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How are slogans and mottos used in companies?
- one of the 12 mechanisms for changing organizational culture
-easy to remember and repeat
Equity Theory
-people strive for fairness and justice in social exchanges or give-take relationships
-motivated by maintained consistency between beliefs and behavior; otherwise, cognitive dissonance (prompts correction)
Negative VS Positive inequity
-Negative inequity (comparison person gets greater benefits for the same work as you)
-Positive inequity (you receive more than another for the same work input)
Outputs VS Inputs
-Outputs (pay, benefits, job security, recognition)
- Inputs (education, skills, creativity, age)
-Outputs/inputs ; the larger the ratio, the better
McGregor's Theory X and Theory Y
-Theory X: pessimistic view; dislike work, need monitored, only reward motivated
-Theory Y: modern, positive view; self-engaged, committed, responsible, creative
Maslow's Hierarchy
-physiological, safety, love, esteem, self-actualization
-have needs beyond paycheck
-satisfied needs lose potential
Acquired needs theory
-David McClelland states achievement, affiliation, and power are not born with
-achievement: excel, overcome, rival and surpass
-affiliation: social relationships, be liked, join groups
-power: influence, teach, and encourage
Self-determination theory
-competence: feel qualified, knowledgeable, and capable
-autonomy: feel independent
-relatedness: be connected and feel belonging
Herzberg's motivator-hygiene theory
-motivating factors cause satisfaction; achievement, recognition, advancement; solve after hygiene
-hygiene factors cause dissatisfaction; company policy, salary, working conditions; solve first
What is organizational socialization?
-the process by which individuals acquire the knowledge, skills, attitudes, and behaviors required to assume a work role.
1) anticipatory socialization: before joining organization; Realistic Job Preview for + and - aspects
2) encounter: learns what it's really like; onboarding to help integrate, assimilate, and transition
3) change and acquisition: master tasks and roles as well as adjust to work values/norms
What is goal setting theory and how does it work?
-Specific, difficult goals lead to higher performance; goal specificity (has been quantified)
-certain abilities and resources needed to reach goal
-feedback and participation in deciding how to achieve goals is necessary but not enough
-goal achievement leads to job satisfaction, meaning higher levels of performance
-goals direct attention, regulate effort, increase persistence, and foster development/application of strategies and plans
What is job design and what factors are included?
-any set of activities that alter jobs to improve the quality of employee experience and level of productivity.
1. top-down approach
2. bottom-up approach
3. Idiosyncratic
top-down approaches
-scientific management: conducts business by facts/truths of observation, experimentation
-job enlargement: combines specialized tasks of comparable difficulty
-job rotation: moved from one specialized job to another
-job enrichment: modified for recognition, stimulation, and advancement
Bottom-up approach
job crafting meaning employees' shape work characteristics
Idiosyncratic
employment terms negotiated for; flexible schedules to career development
What are values and norms in an organization?
-espoused values: explicitly stated qualities and norms preferred by an organization
-enacted values: qualities and norms that are exhibited or converted into employee behavior
What is motivation and its factors?
-describes the psychological processes "that underlie the direction, intensity, and persistence of behavior or thought"
1. extrinsic motivation
2. intrinsic motivation
Extrinsic motivation
results from the potential or actual receipt of external rewards (money, recognition, etc.)
Intrinsic motivation
occurs when an individual is inspired by "the positive internal feeling that are generated by doing well
What are the elements of Vroom's theory?
-expectancy: an individual's belief that a particular degree of effort will be followed by a particular level of performance; "what are the chances of reaching performance goal?"
-instrumentality: perceived relationship between performance and outcomes; "what are chances of various outcomes if goals reached?"
-valence: positive and negative value people place on outcomes; "how much do I value the outcomes?"
-all three must be high
What is the Purpose of Performance Management Systems and what does it consist of?
-strategic: link employee behavior and expected results with organizational goals
-administrative: used for pay raises, promotions, layoffs, etc.
-developmental: identify strengths and weaknesses for development
-communication: emphasize expectations, how they are performing, and where to improve
-organization maintenance: show performance, training, and development needs
-documentation: record decisions and information for litigation/investigation
What do you consider with pay surveys?
-provide information on going rate of pay among competing organizations
-external equity
What are personal incentives and how do they work?
-reward individual performance, but are not rolled into base pay (must re-earn) and are based on physical output rather than subjective ratings
What is Thorndike's observation?
-law of effect: behavior with favorable consequences tends to repeat, unfavorable tends to disappear
-respondent behavior: automatic reaction to stimuli
-operant behavior: learned and occur when we "operate on" the environment for desired consequences
What are consequences of pay decisions?
-employees evaluate pay relative to that of other employees, thus influencing attitude and behaviors
-includes external and internal equity
What are perspectives of performance?
-managers: most frequent, motivated to accurately rate
-peers: know job requirements well, not expected to provide feedback so more motivating
-direct reports: eval of managers, "upward feedback"
-self: tendency to be inflated, likely have easy access to performance, can be used to discuss areas where the disagree with evaluation
-customers: used when direct service to customer or when company wants to cater to the customer
What is agency theory?
-focuses on the divergent interests and goals of the organization's stakeholders and the ways the employee compensation can be used to align these interests/goals
-modern corps have ownership separate from management
Are there problems with job-based pay structures?
-encourage bureaucracy: lack of flexibility and initiative
-reinforces top-down decision making and info flow
-bureaucracy becomes a barrier to change due to time and cost
-doesn't reward desired behaviors in a rapidly changing environment
-discourages lateral movement
What the plus and minus of merit pay?
-traditional form of pay in which base pay is increased permanently
-unidirectional feedback that is infrequent and based on individual differences
-unfair to rate individual performance because differences arise from the system, not from themselves
-merit pay focus discourages teamwork
-must be fair and accurate
-doesn't have to be re-earned each year
-likely doesn't exist due to accumulation effect
What are the main types of reinforcement and how do they work?
-positive reinforcement: the process of strengthening a behavior by contingently presenting something appealing
-negative reinforcement: strengthens a desired behavior by contingently withdrawing something displeasing
-punishment: weakening a behavior by presenting something displeasing or withdrawing something positive
-extinction: weaking behavior by ignoring it
What is the Basic Operant Conditioning Theory, how does it work and what are its parts?
-using consequences to increase or decrease a behavior
-for more often occurrence of behavior, present a positive consequence (give ice cream) or withdraw a negative one (remove bedtime)
-for less often occurrence, present a negative consequence (timeout) or withdraw a positive one (no toys)
What is gainsharing and how does it work?
-form of group compensation based on group or plant performance (not org. wide) that does not become part of the employee's base salary
-payouts are more frequent and not deferred
What are the parts of pay setting structure?
-pay level: external equity through market pay surveys
-job structure: internal equity through job evaluations
What are the attribute approaches?
-attribute approach: focuses on the extent to which individuals have certain attributes believed desirable for company's success
-graphic rating scales: most common, measures traits on a rating scale (like a 1-5)
-mixed-standard scales: gives a trait (like intelligence) with various levels of performance (H, M, L) and their definition; grader gives a +, -, or 0 to indicate how person relates to the level of performance; the +, -, and 0 correlate to a score to asses each trait
What are the market challenges in pay decisions?
-deciding to pay above, at, or below the market average
-businesses need a sufficient ROI, meaning that the investment in employees should make an effective, productive workforce
What are 3 theories explaining compensation's effect and what do they do?
-reinforcement theory: follow's law of effect in that high employee performance with monetary reward is more likely
-expectancy theory: emphasize expected rewards; relies on instrumentality (link between behaviors and pay)
-agency theory: how employee compensation can be used to align stakeholder's interests/goals
key jobs
benchmark jobs; relatively stable content and common to many organizations
non-key jobs
unique to organizations; cannot be valued or compared through market surveys
What is profit sharing and how does it work?
-compensation plan in which payments are based on a measure of organization performance (profits) and do not become part of the employees' base salary
-employees take a broad view of what needs to be done
-labor costs reduced during tough times, wealth shared during good times
What is the Fair Labor Standards Act?
- a minimum wage of 7.25, but states can specify higher
-permits subminimum training wage (85%) to those under 20 up to 90 days
-1.5x beyond 40 hrs
What is the law of effect?
-a response followed by a reward is more likely to recur in the future
What are the factors to consider in the production of goods and services?
-must be able to sell goods/services at a quantity and price for sufficient ROI
-compete on quality, service, price, etc.
-must consider labor cost: average cost per employee (wages, bonuses, health insurance) and staffing level
-consider labor market competition (worker shortage = higher wages)
-tradeoff between high pay (cost) for skilled workers
What is an intermittent reward schedule?
-reinforcement of some but not all instances of a target behavior; fixed ratio, variable ratio, fixed interval, variable interval
What is reliability?
-the consistency of a performance measure
-interrater reliability: consistency among individuals who evaluate performance
Rate ranges
different employees with the same job may have different pay rates due to performance, seniority, training, etc.
Pay level
the average pay (inc. wages, salaries, and bonuses) of jobs in an organization
What is corporate-level diversification?
-most stockholders are far removed from day-to-day operations
-this means principals (owners) and agents (managers) may not share interest
-owners want to maximize their investment, while managers might spend money on perks
-owners take a risk on the business because they can afford to, managers may have jobs as only income and not be willing to risk
-short-term vs. long-term commitment for personal gain can differ
What is the roll of a manager in providing feedback and evaluations under performance management systems?
-provide frequent feedback to correct deficiencies immediately and not surprise employees
-choose a neutral location for a feedback session
-ask employees to rate themselves prior to receiving feedback
-make the feedback session collaborative
-focus on solving problems, not punishment
-focus on results/behavior, not the individual
-minimize criticism
-agree on goals and set to date to review progress
