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Rewards and Motivation 2

Rewards and Motivation 2 - concerns Other employees often...

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Rewards/ Compensation and Motivation The process (straight pay vs. incentives): o Straight pay systems: Time based wage/ salary No budget surprises Very easy to administer Difficult to tie pay to levels of performance o Incentive/ merit pay systems: Usually result in increased performance Possible reduction in quality Not everyone has opportunity to participate These approaches can also lead to reduced cooperation Lack of good performance measures can make these systems difficult to implement In some cases incentive is seen as too small to motivate better performance Private systems keep pay information from being shared The process (public vs. private): o Private pay systems: This is what most of us want Keeps proprietary information from competitors Incorrect perceptions created by lack of actual information may cause equity
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Unformatted text preview: concerns Other employees often find out anyway Without controls these systems may allow for discrimination o Public pay systems: Reduces perceptual mistakes Reduces discrimination Usually motivational But, making information public may create hard feelings May result in “average” increases to all subordinates to protect managers from complaints • Problems w/ focusing on extrinsic rewards: o Decreased task enjoyment o Can undermine feelings of autonomy • Building systems that work: o Rewards contingent on performance o Relevant rewards (e.g. profit sharing) o Valued and equitable rewards o Transparent criteria for how rewards are determined o Team rewards for interdependent jobs o Watch out for unintended consequences (e.g. quantity vs. quality)...
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