Chapter 17: volunteer organizations, motivating with awards Flashcards
What are some of the negative consequences of pay for performance?
(1) It overlooks that some (particularly managers) have the ability to determine criteria directly for bonus payout
(2) They are able to manipulate performance management so that they meet the criteria
What is the disadvantageous outcome of pay for performance?
Income of managers has exploded and distribution of income has een strongly tilted inf amour of high-income recipients
Why is it simply undoable to determine someone’s salary based on expected output?
Principle-agent theory states that it is rarely possible to fully specify the tasks expected from employees because of the impossibility to anticipate future performance requirements
What sort of motivation underlies charitable giving/volunteering?
Intrinsic motivations, people do stuff for free because they want to do something useful for society in accordance with the values they hold dear
What is a major challenge for volunteer organizations?
To uphold retention rate over an extended period of time
What are similarities about for-profit and voluntary organizations regarding instruments to attend to goals? (3)
(1) Monetary incentives play a limited role
(2) An attempt to substitute pay for intrinsic motivation backfires
Intrinsic motivation can be maintained and raised by acknowledging that social recognition is the most important motivator
(4) Praise dresses people’s desire for recognition
Giving awards is an effective way to cater for the peoples desire to be appreciated
What are the 2 characteristics of an award?
(1) They provide hedonic benefits –> people feel recognized and honorees, raising their subjective wellbeing
(2) Instrumental purposes –> raise performance by inducing necessary behavioral change in employees trying to win awards
What are differences between awards and monetary incentives? (6)
(1) Awards have great visibility
(2) Awards and measurement can be vaguely specified
(3) Strenghten an employees’s organization commitment
(4) Establishes a loyalty bond between giver/receiver
(5) low-cost way to honor persons and organizations
(6) Awards are not subject to taxes
What are conditions for successfully introducing awards in a company? (6)
(1) Tasks cannot exactly be defined and much must be left to the volunteers themselves
(2) Great effort from award giver, be specific
(3) Awards must be kept scarce to be taken seriously
(5) Awards are most effective coming as a surprise
(6) Be carefully about who gets the price, don’t give awards to undeserving people
What are negative effects of awards on performance?
(1) There is some doubt that awards have any effect on subsequent performance
(2) CEO’s made best manager or other voveted titles will put in less effort shortly after getting award, instead they spent time on their image. This could be cause awards interfere with the principal-agent relationship
