Week 4 - the desired behavior and the likelihood that the...

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Compensation : Definitions : Pay Structure: The relative pay of different jobs (job structure) and how much they are paid (pay level) Pay Level : The average pay, including wages, salaries, and bonuses, of jobs in an organization. Pay Grades : Jobs of similar worth or content grouped together for pay administration purposes. Pay for Performance : Pay that varies with some measures of performance (e.g., merit pay, bonus pay plans, skill-based pay, incentive plans, variable plans, gain sharing, piecework) Piecework rates : Wage based on production. Concepts : Equity Theory - Workers may adjust their inputs or outputs if they feel that they are not being paid equitably compared to their referent others. Reinforcement Theory - provide positive and negative responses to actions to reinforce behavior (e.g., rat in a maze that collects cheese for getting it correct and an electric shock for going the wrong way) Expectancy Theory - Employees weight their expected outcome based on the desireability of that outcome, the likelihood that their actions can achieve
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Unformatted text preview: the desired behavior and the likelihood that the behavior will lead to the desired outcomes (e.g., will their effort lead to results that will be rewarded in a way that they want?) • Agency Theory- Not being able to monitor workers. How do you get them to behave in line with your interest if you are an owner but you do not see their day-to-day actions (theoretical reason for stock options – aligning employee – often CEO – interests with shareholder interests) • Efficiency Wage Theory- Higher wages attracts better employees who produce more to make-up for the higher pay and work harder for fear of losing the high paying job. • Tournament Theory-If the top prize is big enough, everyone will work hard throughout the organization in hopes of “winning” that prize. • Institutional Theory-Companies copy each other’s behavior – often for less than logical reasons....
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