Problem 5: pay/reward and job performance Flashcards
expectancy theory
-expectations about outcome of your work should match what you get
-money leads to better performance as long as it matches expectations
organisational behaviour modification
-based on operant conditioning, reinforcement of behaviour
-partial reinforcement works better than continuous reinforcement in the lab, not in the workplace
goal setting theory
-specifies the conditions under which a person could perform
–goal should be on a high level
–goal needs to be specific
–regular feedback
–new employees should accept these goals
-for people with difficult goals –> all or nothing reward
-for moderate functioning employees –> proportionate pay, if performance gets better, pay gets better
equity and justice theory
-a balance between inputs and outcomes
-no balance –> cogn dissonance –> change in behaviour
procedural justice
interactional justice
distributive justice
procedural justice = fairness of procedures
interactional justice = social aspect
distributive justice = fairness of rewards
cognitive evolution theory
= intrinsic motivation (IM), adding extrinsic motivation might have a negative effect
-depends on competency and internal locus of causality
-informational outcomes have positive effect on IM, controlling outcome has negative effect, amotivational outcome (negative feedback) also has a negative effect
-only verbal rewards have a positive effect on IM
reflection theory
= emphasis on self-identity
-pay has to be perceived as part of their identity (assigned meaning)
-categories of meaning:
–motivational properties
–relative position
–control
–spending (how the person uses the money they get)
agency theory
= relationship between the principal and agent (employee)
- how well the principal can monitor the agent determines the pay system
–proximity = behavioural based system
– indirect relation = objective performance based pay system
meso-micro theories
-resource dependence model = important facet (e.g., skill) determines pay
-tournament theory = competition for the pay between employees
-neoclassical labor market theory = pay depends on supply and demand
-efficiency wage model = paying better to attract better employees
meta analysis: are incentives related to performance
-method
-results
-meta-analysis
-results:
–financial compensation is moderately related to quantity but not related to quality of performance
–pay increases extrinsic motivation without reducing intrinsic motivation
–setting + theoretical framework are moderators = strongest results in the lab + studies using expectancy reinforcement theory
fixed hiring costs
= costs associated with recruiting, hiring and training people
–> labour hoarding: keeping bad workers to avoid hiring new ones
–> exit costs = costs of person leaving the company, lead to discrimination
deferred compensation
= underpaid when young, overpaid when old
-increases loyalty/commitment
–> people might want to retire earlier + change of company might results on lower pension
compensation as tournament prizes
= fixed prizes that employees compete for
-could enhance performance but could also lead to bad atmosphere between employees
-more accurate judgment of performance, everyone is in the same environment
teams, cooperation and egalitarian pay structures
= difference between pay are determined by monitoring –> when individuals work alone it’s easier to monitor
- should be balance within a team–> a hierarchy but differences can’t get too big as cooperation is necessary
option values
= a value one can earn when they get a promotion
-option value is high when gaps between positions are big
