Appraising and Rewarding Performance. by Mehmet Barkınay. In this presentation the relationship between economic reward systems and organizational behavior will be discussed. The chapter focuses ;
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2. Then on, money as a means of rewarding employees, motivational models applied to pay, cost-reward comparisons, and behavioral considerations in performance appraisal.
Certainly ,money is valuable because of the goods and services that it will purchase. All of us have seen its importance as a status symbol for those who have it and can thus save it, spend it conspicuously, or give it away generously.
Money has status value when it is being received and when it is being spent. It represents to employees what their employer thinks of them. It is also an indication of one employee’s status relative to that of other employees. It has about as many values as it has possessors. (e.g. P135)
Extrinsic and Intrinsic Rewards:
Money is essentially an extrinsic reward rather than an intrinsic one, so it is easily administered in behavior modification programs.
However, it also has all the limitations of extrinsic benefits. No matter how closely management attaches pay to performance, pay is still something that originates outside the job and is useful only away from the job.Therefore, it tends to be less immediately satisfying than intrinsic job rewards.
Managements by objectives (MBO) is a cyclical process that often consists of four steps as a way to attain desired performance.
* Has previously set measurable performance standards
* Has gathered specific evidence frequently about performance
* Seeks and uses inputs from other observers in the organization
* Provides support, acceptance, and praise for talks well done
* Listens actively to the employee’s input and reactionsSuggested Approaches for the Appraisal Interview
Appraisal interviews are most likely to be successful when the appraiser;
* Allows participation in the discussion
* Sharply limits the amount of criticism to a few major items
Piece rates; sale commission
Piece rate only for pieces meeting the standard commission only for sales that are without bad debts.
Bonus for selling an established number of items during a predetermined time span
Another advantage from the employee’s point of view is that incentives are comparatively objective. They can be computed from the number of pieces, dollars, or similar objective criteria.