Behavior and theory review 2.docx - Chapter 6 Meaning of...

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Chapter 6 Meaning of Money at Work Multiple perceptions and emotions concerning money o Money as a tool (i.e,. Money is valued because it is an instrument for acquiring other things of value) o Money as drug (money is an object of addictive value in itself) o Money ethic (- believe that money is not evil; and it is a symbol of achievement and power) Gender differences- valued more by men o Men—money is a symbol of power and status o Women—money is instrumental (exchanged) Cultural differences o High power distance—money brings higher respect and priority o Nurturing cultures—less discussion or display of wealth o Value of saving versus spending money Rewards Membership- and Seniority-Based rewards o Fixed wages, seniority-based rewards o Advantages: May attract job applicants Less financial insecurity Less turnover with seniority o Disadvantages: No performance motivation Discourages poor performers from leaving May act as golden handcuffs They discourage employees from quitting because of deferred bonuses or generous benefits that are not available elsewhere Job Status-Based Rewards o Includes job evaluation and status perks Most job evaluation methods give higher value that require more skill and effort, have more responsibility, and difficult working conditions o Advantages: Job evaluation—more pay fairness, less pay discrimination Motivates competition for promotions o Disadvantages Encourages bureaucratic hierarchy Reinforces status versus an egalitarian culture Everyone should have equal pay and opportunities Employees exaggerate duties, hoard resources Competency-Based Rewards o Motivate employees to learn new skills o Two types of competency rewards
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Competency-based pay bands–acquiring or demonstrating competencies assigned to that pay group Skill-based—number of specific skill modules learned o Advantages: Motivates learning new skills Multi-skilled, flexible, adaptive employees Higher product or service quality o Disadvantages: Overdesigned (complex) Potentially subjective Higher training costs Performance-Based Rewards o Individual rewards Bonuses, piece rates, commissions o Team rewards Bonuses gain-sharing plans- calculates bonuses from the work units cost savings and productivity improvement o Organizational rewards Organizational bonuses, ESOPs- are organizational rewards that encourage employees to buy company stock, usually at a discounted price. stock options- give employees the right to purchase company stock at a predetermined price up to a fixed expiration date. profit-sharing- which employees receive a percentage of the previous year’s company profits.
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