BU288 Lecture Notes - Lecture 6: Job Enrichment, Motivation, Profit Sharing
Document Summary
Money is most effective as a motivator when contingent on performance. Schemes link performance to pay on production jobs called wage incentive plans. Piece-rate in which workers are paid a certain amount of money for each product produced, is the prototype of all wage incentive plans. In general, wage incentives increase productivity, but their introduction can be accompanied by a number of problems, i. e. restriction of production. Merit pay plans are an attempt to link pay to performance in white collar jobs: less effective than they could be, reason behind lower effectiveness is because: Compensation plans to enhance group performance are: o profit sharing. Profit earned by company is split among employees. Works better in smaller companies o employee stock ownership. Gives employees a sense of ownership and involvement in org: gainsharing, skill-based pay. Extra pay based on further skills that one employee may have over another.
