Topic 9: Rewards

Question 1

What are reward systems used to do?

Answer 1

• Attract and retain staff.
• Motivate effort.
• Motivate change in behavior.

Question 2

What do process theories tell us about how rewards should be designed?

Answer 2

• Create a perception that effort will lead to rewards
• Ensure that rewards are viewed as fair and equitable
• Manage situation factors
  
  • Design jobs so that effort can lead to high performence
  • Hire qualified employees or train employees to appropriate level

Question 3

How do we categorise rewards based on what kind of need they fulfill?

Answer 3

• Intrinsic rewards satisfy higher order needs
• Extrensic rewards satisfy lower order needs

Question 4

What does content theory tell us about rewards and how they should be designed?

Answer 4

• Rewards should be both intrinsic and extrinsic.
• Needs are dynamic - a satisfied need is no longer a need.
• A satisfied need leads to a focus on a higher order need.

Question 5

What is Frederick Herzberg’s theory?

Answer 5

Motivator Hygiene theory

(It was rejected due to lack of evidence.)

Question 6

Explain Motivator Hygiene Theory

Answer 6

The idea that:

• Employees have job satisfaction when they fulfill their growth and esteem needs
• Experience dissatisfaction when they have poor working conditions, security and other unfurfilled lower needs.

Importantly

• Having the lower needs furfilled meerly prevents dissatisfaction.Only the characteristics of the job itself can motivate employees.

Question 7

What kinds of things are hygiene factors?

Answer 7

PSSC_eB_ePI

• Pay
• Status
• Security
• Working Conditions
• Fringe Benifits
• Policies and Administrative Practices
• Interpersonal Relations

Question 8

What kinds of things are motivators in the motivator-hygiene model?

Answer 8

MCR_eF_eR_aGJ

• Meaningful work
• Challenging work
• Recognition for accomplishments
• Feeling of achievement
• Increased responsibility
• Opportunities for growth and advancement
• The job itself

Question 9

What types of rewards do we look at?

Answer 9

• Wage
• Seniority
• Job status
• Competency based
• Task performence (seperate by levels)

Question 10

How does wage act as a motivator?

Answer 10

SMPA

• Symbol of success
• Reinforcer and motivator
• Reflection of perforrmance
• Can reduce anxiety

Question 11

What are the advantages / disadvantages of benefits that increase with seniority

Answer 11

Advantages:

• Guaranteed wages may attract job applicants
• Seniority-based rewards reduce turnover

​Disadvantages:

• Does not motivate job performance
• Discourages poor performers from leaving
• May act as golden handcuffs (tie people to the job) - A continuance commitment rather than affective commitment

Question 12

What are the advantages & disadvantages of job status based rewards (includes evaluation and importance of job).

Answer 12

Advantages:

• Job evaluation tries to maintain fairness (pay equity).
• Motivates competition for promotions.

Disadvantages:

• Employees may exaggerate duties, hoard resources.
• Encourages bureaucratic hierarchy.
• Reinforces status mentality.

Question 13

What are competency based rewards?

Answer 13

• When pay increases with competency acquired and demonstrated (usually within pay groups).
• A Narrow variation - Skill-based pay, pay increases with mastery of measurable skills learned.

Question 14

What are the advantages and disadvantages to competency based rewards

Answer 14

Advantages:

• Creates incentive to learn: more flexible workforce, better quality consistent with employability

Disadvantages:

• Potentually subjective
• Higher training costs

Question 15

What are the three level of rewards? Give Examples.

Answer 15

• Organisational (profit sharing, stock options).
• Team (bonuses, gainsharing).
• Individual (bonuses, commisions, piece rate).

Question 16

Evaluate organisational rewards

Answer 16

• Creates an “ownership” culture
• Adjusts pay with firm’s prosperity
• Weak connection between individual effort and reward
• Reward amounts are usually dominated by external forces.