Chapter 5: Reward System and Motivating by Job Redesign Flashcards
Motivation In Action:
How motivation is implemented in organizations, focus on practices rather than theories
The Role of Money:
and percent of Canadians believed were underpaid
Money is the most commonly used reward in organizations
46%
How managers can set pay levels, pros and cons
Pay Below Market:
Pay Above Market:
- cuts operating cost, increase profit, morale may suffer
- keep and attract motivated and qualified employees, but decreases company profits
Setting pay levels: Internal Equity
Worth of the job to the organization (job evaluation)
Setting Pay levels: External Equity
The competitiveness of an organization’s pay relative to industry standards
Pay Programs: Fixed Pay Programs
Employee’s level of pay is fixed at a certain level
Pay Programs: Variable Pay Programs:
Portion of an employee’s pay is based on some individual and organizational measure of performance. Only a portion rather than full amount, of the pay is variable.
Individual Based Programs - Piece Rate Pay Plan
Pay a fixed sum for each unit of production completed
Individual Based Programs - Merit-based pay plan
pay is based on performance appraisal ratings
Individual Based Programs - Bonuses
One-time rewards for defined work rather than ongoing entitlements
Individual Based Programs - skill based pay
Based on (2)
Based on number of skills employees have or # of jobs can do
Group based Programs - Gainsharing
Productivity gains and reward is shared, fund comes from savings in production cost, rather than after those products have been sold
Organizational Based Incentives - Profit Sharing Plans
Organization-wide programs that distribute compensation based on some established formula designed around a company’s profitability
Profitability Plans program Downsides (2)
they lack focus on the future, as profit is calculated based on the past performance rather than expected future performance
lack of consideration for programs that maintain long-term profitability, customer service and employee development, programs don’t directly generate profits.
Employee Stock Ownership Plans (ESOPs)
Company established benefit plans in which employees acquire stock as part of their benefits
Stock Options
Give employees the right to buy stocks in the company at a later date for a guaranteed price
Employee Stock Ownership Plans (ESOPs) and Stock Options are future oriented meaning
employees who receive benefits have to hold onto for some time before selling or exercising them. Programs motivate employees by aligning employee self-interest with the best interests of their organizations
Challenges to variable pay programs: Teamwork (2)
managers often forget that not all variables pay programs are created equal.
group-based programs are beneficial for teams but programs based on individuals’ incentives can harm team performance
Challenges to variable pay programs: Unions (3)
Which country has more?
Paid on basis of……rather than…..
How much range and opportunity?
Canada has more unionized workplace than in the United States
Unionized employees are paid on the basis of seniority and job category, rather than performance
Little range within a category and few opportunities to receive performance-based pay
Challenges to variable pay programs: Public Sector Employees
jobs in PS are mostly service in nature, difficult to quantify
Challenges to variable pay programs: Ethical Consideration and 2 examples
Performance-based pay programs lead to manipulation of performance
Etc: Managers force staff to work without pay to keep their own bonus
Employees compete for self interest, rather than interest of the organization
Flexible Benefits: Developing a reward Package
Reward systems monetary compensation and benefits packages to enhance employee well-being indirectly.
Flexible Benefits: Developing a Benefits Packages: What was it originally and why didn’t it work
- Originally one-benefit-plan fits all approach but now viewed as costly and ineffective as individuals have different needs.
- employees with families pay prefer insurance coverages for whole family while others without family prefer coverage for themselves at lower costs.
Modular Plan Benefit
Predesigned packages of benefits, with each module put together to meet needs of specific groups of employers
Core-Plus Plans
Plans that consist of essential benefits and a menu-like selection of other benefit options from which employees can select
Flexible Spending Plans and examples
Plans that allow employees to set aside pre-tax dollars up to the dollar amount offered in the plan to pay for particular benefits, such as eye care and dental premiums
Job Characteristic Model (JCM):
Proposes how different elements in a job are organized can act to increase or decrease effort of job
Job Characteristic Model (JCM): 5 dimensions
Skill variety, Task Identity, Task Significance Autonomy, Feedback
Job Characteristic Model (JCM): Autonomy
job provides employee freedom, independence, and discretion in scheduling work each day and determining procedure for carrying it out
What does MPS Stand for?
motivating potential score (MPS)
What is MPS used for
Combine the core dimensions into a single predictive index to evaluating jobs based on Job Characteristic Model
Motivational Performance Score Formula
(Skill variety + Task Identity + Task Significance)/3 * Autonomy * Feedback
Redesign Jobs that motivate: Job Rotation
Periodic shifting of workers from one task to another
Redesign Jobs that motivate: Job Enrichment
vertical expansion of jobs that allow employees to do a complete activity, employee controls plannings, execution and evaluation of work
Redesign Jobs that motivate: Relational Job Design
How managers design work so employees are motivated to promote well-being of the organization’s customers, clients, or other users of their services and products (beneficiaries)
Redesign Jobs that motivate: Flextime (Flexible Work Time)
Employees work a specific number of hours a week, but they are free to vary the hours of work within certain limits (common core (e.g., 9am-3pm) + flexibility band (e.g., 6am-9am or 3pm-6pm)
Redesign Jobs that motivate: Job Sharing
what is it?
where is it popular
percentage of Canada employers
Two or more people split 40hour week job.
Popular in Europe
14%
Redesign Jobs that motivate: Telecommunications (teleworking or virtual office)
Employees complete their work at home for at least two days a week on a computer linked to the employer’s office by VPN or the whole week
Redesign Jobs that motivate: Employee Involvement
Participative Processes that use employees input to increase their commitment to the organization’s success
Procedural Justice
employees are engaged in making decisions that affect them and increase their autonomy and control, will be more motivated, committed, productive and satisfied
Redesign Jobs that motivate: Participative Management
Process in which subordinates share a significant degree of decision-making power with their immediate superiors (joint decision making)
Redesign Jobs that motivate: - Representative Participation
Employees participate in organizational decisions making through a small group of representative employees
Ex councils and board representatives
