and will increase worker productivity but there are several potential problems with them: 1) Lowered Quality – can increase productivity at the expense of quality 2) Differential Opportunity – workers could be given a higher opportunity for incentives than others 3) Reduced Cooperation – workers may not clean up or may not perform maintenance of equipment 4) Incompatible Job Design – assembly line is hard to implement wage incentives 5) Restriction of Productivity – artificial limitation of work output that can occur under wage incentive plans - may fear that if they produce at a high level, rate of pay will go down Merit Pay Plans – Systems that attempt to link pay to performance on white-collar jobs - performance reviews that lead to some merit pay to be awarded Some potential problem with the merit pay system are: 1) Low Discrimination – managers may not be able to tell good performers apart from poor performers 2) Small Increases – merit increases could be too small to be effective motivators - some firms replaced conventional merit pay with a lump sum bonus that is paid out all at one time and not build into base pay; they get people’s attention 3) Pay Secrecy – secrecy may damage the motivational impact of a well-designed merit plan Managers tend to underestimate the pay of their superiors and overestimate the pay of their employees. Using Profit to Motivate Teamwork and Cooperation 1) Profit Sharing - The return of some company profit to employees in the form of a cash bonus or a retirement supplement - not highly motivational since too many factors are beyond the control of the workforce - works better in smaller firms that regularly turn a large profit 2) Employee Stock Ownership Plans (ESOPs) – Incentive plans that allow employees to won a set amount of a company’s shares and provide employees with a stake in the company’s future earnings and success - increase loyalty and motivation since they align employees’ goals and interests with those of the organization and create a sense of legal and psychological ownership - work better in small organizational that regularly turn a profit; in large organizations it is harder for employees to see the connection between their efforts and company profits 3) Gain Sharing – A group pay incentive plan based on productivity or performance improvements over which the workforce has some control - ex. rewarding employees for low waste of supplies or for cooperative behaviour 4) Skill-Based Pay – A system in which people are paid according to the number of job skills they have acquired - training costs can be high but the idea is to motivate employees to learn a wide-variety of work tasks regardless of the job that they might be doing at any given time - the more skills their acquire, the higher the person’s pay 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 Assembly line jobs are “shallow” and “narrow” (low in breadth and depth). High scope jobs provide more intrinsic motivation than low-scope jobs. Two ways to increase the scope of a job is: Job Rotation – Rotating employees to different tasks and jobs in an organization Stretch Assignments - offer challenging opportunities for employees to broaden their skills by working on a variety of tasks with new responsibilities Core Job Characteristics 1) Skill Variety – The opportunity to do a variety of job activities using various skills and talents 2) Autonomy – The freedom to schedule one’s own work activities and decide work procedures 3) Task Significance – The impact that a job has on other people 4) Task Identity – The extent to which a job involves doing a complete piece of work, from beginning to end 5) Feedback – Information about the effectiveness of one’s work performance Growth Need Strength – a moderator which is the extent to which people desire to achieve higher- order need satisfaction by performing their jobs Core Job Characteristics examples: Job Enrichment – The design of jobs to enhance intrinsic motivation, quality of working life, and job involvement Job Involvement – A cognitive state of psychological identification with one’s job and the importance of work to one’s total self image Job Enrichment 1) Combining tasks – moving tasks that might have been performed by different workers to one worker 2) Establishing external client relationships – putting employees in touch with people outside the organization who depend on their products/services (give line workers letters from customers) 3) Establishing internal client relationships – putting employees in touch with people who depend on their products or service
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