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Rewards

Rewards. OS352 HRM Fisher Nov. 9, 2004. Agenda. Pay grades Purpose and types of rewards Effectiveness Case study. Pay Grades. Used in federal government Job evaluation places jobs in a specific pay grade Can have ranges (e.g., GS 11-13, depending on education and experience)

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Rewards

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  1. Rewards OS352 HRM Fisher Nov. 9, 2004

  2. Agenda • Pay grades • Purpose and types of rewards • Effectiveness • Case study

  3. Pay Grades • Used in federal government • Job evaluation places jobs in a specific pay grade • Can have ranges (e.g., GS 11-13, depending on education and experience) • Also have pay differentials

  4. GradeSalary 1 $22,000 2 $35,000 3 $36,000 4 $45,000 5 $68,000 How does all of this become a pay structure? Helps guide/place controls on managers – we know when an employee is paid appropriately

  5. Purpose of rewards • Thank employees for a job well done • Motivate certain kinds of behaviors • Continued good performance • Increased performance • Change in how effort is allocated • Need to consider motivation theories when determining appropriate rewards • Equity • Expectancy • Need based theories

  6. Pay Increases • Raise – permanent increase • Bonus – one time payment • Spot bonuses are less formal bonus programs • Many companies still using signing bonuses • Increases must be large enough to be meaningful • Thinking about raises vs. bonuses • What are the cost implications of each? • What are the motivational implications of each?

  7. Basis for rewards • Individual level rewards • Piecework • Merit pay • Sales commissions • Group/organizational level rewards • Gainsharing • Profit sharing • Stock ownership

  8. Non-monetary rewards • Includes recognition and opportunities • Employee of the month • Lunch with the boss • Bigger office • Attending a conference or seminar • Not technically part of the overall compensation package, but an important motivational tool

  9. Effectiveness • Aligned with corporate goals, strategy • Contingent on performance • Valued by the employees • Allocation process is perceived as fair

  10. Rewards Case Study • Read the “Howe 2 Ski” case study • Will be distributed in class • In small groups, answer the questions • Whole class discussion

  11. An Ongoing Debate: Do Monetary Rewards Motivate or De-Motivate? • Motivate: Economic incentives improve quantity and do not reduce quality (Gupta & Mitra). • De-Motivate: Economic incentives reduce the satisfaction of doing enjoyable tasks (Deci).

  12. For next class • Topic: Pay secrecy • Read HBR case “When Salaries Aren’t Secret” • What are the key issues for the organization? For the employees? • How would you recommend the organization deal with this problem? • If you did not buy the case, it is available in hard copy from the library

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