Internet Notes-Ch.6 - Internet Notes Chapter 6...

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Internet Notes Chapter 6 Chapter Summary Questions and Exercises prepared by Alan Saks. I. Money as a Motivator The money that employees receive in exchange for organizational membership is usually a package made up of pay and  various other fringe benefits that have dollar values, such as insurance plans, sick leave, and vacation time. We are mainly  concerned with the motivational characteristics of pay. Employees and managers, however, seriously underestimate the  importance of pay as a motivator.  Motivation theories suggest that money can be a motivator to the extent that it satisfies a variety of needs, is highly valent,  and it is clearly tied to performance. Research has found that financial incentives and pay-for-performance plans increase  performance and lower turnover. In general, the ability to earn money for outstanding performance is a competitive advantage  for attracting, motivating, and retaining employees.  A. Linking Pay to Performance on Production Jobs  The prototype of all schemes to link pay to performance on production jobs is piece-rate. Under a  piece-rate  system, workers  are paid a certain sum of money for each completed unit of production completed. Various schemes that link pay to  performance on production jobs are called  wage incentive plans  which often offer a bonus for production over a minimum  quota. These wage incentives have often resulted in increases in productivity.  B. Potential Problems with Wage Incentives  Despite their theoretical and practical attractiveness, wage incentives have some potential problems when they are not  managed with care.  Lowered Quality. It is sometimes argued that wage incentives can increase productivity at the expense of quality. While  adequate systems can usually be put in place to monitor and maintain quality in manufacturing operations, wage incentives  that increase "through-put" in service contexts are more difficult to control.  Differential Opportunity . A threat to the establishment of wage incentives exists when workers have differential opportunities  to produce at a high level. Sometimes access to raw materials or the quality of production equipment can give some workers  an unfair advantage over others in their opportunity to earn incentives.  Reduced Cooperation. Wage incentives that reward individual productivity might decrease cooperation among workers who  might hoard materials intended for common use or neglect common tasks like house-keeping that do not contribute directly to  production quotas.  Incompatible Job Design. In some cases, the way jobs are designed can make it very difficult to install wage incentives. It is 
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  • Winter '09
  • Jaeger
  • Job Characteristics Model, wage incentives, Job Enrichment  Job, wage incentive plans, job involvement. Job

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