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Chapter_Six_–_Motivation_in_Practice - MOS...

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MOS EXAM #2 1 Chapter Six – Motivation in Practice Money as a Motivator According to need theories, money is motivating to people who have strong lower-level needs (ex. If the extra money will enable a person to buy food, shelter, or water) Hierarchy terminology – pay can also function to satisfy social, self-esteem, and self-actualization needs Expectancy theory – pay can satisfy a variety of needs, it should be highly valent, and I should be a good motivator to the extent that it is clearly tied to performance, decrease turnover Research on pay and financial incentives have shown that, overall, they increase performance and decrease turnover Research suggests that pay may be the most important and effective motivator on performance Linking Pay to Performance on Production Jobs Piece-rate – a pay system in which individual workers are paid a certain sum of money for each unit of production completed; ex. Picking fruit Wage - incentive plan – various systems that link pay to performance on production jobs o Most common o A system whereby workers are paid a basic hourly wage ad paid a piece- rate differential on top of this hourly wage Compared to regular hourly wages, wage incentives usually have a substantial increase in productivity Potential Problems with Production Jobs Lowered quality – increased productivity at the expense of quality Differential Opportunity – workers have different opportunities to produce at a higher level, for example because of geographical region Reduced Cooperation – decrease cooperation among workers; competitive spirit Incompatible Job Design – difficult to implement wage incentive system, for example on an assembly line hard to identify and reward individual contributions to productivity o As the size of a time increases, relationship between an individual’s productivity and pay decreases Restrictions of Productivity – workers can come to an informal agreement to produce less than possible so that no one is “left behind”, think about Hawthorne studies Linking Pay to Performance on White-Collared Jobs Compared to production jobs, there are fewer objective measures on which pay can be administered Merit Pay Plans – systems that attempt to link pay to performance on white- collared jobs o Periodically (usually annually), managers are required to evaluate performance of employees on some form of rating scale or by means of a
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MOS EXAM #2 2 written description of performance; using these evaluations the manager decides on an appropriate amount of bonus pay Individuals who see a strong link between performance and pay tend to perform better One of the most common forms of motivational pay in Canada Potential Problems with Merit Pay Managers’ performance appraisal ratings – subjective, biased, manager unwilling to discriminate between good and poor performers, not taught how to properly appraise o
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