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Recognizing Employee Contributions with Pay - Chapter 12
- 1. Recognizing Employee Contributions with Pay GROUP 6
- 2. Our Team Group 6 Lecturer Dr. Nova Mardiana.S.E M.M Student 1711011034 Dimas Putra A Student 16111134 Abdelrahman Student 1711011108 Permata Dinda
- 3. Learning Objectives Discuss how pay influences individual employees, and describe three theories that explain effect of compensation of Individuals. Describe the fundamental pay programs for recognizing employees contributions to organization’s sucess. List the advantage and disadvantage about this pay program. Explain the importance of process issues such as communication in compensation management.
- 4. How Does Pay Influence Individual Employees?
- 5. Three Additional Theory Also Help Explain Compensation Effect’s Reinforcement Theory Expectancy Theory Agency Theories
- 6. Reinforcement Theory E. L Thorndike’s Law of effect states that a response followed by a reward is more likely to recur in the future. The implication for compensation management is that high employee performance by a monetary reward will make future high performance more likely.
- 7. Expectancy Theory The theory that says motivation is a function of valence, instrumentality, and expectancy. This theory is focuses on the link between rewards and behavior, it emphasizes expected rather than experienced the rewards. In other words, it focuses on the effects of incentives Valence Perceptions Instrumentality: Link Between Behaviors and Pay Increase Motivation and Performances Increase The Performance
- 8. Agency Theory Agent A person (a manager) who is expected to act on behalf of a principal (an owner) Focus Behavior reward- contigencies can shape behaviors. Principal In agency theory, a person (an owner) who seeks to direct another person behavior. Particular Value in Management Decision Emphasis risk of trade off
- 10. Type of Contract Should An Organization Use Chapter 12 Risk Aversion Among agents makes outcome-oriented contract likely. Outcome Uncertainity Profit is an example of an outcome. Measurable Job Outcomes When outcomes are more measurable, outcome oriented contracts are more likely. Job Programmbility As jobs become less programable (less routine), outcome oriented contract. Ability to Pay and Tradition
- 11. Program Recognizing Contribution Programs differ by payment method,payout frequency and ways of meas uring perfor--mance. Potential consequences include employees’ perfor mance motivation and attraction, culture and costs.
- 12. Merit Pay Performance rating with the employee’s posit ionin a pay range to determine the size and frequency of his or her pay increases. Merit pay programs link performance- appraisal ratings to annual pay increases. Some regarding percentage of employees who fall into each performance category.
- 13. Edward W. Deming, a critic of merit pay, Argued that it is unfair to rate individual performance because "apparent differences between people arise almost entirely from the system that they work in, not the people themselves.”
- 14. Critics of Merit Pay 1. Focus on merit pay discourages teamwork. 2. Measurement of performance is done unfairly inaccurately. 3. Merit pay may not really exist.
- 15. Individual Incentives Individual incentives reward individual performance but payments are not rolled into base pay and performance is usually measured as physical output rather than by subjective ratings. Individual incentives is rare because: 1. Most jobs have no physical output measure. 2. Many potential administrative problems. 3. Employees may do what they get paid for a Typically do not fit in with team approach. May be inconsistent with organizational goals. Modern PowerPoint Presentation
- 16. Profit Sharing Advantage: Profit sharing may encourage employees think more like owners. Disadvantages: They have a little control. Modern PowerPoint Presentation
- 17. Ownership Ownership encourages employee to focus on organizations sucess.
- 18. Gainsharing
- 19. Table Style Insert the title of your subtitle Here
- 20. Compensation Management Insert the title of your subtitle Here 02 . .
- 22. Thank you Insert the title of your subtitle Here