3306 chapter 9

static wages

Agency theory claims that employees prefer _______.

Distributive justice

Amount that is distributed to employees

Procedural justice

Procedures used to determine the amount of rewards.

Merit pay

Wage increase granted to employee as function of some assessment of employee performance. Adds on to base pay in subsequent years.

Level of Pay

_______ is easily communicated in an offer of employment to a candidate because it is perceived as more objective than other char

communication.

• A key element in fairness is ___________.

They focus on quantity at the expense of quality.

Identify a mistake pay-for-performance plans make that cause them to be inefficient.

Goal setting theory

In 1968 Locke created what theory ___________.

Have a decentralized structure.

In order for different operating units in an organization to be able to develop flexible variations on a pay-for-performance plan, the organization should _________.

In organizations that have highly variable annual performance.

In what kind of organizations is it appropriate to emphasize base pay while having a low incentive component in the compensation strategy?

1. Incentive effect 2. Sorting Effect

Linking pay to performance may occur through two mechanisms:

Goal Setting Theory

Most reliable theory of motivation. Best theory of motivation.

Job performance.

Salary increases should be tied to _______.

Base Pay

The guaranteed portion of an employee's wage package.

1. Efficiency. 2. Equity. 3. Compliance.

The pay model suggests effectiveness depends on three things:

Across-the-board increase

Wage increase granted to all employees, regardless of performance. Size related to some subjective assessment of employer about ability to pay.

Flexible Compensation

__________ is the idea that only the individual employee knows what package of rewards would best suit personal needs.

Organizational strategy

____________- is the guiding force that determines what kinds of employee behaviors are needed.

Incentive Effect

_____________- pay can motivate people to perform better.

Motivation

______________-A set of internal and external forces that initiate workrelated behavior and determine its form, direction, intensity, and duration (Pinder, 1998).

Employees valuation of organization rewards provided for satisfactory job performance.

valency

Sorting effect

People sort themselves by what is important to them.

with pay-for-performance combinations

How do employers best appeal to scarce talent?

Distributive Justice, Procedural Justice

There are two types of equity or fairness:

Strategy, Structure, Standards

Efficiency involves three general areas of concern:

expectancy

Employee's assessment of their ability to complete necessary job tasks.

Instrumentality

Employee's beliefs that their organization will reward requisite job performance.

productivity, quality

Evidence points to paying for skill may not increase _____________ but may improve __________.

Helping employees believe in the importance of quality

Evidence shows that skill-based pay benefits an organization by ______.

Expectancy Theory

________ argues that people behave as if they cognitively evaluate what behaviors are possible in relation to the value of rewards offered in exchange.