what are advantages and disadvantages based on reward based on task performance?
motivates task perfomance, attracts perfomance oriented applicants, organizational rewards create an ownership culture, pay variabilty may avoid layoffs during downturns
may weaken job content motivation, may distance reward giver from receiver, may discourage creativity, tends to addresss symptons, not underlying causes of behavior
what are gainsharing plans?
form of team based compensation that calculates bonusesf rom the work unit's cost savings and productivity improvement
what are some examples of organization rewards?
Employee stock ownership plans (ESOPs)
profit sharing plans
what is Employee stock ownership plans (ESOPs)?
encourages employees to buy company stock, usually at discounted price or through a no interest loan; most are designed for retirement plans. stock is vested (legally transferred) to the employee after seven years of service
helps align individual with organization's success
what is stock options
give employees the right to purchase shares from company at a future date at a predetermined price up to a fixed expiration date
what are profit sharing plans
calculate bonuses from previous year's level of corporate profits
creates less of ownership culture as in stock options and ESOPs
adjusts employee compensation with firm's prosperity, reduce layoffs or negotiated pay reductions during recessions
what is the main problem concerning stock options, ESOPs, profit sharing?
weak connection between individual effort and corporate profits or the value of company shares (which is determined by economic conditions not employee's performance)
some companies use ESOPs as replacement for employee pension plans (company can go bankrupt)
how to improve reward effectiveness?
link rewards to performance
ensure that rewards are relevant
use team rewrds for interdependent jobs
ensure that rewards are valued
watch out for unintended consequences
what is the organization's goal in job design?
to create jobs that can be performed efficiently yet employees are motivated and engaged
what are the advantages and disadvantage of job specialization?
less time changing activities, lower training costs, job mastered quickly, better person-job matching