...With the rising popularity of shared capitalism in the United States, it is worthwhile to analyze the effects this trend and the workplace theories that correspond to it. The purpose of the paper is to show not only how forms of shared capitalism in the workplace can increase overall employee compensation, but how several labor theories relate and support the outcomes of shared capitalism. More specifically, three theories will be extrapolated and the outcomes of shared capitalism will follow each theory. First, expectancy theory will be explained and followed by its correlation to motivation and increased compensation. Second, equity theory will be explained and followed by the results of ESOPs. Finally, an explanation of efficiency wage theory will be provided and followed by the outcome of pay on shirking. Expectancy theory hypothesizes that a person decides to act in a certain way due to their motivation to choose a certain behavior rather than another behavior because of what they expect the outcome of their chosen behavior will be. Hence, an individual will choose the behavior with the most desirable result. Expectancy theory is a type of pay-for-performance theory that focuses on the needs for institutions to reward employees based off of their performance and to ensure that those rewards are desired by the employees. The motivational force of the employee is theorized to be a function that is multiple of three factors: expectancy (the perceived link between effort...
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...Compensation in the Workplace 12/10/15 Compensation is a major part of the Human Resources field. It could be a major deciding factor when talking about what attracts and keeps people at a particular business. Compensation is defined as “Compensation is the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required. Essentially, it's a combination of your pay, vacation, bonuses, health insurance, and any other perk you may receive, such as free lunches and parking” (Heathfield, 2015). Compensation is based on many factors. And certain companies pay more attention to these factors than other companies do. The first major subheading under compensation is total rewards and compensation. Designing reward packages that appeal to a variety of people is one way companies attract and retain high quality employees. Companies address pay and benefits using something called a total rewards philosophy. A total rewards philosophy is “the monetary and nonmonetary rewards provided by companies to attract, motivate, and retain employees” (Mathis, R, Valentine, and Jackson, 2013). An effective total rewards approach balances the interests and costs of the company with the needs and expectations of the employee. Another way that companies determine the market rate for a particular job is they do salary surveys for that position. These surveys show what other companies are paying for that position along with...
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...The Impact of Compensation Practices February 20, 2011 “The ultimate goal of a pay system is to align the goals and interests of employees with the goals and interests of the organization” – Robert L. Heneman The Impact of Compensation Practices The business arena is ever changing. Where people work, how they work, the relationships in the workplace and compensation for their work continues to change. Hence, “It will be the challenge of compensation professionals to devise ways to reward and motivate employees who work under increasingly flexible arrangements” (Bennett, 1995). Most people interchange and have the perspective that pay and compensation are the same when in reality, compensation is more than just monetary rewards. Compensation is often misunderstood, and can also be misapplied. More often than not, it is out of synch with the values and processes of an organization. This is because despite continued organizational changes, the actual strategies for administering and implementing compensation is misaligned with the rapid changes in the company. “Pay can no longer be seen as a mere expense and cost of doing business, but instead must be viewed as an investment that is closely linked to the long-term success of the organization” (Flannery, et. al., 1996). As Cable and Judge (1994) note, “compensation systems are capable of attracting (or repelling) the right kinds of people because they communicate so much about an organization’s philosophy,...
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...Compensation Incentives Theory and Practice Compensation is the direct financial consideration offered by employer to employee in return for work done or service offered by employee during the period of employment. Incentives are ‘extra’ benefits given to employee in recognition of high quality performance. Incentives also ensure employee-loyalty to organization. In a way, incentives inspire employees to put in ‘extra’ effort in ‘work performance’. This management practice reduces ‘employee turnover and provides continous ‘harmonious’ workplace environment. This strategy is also implemented for new recruitment. Sometimes, organizations may not offer high ‘remuneration’ to attract best talent in business; but the ‘extras’ like additional accommodations, facilitations and flexibility offered attract talented employees. The practice is based on human psychology that forms individual preferences and choices; and makes employees feel ‘important’ and with sense of dignity. The employer organization can offer “direct financial, indirect financial and non financial compensation” to the extent that will prove beneficial to all concerned. (Compensation Systems: Design and Goals). This paper discusses forms or manner in which incentives are offered by employers and how incentives affect, impress and prompt employee response. Challenge, struggle and chaotic times are upon society, affecting not only the indivuals but the organizations as well. During these times, the need to achieve...
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...the workers. Three ways to motivate others in the workplace are: 1. Choose an appropriate reward or punishment. An appropriate reward or punishment is both effective in motivating a group member or group and feasible from the company standpoint. Rewards should have a high positive valence and punishments a high negative valance. If one reward does not work, another should be tried. 2. Supply ample feedback. Behavior modification tactics cannot work well without frequent feedback to individuals. Feedback can take the form of simply telling people they have done something right or wrong. 3. Schedule rewards intermittently. Rewards should not be given on every occasion for good performance. Intermittent rewards sustain desired behavior longer and slow the process of behavior fading away when it is not rewarded. A reward that is given continuously may lose its impact (DuBrin, 2004, p. 130). A strategy for enhancing motivation in the workplace: The employees will want to feel they have an interest in the goals of communication. Both parties will want to be respectful and ensure they are being authentic and genuine in their communication. Non-verbal clues include facial expressions, body language and micro expressions, which are small facial clues that show the person, may or may not be truthful and authentic. Observing these clues can allow the other person to dig deeper or confront any discrepancies. This will strengthen workplace communication and address issues before they become...
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...11 * Compensation – the total of an employee’s pay and benefits * Types of Compensation * Base pay – Wages are paid on hourly basis; Salary is based on a longer time period * Wage and salary add-ons – includes overtime pay, shift differential, premium pay for working weekends & holidays * Incentive pay – (a.k.a. “variable pay”) is “pay for performance”, and commonly includes pieces work in production and commission sales. * Benefits – Indirect compensation that provides something of value to the employee * Skill-Based or Competency-Based Pay? * Pay members of workforce for individual skills or competencies that they bring to work, whether or note necessary to do their current job * Competency * Individuals knowledge in a particular area * Skills * Ability to apply the knowledge set in the field * At, Above, or Below the Market? * What you would pay for employees in relation to the market * Efficiency wage theory * Higher wages, get higher production * Wage Compression * Occurs when new employees require higher starting pay than the historical norm, causing narrowing of the pay gap between experienced and new employees * Fair Labor Standards Act * Minimum wage, overtime issues, child labor rules for U.S. based businesses * Minimum wage – the lowest hourly rate of pay generally permissible by federal law * Employees...
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...could use to determine incentive pay. Specify the principal manner in which the proposed methods take into consideration individual, group, and company performance. As an HR manager of a new retail company that is growing in revenue and profitability it is important to enhance the base compensation and benefits package offered to employee. Many companies are using employee incentive and reward schemes to help them motivate workers, increase productivity and recruit and retain valuable staff. Incentive schemes work by encouraging employees to associate excellence with reward. This is achieved when employees consistently see their colleagues being rewarded for delivering excellence in their field. Over time, it can lead to the development of a more positive workplace ideology which in turn can help to keep individual employees and teams of workers motivated (www.ovationincentives.com). Incentive pay is the forms of pay linked to any employee’s performance as an individual, group member or organization member (Noe, Hollenbeck, Gerhart, and Wright (2014) p. 371). The two methods often used to determine incentive pay are merit pay and profit sharing. Merit pay is system of linking pay increases to ratings on performance appraisals (Noe, Hollenbeck, Gerhart, and Wright (2014) p. 375). A healthy competitive spirit among employees can propel them to achieve superior results for the organization. Competition is a natural human instinct, and merit pay capitalizes on that instinct...
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...survive. Organisations compete with each other over the talent they need. Big salaries, all kinds of compensation; they reach far back in their pockets to pay what is 'necessary'. While this is going on, another important development is taking place. Getting the talent you need, is one thing; keeping the talent you have and making sure that the talent becomes more than just that, is something else, for example Philips, in the line of their employability program no loner offered employees a steady job. Instead they offered a contract which included that both parties agree that they will work on a career path for the employee. Different kinds of reward systems include: Specific Specific Focuses on the desired behaviours and provides the performer with clear 'line of sight' between action and the (business)result. Personalized Meaningful The value of the reward is 'worth the effort' to both performer and organization Immediate Timely The rewards are provided 'as timely as necessary to reinforce the desired behaviours that achieve desired results. Contingent Achievable The results are viewed as achievable, though not easy. Sincere Reliable The rewards are provided 'contingent' on taking an action or achieving a result. From a performance management point of view, the ultimate objective is to create a workplace environment that is filled with both natural work reinforcers (intrinsic) and external rewards and recognition, all directed to those behaviours necessary...
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...Human Resource Management Functions, Applications, Skill Development Robert N. Lussier Springfield College John R. Hendon University of Arkansas at Little Rock USAGE Los Angeles | London | New Delhi Singapore | Washington DC Detailed Contents About the Authors Preface xxiv xxv PART I. 21ST-CENTURY HUMAN RESOURCE MANAGEMENT STRATEGIC PLANNING AND LEGAL ISSUES 1 Chapter 1 The New Human Resource Management Process 2 SHRM 3 Why Study Human Resource Management? 4 HRM Past and Present 6 Past View of HRM 6 Present View of HRM 6 21st-century HRIi 8 HRM Challenges 8 The HRM Strategic View 9/ Technology and Knowledge 10 Labor Demographics 11 Productivity and Competitiveness Through HRM HRM Skills 12 Technical Skills 12 Human Relations Skills 13 Conceptual and Design Skills Business Skills 14 12 13 Line Managers' HRM Responsibilities 15 Line Versus Staff Management 15 Major HR Responsibilities of Line Management 15 HR Managers' Resonsibiiities: Disciplines Within HRW? 16 The Legal Environment: EEO and Diversity Management 17 Staffing 17 Training and Development 20 Employee Relations 20 Labor and Industrial Relations 20 Compensation and Benefits 20 Safety and Security 21 Ethics and Sustainability 21 HRM Careers 23 The Society for Human Resource Management Other HR Organizations 24 Professional liabiliy 24 23 The Practitioner's Model for HRM The Model 24 Sections of the Model 25 24 Trends...
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...suggests that improvement in job satisfaction is directly correlated to improvements in employee performance. Employee satisfaction, though, is a complex issue. A number of different types of human resource management systems have been put into place in an effort to improve employee satisfaction, including shorter workdays, shorter workweeks, and improvements in compensation packages. Some theorists have argued, though, that of all of these efforts, compensation improvements have had the greatest impact on performance outcomes of all of the efforts put in place (Lawler and Worley, 2006). This review of literature assesses the impacts of motivational strategies, especially in the presence of workplace dissatisfaction, to provide support for compensation motivators in a transitioning workplace. Literature Summary Since the late 1960s, theorists like Gary Becker have attempted to determine the best ways to retain and motivate a workforce population. Becker (1967) defended the use of the concept of human capital, a concept easily applied to the modernizing and...
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...1.0 INTRODUCTION Employee is motivated to increase their job performances. The questions are what motivation is and why it is important to motivate employee in workplace? Over the last twenty decades, motivation is number one factor in increasing level of performance. It is operationally defined as inner force that drives individuals to accomplish personal and organizational goals. In other words, motivated employees are needed in our rapidly changing workplaces. This is because every individual or employee needs motivation and so do organization. Employee who is highly motivated will help him achieve his personal goals and increase his job satisfaction and productive. Islam R and Hj Ismail A.Z (2008), based the study of Employee motivation A Malaysian perspective, the purpose of the research paper is to identify the motivation factors of employees that working in the various Malaysian organization. Based on the finding, it indicate that factor such as gender, race, education, employment status and marital status were found some impact on motivation. This finding gives a guideline for manager to develop a motivation program for employees Somehow, the motivation helps in self development of employee and always received gain by working with a dynamic team. And similarly, motivation is important to a workplace in organization as motivation will lead to an optimistic and challenging attitude at work place. Always remember, the more employee are motivated, the more empowerment...
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...for motivating employees as part of performance recognition. The following paper presents a discussion on the importance of employee motivation in the workplace. The discussion is mainly based on literature review and points that employee motivation is necessary for improved work performance. The paper has explored the important contributing played by work-life balance and financial incentives in improving employee motivation. The research indicates that the two factors foster loyalty by employees, increased performance and commitment, which are essential indications of motivation. The concept of Employee Motivation and Rewards Most discussions of motivation begin with the concept of individual needs – the unfulfilled physiological or psychological desires of an individual. Content theories of motivation use individual needs to explain the behaviours and attitudes of people at work. The basic logic is straightforward. People have needs. They engage in behaviours to obtain extrinsic and intrinsic regards rewards to satisfy needs (Schermerhorn et al, 2011). According to Jenkins, Mitra, Gupta and Shaw (2001) employee motivation is an intrinsic drive and enthusiasm to successfully accomplish tasks related to work. Greene (2001) has defined it as an internal drive which causes individuals to take initiatives in the workplace. In their article, Rynes, Schwab and Heneman...
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...Why Incentive Plans Cannot Work by Alfie Kohn Harvard Business Review Reprint 93506 I N Q U E S T I O N When reward systems fail, don’t blame the program – look at the premise behind it. Why Incentive Plans Cannot Work By Alfie Kohn It is difficult to overstate the extent to which most managers and the people who advise them believe in the redemptive power of rewards. Certainly, the vast majority of U.S. corporations use some sort of program intended to motivate employees by tying compensation to one index of performance or another. But more striking is the rarely examined belief that people will do a better job if they have been promised some sort of incentive. This assumption and the practices associated with it are pervasive, but a growing collection of evidence supports an opposfailure of any given incentive program is due less to a glitch in that program than to the inadequacy of the psychological assumptions that ground all such plans. thinking – those who promote teamwork, participative management, continuous improvement, and the like – urge the use of rewards to institute and maintain these very reforms. What we use bribes to accomplish may have changed, but the reliance on bribes, on behaviorist doctrine, has not. Moreover, the few articles that appear to criticize incentive plans are Temporary Compliance Most managers too often believe in the redemptive power of rewards. ing view. According to numerous studies in laboratories, workplaces...
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...redefine sales strategies, incentives, and pay compensation. Labor commands a high level of overhead for a company; therefore, pay policies, benefits, and compensations are critically important to be evaluated closely because it affects the livelihood and lifestyle of all workers. Ideally, an effective and sound sale compensation plan enables the company directly tie sales activities toward the expected outcome, and these outcomes should be rewarded with incentives and compensation base on the achievement level. Employers that want to succeed in this increasingly competitive environment must have a well-designed compensation plan that motivates employees, controls compensation costs, and ensures equity. The best compensation plans mirror the culture of the employer. To achieved a successful sales compensation plan, the sales goal has to be defined clearly, realistically, and challenging. Performances have to be track closely and measured toward goals. To determine a salary, a pay structure has to be created that will put employees in a grading system which includes experiences, education, and other qualifications. Compensation plan for new sales team department comprise off: • Sales Bonuses-based incentives • For short term incentives: Periodic bonuses (Quarterly) when sales quota was reached. 40 % Percentage off daycare for sales repsentatives. Quarterly discount to locals vendors participating in employees rewards programs. For long term incentives: • Annual bonuses when...
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...case of the Slade Plating department there are a number of problems that occur within the company. The main problem is that most of the employees within the department punch fellow co-workers timecards out when the employees are not there. A lot of these problems can be linked to the business’ organizational behavior. There are many employees within the firm that have organized into teams. The most organized being the Sarto and Clark groups. Employees in these groups and some within smaller groups have developed a system where one person in the group stays after the manager leaves at 5:00pm. The alternating individual staying late punches out the other employee’s timecards at 7:00pm allowing most of the staff to go home early without losing pay. This problem occurs because the manager arrives later and leaves earlier than any other employee. The workers are unsupervised for many hours per day and are often not supervised at all on weekends. Proper supervision and coordination of authority is paramount to improving the existing problem at the Slade Plating Department. These practices also occur because the hourly wage offered is low and the system being used is fairly easy to manipulate. There is no reason that in this modern age of technology employees are so easily able to steal from the Slade Company. Many options exist to this agency that are both inexpensive and cost effective. Modernization or implementation of new video monitoring and/or clock-in/out systems could eliminate...
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