strategic compensation in canda
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ch 3 a behavioural framework for compensationTRANSCRIPT
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NETA PowerPoint® Slides to accompany
Prepared by Cheryl Dowell,Algonquin College, and Greg Cole,Saint Mary’s University
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A Behavioural Framework for Compensation
Chapter 3
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Chapter Learning Objectives
1. Identify the three main types of reward problems that can afflict organizations.
2. Define the three key employee behaviours desired by employers.
3. Identify three key job attitudes and explain their roles in determining employee behaviour.
4. Describe the causes and consequences of reward dissatisfaction.
5. Explain how to generate membership behaviour.
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Chapter Learning Objectives
6. Explain how to generate membership behaviour.
7. Outline the process through which task behaviour is motivated.
8. Explain how to generate organizational citizenship behaviour.
9. Discuss the role that managerial strategy plays in determining the type of employee attitudes and behaviour needed by an organization.
10. Describe the implications of the behavioural framework for designing effective reward systems.
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Types of Reward Problems
Failure to produce desired behaviour
Production of desired behaviour and undesirable consequences
Production of reward dissatisfaction
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Three Key Employee Behaviours
1. Membership behaviour occurs when employees decide to join and remain with a firm.
2. Task behaviour occurs when employees perform the specific tasks that have been assigned to them.
3. Organizational citizenship behaviour occurs when employees voluntarily undertake special behaviours beneficial to the organization that go beyond simple membership.
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Three Key Attitudes
1. Job satisfaction, the attitude one holds toward one’s job and workplace, either positive or negative
2. Work motivation, the attitude one holds toward good job performance, either positive or negative. Essentially, it is the strength of an employee’s desire to perform his or her job duties well.
3. Organizational identification consists of three interrelated elements: a sense of shared goals and values with the organization, a sense of membership or belongingness, and an intention to remain a member of the organization.
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Perceived Inequity
• Equity theory: employees’ base perceptions of equity (fairness) on a comparison of their contributions/rewards ratio to the ratios of others perceived as being similar
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Relative Deprivation Crosby Theory• Employees experience dissatisfaction with pay when:
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1 there is a discrepancy between the outcome they want and what they actually receive.
2 they see that a comparison “other” receives more than they do.
3 past experience has led them to expect more than they now receive
4 future expectancies for achieving better outcomes are low.
5 they feel that they are entitled to more.
6 they absolve themselves of personal responsibility for the lack of better outcomes.
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Organizational Justice
Distributive justice
Procedural justice
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consistent procedures are applied uniformly to different jobs and time periods
free of bias personal interests do not enter into application of the procedures
flexible there must be procedures for employees to appeal pay system decisions
accurate application of procedures must be based on factual information
ethical accepted moral principles must guide application of the procedures
representative all affected employees must have an opportunity to express their concerns, which are given serious consideration by the organization
Procedural Justice: The Pay System Must Be …
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Consequences of Reward Dissatisfaction:Attempt to Increase Rewards
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Find more rewarding job
Acquire illicit rewards
Demand higher pay / unionize
Increase effort / performance
Demand improved job duties
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Consequences of Reward Dissatisfaction:Attempt to Reduce Contributions
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Demand reduced job duties
Reduce effort / performance
Increased absenteeism
Find less demanding job
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Membership Behaviour: Statistics Canada
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Employed62%
Not em-
ployed7%
Not interested31%
Canadian Labour Force
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Causes of Membership Behaviour
Job satisfaction
Organizationalidentification
Job attitudes
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Organizational Commitment
• Affective commitment, attachment to an organization based on positive feelings toward the organization
• Continuance commitment, attachment to an organization based on perceived lack of better alternatives
• Research shows no relationship between continuance commitment and affective commitment or between continuance commitment and job satisfaction.
• However, affective commitment and job satisfaction are related.
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Theories of Motivation
Content Theories Process Theories theories that focus on
understanding motivation by identifying underlying human needs
theories that focus on understanding motivation by determining the process humans use to make choices about the specific actions they will take
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Two-Factor Theory
Job content Job
context
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HygienesMotivators
ExtrinsicIntrinsic
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Job Characteristics Theory
Task identity the extent to which a worker performs a complete cycle of job activities
Task significance the perceived importance or social value of a given task
Skill variety the variety of skills required for task completion
Job autonomy the degree of freedom workers have in decidinghow to perform their jobs
Job feedback the extent to which the job itself provides feedback on worker performance
Job enrichment the process of redesigning jobs to incorporate more of the five core dimensions of intrinsically satisfying work
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Reinforcement Theories
• Positive reinforcement takes place when a reward follows a valued behaviour.
• Negative reinforcement takes place when an undesirable consequence occurs whenever the valued behaviour does not occur.
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A behaviour will be repeated if valued outcomes flow from that behaviour or if performing the behaviour reduces undesirable outcomes.
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Expectancy Theory
1.
• Is the task worth doing?• Do the rewards exceed the costs? Is net valence
positive?
2.
• Will I actually receive the rewards if I accomplish the task?
• Is the instrumentality clear?
3.
• Will I actually be able to accomplish the task if I exert the effort ?
• Is my expectancy strong?
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Attribution and Economic Theories of Motivation• Attribution theory: theory of motivation arguing that humans
often act without understanding their motives for their behaviour and afterward attempt to attribute motives for their actions
• Economic theory: assumes that people are motivated only by extrinsic (economic) rewards, and they will always seek to maximize these rewards while minimizing their contributions to the organization
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Agency Theory and Money as the Motivator
• Agency theory: Agents (employees) will pursue their own self-interests rather than the interests of their principals (employers) unless they are closely monitored or their interests are aligned with the interests of their principals.
• Noncash employee recognition program: a program that provides noncash rewards to employees in recognition of employee accomplishments or actions that are valued by the organization
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Causes of Citizenship Behaviour
Shared organizational
goals
Feelings of membership
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Creating Citizenship Behaviour
Security
Trust
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Behavioural Implications
• Task• Membership• Organizational citizenship
Define the necessary employee behaviour
• Personal competencies• Values• Characteristics
Determine the necessary employee
attributes
• Demographic characteristicsIdentify salient employee needs
• Tangible, physical• Psychological and opportunity
Ensure a positive reward valence
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Discussion Questions
1. Discuss the three main types of reward problems. Have you ever encountered any of these problems?
2. Discuss how employee job attitudes serve as the link between reward systems and employee job behaviour.
3. Discuss how reward systems can be used to generate task behaviour, membership behaviour, and citizenship behaviour.
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