Lecture 6

Question 1

Reward Subsets
2 extrinsic
1. intrinsic

Answer 1

1. Financial Incentives
2. Non-Financial Incentives
3. Intangible rewards

Question 2

3 Setting pay levels..

Answer 2

1. Legal Requirement
2. Market Forces
3. Organisations goals

Question 3

How much do we pay relative to

Answer 3

Others in Organisation

People doing similar jobs outside

Question 4

Netflix wants

Answer 4

A players only

Question 5

4 ways to attract new graduates

Answer 5

1. High Pay (Materialism)
2. Individual Pay (Individualism)
3. Fixed pay (Risk-Aversion)
4. Flexible Benefits (internal locus of control)

Question 6

2 Advice for rewarding

Answer 6

How reward is more important than how much

Don’t focus only on financial incentives

Question 7

2 How do people evaluate pay?

Which is usually more important

Answer 7

Satisfaction, Fairness

Fairness is usually more important

Question 8

What informs pay satisfaction?

Answer 8

1. Pay rise (<1%)
2. Discrepancy (expected vs actual) 25%
3. Interpersonal Comparison 50%

Question 9

Types of Fairness

What or How? for each

Answer 9

1. Distributive fairness - what
2. Procedural fairness - how
3. Managerial Fairness - how

Question 10

Pay for performance effects

Answer 10

1. Sorting Effect
   - Attraction
   - Retention
2. Incentive Effect
   - Individual Effort
   - Individual Performance
   - Reward
   - Personal values/goals

Question 11

Potential issue with incentive effect

Answer 11

Garbage men example

Question 12

3 Motivation Characteristics

Answer 12

1. Intensity of Effort
2. Direction of Effort
3. Persistence of Effort

Question 13

problems with motivation intensity

Answer 13

excessive risk taking

Question 14

Shot term incentives

Answer 14

do not lead to persistence of effort

especially cash-based

Question 15

Sorting Effect works only if

Answer 15

Companies can afford to differentiate

Question 16

Everyday incentives (verbal rewards) only work for

Answer 16

Simple tasks, not Complex tasks

Question 17

Rewards matter because

Answer 17

1. Attraction
2. Retention
3. Motivation

Question 18

For Americans what is most important

Answer 18

meaningful work

Question 19

Incetive effect drives which type of motivation

Answer 19

Intensity motivation