Effort = Instrumentality + Valence + Expectancy(reliable outcome) +(desire for outcome ) + (confidence in abilities)Instrumentalitya person’s belief that a specific action leads to a specific outcomeValencethe strength of an individual’s desire for a particular outcomeExpectancya person’s belief that a chance exists that a certain effort will lead to a particular level of performance which , in turn, will lead to certain outcomesTheory XManagerbelieves that employees inherently do not like to work and must be strictly controlled and forced to workTheory YManagerbelieves that employees dislike rigid controls and inherently want to accomplish something21
CompensationTotalcompensation /Total rewardsMonetary and non-monetary rewards provided to employees in order toattract, motivate and retain themIntrinsicrewardsIntangible, psychological and social effects of compensationExtrinsicrewardsTangible, monetary and nonmonetary effects of compensationDirectcompensationThe employer exchanges monetary rewards for work doneIndirectcompensationEmployer-provided benefits—like health insurance—that are provide employees for being a member of the organizationBase payThe basic monetary compensation that an employee receives, usually as a wage or salaryWages Variable payments to employees calculated on the amount of time worked.SalaryConsistent payments to employees, made each period regardless of thenumber of hours worked in the periodVariable payCompensation linked to individual, team, or organizational performanceusually in the form of stock options or bonusesEqual pay actRequires that men and women be paid the same for performing substantially similar jobs with limited non-gender exceptionsComparableworthSimilarity in pay for all jobs requiring comparable level of knowledge, skills, and abilities, even if actual duties and market rates differ significantly.GarnishmentA court action in which a portion of an employee’s wages is set aside topay a debt owed a creditorEquity theory(incompensation)The perceived fairness between what a person does (inputs) and what the person receives in terms of compensation (outcomes)Internal equityThe perceived fairness of the pay structure within an organizationExternal equityThe perceived fairness in pay relative to what other employers are paying for the same type of workPay secrecyThe degree of openness or secrecy that an org allows regarding its pay systemPaycompressionOccurs when there is only a small difference in pay between employeesregardless of their skills, experience, or seniorityEntitlementphilosophyAssumes that individuals who have worked another year are entitled to pay increases, with little regard for performance differencesPay-for-performancephilosophyRequires that compensation changes reflect individual performance differencesMarket PricingUse of pay survey data to identify the relative value of jobs based on what other employers pay for similar jobsPay surveysInformation on prevailing market rates and includes topics such as incentive plans, overtime pay, base pay and vacation / holiday practices22
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- Management, Organizational studies and human resource management