Chapter 10: Motivating and Rewarding Employees
Section 10.3 - Contemporary Issues in Motivation
Key Terms
 Pay-for-performance programs
 Competency-based compensation
 Broad-banding
 Stock options
 Flextime
 Job sharing
 Telecommuting
Summary
Contemporary motivation issues facing today’s managers include motivating a
diversified workforce, pay-for-performance programs, motivating minimum wage
employees, motivating professional and technical employees, and flexible work schedule
options. To maximize motivation in today’s diversified workforce, management needs to
think in terms of flexibility. Employees have different personal needs and goals that
they’re hoping to satisfy through their jobs. A diverse array of rewards is needed to
motivate employees with such varied needs. Managers must be flexible enough to
accommodate cultural differences.
Motivation tells us that people act in order to satisfy some need. Because pay is an
important variable in motivation, we need to look at how we can use pay to motivate high
levels of employee performance. Pay-for-performance programs pay employees on the
basis of some performance measure. Piece-rate plans, gain sharing, wage incentive plans,
profit sharing, and lump sum bonuses are examples of pay for performance programs.
A recent extension of the pay for performance concept is called the competency based
compensation program. A competency based compensation program pays and rewards
employees on the basis of the skills, knowledge, or behaviors employees possess. Preset
pay levels, called broad-banding are established on the basis of the degree to which these
competencies exist.
A variation of pay-for-performance programs in organizations today is the offering of
stock options. Stock options are represented by programs that allow employees to
purchase company stock at a fixed price. Options have been a common incentive offered
to executives.
How can managers motivate minimum wage employees? Many companies use employee
recognition programs such as employee of the month, quarterly employee performance
award ceremonies, or other celebrations of employee accomplishment. Rewards are only
part of the motivation equation. There are other elements such as empowerment and
career development assistance.
In addition to an increased use of temporary and contingent workers, contemporary
companies are looking at other options including flextime, job sharing, and
telecommuting.
Flextime is a scheduling option that allows employees, within specific parameters, to
decide when to go to work. Employees have to work a specific number of hours a week,
but they are free to vary the hours of work within certain limits. Potential benefits of
flextime include improved employee motivation and morale, reduced absenteeism as a
result of enabling employees to better balance work and family responsibilities, increased
wages due to productivity gains, and the ability of the organization to recruit higherquality and more diverse employees.
Job sharing allows two or more individuals to split a traditional 40-hour-a-week job. Job
sharing allows the organization to draw upon the talents of more than one individual for a
given job. Job sharing is growing in popularity, with 57 percent of large organizations
offering it.
Telecommuting is a system of working at home on a computer that is linked to the office.
Telecommuting offers an opportunity for a business in a high-labor-cost area to have its
work done in an area where lower wages prevail. Organizations still have a responsibility
to ensure the health and safety of the off-premise work site. For employees, the two big
advantages of telecommuting are the decrease in time and stress of commuting in
congested areas and the increase in flexibility in coping with family demands.
Employee empowerment means giving employees the power to make decisions and take
actions on their own—is an important motivational approach. Empowered employees
can provide flexibility and speed. They often display stronger work motivation, better
work quality, higher job satisfaction, and lower turnover.
Section Outline
I.
Contemporary Issues in Motivation
A. What is the key to motivating a diverse workforce?
B. Should employees be paid for performance or time on the job?
C. How can managers motivate minimum-wage employees?
D. What’s different in motivating professional and technical employees?
E. What can management do to improve work/life balance?
1. How does flextime work?
2. Can employees share jobs?
3. What is telecommuting?
II.
What Do Entrepreneurs Do to Motivate Employees?