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Rewards and Motivation

Rewards and Motivation. Motivation - a nagging concern. What is the problem? Effort, performance, retention, loyalty, membership, commitment, trust, empowerment, participation, work design Extrinsic and intrinsic rewards Expectancy and Equity Rhetoric versus reality

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Rewards and Motivation

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  1. Rewards and Motivation

  2. Motivation - a nagging concern • What is the problem? • Effort, performance, retention, loyalty, membership, commitment, trust, empowerment, participation, work design • Extrinsic and intrinsic rewards • Expectancy and Equity • Rhetoric versus reality • How I construe my/your motivation, needs & drives • How to "motivate people to give their all"

  3. Would I really work for you without reward? • Fundamental to employee contract • Traditional economic exchange model. Pay-effort determinism • "Rate for the job" • Occupational norms, expectations and choices • Expediency - "suitable for my life package at the moment" • Etzioni & organisational membership • Coercive - Remunerative - Normative • Alienated - Instrumental - Moral involvement

  4. The person-as-economist expects • ROI - time, effort, commitment • "What's in it for me?" calculation • Conscious  subconscious (self image and comparisons) • Fairness (equitable social (economic) exchange) • interpret rewards/pay-offs of others • judge what is fair/unfair • satisfaction if each party achieves a balance (relative equality) • Psychological extension to neutral, economic model • Construing the value & importance of input-output • Social, psychological - individual & group • Validation of personal perceptions and comparisons • Clear/distorted • internal/external

  5. Design Features of Reward Systems • Monetary • Time-based (not directly related to performance) • Performance-linked • Output, %, PRP, merit pay, commission, skill-based • collective-output schemes • Corporate performance-related bonuses + profit sharing • Monetary-equivalent • Car, phone, holidays, loans, accommodation, fees, vouchers • Deferred (promotion, pension) • Non-monetary / intrinsic benefits - safety, status, recognition, plaques, contribution and empowerment • Negatives pressure, penalties, harassment, side-lining, dismissal

  6. Pay by time schemes - Components • simple to administer • Defined time – F/T, P/T, mixed-time, casual • No attendance, no pay? Hourly, weekly, monthly • Premiums – 1.5T, 2T, nights • Flexi-time schemes • “Door knob syndrome” • Job grading/evaluation - evaluate the job not the person doing it • Control mechanisms & tools – clocks, supervision, time sheets? • Performance assumptions • Trust, competence, diligence, fidelity, care, good-will, cooperation • Work for Er in Er time ……versus ……...in your time? • Supervision and monitoring - “When the cats away”? • Is actual presence necessary? Off-site working. • Life increments - pay & career progression, security?

  7. PRP, merit pay, skill-based schemes • Requires • targeting, information & measurement • Manager appraisal and judgement • Problems of "big scheme" rules and controls • Pay linked to • Individual merit (behaviours, traits & competencies: flexibility, cooperation, punctuality, effort, skills/abilities). • concrete individual or group targets • Staff appraisal criteria and rating

  8. Performance-Related Pay (PRP) • extensive but partial and sectoral • little research data on effectiveness • pay linked to specific aspect of performance • Intensity of MbO approach • Problem of defining the group + outputs • What if key results not achieved? • How is control and consistency achieved? • Fairness + validation of "the manager's judgment" • Addition to salary (merit pay or bonus) for this appraisal round. • The apparent exaggeration of "Fat cat bonuses" – the "global labour market for stars" + formulae?

  9. Emotional & social dynamics & expectations • Important for employee belief and commitment • Impact of rules-of the-scheme (formal contract) on individual sensitivity (psychological contract). • personal expectations • + formal/informal exchange Er çè Ee • my manager as • employer (by proxy) • as a person I like/dislike, respect? • How I "see" what others are getting - internally and externally.

  10. Pay-offs in the Employer-Employee Relationship(after Mumford 1972) • Task structure Work within firm’s policy, procedure & technical constraints. Job roles, work arrangements & relationships • Knowledge & skill Employer wants know-how, competence, experience. Employee wants to be put to good use & be developed • PsychologicalManagement & co-workers want committed, loyal, motivated staff. Individual wants satisfaction • Efficiency/rewards Employer wants performance & output to a quality standard. Employee wants equitable, felt-fair rewards & opportunity • EthicalValues & ambiguities/inconsistencies in right/wrong behaviour

  11. Conscious calculation & instrumentality? Take-it or leave it + "9-5" sub-optimisation Tangible over non-tangible rewards Organisational rationalisation of effort-reward relationship Structural inflexibility of reward packages Constructing and controlling the performance review and PRP system Genuine involvement & participation Delegation, reliance and confidence Organisational "Culture" Problems

  12. Homo economicus Content theories - needs and factors: Maslow, Alderfer, McClelland - Needs and satisfactions Herzberg - hygiene and motivators, job redesign Process theories McGregor, Likert et al - on being managed Adams - Equity theory Vroom, Lawler - Expectancy theory Hackman & Oldham - job characteristics Locke - Goal setting Reinforcement theory (operant conditioning) Positive (continuous, fixed and variable intervals/ratios) Avoidance learning and punishment How has work-motivation theory dealt with this?

  13. Abraham Maslow - Need Satisfaction teleology goal-orientation Behaviour/ Action achieve drive Goals Needs satisfy

  14. Maslow's Need-Satisfaction Model • Content theory - the needs that motivate • simple description, partial account - not quantifiable • chronic deficiency drives (motivates) behaviour • gratified needs - equilibrium • snakes and ladders or • lower needs mediated by higher order consciousness? • nb: Alderfer ERG theory - existence, relatedness, growth) • cognitive and developmental

  15. more efficient perception of reality + comfortable with it acceptance of self & others + social interest problem-orientation, spontaneity and creativity detachment - value privacy autonomy - independence of culture & environment resistance to enculturation continued freshness of appreciation mystic experience or oceanic feeling interpersonal relations & democratic behaviour sense of humour This idealised, self-actualised person?

  16. Self-actualised? Human… like everyone else….. • displays frailty & failings, ups & downs. • emotional, critical attitudes towards others • urge to decide for themselves • may say "NO" & be unpredictable - own destiny. • wants reasons without always wishing to conform. • accepts need for conformity most of the time to serve their interests • avoids being selfish & ego-centred (denying space to others).

  17. expectancy - If I tried could I do it? Get away with it? • Instrumentality - if I did it will I attain the outcome? • valence (subjective valuation) - do I really value what's available? • Expressed as probabilities. Path-goal relationships which “explain” motivation è performance. Expectancy theory (the process of motivation) assoc.. with Vroom & Lawler/Porter Motivated to perform because of expectations relating to perceived payoffs from the performance. ______ Desirability of payoffs (valence), perception of expectancy + force of expression - intrinsic to the person. ______ Personal view of what is challenging or interesting, important to self + valuation of extrinsic payoffs - pay & material rewards

  18. Expectancy Theory - Vroom et al valence A robust explanatory, predictive model? How the individual construes it all?

  19. Equity & consistency - an impossible ideal? • “Felt-fairness” - how I am treated in relation to others • Equity balance sheet & "the last straw” • "What you gain on the swings….." Trust/good-will • “No more … that’s it for me!” • Internal & external comparisons (groups & individuals) • Feelings & perceptions - not synonymous with equality • Proposition… better motivated if treated equitably & consistently • distributive equityhow I perceive I am treated & rewarded in comparison to others • procedural equityhow I see organisational procedures being applied

  20. Equity and Justice • Distributive justicehow rewards are distributed in accordance with • “my contribution” & need • what was promised. • Procedural equityhow reward decisions are made & managed • Adequate consideration of employee’s viewpoint • No personal bias • Consistent application of criteria • Early feedback on outcome of decisions • Adequate explanation of decisions made

  21. Job design & flexibility - matching people to jobs MbO - defining expectations and feedback Teams and semi-autonomous groups, empowerment Concern for staff development, competencies and accreditation Effort to refine and deliver “reward packages” that "motivate" - PRP Managerial behaviours Constant organisational vigilance & sensitivity A rewarding, supportive climate Cultures that foster confidence and identification (one-ness with the firm) meaningful, practical commitment? Organisational initiatives

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