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Incentives

Incentives. Dessler Chapter 12. Agenda – 3/29/05. Reminder Announcements Questions and Comments Incentives. Reminder 1. Turn in Your Performance Reports! The Reports Count for 15% of Your Final Grade. PR 4 Due This Friday (4/1/05) Before 3:00 Via Email. Reminder 2.

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Incentives

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  1. Incentives Dessler Chapter 12

  2. Agenda – 3/29/05 • Reminder • Announcements • Questions and Comments • Incentives

  3. Reminder 1 Turn in Your Performance Reports! The Reports Count for 15% of Your Final Grade. PR 4 Due This Friday (4/1/05) Before 3:00 Via Email.

  4. Reminder 2 HRM Intervention 2 Due Next Friday (4/8/05) by 3:00 PM via Email Focus on Compensation and Benefits Rough Drafts Accepted Until 4/5/05

  5. Reminder 3 No Class Thursday (3/31/05) for Caesar Chavez Day

  6. Turn in Your Midterm Exam Make-Up I Will Return Your Make-Up Next Tuesday IN CLASS

  7. Announcement 2 Guest Speaker Next Tuesday (4/5/05) Dale Carlsen – Sleep Train Mattresses

  8. Questions and Comments? What is Salary Compression? What is the Purpose of Compensation? What Are the Negative Outcomes Associated with Perceived Inequity?

  9. Incentives • What are Incentives? • Terminology • How Do Organizations Use Incentives • Types of Incentives • Why Incentives Influence Behavior • Motivation • Justice • Trends in Incentives • Merit Pay

  10. What Are Incentives - Terminology • Incentive • A reward or Punishment Used to Induce Action (Behavior) • Motivation • EDS • Justice • Procedural and Distributive • Traditional Pay Incentive • Piecework, Hourly, Salary • Social Loafing • The Price of Group Incentives

  11. Link Pay to Job to Performance Short Term Bonuses - Annual or Immediate Prevalent Use in Private Sector Base + Commission Prevalent Use in Sales Long Term Stock Options Long Term Performance Profit Sharing Employee Stock Option/Ownership Plans (ESOPs) Gainsharing How Organizations Use Incentives

  12. The Relationship Between Motivation and Pay • Ambiguous At Best • Herzberg’s 2 Factor Theory • Pay Merely Satisfies, Mostly Dissatisfies • Intrinsic and Extrinsic • Social Perceptions • Relative Nature of Motivation • Better Motivator Than Pay • Goal Setting and Valence-Expectancy

  13. Why Pay Really Matters- Pay and Justice • Justice = Fairness • Remember Individual Perceptions • Who Is Your “Comparison Other” • Procedural Justice Drives Distributive Justice • Practical Advice for Organizations

  14. Trends in Pay - Merit Pay • Direct Pay For Performance • At Risk • Variable not Stable • Who Excels with Merit-Based Pay? • High Self-Esteem • High Need for Achievement • Paying for Organizational Citizenship Behaviors (OCBs) • Damaged Commitment

  15. Practical Suggestions • Balance Pay for Job and Pay for Performance • Use Different Mixes of Incentives • Don’t Use Pay to Punish • The Power of Goals… • Challenging Yet Attainable • Communicate the Process • Procedural Justice • No “Standard” OCBs

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