LO1

• The word for pay in Malaysian and Slovak means “to replace a loss”; in Hebrew and Swedish it means “making equal.
• money 


  is much more than a form of compensation

  for an employee’s contribution to organizational

  objectives.
• Money


  form of exchange
• Money


  Relates to needs and self-concept, generates emotions.
• Money


  Viewed as instrumental value or value for its own sake.
• Money


  It is a symbol of achievement and status, a motivator, a source of enhanced or reduced anxiety, and an influence on our propensity to make ethical or risky decisions.
• Money


  It also generates a variety of emotions, some of which are negative (anxiety, depression, anger, helplessness, etc.).
• Money


  influences human thoughts and behaviour nonconsciously to some extent.
• Money


  probably the most emotionally meaningful

  object in contemporary life.
• Money ethic


  money perceived as not evil, symbol of achievement, something of value to be budgeted.
• people have a strong “money ethic” or “monetary

  intelligence”
• Meaning of money differs between men and women.​

  Meaning of money varies across cultures.​

  Money motivates more than previously believed.
• 4 specific reward objective

  1. Membership & Seniority
  2. Job Status
  3. Competencies
  4. Performance
• Membership-based and seniority-based rewards


  sometimes called “pay for pulse”
• Membership/Seniority Based Rewards​


  represent the largest part of most paycheques.
• Membership/ seniority Sample rewards


  • Fixed pay

  • Most employee benefits

  • Paid time off
• Membership/ seniority Advantages


  • May attract applicants

  • Minimizes stress of insecurity

  • Reduces turnover
• Membership/ seniority Disadvantages


  • Doesn’t directly motivate

  performance

  • May discourage poor performers

  from leaving

  • “Golden handcuffs” may undermine

  performance
• Job Evaluation


  Systematically rating the worth of jobs within an organization by measuring their required skill, effort, responsibility, and working conditions.
• job status-based rewards


  encouraging a bureaucratic hierarchy.
• job status-based rewards


  These rewards also reinforce a status mentality, whereas Millennial employees expect a more egalitarian workplace.
• Skill-based pay structures


  more measurable competency-based reward systems in which employees receive higher pay based on how quickly or accurately they perform

  specific tasks and operate equipment.
• Competency-based rewards


  motivate employees to learn new skills. This tends to support a more flexible workforce, increase employee creativity, and allow employees to be

  more adaptive to new practices in a dynamic environment.
• Job status based reward sample rewards


  • Promotion-based pay increase

  • Status-based benefits
• Job status based reward advantages


  • Tries to maintain internal equity

  • Minimizes pay discrimination

  • Motivates employees to compete for promotions
• Job status based reward disadvantages



  • Encourages hierarchy, which may increase costs and reduce responsiveness

  • Reinforces status differences

  • Motivates job competition and exaggerated job worth
• In recent years, many companies have shifted reward priorities to skills, knowledge, and other personal characteristics that lead to superior performance. The two main reward practices in this category are competency-based pay structures

  and skill-based pay structures.
• Competency-based pay structures


  identify clusters of skills, knowledge, and experience specific to each broad job group as well as clusters relevant across all job groups.
• Skill-based pay


  they are expensive because employees spend more time learning new tasks.
• Competency-Based Rewards​ sample rewards


  • Pay increase based on competency

  • Skill-based pay
• Competency-Based Rewards​ advantages

  • Improves workforce flexibility

  • Tends to improve quality

  • Motivates career development

  • Motivates learning new skills.​
  • Multi-skilled, flexible, adaptive employees.​
  • Higher product/service quality.
• Competency-Based Rewards disadvantages


  • Relies on subjective measurement of competencies

  • Skill-based pay plans are expensive

  • Over-designed (complex).​
  • Potentially subjective.​
  • Higher training costs.
• some of the most popular individual, team, and organizational performance-based rewards.

  1. Individual rewards
  2. Team Rewards
  3. Organizational Rewards
  4. Evaluating Organizational-Level Rewards
• Individual Rewards


  • Bonuses, piece rate, commissions.
  • Many employees receive individual bonuses or other rewards for accomplishing a specific task or exceeding annual performance goals.
• referral bonus


  paid when a friend is hired by the company —is one of the most common individual bonuses for non-executive staff in Canada.
• piece rate


  specific amount earned for each room cleaned
• commissions


  pay depends on the sales volume they generate.
• Team Rewards


  Bonuses, gainsharing plans.
• gainsharing plan


  A teambased reward that calculates bonuses from the work unit’s cost savings and productivity

  improvement.
• Organizational rewards.​

  • Bonuses, ESOPs, share options, profit-sharing.