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Managing Human Resources, Luis Gomez Mejia,  David Balkin,Ch1, Managing Human Resources 6e Luis Gomez Mejia  David Balkin, Ch11, Vahdi Boydaş, Mensur Boydaş
 

Managing Human Resources, Luis Gomez Mejia, David Balkin,Ch1, Managing Human Resources 6e Luis Gomez Mejia David Balkin, Ch11, Vahdi Boydaş, Mensur Boydaş

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Managing Human Resources, Luis Gomez Mejia, David Balkin,Ch1, Managing Human Resources 6e Luis Gomez Mejia David Balkin, Ch8, Vahdi Boydaş, Mensur Boydaş

Managing Human Resources, Luis Gomez Mejia, David Balkin,Ch1, Managing Human Resources 6e Luis Gomez Mejia David Balkin, Ch8, Vahdi Boydaş, Mensur Boydaş

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    Managing Human Resources, Luis Gomez Mejia,  David Balkin,Ch1, Managing Human Resources 6e Luis Gomez Mejia  David Balkin, Ch11, Vahdi Boydaş, Mensur Boydaş Managing Human Resources, Luis Gomez Mejia, David Balkin,Ch1, Managing Human Resources 6e Luis Gomez Mejia David Balkin, Ch11, Vahdi Boydaş, Mensur Boydaş Presentation Transcript

    • (c) 2007 by Prentice Hall 11-1 Rewarding PerformanceRewarding Performance Chapter 11Chapter 11
    • (c) 2007 by Prentice Hall 11-2 • Recognize individual & group contributions to the firm by rewarding high performers • Develop pay-for-performance plans that are appropriate for different levels in an organization • Identify the potential benefits & drawbacks of different pay-for- performance systems & choose the plan that is most appropriate for a particular firm • Design an executive compensation package that motivates executives to make decisions that are in the firm’s best interests • Weigh the pros & cons of different compensation methods for sales personnel & create an incentive plan that is consistent with the firm’s marketing strategy • Design an incentive system to reward excellence in customer service Chapter 11 OverviewChapter 11 Overview
    • (c) 2007 by Prentice Hall 11-3 Pay-for-performance:Pay-for-performance: The ChallengesThe Challenges • Pay-for-performance orPay-for-performance or Incentive SystemsIncentive Systems • The “The “do only what you get paiddo only what you get paid forfor” syndrome” syndrome
    • (c) 2007 by Prentice Hall 11-4 • Negative effects on the spirit ofNegative effects on the spirit of cooperationcooperation • Lack of controlLack of control • Difficulties in measuring performanceDifficulties in measuring performance • Psychological contractsPsychological contracts • The credibility gapThe credibility gap • Job dissatisfaction & stressJob dissatisfaction & stress • Potential reduction of intrinsic drivesPotential reduction of intrinsic drives Pay-for-performance:Pay-for-performance: The ChallengesThe Challenges
    • (c) 2007 by Prentice Hall 11-5 • Link pay & performance appropriatelyLink pay & performance appropriately – Piece-rate systemPiece-rate system –– A compensation systemA compensation system in which employees are paid per unitin which employees are paid per unit produced.produced. • Use pay-for-performance as part of aUse pay-for-performance as part of a broader HRM systembroader HRM system • Build employee trustBuild employee trust Meeting the Challenges ofMeeting the Challenges of Pay-for-performance SystemsPay-for-performance Systems
    • (c) 2007 by Prentice Hall 11-6 • Promote the belief that performancePromote the belief that performance makes a differencemakes a difference • Use multiple layers of rewardsUse multiple layers of rewards • Increase employee involvementIncrease employee involvement • Use motivation & nonfinancial incentivesUse motivation & nonfinancial incentives Meeting the Challenges ofMeeting the Challenges of Pay-for-performance SystemsPay-for-performance Systems
    • (c) 2007 by Prentice Hall 11-7 Types of Pay-for-performanceTypes of Pay-for-performance PlansPlans • Individual-based plansIndividual-based plans –Merit payMerit pay –Bonus programsBonus programs –Lump-sum paymentsLump-sum payments • Advantages & disadvantages ofAdvantages & disadvantages of individual-based pay-for-individual-based pay-for- performance plansperformance plans
    • (c) 2007 by Prentice Hall 11-8 Conditions under which individual-basedConditions under which individual-based plans are most likely to succeed-plans are most likely to succeed- • When the contributions of individual employeesWhen the contributions of individual employees can be accurately isolatedcan be accurately isolated • When the job demands autonomyWhen the job demands autonomy • When cooperation is less critical to successfulWhen cooperation is less critical to successful performance or when competition is to beperformance or when competition is to be encouragedencouraged Types of Pay-for-performanceTypes of Pay-for-performance PlansPlans
    • (c) 2007 by Prentice Hall 11-9 Team-based PlansTeam-based Plans • Advantages andAdvantages and disadvantages to team-disadvantages to team- based pay-for-performancebased pay-for-performance plansplans
    • (c) 2007 by Prentice Hall 11-10 Conditions under which team-basedConditions under which team-based plans are most likely to succeed-plans are most likely to succeed- • When work tasks are so intertwined it isWhen work tasks are so intertwined it is difficult to single out who did whatdifficult to single out who did what • When the firm’s organization facilitates theWhen the firm’s organization facilitates the implementation of team-based incentivesimplementation of team-based incentives • When the objective is to fosterWhen the objective is to foster entrepreneurship in self-managed workentrepreneurship in self-managed work groupsgroups Team-based PlansTeam-based Plans
    • (c) 2007 by Prentice Hall 11-11 • GainsharingGainsharing • Conditions favoring plantwideConditions favoring plantwide plansplans – Firm sizeFirm size – TechnologyTechnology – Historical performanceHistorical performance – Corporate cultureCorporate culture – Stability of the product marketStability of the product market Plantwide PlansPlantwide Plans
    • (c) 2007 by Prentice Hall 11-12 Corporatewide PlansCorporatewide Plans • Profit sharingProfit sharing • Employee StockEmployee Stock Ownership PlanOwnership Plan (ESOP)(ESOP) • Advantages andAdvantages and disadvantages ofdisadvantages of corporatewide pay-corporatewide pay- for-performancefor-performance plansplans
    • (c) 2007 by Prentice Hall 11-13 Conditions favoring corporatewideConditions favoring corporatewide plansplans • Firm sizeFirm size • Interdependence of different parts ofInterdependence of different parts of the businessthe business • Market conditionsMarket conditions • The presence of other incentivesThe presence of other incentives Corporatewide PlansCorporatewide Plans
    • (c) 2007 by Prentice Hall 11-14 For Executives & SalespeopleFor Executives & Salespeople • Salary & short-term incentivesSalary & short-term incentives • Long-term incentivesLong-term incentives • PerksPerks • Directors & shareholders as equityDirectors & shareholders as equity partnerspartners • SalespeopleSalespeople Designing Pay-for-performanceDesigning Pay-for-performance PlansPlans
    • (c) 2007 by Prentice Hall 11-15 • Do you think it is ethical for a company toDo you think it is ethical for a company to give its CEO and its other top executivesgive its CEO and its other top executives multimillion-dollar pay packages that aremultimillion-dollar pay packages that are not closely tied to the company’snot closely tied to the company’s performance?performance? A Question of Ethics -A Question of Ethics -
    • (c) 2007 by Prentice Hall 11-16 Rewarding Excellence inRewarding Excellence in Customer ServiceCustomer Service Customer service rewards may beCustomer service rewards may be individual-, team-, or plant-basedindividual-, team-, or plant-based
    • (c) 2007 by Prentice Hall 11-17 • Pay-for-performance: The Challenges • Meeting the challenges of pay-for- performance systems • Types of pay-for-performance • Designing pay-for-performance plans for executives & salespeople Summary and ConclusionsSummary and Conclusions