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PAY FOR PERFORMANCE - THE EVIDENCE (OTHER REWARDS THAT INFLUENCE THE …
PAY FOR PERFORMANCE -
THE EVIDENCE
MOTIVATION THEORIES
MASLOW'S NEED
HIERARCHY
Essential features
Need from a hierarchy from the most basic to higher-order
Need to meet lower-order needs first before higher-order
Prediction about performance-based pay
Enough base pay to support basic living needs
Success-sharing plans may be motivating to the extent they help employees pursue higher-order needs.
EXPECTANCY
Essential Features
Based on three perception
Expectancy is employee's assessment of their ability to perform required job tasks.
Instrumentality is employee's beliefs that requisite job performance will be rewarded by the organization
Valence is the value employees attach to the organization rewards offered for satisfactory job performance.
Predictions about performance-based pay
Job tasks and responsibilities are clearly defined.
Performance-based pay is large enough to be seen as rewards.
EQUITY
Essential Features
Employees are motivated when output are equal to perceived inputs
if employees perceived that others are paid more for the same effort, the will react negatively.
**Prediction about Performance-based pay
Increase performance must be matched by increases pay.
Performance inputs and expected outputs must be clearly defined.
HERZBERG'S
TWO-FACTOR
THEORY
Essential features
Employees are motivated by hygiene factors and satisfiers.
Hygiene factors - basic living needs, security and fair treatment
Recognition, promotion, and achievements
Prediction about performance-based pay
Based pay is enough to support basic needs
Performance is obtained through rewards
Performance-based pay motivating employees for recognition and achievement
OTHER REWARDS THAT INFLUENCE THE
DECISION TO STAY IN ORGANIZATION
Development opportunity
Social
Status recognition
Work importance
Benefits
Work variety and challenge