Changing Employee Behaviour - Remuneration vs. Reward


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Remuneration Motivation: Rewarding Best Behaviour. We give a holistic 101 on the typical types of reward systems employers can use to get the desired ongoing response from employees.

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Changing Employee Behaviour - Remuneration vs. Reward

  1. 1. Remuneration Motivation: Rewarding Best Behaviour Psych Press News
  2. 2. What is Remuneration? “Financial incentives constitute employees’ payment when offering labour” Salary Benefits Remuneration Gkorezis & Petridou, 2012: 3598 Performance pay © Copyright Psych Press 2013
  3. 3. Remuneration as Reward Effort Reward “Effort Reward Imbalance Model” • Job stress comes when effort and reward are not balanced • A problem in one area can result in complaints about another © Copyright Psych Press 2013
  4. 4. Other Forms of Reward Extrinsic • Rewards that are outside of the actual role and team: – Financial – Advancement opportunities – Prestige Intrinsic • Rewards that are connected to the organisation, its mission and team: – Relationships – Achievement – “A job well done” © Copyright Psych Press 2013
  5. 5. Classical Conditioning Stimulus • Original • Paired Involuntary Response • In Pavlov’s famous experiment, a bell was rung at the same time as food was presented to a dog. The dog would salivate for the food, but eventually would salivate at the sound of the bell • The paired stimulus, the bell, resulted in the involuntary response © Copyright Psych Press 2013
  6. 6. Operant Conditioning • A voluntary action is reinforced with reward or punishment • Remuneration reinforces behaviours • An unintended consequence is where the wrong behaviours are reinforced Voluntary action © Copyright Psych Press 2013 Reinforcement
  7. 7. Reinforcing the Right Behaviours On Target Off Target • Goal: to improve word-ofmouth referrals • Reinforcement: ‘finders fees’ for successful referrals • Result: staff motivated to generate referrals • Goal: to develop longterm relationships with clients • Reinforcement: salesbased commission with no trailing commissions • Result: sales staff focus on immediate revenue even if it loses clients longer term © Copyright Psych Press 2013
  8. 8. Psychological Contract •Remuneration •Safety •Formal obligations •Position •Colleagues •Management •Clients Transactions Wider Market •Context •Community •Competing offers Relationships Work •Prestige •Career prospects •Job security • The ‘psychological contract’ refers to the mutual obligations between an employee and employer • Psychological contracts encompass formal and informal aspects of work • It is mediated in comparative terms by what is available in the whole market © Copyright Psych Press 2013
  9. 9. Designing Reward Systems • Reward systems should take a holistic approach to achieving optimum performance • Rewards can be monetary and nonmonetary Intrinsic & extrinsic rewards Psychological contract © Copyright Psych Press 2013 Reinforcement & conditioning Performance
  10. 10. Remuneration: Thought-Starters The remuneration system… • Has an overall objective and each component has a business case for it • Is based on evidence and benchmarking from reliable sources • Includes monitoring and regular review systems including employee feedback • Encourages desirable behaviour and discourages undesirable behaviour • Rewards the individual for their work and avoids rewarding or punishing them for others’ actions • Is transparent and easy to understand or calculate – Adapted from Scott, 2008 © Copyright Psych Press 2013
  11. 11. References • Gkorezis, P., & Petridou, E. (2012). The Effect of Extrinsic Rewards on Public and Private Sector Employees’ Psychological Empowerment: a collaborative approach. The International Journal of Human Resource Management, 23(17). 3596-3612. doi: 10.1080/09585192.2011.639025 • Nelson, L., Tonks, G., & Weymouth, J. (2006). The Psychological Contract and Job Satisfaction: Experiences of a Group of Casual Workers. Research and Practice in Human Resource Management, 14(2), 18-33. Online: • Scott, I.A. (2008). Pay for performance programs in Australia: a need for guiding principles. Australian Health Review, 32(4), 740-749. © Copyright Psych Press 2013