ch 6: applied performance practices Flashcards
the meaning of money
o Tool – instrument for acquiring other things of value
o Drug – an object of addictive value in itself
gender differences money
- Men more likely than women to view money as a symbol of power and status, means to autonomy
o Women – more likely to view money in terms of things for which it can be exchange + as a symbol of generosity and caring
country differences money
- People in China, Japan (countries with high power distance) – high respect and priority for money
o Denmark, Austria, Israel (strong egalitarian culture) – discouraged from openly talking about money or displaying their personal wealth
o Swiss culture values saving money, Italian culture places more value on spending it
membership and seniority-based rewards
- Sometimes called “pay for pulse” – the largest part of most paychecks (especially in egalitarian cultures)
o Benefits provided equally to everyone – free or subsidized meals during wok, but others increase with seniority - Potentially reduce turnover and attract job applicants (those who want predictable income)
o But don’t directly motivate performance – discourage poor performers from seeking work better suited to their abilities
o Good performers are more easily lured to better-paying jobs - Some rewards are also “golden handcuffs” – discourage employees from quitting because of deferred bonuses or benefits that aren’t available elsewhere
o Potentially weaken job performance – generate continuance rather than affective commitment
job status-based rewards
- Job evaluation – systematically rating the worth of jobs within an organization by measuring the required skill, effort, responsibility, and working conditions
- The higher the worth of a job – the higher the minimum and maximum pay for people in that job
o Tries to maintain pay equity and minimize pay discrimination, but this process may actually institutionalize inequities - Besides higher pay, employees with more valued jobs sometimes receive larger offices, company-paid vehicles, other perks
o Motivates employees to compete for promotions - Can encourage bureaucratic hierarchy, reinforce status mentality (millennials want a more egalitarian workplace), motivates them to compete with one another for higher-status jobs, to exaggerate their job duties and hoard resources as ways to increase the worth of their current job
competency-based rewards
- Reward priorities to skills, knowledge, other competencies that lead to superior performance
o Identify a list of competencies relevant across all job groups + those that are group specific - Ex: set of pan-organizational competencies (accountability, technical competency)
o Four broad organizational levels: technical/professional (team-oriented, technical acumen), supervisory (informing, emotional intelligence), managerial (financial acumen, fostering innovation), executive (strategic thinking, managing stakeholders)
o Each has a pay range - Skill-based pay plans – more specific variation of competency-based rewards – people receive higher pay determined by their mastery of measurable skills
- Pro: motivate employees to learn new skills (support a more flexible workforce, increase employee creativity, allow employees to be more adaptive to embracing new practices in a dynamic environment), products also improve (employees with multiple skills are more likely to understand the work process, know how to improve it)
- Con: often over-designed (difficult to communicate to employees), abstract (raises questions about fairness)
o Skill-based measure specific skills so they’re usually more objective, but expensive
peformance-based rewards
- Individual rewards – for accomplishing a specific task or exceeding annual performance goals
o Sometimes as commissions – pay depends on the sales volume - Team rewards – also include penalties
o Gainsharing plan – a team-based reward that calculates bonuses from the work unit’s cost savings and productivity improvement – implemented in many hospitals (reduction of costs – negotiating better prices of materials) – improves team dynamics, knowledge sharing, pay satisfaction + strong link between effort and performance - Organizational rewards – bonuses to all employees for achieving preset organizational goals or companywide variation of a gainsharing plan
o Employee stock ownership plan (ESOP) – a reward system that encourages employees to buy company stock
o Stock options – a reward system that gives employees the right to purchase company stock at a future date at a predetermined price
o Profit-sharing plan – a reward system that pays bonuses to employees on the basis of the previous year’s level of corporate profits - ESOP and stock options – create an ownership culture – feel aligned with the organization’s success (might increase firm performance, but the effects are modest)
- Profit sharing and organization-wide productivity bonuses – improved productivity, but their effectiveness depends on industry, bonus complexity and other factors
o Profit sharing – advantage of automatically adjusting employee compensation with the firm’s prosperity (reducing the need for layoffs or negotiated pay reductions in recession) - Doesn’t improve motivation – weak connection between their individual effort and the determinants of rewards
o Even in small companies – stock influenced by economic conditions, competition - ESOP and other organizational rewards – more robust influence on motivation and firm performance when employees are also involved in organizational decisions
do employees think there is a clear link between job performance and pay
o 42% of employees think that there is a clear link between job performance and pay + 32% of employers
how can inconsistencies and bias for rewards be minimized
minimized through gainsharing, ESOPS – objective performance measures
o Subjective – rely on multiple sources of information + apply rewards as soon as the performance occurs and in a large-enough dose so that employees experience positive emotions
- The more employees see a “line of sight” between their daily actions and the reward, the more they’re motivated to improve their performance
o Reward systems also need to correct for situational factors
when are team rewards better
when employees work in highly interdependent jobs – can’t measure individual performance + encourage cooperation + support employee preferences for team-based work
o Concern: employees in low-collectivism cultures prefer rewards based on their individual performance
unintended consequences of rewards
o Rewarding employees for how much they produce results in lower quality and more product defects + employees who work mainly on piece-rate pay experience worse physical and emotional health
o Money isn’t the only thing that motivates people – employees more engaged in work through intrinsic motivation (jobs that are interesting, challenging, provide autonomy)
job design practices
- Describes how jobs, tasks, roles are structured, enacted and modified, as well as their impact on individual, group, and organizational outcomes
job specialization
– the result of a division of labor, in which work is subdivided into separate jobs assigned to different people
cycle time
the time required to complete the task before starting over with another item or client
job specialization improves work efficiency
o Less variety of tasks to juggle – less time lost changing over to a different type of activity, mental attention doesn’t linger on the previous type of work
o Employees become proficient more quickly – fewer physical and mental skills to learn, less time to train and develop for high performance
o Shorter work cycles give employees more frequent practice with the task – mastered more quickly
o Increase work efficiency by allowing employees with specific skills to be matched more precisely
