WORK ATTITUDES University of Kentucky工作态度肯塔基大学.pptVIP

Pay for Performance Seniority/Longevity Based Pay Rewards employees for tenure Way to keep investment in human capital Advantages Objective Fair Disadvantages Fails to distinguish performance differences Difficult to use strategically Pay for Performance Motivation to perform well Motivation to acquire skills Expectancy Theory Motivation = Expectancy X Instrumentality X Valence Expectancy - can I do the work? Instrumentality - if I do the work, will I be rewarded? Valence - do I value the reward? Implications for Compensation Valence Instrumentality Perceptions Required Conditions for Performance Based Pay Employees must be able to control performance is performance dependent on others? Better performance must help organization Must be able to measure performance cheaply and accurately Organization must give meaningful increases Pay increases must be tied to performance Agency Theory principals as owners agents as managers pay motivates performance if performance can be monitored ? pay based on work if performance cannot be monitored ? pay aligned with organizations goals Agency Theory: Implications Performance based pay can induce employee performance Performance based pay linked to organization’s objectives Employees will need premium for pay at risk Can Compensation Motivate? On average, organizations with pay for performance have better overall performance Which way is causality?? Decision to Join Firm People join because of pay Depends on individual characteristics Materialistic Pay level Low self-esteem No pay for performance Risk takers Pay for performance Individualists Plans based on individual performance Pay and Retention Absenteeism reduced when tied with pay Reduced turnover when skill based pay Group incentives lead to turnover Individual incentives lead to retention Merit Pay Characteristics Rewards past individual performance Pay is linked to performance appraisal results Feedback is infrequent Merit Pay Implications Doesn’t work wh