Compensation management theories
Reinforcement theory
Reinforcement theory proposes that you can change someone’s behavior by using reinforcement, punishment and extinction. Rewards are used to reinforce the behavior you want and punishments are used to prevent the behavior you do not want. Extinction is a means to stop someone from performing a learned behavior.
Reinforcement is a behavioral construction where control is achieved by manipulating the consequences of behavior. A business manager using reinforcement theory might employ reward for desirable behavior by staff and punishments for undesirable behavior to help steer employees toward intended performance goals.
Reinforcement theory states that a response followed by a reward is more likely to recur in the future (Thorndike's Law of Effect). The implication for compensation management is that high employee performance followed by a monetary reward will make future high performance more likely. By the same token, high performance not followed by a reward will make it less likely in the future. The theory emphasizes the importance of a person actually experiencing the reward. TYPES OF REINFORCEMENT
Positive
Positive reinforcement results when the occurrence of a valued behavioral consequence has the effect of strengthening the probability of the behavior being repeated. The specific behavioral consequence is called a reinforcer. Example, sales person that exact extra effort to meet a sales quota (behavioral) and is then rewarded with a bonus (positive reinforce). The administration of a positive reinforce should make it more likely that the sales person would continue to exert the necessary effort in the future.
Negative reinforcement
Negative reinforcement results when an undesirable behavioral consequence is withheld with the effect of strengthening the probability of the behavior being