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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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- Spring '09
- Salary, Employment compensation