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Unit Lesson

MBA 6001: Unit IV

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Reward systems and productivity

Unit IV:

Please be sure to turn up your volume or plug in your headphones. The next several slides contain important audio.

(OpenClipartVectors, 2013)

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Human Resource Management

Human Resource Management (HRM)

Planning

Staffing

Compensation

Benefits

Implementing policies

Human Resource Development (HRD)

Employee and management development

Improved performance

Training and development

Aligning skills to development to achieve strategic goals

Insert Image of boundary-less design

Lawler (as cited in McEwan, 2015) stated, “Virtually every organization has a performance system that is expected to attract, retain, and motivate employees to achieve the organization’s goals” (p. 396).

Human resource management (HRM) is important to an organization’s strategic success. It deals with the formal systems of human resource (HR) planning, staffing, compensation, benefits, and implementing policies. Human resource development (HRD) is similar to human resource management, but its focus is on employee management development, improved performance, training and development, and aligning skills to development to achieve strategic goals.

Human capital is one of the most important resources in an organization's success, yet a major challenge for human resource management is to hire and retain employees. “Virtually every organization has a performance system that is expected to attract, retain, and motivate employees to achieve the organization’s goals” (Lawler as cited in McEwan, 2015, p. 396).

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Motivation

Factors of a reward system

Equity in compensation

Performance standards

Team and individual rewards

(Marco, 2012)

Motivation is an important aspect of achieving organizational goals and productivity. Rewards are important to motivate employees to contribute their best efforts to innovation and improve a company’s performance (Smit, Stanz, & Bussin, 2015). Research literature identifies the factors of a reward system, which usually involve 1) equity in compensation, 2) performance standards, and 3) team and individual rewards (McEwan, 2015).

Employees will give their best performance when they trust that management will reward their efforts through compensation, recognition, important projects, and other incentives they value. Management should constantly monitor reward systems to evaluate performance and to align them with employee goals and productivity.

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Organizational Rewards

Intrinsic Rewards

Work

Performance

Influence

Autonomy

Respectability

Extrinsic rewards

Promotions

Power and prestige

Monetary benefits

Opportunities to attend conferences/seminars

Opportunities to collaborate with senior members

Organizational rewards often are both intrinsic and extrinsic. Intrinsic rewards include one’s work and satisfaction with one’s performance, which results in a self-motivated ability to influence autonomy and respectability. Extrinsic rewards include promotions, power and prestige, monetary benefits, opportunities to attend conferences and empowerment seminars, and opportunities to collaborate with senior organizational members (Bridges, 2006).

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Inspiration

(Altmann, 2015)

Inspire workers through

Sense of belonging

Recognition

Self-esteem

Feeling of control

Ability to live up to ideals

Motivation and inspiration provide the energy necessary to achieve grand visions (Kotter as cited in Osuoha, 2010). This motivation and inspiration is not by forcing people in the right direction as control mechanisms, but by satisfying their most basic needs of achievement. A manager can inspire workers through a sense of belonging, recognition, self-esteem, a feeling of control over one’s life, and the ability to live up to one’s ideals.

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Maslow’s Theory

(BetterWorks Breakroom, 2009)

Several motivational theories exist that one should become familiar with. Maslow’s theory indicates a hierarchy of needs pyramid of five basic needs: 1) psychological, 2) safety, 3) social, 4) esteem, and 5) self-actualization. A manager should meet and satisfy each need, one at a time, in hierarchal order, before moving to the next level.

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Motivational Theory

The path-goal theory suggests a leader should make valuable rewards available to employees, and explain the behaviors necessary to earn the rewards. Subordinates will react favorably to leaders who will help them make progress towards specific goals by clarifying the paths to such rewards (Greenberg, 2002). The path-goal theory suggests that leaders can adopt four basic styles that include instrumental or directive style, supportive style, participative style, or achievement-oriented style to increase motivation and enhance performance. Interestingly, the path-goal theory will enhance a follower’s motivation, but only to the extent he or she makes progress toward valued goals (Greenberg, 2002).

Vroom’s expectancy theory deals with the value and the relationship of rewards and required performance. This theory states that individual motivation comes from how people value the outcome. If employees do not receive promotions or pay increases, they may lack the motivation to perform. The employees will evaluate the work and the reward, and will choose an outcome based on how they value the reward.

The equity theory emphasizes that both the absolute and relative rewards available in the system motivate employees. When employees think the system is fair, it highly motivates them versus when they experience unfairness; it demotivates them. Skinner’s work explains respondent and operant conditioning, including positive reinforcement, negative reinforcement, punishment, and extinction (as cited in Foxall & Greenley, 2000). Basically, the theory holds that employees learn most motivated behaviors.

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Path-Goal Theory

Leaders adopt four basic styles to increase motivation and enhance performance:

Vroom’s Expectancy Theory

Value and relationship of rewards and required performance

Equity Theory

Emphasizes both absolute and relative rewards available

Individual motivation comes from how people value outcome

Instrumental or directive style

Supportive style

Participative style

Achievement-oriented style

Explains behaviors necessary to earn rewards

Performance Management

Nonmonetary motivators

Praise

Positive reinforcements

Projects

Shared responsibilities

Leadership opportunities

Performance goals

Employee development

Involvement in projects

Shared decision making

(Alt, 2014)

Employees want a career path, public praise, opportunities for input, and constructive criticism. Performance appraisals must include individual and departmental goals that align with strategic goals. Other performance goals may consist of individualized employee development programs, involvement in highly profiled projects, and shared decision making.

Businesses rely on technologies to communicate with employees and ensure operational autonomy. Employee engagement, commitment, and job satisfaction create a productive workforce (Markos & Sridey, 2010). Research shows a relationship exists between employee engagement, employee retention, customer satisfaction, and profitability. A review of successful organizations will confirm that companies use total reward systems to achieve competitive advantage and significant profits.

Once an organization communicates a shared-vision, employees can get on board with sales growth, market share, performance goals, and reward systems. People recognize companies like Zappos, Facebook, Google, and Adobe for how they value their human capital and employees by providing total rewards such as compensation, benefits, extensive training, mentoring, bonuses, and stock options. Nonmonetary motivators are also used such as praise, positive reinforcements, projects, and shared responsibilities and leadership opportunities.

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Self Check

True or False

The path-goal theory emphasizes that both the absolute and relative rewards available in the system motivate employees.

(Altmann, 2014)

The next few slides consist of self check questions for you to test your knowledge regarding the content covered in this unit. The correct answer will be indicated on the next slide.

True or False: The path-goal theory emphasizes that both the absolute and relative rewards available in the system motivate employees.

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FALSE

The equity theory emphasizes that both the absolute and relative rewards available in the system motivate employees.

When employees think the system is fair, it highly motivates them versus when they experience unfairness, it demotivates them.

(ClkerFreeVectorImages, 2012)

The answer is False!

The equity theory emphasizes that both the absolute and relative rewards available in the system motivate employees. When employees think the system is fair, it highly motivates them versus when they experience unfairness, it demotivates them.

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True or False

Intrinsic rewards include one’s work and satisfaction with one’s performance, which results in a self-motivated ability to influence autonomy and respectability.

(Altmann, 2014)

True or False: Intrinsic rewards include one’s work and satisfaction with one’s performance, which results in a self-motivated ability to influence autonomy and respectability.

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TRUE

Extrinsic rewards include promotions, power and prestige, monetary benefits, opportunities to attend conferences and empowerment seminars, and opportunities to collaborate with senior organizational members (Bridges, 2006).

Intrinsic rewards include one’s work and satisfaction with one’s performance, which results in a self-motivated ability to influence autonomy and respectability.

(ClkerFreeVectorImages, 2014)

True! Extrinsic rewards include promotions, power and prestige, monetary benefits, opportunities to attend conferences and empowerment seminars, and opportunities to collaborate with senior organizational members (Bridges, 2006).

Intrinsic rewards include one’s work and satisfaction with one’s performance, which results in a self-motivated ability to influence autonomy and respectability.

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References

Alt, M. (2014). Training [Image]. Retrieved from https://pixabay.com/en/training-development-business-396524/

Altmann, G. (2014). Test [Image]. Retrieved from https://pixabay.com/en/board-school-uni-learn-work-test-361516/

Altmann, G. (2015) It’s time to Inspire [Image]. Retrieved from https://pixabay.com/en/board-font-chalk-enlightenment-953154/

BetterWorks Breakroom. ( 2009). Maslows hierarchy and employee benefits [Image]. Retrieved from https://www.flickr.com/photos/betterworksinc/5853680855/in/photolist-9VgDnZ-bnQQtL-cobMif-7mKcBV- 5Pf13e-6qF3jA-pS6czF-4PuWv4-nn8DXn-9tfRCV-4PuWbt-pwACbj-4bcU8x-4XBrXf-ob3Vu7-fpSYL3-5D3FwN-EdRVy- 7wkVN6-8zuG99-6YG1Qn-6qbJw4-6qbJun-7fuqvP-oMUFyt-bpZyf6-8q2Jui-bCAYxF-qWa5nu-bUQYQB-qYiQP2- b62jzc-h1D7Pe-8zuFYy-794YzL-nAdp8X-EdZVt-6qfU6Y-EdRVJ-bcdGbX-q2EZ3g-qFUERs-qFTuDo-qYsKPt-qFTrGw- q2Eth4-q2EvM4-nFUbhG-qFSvpo-qFUCQJ/

Bridges, A. L. (2006). Dare to be heard: Black women managers voice perceptions of gratifying and non-gratifying workplace experiences (Doctoral dissertation) (Order No. 3225573). Available from ProQuest Dissertations and Theses database. (305318601)

ClkerFreeVectorImages. (2012). X [Image]. Retrieved from https://pixabay.com/en/cancel-no-symbol-sign-wrong-mark-47588/

ClkerFreeVectorImages. (2014). Checkmark [Image]. Retrieved from https://pixabay.com/en/checkmark-tick-check-yes-mark-303752/

 

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References

Foxall, G. R., & Greenley, G. E. (2000). Predicting and explaining responses to consumer environments: An empirical test and theoretical extension of the behavioural perspective model. The Service Industries Journal, 20(2), 39-63.

 

Greenberg, J. (2002). Managing behavior in organizations (3rd ed.). Upper Saddle River, NJ: Prentice.

  

Marco, P. (2012). Motivation [Image]. Retrieved from https://pixabay.com/en/motivation-stock-exchange-graph-1015455/

Markos, S., & Sridevi, M. S. (2010). Employee engagement: The key to improving performance. International Journal of Business and Management, 5(12), 89-96.

McEwan, B. (2015). Organizational development: Begin with a healthy infrastructure. Organization Development Journal, 33(3), 23-38.

OpenClipartVectors. (2013). Headset [Image]. Retrieved from https://pixabay.com/en/headphone-headset-music-audio-159569/

Osuoha, R. (2010). A study of African American women: The impact of the glass ceiling syndrome on advancement opportunities in organizations (Order No. 3397162). Available from ProQuest Dissertations and Theses database. (89193104)

Smit, W., Stanz, K., & Bussin, M. (2015). Retention preferences and the relationship between total rewards, perceived organisational support and perceived supervisor support. SA Journal of Human Resource Management, 13(1), 1-13. doi:http://dx.doi.org/10.4102/sajhrm.v13i1.665

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