Topic 9: Rewards Flashcards Preview

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Flashcards in Topic 9: Rewards Deck (16):

What are reward systems used to do?

  • Attract and retain staff.
  • Motivate effort.
  • Motivate change in behavior.


What do process theories tell us about how rewards should be designed?

  • Create a perception that effort will lead to rewards
  • Ensure that rewards are viewed as fair and equitable
  • Manage situation factors 
    • Design jobs so that effort can lead to high performence
    • Hire qualified employees or train employees to appropriate level


How do we categorise rewards based on what kind of need they fulfill?

  • Intrinsic rewards satisfy higher order needs
  • Extrensic rewards satisfy lower order needs


What does content theory tell us about rewards and how they should be designed?

  • Rewards should be both intrinsic and extrinsic.
  • Needs are dynamic - a satisfied need is no longer a need.
  • A satisfied need leads to a focus on a higher order need.


What is Frederick Herzberg's theory?

Motivator Hygiene theory

 (It was rejected due to lack of evidence.)


Explain Motivator Hygiene Theory

The idea that:

  • Employees have job satisfaction when they fulfill their growth and esteem needs 
  • Experience dissatisfaction when they have poor working conditions, security and other unfurfilled lower needs. 


  • Having the lower needs furfilled meerly prevents dissatisfaction.Only the characteristics of the job itself can motivate employees.


What kinds of things are hygiene factors?


  • Pay
  • Status
  • Security
  • Working Conditions
  • Fringe Benifits
  • Policies and Administrative Practices
  • Interpersonal Relations


What kinds of things are motivators in the motivator-hygiene model?


  • Meaningful work
  • Challenging work
  • Recognition for accomplishments
  • Feeling of achievement
  • Increased responsibility
  • Opportunities for growth and advancement
  • The job itself


What types of rewards do we look at?

  • Wage
  • Seniority
  • Job status
  • Competency based
  • Task performence (seperate by levels)


How does wage act as a motivator?


  • Symbol of success
  • Reinforcer and motivator
  • Reflection of perforrmance
  • Can reduce anxiety



What are the advantages / disadvantages of benefits that increase with seniority


  • Guaranteed wages may attract job applicants
  • Seniority-based rewards reduce turnover


  • Does not motivate job performance
  • Discourages poor performers from leaving
  • May act as golden handcuffs (tie people to the job) - A continuance commitment rather than affective commitment


What are the advantages & disadvantages of job status based rewards (includes evaluation and importance of job).


  • Job evaluation tries to maintain fairness (pay equity).
  • Motivates competition for promotions.


  • Employees may exaggerate duties, hoard resources.
  • Encourages bureaucratic hierarchy.
  • Reinforces status mentality.


What are competency based rewards?

  • When pay increases with competency acquired and demonstrated (usually within pay groups).
  • A Narrow variation - Skill-based pay, pay increases with mastery of measurable skills learned.



What are the advantages and disadvantages to competency based rewards


  • Creates incentive to learn: more flexible workforce, better quality consistent with employability


  • Potentually subjective
  • Higher training costs


What are the three level of rewards? Give Examples.

  • Organisational (profit sharing, stock options).
  • Team (bonuses, gainsharing).
  • Individual (bonuses, commisions, piece rate).


Evaluate organisational rewards

  • Creates an "ownership" culture
  • Adjusts pay with firm's prosperity
  • Weak connection between individual effort and reward
  • Reward amounts are usually dominated by external forces.