OB Chapter 6

• symbol of success
• reinforcer and motivator
• reflection of performance
• reduce anxiety

• membership and seniority
• job status
• competencies
• perfomance based

• attract applicants, low turnover, minimize stress of insecurity
• doesn't motivate perofmance, may discourage poor performers from leaving, golden handcuffs

fixed pay, most employee benefits, paid time off

• tries to maintain internal equity, minimize pay discrimination, motivates employees to compete for promotions
• encourages hierarchy (increase costs and reduce responsiveness), reinforces status differences, motivates job competition and exaggerate job worth

status based benefits, promotion based pay increase

pay increased based on competency, skill based pay

• improves workforce flexibility, tends to improve quality, consistent with employability
• subjective measurement of competencies, skill based pay plans are expensive

commissions, merit pay, gainsharing, profit sharing, stock options

• 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

form of team based compensation that calculates bonusesf rom the work unit's cost savings and productivity improvement

• Employee stock ownership plans (ESOPs)
• stock options
• profit sharing plans

• 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

give employees the right to purchase shares from company at a future date at a predetermined price up to a fixed expiration date

• 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

• 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)

• 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

to create jobs that can be performed efficiently yet employees are motivated and engaged

• less time changing activities, lower training costs, job mastered quickly, better person-job matching
• job boredom, discontentmet pay, higher costs, lower quality, lower motivation

5 core job characteristics leads to 3 critical psychological states that create positive outcomes

• skill variety
• task identiy
• task significance
• autonomy
• feedback from job

• meaningfulness (skill variety, task identity, task significance)
• responsibility (autonomy)
• knowledge of results

• job rotation
• job enlargement (this only benefits when skill variety is combined with more autonomy and job knowledge)
• job enrichment: more responsibility for scheduling, coordinating and planning one's own work (cluster tasks into natural groups, establishing client relationships)

• self determination: employees feel they have freedom and independence over their work
• meaning: employees believe their work is importnat
• competene: feelings of self efficacy
• impact: feel their actions influence success

• empowerment is a state of mind; execs need to create environment to support feelings of empowerment
• at individual level: employess must have the necessary competencies 
• job design factors: autonomy, task identiy, task significance, job feedback
• organizational factos: resources, learning orientation, trust