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COMP-7

1. What behavior do employers care about?


2. Please explain one of motivation theory and essential features and
prediction about Performance-base pay and so what.
3. Does compensation motivate behavior?
4. Do employees perform better on their jobs because of pay?
Answers
1.- Employers want employees to perform in ways that lead to better
organizational performance
-Organizational strategy is the guiding force that determines what kinds of
employee behaviors are needed
Behaviors that compensation needs to reinforce
Compensation should be sufficiently attractive to make recruiting and
hiring good potential employees possible (attraction)
Need to make sure the good employees stay with the company
(retention)
Need to find ways to motivate employees to perform well on their jobs
to take their knowledge and abilities and apply them in ways that
contribute to organizational performance
Performance measurement
Need to accurately measure performance to tell if compensation
efforts are working
Performance management
2.-Theory Expectancy
-Essential features : Motivation is the product of three perceptions :
expectancy,instrumentality and valence.
Expectancy is employees assesment of their ability to perform required job tasks.
Instrumentality is employees beliefs that requisite job performance will be
rewarded by the organization
Valence is the value employees attach to the organization rewards offered for
satisfactory job performance
- Prediction about Performance-base pay :
>Job tasks and responsibilities should be clearly defined
> The pay-performance link is critical
>People choose the behavior that leads to the greatest reward
So what :
>Larger incentive payments are better than smaller ones
>Line of sight is critical-employees must believe they can influence performance
targets
>Employee assessments of their own ability are important-organizations should
be aware of training and resource needs required to perform at target levels

3.Yes,because Compensation is designed to support this risk-taking behavior and


Compensation is but one of many rewards that influence employee behavior
4.

-Not clear if performance of individuals can be increased by tying it to pay

-If the incentive depends on individual performance, applicants find the company
more attractive
-Team-based incentives, in contrast, are less attractive
-A number of recent studies provide strong evidence that pay for performance
has a direct and, at times, substantial impact on firm performance