Organizational Behaviour
The Individual
Motivation III
Motivation in practice
Wage incentive plans for
production/manufacturing jobs
Plan
type
How it works
To be
effective
Advantages
Disadvantages
Wage
Money for each
Incentive unit produced
(piece-rate) or
Plans
monthly
production
bonuses
Must be able
to measure
individual or
organizational
production
levels
Easy to
implement
and
understand,
highly
effective
Reduced quality,
differential
opportunity,
reduced
cooperation,
restriction of
productivity
Skills
Based
Pay
Plans
Skills must be
linked to pay
levels, there
must be welldeveloped
training
procedures
The company
can operate
with less
staff, workers
have a
broader view
of company,
better
problem
solving skills
Raised costs for
training and
salary, having
trained but
unused skills
Salary
increases with
the number of
tasks that the
individual can
perform
Wage incentive plans for white collar jobs
Plan type How it works
To be
effective
Advantages
Disadvantages
Merit Pay
Plans
Must have
reliable and
valid methods
of measuring
performance
A method to
reward good
performance
at the
managerial
level, easy to
pay out
Ineffectiveness
created by lack
of distinction
between high
and low
performance, too
small of
increases, pay
secrecy
Bonuses are
given on either
a monthly or
lump sum
basis, based
upon
performance
evaluation
results
Group incentive plans – motivating
teamwork
Plan type
How it works
To be
effective
Advantages
Disadvantages
Profit sharing
and
ESOPs
A varying
annual bonus or
purchase
options based
on profits
Employees
must be able
to collectively
influence
profits
Simple, easy to
communicate,
pays out only
when profitable,
unites employee
& employer
interests
Short term
perspective,
factors beyond
employee control
can influence
Gainsharing
Based on
outcomes over
which
employees have
control
(increased
productivity or
cost reductions)
then members
get a bonus
Objectives
must be
measurable,
employees
must trust
management
Increases
coordination and
teamwork,
employees learn
more about the
business, higher
motivation,
smarter work
methods
If focus only on
productivity will be
ineffective,
bonuses have to
be paid even when
unprofitable
Job Characteristics Model
Core Job
Characteristics
Skill Variety
Task Identity
Task Significance
Autonomy
Job Feedback
Critical Psychological
States
Personal and Work
Outcomes
Experienced
meaningfulness of
work
Experienced
responsibility for
work outcomes
High internal work
motivation
Knowledge of
actual work
results
High quality work
performance
High satisfaction with
work
Low absenteeism and
turnover
Diagnosing for problems in job
enrichment levels
• Survey method
– MPS =
– skill variety + task identity + task significance X autonomy X feedback
3
• Structural clues
– Presence of
:inspectors or checkers
:troubleshooters
:communications and customer
relations departments
:labour pools
:central decision making
Common job design activities to enrich
jobs
• Job engineering – to create efficiency in work
production and plant layout (e.g. Scientific
Management)
• Job rotation – adds variety and reduces
boredom
• Job enlargement/combining tasks – increases
the number of tasks performed by the
individual
• Job enrichment/vertical loading – increases
the level of employee responsibility and
accountability (reducing supervision)
Common job design activities to
enrich jobs
• Establishing client relationships and
accountability
– Having employees responsible to those
receiving the product; both internally and
externally
• Forming natural teams
– putting teams together to produce a complete
product
Alternatives for those who do
not want job redesign
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