Topic 8 - Performance-based Pay: Motivational Foundations Flashcards
What is employee motivation?
Employee motivation is an employee’s intrinsic enthusiasm and drive to accomplish activities related to work, driven by an internal decision to take action.
Why do organizations use performance-based pay systems?
To provide incentives for behaviors and outcomes that enable higher performance.
What determines the success of performance-based pay systems?
How well the system aligns with employees’ motivation.
What are the five most applicable theories of motivation for performance-based pay systems?
Maslow’s hierarchy of needs, McClelland’s theory of learned needs, Herzberg’s hygiene-motivator theory, self-determination theory, and expectancy theory.
Does the word “theory” in motivation theories imply guesswork?
No, these theories are supported by substantial evidence and help managers design effective reward systems.
What is Maslow’s Hierarchy of Needs Theory?
A theory stating that everyone has five universal needs ordered in a hierarchy, from basic survival needs to self-actualization
What are the five levels in Maslow’s hierarchy of needs?
Physiological needs, safety and security needs, social needs, ego and esteem needs, and self-actualization needs.
What are physiological needs according to Maslow?
Needs necessary for survival, such as food, water, oxygen, sleep, sex, and sensory satisfaction.
What are safety and security needs in Maslow’s theory?
A desire for stability, security, protection, freedom from fear, and a need for structure and order.
What are social needs in Maslow’s hierarchy?
The need for emotional love, friendship, and affectionate relationships with others, including family and friends.
What are ego and esteem needs in Maslow’s hierarchy?
The desire for self-respect, self-esteem, and recognition or esteem from others.
What is self-actualization in Maslow’s hierarchy of needs?
The need for self-realization, continuous self-development, and achieving one’s full potential.
What is the principle of prepotency in Maslow’s theory?
Higher-level needs only become important and influence behavior once lower-level needs are satisfied.
How does Maslow’s hierarchy relate to motivation in the workplace?
Employees are motivated to achieve needs in sequence, starting with basic needs and progressing to self-actualization, which can inform the design of rewards systems.
Why is money significant in motivation theories?
Money impacts motivation across various theories, but its effects can vary and sometimes contradict depending on the theory.
In order to design effective performance-based pay systems, managers must have a good understanding of __________________.
Employee motivation
Employee metrics
Employee merit
Employee management
Employee motivation
The primary reason that organizations use performance-based pay is to:
Provide an incentive for the types of behaviors and outcomes that enable higher performance
Provide an incentive for standing out in a low-performing market
Provide an incentive for standing out in a high-performing economy
None of the above
Provide an incentive for the types of behaviors and outcomes that enable higher performance
What is the core assumption of the Reinforcement Theory of motivation?
Behavior is a function of its consequences.
What does the Reinforcement Principle state?
Positive consequences (rewards) increase the likelihood of a behavior recurring, while negative consequences (punishments) decrease it.
How does the Timing Principle influence behavior in the workplace?
The smaller the time gap between the behavior and the reward or punishment, the greater the impact on behavior.
What is an example of the Timing Principle in action?
Handing an employee a reward immediately after hard work has a stronger motivational impact than giving it months later during a review.
What does the Variability Principle suggest about reinforcing behaviors?
New behaviors are acquired faster when rewards are given every time (low variability), but behaviors persist longer when rewards are given intermittently (high variability).
How should rewards be managed according to the Variability Principle during a system rollout?
Rewards should be more frequent at the beginning and transition to variable over time.
Why is it important to design reward systems with careful consideration of consequences?
Consequences directly influence the likelihood of future performance-related behaviors at work.