MGHB02H3 Chapter Notes - Chapter 6: Profit Sharing, Absenteeism, Motivation
Document Summary
Questions and exercises prepared by alan saks: money as a motivator. The money that employees receive in exchange for organizational membership is usually a package made up of pay and various other fringe benefits that have dollar values, such as insurance plans, sick leave, and vacation time. We are mainly concerned with the motivational characteristics of pay. Employees and managers, however, seriously underestimate the importance of pay as a motivator. Motivation theories suggest that money can be a motivator to the extent that it satisfies a variety of needs, is highly valent, and it is clearly tied to performance. Research has found that financial incentives and pay-for-performance plans increase performance and lower turnover. In general, the ability to earn money for outstanding performance is a competitive advantage for attracting, motivating, and retaining employees: linking pay to performance on production jobs. The prototype of all schemes to link pay to performance on production jobs is piece-rate.
