Rewards

1
Rewards

• OS352 HRM
• Fisher
• Nov. 6, 2003

2
Agenda

• Purpose and types of rewards
• Effectiveness
• Case study

3
Purpose

• 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

4
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?

5
Basis for rewards

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

6
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

7
Effectiveness

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

8
Rewards Case Study

• Read the Howe 2 Ski case study
• Will be distributed in class
• In small groups, answer the questions
• Whole class discussion

9
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).

10
For next class

• Topic Pay secrecy
• Read HBR case When Salaries Arent Secret
• What are the key issues for the organization? For
  the employees?
• How would you recommend the organization deal
  with this problem?