Motivation III Motivation in practice Organizational Behaviour The Individual

Wage incentive plans for production/manufacturing jobs Plan type How it worksTo be effective AdvantagesDisadvantages Wage Incentive Plans Money for each unit produced (piece-rate) or monthly production bonuses Must be able to measure individual or organizational production levels Easy to implement and understand, highly effective Reduced quality, differential opportunity, reduced cooperation, restriction of productivity Skills Based Pay Plans Salary increases with the number of tasks that the individual can perform Skills must be linked to pay levels, there must be well- developed training procedures The company can operate with less staff, workers have a broader view of company, better problem solving skills Raised costs for training and salary, having trained but unused skills

Wage incentive plans for white collar jobs Plan typeHow it worksTo be effective AdvantagesDisadvantages Merit Pay Plans Bonuses are given on either a monthly or lump sum basis, based upon performance evaluation results Must have reliable and valid methods of measuring performance A method to reward good performance at the managerial level, easy to pay out Ineffectiveness created by lack of distinction between high and low performance, too small of increases, pay secrecy

Group incentive plans – motivating teamwork Plan typeHow it worksTo be effective AdvantagesDisadvantages Profit sharing and ESOPs A varying annual bonus or purchase options based on profits Employees must be able to collectively influence profits Simple, easy to communicate, pays out only when profitable, unites employee & employer interests Short term perspective, factors beyond employee control can influence GainsharingBased on outcomes over which employees have control (increased productivity or cost reductions) then members get a bonus Objectives must be measurable, employees must trust management Increases coordination and teamwork, employees learn more about the business, higher motivation, smarter work methods If focus only on productivity will be ineffective, bonuses have to be paid even when unprofitable

Job Characteristics Model Personal and Work Outcomes Core Job Characteristics Critical Psychological States Skill Variety Task Identity Task Significance Autonomy Job Feedback Experienced meaningfulness of work Experienced responsibility for work outcomes Knowledge of actual work results High internal work motivation High quality work performance High satisfaction with work Low absenteeism and turnover

Diagnosing for problems in job enrichment levels Survey method –MPS = –skill variety + task identity + task significance X autonomy X feedback 3 Structural clues –Presence of :inspectors or checkers :troubleshooters :communications and customer relations departments :labour pools :central decision making

Common job design activities to enrich jobs Job engineering – to create efficiency in work production and plant layout (e.g. Scientific Management) Job rotation – adds variety and reduces boredom Job enlargement/combining tasks – increases the number of tasks performed by the individual Job enrichment/vertical loading – increases the level of employee responsibility and accountability (reducing supervision)

Common job design activities to enrich jobs Establishing client relationships and accountability –Having employees responsible to those receiving the product; both internally and externally Forming natural teams –putting teams together to produce a complete product

Alternatives for those who do not want job redesign ?????