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Rewards

Rewards. OS352 HRM Fisher Nov. 6, 2003. Agenda. Purpose and types of rewards Effectiveness Case study. Purpose. Thank employees for a job well done Motivate certain kinds of behaviors Continued good performance Increased performance Change in how effort is allocated

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Rewards

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  1. Rewards OS352 HRM Fisher Nov. 6, 2003

  2. Agenda • Purpose and types of rewards • Effectiveness • Case study

  3. Purpose • Thank employees for a job well done • Motivate certain kinds of behaviors • Continued good performance • Increased performance • Change in how effort is allocated • Need to consider motivation theories when determining appropriate rewards • Equity • Expectancy • Need based theories

  4. Pay Increases • Raise – permanent increase • Bonus – one time payment • Spot bonuses are less formal bonus programs • Many companies still using signing bonuses • Increases must be large enough to be meaningful • Thinking about raises vs. bonuses • What are the cost implications of each? • What are the motivational implications of each?

  5. Basis for rewards • Individual level rewards • Piecework • Merit pay • Sales commissions • Group/organizational level rewards • Gainsharing • Profit sharing • Stock ownership

  6. Non-monetary rewards • Includes recognition and opportunities • Employee of the month • Lunch with the boss • Bigger office • Attending a conference or seminar • Not technically part of the overall compensation package, but an important motivational tool

  7. Effectiveness • Aligned with corporate goals, strategy • Contingent on performance • Valued by the employees • Allocation process is perceived as fair

  8. Rewards Case Study • Read the “Howe 2 Ski” case study • Will be distributed in class • In small groups, answer the questions • Whole class discussion

  9. An Ongoing Debate: Do Monetary Rewards Motivate or De-Motivate? • Motivate: Economic incentives improve quantity and do not reduce quality (Gupta & Mitra). • De-Motivate: Economic incentives reduce the satisfaction of doing enjoyable tasks (Deci).

  10. For next class • Topic: Pay secrecy • Read HBR case “When Salaries Aren’t Secret” • What are the key issues for the organization? For the employees? • How would you recommend the organization deal with this problem?

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