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Reward Systems LRS 551 : 

Reward Systems LRS 551 Compensation Goals Pay Satisfaction Equity Job Evaluation Pay Motivation

Motivational Inducement Systems : 

Motivational Inducement Systems Motivational Inducement Systems represent the environment in which the individual performs. They provide the situational context for predicting and understanding workplace motivation and resultant performance. Motivational Inducement Systems represent the set of variables that the management of an organization can manipulate in an attempt to increase the motivation level or direction of its workforce. There are four major inducement systems: Reward: Pay and promotion system Task: The design of tasks and jobs Managerial: The style used by relevant leaders Social: Workgroup dynamics and the culture of the workgroup and organization.

Inducement Systems: Motivation & Satisfaction : 

Inducement Systems: Motivation & Satisfaction Satisfaction-An employee's attitudinal response to his or her organization. As an attitude, job satisfaction is summarized in evaluative component and comprised of cognitive, affective, behavioral components. As with all attitudes, the relationship between satisfaction and behavior, most specifically job performance and membership, is complex. Satisfaction is a function of the extent to which expectations are met resulting in positive feelings regarding aspects of the organization. Motivation- The force that Energies, Directs and Sustains behavior. Motivation is a function of the interaction between the dispositional variables of individuals and their perceptions of the situations in which they perform. Reward Pay & Promotion Task Job Design Managerial Leadership Style Social Culture Task variety and enjoyment. Absence of unpleasant activities Equity, perceived fairness. and adequacy. Satisfaction with leader; Affirmation of worth Satisfaction with work group; Affirmation of worth Perceived link between ERB and increased pay Conditional positive task feedback Conditional validating social feedback from leader Conditional validating social feedback from Work group members

Inducement Systems & Motivational Sources : 

Inducement Systems & Motivational Sources

Reward Systems : 

Reward Systems What are the goals of a compensation system? Attract new qualified members Retain high performing members Reinforce Adequate Role Behavior (ARB) Motivate Extra Role Behavior (ERB) What are the dimensions of a compensation system? Pay Structure- The relative pay differential among various jobs within the organization and how this is determined. Pay Level- The relative amount of pay assigned to each job compared to the job market Pay Form- The makeup of the pay this individual receives. The relative amount of guaranteed vs. at risk pay. Basis for pay increases- How pay changes from year to year is an important aspect of a compensations system. The various bases for change are: Seniority and longevity Cost of living Performance/merit Changes in job scope Increases in individual qualifications such as a new degree or certification. Changes in market for job and/or individual- A special form of this type of increase is to match a competing job offer.

Pay Satisfaction : 

Pay Satisfaction Pay Satisfaction Fairness Adequacy Retention Adequate Role Behavior

Pay Equity : 

Pay Equity H : L Underpaid Inequity H H

Contributions : 

Contributions Job Contributions Responsibility Effort required Skills level required Working Conditions Personal Contributions Seniority Education Prior Experience Performance Contributions Quality of work Quantity of work Contribution to effectiveness and goal attainment

Comparisons : 

Comparisons Job Equity- Individuals compare their pay to the pay of other individuals in the same position they hold within their organization. (Turret lathe operators at Electric Boat compare to other TLO’s at EB) Company Equity- Individuals compare their pay to the pay of other individuals holding the different positions within their organization. (Nurses and R.I. Hospital compare to pharmacists at RIH). Occupational (Market) Equity- Individuals compare their pay to the pay of other individuals holding the same position in other organizations. (Engineers at Raytheon compare to Engineers at NUWC) Cohort Equity- Individuals compare their pay to the pay of others in similar cohort groups, generally age and education. Self Equity- Individuals compare their pay to the pay they received at another point in time.

Responses to Inequity : 

Responses to Inequity Leaving the organization Reduction in performance, generally extra role behavior Attempting to increase one’s pay Attempting to increase the performance of others- Generally through peer pressure Rationalization- perceptually altering reward and/or contributions.

Job Evaluation - FES : 

Job Evaluation - FES FACTOR 1: KNOWLEDGE REQUIRED BY THE JOB Factor 1 measures the nature and extent of information of facts which the workers must understand to do acceptable work (e.g., steps, procedures, practices, rules, policies, theories, principles, and concepts) and the nature and extent of the skills needed to apply those knowledges . To be used as a basis for selecting a level under this factor, a knowledge must be required and applied Level 1-1                   50 Points Knowledge of simple, routine, or repetitive tasks or operations which typically includes following step-by-step instructions and requires little or no previous training or experience. OR Skill to operate simple equipment or equipment which operates repetitively, requiring little or no training or experience. OR Equivalent knowledge and skill Level 1-2                   200 Points Knowledge of basic or commonly-used rules, procedures or operations which typically requires some previous training or experience; OR Basic skill to operate equipment requiring some previous training or experience such as keyboard equipment; OR Equivalent knowledge or skill. use of specialized complicated techniques; OR Equivalent knowledge and skill. Level 1-6                     950 Points Knowledge of the principles, concepts, and methodology of a professional or administrative occupation as described in Level 1-5 which has been either: (a) supplemented by skill gained through job experience to permit independent performance or recurring assignments, or (b) supplemented by expanded professional or administrative knowledge gained through relevant graduate study or experience which has provided skill in carrying out assignments, operations, and procedures in the occupation which are significantly more difficult and complex than those covered by Level 1-5; OR Practical knowledge of a wide range of technical methods, principles, and practices similar to a narrow area of a professional field, and skill in applying this knowledge to such assignment as the design and planning of difficult, but well precedented projects; OR Equivalent knowledge and skill. Level 1-7                     1250 Points Knowledge of a wide range of concepts, principles, and practices in a professional or administrative occupation, such as would be gained through extended graduate study or experience, and skill in applying this knowledge to difficult and complex work assignments; OR A comprehensive, intensive, practical knowledge of a technical field and skill in applying this knowledge to the development of a new methods, approaches, or procedures; OR Equivalent knowledge and skill. Level 1-9                    1850 Points Mastery of a professional field to generate and develop new hypotheses and theories; OR Equivalent knowledge and skill.

Salary Structure : 

Salary Structure Grade 1 Grade 2 Grade 3 Grade 4 Grade 5 Grade 6 Grade 7 FES Points

Motivational Pay Systems : 

Motivational Pay Systems Merit Pay Bonuses Commissions Incentive Systems Profit Sharing Gainsharing Skill Pay

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