I. The Meaning of Money in the WorkplaceA. Money and Employee Needs1.
Money is an important factor in satisfying individual needs. 2. Money is a symbol of status, which relates to the innate drive to acquire. 3.
Financial gain symbolizes personal accomplishments and relates to growth needs. 4. People value money as a source of feedback and a representation of goal achievement. 5. Compensation is one of the top three factors attracting individuals to work for an organization.Order now
B. Money Attitudes and Values1. Money tends to create strong emotions and attitudes, most of which are negative, such as anxiety, depression, anger, and helplessness. 2. Money is associated with greed, avarice and occasionally, generosity. 3.
People with a strong money ethic believe that money is not evil; that it is a symbol of achievement, respect, and power; and it should be budgeted carefully. 4. Cultural values seem to influence attitudes toward money and a money ethic. a. People with Confucian work values are more likely to carefully budget their money but are also more likely to spend it.
b. People in countries with a long-term orientation give money a high priority in their lives. c. Scandinavians, Australians, ad New Zealanders have a strong egalitarian value that discourages people from openly talking about money or displaying their personal wealth.
C. Money and Social Identity1. People tend to define themselves in terms of their ownership and management of money. 2.
Couples tend to adopt polarized roles regarding their management and expenditure of money. 3. Men are more likely than women to emphasize money in their self-concept. 4. Men are shown to be more confident managing their money and are more likely to use money as a tool to influence and impress other.
II. Reward PracticesA. Membership-and Seniority-Based Rewards1. Represent the largest part of most paychecks. 2. Also called “pay for pulse.
” 3. Employees receive either the same wages and benefits, or these financial rewards increase with years of service. 4. Attract job applicants with security needs, reduce stress, and sometimes improve loyalty. 5.
They do not directly motivate job performance. 6. They discourage poor performers from seeking out work better suited to their abilities. 7. Some of these rewards undermine job performance by creating continuance commitment. B.
Job Status-Based Rewards1. Job evaluation is commonly used to rate the worth or status of each job, with higher pay rates going to jobs that require more skill and effort, have more responsibility, and have more difficult working conditions. 2. Organizations that don’t rely on job evaluation indirectly reward job status based on surveys estimating what other companies pay for specific jobs. 3. Job status-based pay motivates employees to compete for promotions and tries to make pay levels fair across different jobs (called internal equity).
4. One concern is that rewarding people for the worth of their jobs is inconsistent with the model of market-responsive organizations that have few layers of hierarchy and encourage initiative in everyone. 5. Status-based rewards motivate employees to compete with each other, rather than focusing their energy on customer service and other market needs. 6. They tend to reward functional specialization rather than the organization’s central goals of anticipating and responding to market needs.
7. Job evaluation systems motivate employees to increase their pay rate by exaggerating job duties and hoarding resources. C. Competency-Based Rewards1. Organizations are shifting from rewarding job status to rewarding employees for their skills, knowledge, and other competencies that lead to superior performance. 2.
Skill-based pay is a variation of competency-based rewards. The employees pay rate depends on the number of skill modules that he or she has mastered, not on the specific job performed on a particular day. 3. They improve workforce flexibility because they motivated employees to acquire a variety of skills that they can apply to different jobs as demands require.
4. Product or service quality tends to improve because employees with multiple skills are more likely to understand the work process and know how to improve it. 5. They are consistent with employability because they reward employees who continuously learn skills that will keep them employed. 6. A potential problem is that measuring competencies can be subjective, particularly where they are personality traits or values.
7. They are usually more objective and accurate but also expensive. D. Performance-Based Rewards1.
Individual Rewardsa. Employees receive individual bonuses or awards for accomplishing a specific task or performance goal. b. Salespeople typically earn commissions where pay increases with sales volume.
c. Piece-rate systems reward employees based on the number of units produced. 2.Team Rewardsa.Organizations are shifting their focus from individuals to teams and employees are finding a larger part of their paycheck based on team performance.b.Gainsharing .