Unit IV Sustaining Employee Interest

(1)

UNIT IV

SUSTA

SUSTAINING INING EMPLOYEE INTEREST EMPLOYEE INTEREST

by by Ramya Rajendran Ramya Rajendran Asst Professor Asst Professor VIMS VIMS

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CHAPTER OUTLINE

∞

Compensation plan

∞

_Reward

∞

Motivation

∞

Application of t

eories of motivation

∞

Career mana!ement

∞

(3)

CHAPTER OUTLINE

∞

Compensation plan

∞

_Reward

∞

Motivation

∞

Application of t

eories of motivation

∞

Career mana!ement

∞

(4)

COMPENSATION PLAN

(5)

!AT

IS

COMP

ENS

A

T

ION

"

$

$ "eals wit ever% t%pe of"eals wit ever% t%pe of

reward individ&als receive

in e'can!e for

performin!

performin! or!ani(atior!ani(ationalonal

tas)s*

$

$ Cief reason w% mostCief reason w% most

individ&als see)

emplo%ment*

$

(6)

OBJECTIVES OF COMPENSATION

$ Ade+&ate

$ E+&ita,le

$ -alanced

$ Cost.effective

$ /ec&re

$ Incentive.providin!

(7)

(8)

COMPENSATION METHODS/PLANS

$ 0LAT RATE/

$ PA1MENT 0OR TIME 2OR3E"

$ 4ARIA-LE PA15 INCENTI4E

COMPEN/ATION

$ O2NER/HIP

$ PEOPLE -A/E" PA1

$ E6ECUTI4E PA1

(9)

0lat rates

$ Uniform wa!e rates

$ E'5 Administrative assistants . 7889o&r

$ -on&s9incentives :sales professions;

(10)

Pa%ment for time wor)ed

S# NO AGES SALARY 8 Pa% calc&lated at o&rl% rates Ann&al or montl% rates

(11)

Pa%ment for time wor)ed

$ =eneral> across.te.,oard increase for all

emplo%ees :2A=E/;

$ Merit increases paid to some emplo%ees

:/ALAR1;

$ ,ased on some indicator of ?o, performance

$ Cost.of.livin! ad?&stment :COLA;

$ ,ased on te cons&mer price inde' :CPI;

(12)

VARIABLE PAY: INCENTIVE COMPENSATION

$ef%n%t%on for &ar%ab'e (ay : Any compensation plan that

emphasizes

@ a shared focus on org. success,

@ broadens opportunities for

incentives to nontraditional groups &

@ operates outside the base pay increase system.

(13)

VARIABLE PAY: INCENTIVE COMPENSATION

(14)

VARIABLE PAY: INCENTIVE COMPENSATION

TYPES:

Merit incentives Individ&al incentives Team incentives Or!* Incentives

(15)

VARIABLE PAY: INCENTIVE COMPENSATION

Merit incentives:

$ Performance increases $ Pa% increases

$ Hi!er ,ase salar% after ann&al performance eval&ation

ISSUES:

@ Emplo%ees fail to ma)e te connection ,etween pa% and performance

@ Te secrec% of te reward is perceived ,% oter emplo%ees as ine+&it%

(16)

VARIABLE PAY: INCENTIVE COMPENSATION

INDIVIDUAL INCENTIVES:

@ Piecewor)

$ Pa% fl&ct&ates ,ased on prod&ction &nits9time $ E!5 sewin! mills @ < sirts

@ Prod&ction ,on&ses

$ Pa%s a ,on&s wen a emplo%ee e'ceeds te standard :la,or savin!s;

@ Commissions

$ Compensation on /ales B in &nits9mone% :mar)etin! professions;

(17)

VARIABLE PAY: INCENTIVE COMPENSATION

TEAM INCENTIVES

$ 2en it is diffic&lt to meas&re individ&al o&tp&t

$ 2en cooperation is needed to complete a tas) or pro?ect

$ 2en mana!ement feels tis is a more appropriate meas&re on wic to ,ase incentives

(18)

VARIABLE PAY: INCENTIVE COMPENSATION

Or!ni"!ti#n $i%e Incentives

Us&all% ,ased on one of two performance concepts5

@ A sarin! of profits !enerated ,% all emplo%ees alto!eter @ A sarin! of mone% saved as a res&lt of emplo%ees efforts to

(19)

VARIABLE PAY: INCENTIVE COMPENSATION

SU&&ESTION SYSTEMS:

$ 0ormal metod

$ O,tain emplo%ee advice on improvements in or! effectiveness

(20)

VARIABLE PAY: INCENTIVE COMPENSATION

&!in s'!rin:

$ Emplo%ees earn ,on&ses tied to &nit.wide

performance as meas&red ,% a predetermined> !ain sarin! form&la

$ Commonl% &sed !ain sarin! plans5

$Lincoln Electric Plan $/canlon Plan

$R&c)er Plan $Impro/are

(21)

VARIABLE PAY: INCENTIVE COMPENSATION

PROFIT SHARIN& PLANS:

$ Cas or c&rrent distri,&tion plans provide f&ll pa%ment to participants soon after profits ave ,een determined $ "eferred plans cre%it ! (#rti#n #) c*rrent (r#)its to

emplo%eesD acco&nts wit cas pa%ments made at te time of retire+ent, %is!-i.it, sever!nce, #r %e!t'

$ A com,ination of ,ot incorporates aspects of c&rrent and deferred options

(22)

VARIABLE PAY: INCENTIVE COMPENSATION

ISSUES OF VARIABLE PAY:

$ Percenta!e of an emplo%eeDs pa%cec) is p&t at ris) $ If ,&siness !oals are not met> te pa% rate will not rise

a,ove te lower ,ase salar%

$ Ann&al raises are not !&aranteed $ Helps mana!e la,or costs

(23)

Ownersip

$ Emplo%ee stoc) ownersip plan :E/OP; @ emplo%ees receive stoc) in te compan%

$ Invests in te stoc) of te emplo%er compan% $ To increase wor)er commitment  performance

(24)

People ,ased pa%

$ /)ill.-ased Pa%

$ 3nowled!e.-ased Pa%

$ Credential.-ased Pa% :+&alifications; $ 0eed,ac) Pa%

(25)

E'ec&tive pa%

$ "ramatic !rowt

$ 4aria,le performance.

,ased pa% is empasi(ed over !&arantees

$ CEOs are enco&ra!ed to invest in compan% stoc) $ CEOs are eld

responsi,le for te cost of capital

(26)

(27)

2HAT I/ A RE2AR"F

$ /ometin! !iven or

received in ret&rn or

recompense for

service> merit>

ardsip> etc*

(28)

(29)

INTRINSIC VERSUS E1TRINSIC RE0ARDS

Intrinsic re$!r%s

$ /atisfactions derived from te ?o, itself> s&c as pride in oneDs wor)> a feelin! of accomplisment> or ,ein! part of a team*

(30)

INTRINSIC VERSUS E1TRINSIC RE0ARDS

E2trinsic re$!r%s

$ -enefits provided ,% te emplo%er> &s&all% mone%> promotion> or ,enefits

$ E!5 a salar% increase or a write.&p in te compan% ma!a(ine

(31)

FINANCIAL VERSUS NONFINANCIAL RE0ARDS

FINANCIAL RE0ARDS

$ tro&! wa!es> ,on&ses> or profit sarin!

NONFINANCIAL RE0ARDS

$ indirectl%> tro&! emplo%er. s&,sidi(ed ,enefits s&c as retirement plans> paid

vacations> paid sic) leaves> and p&rcase disco&nts*

3One (ers#n4s )##% is !n#t'er (ers#n4s (#is#n5

(32)

PERFORMANCE6BASED VERSUS MEMBERSHIP6BASED RE0ARDS

MEMBERSHIP6BASED RE0ARDS

$ paid on te ,asis of ,ein! a mem,er of an or!ani(ation*

$ reward !oes to all emplo%ees irrespective of teir performance incl&de

@ salar% increases attri,&ta,le to la,or.mar)et conditions> @ seniorit% or time in ran)

(33)

PERFORMANCE6BASED VERSUS MEMBERSHIP6BASED RE0ARDS

PERFORMANCE6BASED RE0ARDS

$ ,asis of an emplo%ees ?o, performance a,ilit%*

$ &se commissions> piecewor) pa% plans> incentive s%stems> !ro&p ,on&ses> merit pa%> or oter forms

(34)

(35)

•What makes people do

what they do?

•Why do some people

(36)

(37)

MOTI4ATION . MEANIN=

$ Internal and e'ternal factors tat stim&late desire

and ener!% in people to ,e contin&all% interested and committed to a ?o,> role or s&,?ect> or to ma)e an effort to attain a !oal*

(38)

(39)

(40)

T1PE/ O0 MOTI4ATION

$ Positive vs ne!ative

$ Rational vs emotional

$ Intrinsic vs e'trinsic

(41)

(42)

Maslow’s

Hierarchy

of Needs

Self-actualization

actualization

Esteem

Social needs

Safety and security needs

Physiological needs

(43)

T'e#r 1

0#r7ers

Dis.i7e 0#r7

Av#i% Res(#nsi-i.it

Litt.e A+-iti#n

T'e#r Y

0#r7ers

En8# 0#r7

Acce(t Res(#nsi-i.it

Se.)6Directe%

Mc&re#r4s T'e#r 1 9 T'e#r Y Mc&re#r4s T'e#r 1 9 T'e#r Y

(44)

Her(,er!Ds Two.0actor Teor%

$ Go, dissatisfaction and Go,

satisfaction are not opposite to eac

oters

(45)

Her(,er!Ds Two.0actor Teor%

Hiene F!ct#rs

M#tiv!ti#n!. F!ct#rs

$

!.it #) s(ervisi#n

$

R!te #) (!

$

C#+(!n (#.icies

$

0#r7in c#n%iti#ns

$

Re.!ti#ns $it' #t'ers

$

J#- sec*rit

$

!.it #) s(ervisi#n

$

R!te #) (!

$

C#+(!n (#.icies

$

0#r7in c#n%iti#ns

$

Re.!ti#ns $it' #t'ers

$

J#- sec*rit

$

C!reer A%v!nce+ent

$

Pers#n!. r#$t'

$

Rec#niti#n

$

Res(#nsi-i.it

$

Ac'ieve+ent

$

C!reer A%v!nce+ent

$

Pers#n!. r#$t'

$

Rec#niti#n

$

Res(#nsi-i.it

$

Ac'ieve+ent

(46)

McC.e..!n%4s Nee%s T'e#r

Need for Acievement Need for Need for Power Power Need for Need for Affiliation Affiliation

(47)

S(eci)ic &#!.s

&#!.6Settin

T'e#r

&#!.6Settin

T'e#r

C'!..enin

&#!.s

C'!..enin

&#!.s

&#!.s !n%

P!rtici(!ti#n

&#!.s !n%

P!rtici(!ti#n

(48)

/pecific /pecific Relevant Relevant Callen!in! Callen!in! T!s7 T!s7 E))#rt E))#rt T!s7 T!s7 Per)#r+!nce Per)#r+!nce

Effective =oal /ettin!

Callen!in! Callen!in! Participation Participation Commitment Commitment

(49)

Are! #) O(ti+!. &#!. Di))ic*.t Hi' T ! s 7 P e r ) # r + ! n c e

L#$ M#%er!te C'!..enin I+(#ssi-.e

Effect of =oal "iffic&lt% on

Performance

(50)

Reinforcement Theory

C#nse<*ences Re$!r%s N# Re$!r%s P*nis'+ent Be'!vi#r

(51)

Perceive%

R!ti# C#+(!ris#n

!

E+(.#ee4s

Assess+ent

O*tc#+es A In(*ts A O*tc#+es A In(*ts A O*tc#+es A In(*ts A O*tc#+es B In(*ts B O*tc#+es B In(*ts B O*tc#+es B In(*ts B = > ? Ine<*it @Un%er6Re$!r%e% E<*it Ine<*it @Over6Re$!r%e%

a_{Person A %s t)e em('oyee* and (erson + %s a re'e&ant ot)er or referent#}

E<*it T'e#r

(52)

Negative and Positive Inequity

A. An !uita"le A. An !uita"le

#ituation #ituation

Self

Self Other Other

$% & hour ' $% per hour $( % hours ' $% per hour

(53)

Negative and Positive Inequity (cont)

$% & hour ' $% per hour $) & hour ' $) per hour *. Ne+ati,e -ne!uity *. Ne+ati,e -ne!uity Self

(54)

Negative and Positive Inequity (cont)

$% &

hours

' $& per hour

. /ositi,e -ne!uity . /ositi,e -ne!uity $) & hour ' $) per hour Self

(55)

E6t#6P

E2(ect!nc _E2(ect!ncP6t#6O O*tc#+es

9 V!.ences In%ivi%*!. In%ivi%*!. Effort Effort In%ivi%*!. In%ivi%*!. Performance Performance

E2(ect!nc T'e#r #) M#tiv!ti#n

 Re$!r%s6(ers#n!. #!.s re.!ti#ns'i(  E))#rt6(er)#r+!nce re.!ti#ns'i(  Per)#r+!nce6re$!r%s re.!ti#ns'i( Pers#n!. Pers#n!. &#!.s &#!.s Or!ni"!ti#n!. Or!ni"!ti#n!. Re$!r%s Re$!r%s   O&tcome 8 O&tcome 8  or .  or . O&tcome  O&tcome   or .  or . O&tcome < O&tcome <  or .  or . 

(56)

Vroom’s Exectancy !heory

0pectancy1

0pectancy1 "elief that e#ort leads to a seci$c level of erformance

-nstrumentality1

-nstrumentality1 % erformance  outcome ercetion&

2alence1

2alence1 !he Value of a re'ard or outcome

Moti,ational force '

(57)

ALDERFER4S ER& THEORY

$ E'tension  refinement of MaslowDs model

*

/elf. Act&ali(ation Esteem Esteem -elon!in!ness -elon!in!ness /afet% /afet% P%siolo!ical P%siolo!ical =rowt Relatedness Relatedness E'istence E'istence ER& T'e#r Nee%s Hier!rc' T'e#r

(58)

PORTER 9 LA0LER MODEL

 Extension Of Vroom’s Exectancy !heoryExtension Of Vroom’s Exectancy !heory

In%ivi%*!. In%ivi%*!. Effort Effort In%ivi%*!. In%ivi%*!. Performance

Performance s!tis)!cti#ns!tis)!cti#n

Or!ni"!ti#n!. Or!ni"!ti#n!.

Re$!r%s Re$!r%s

(59)

T)eory ,

$ 2illiam O&ci> inte!rates Gapanese and American ,&siness practices

$ Teor% J T%pe Or!ani(ation so&ld ,e

8* Lon!.term emplo%ment

<* participative decision.ma)in! * /low eval&ation and promotion K* informal control meas&res

* =reater wor)ers involvement * /ta,le wor) environment

(60)

APPLICATION OF THEORIES OF

MOTIVATION

(61)

APPLICATION OF THEORIES OF

MOTIVATION

$ M-O

$ Emplo%ee Reco!nition Pro!rams

$ Emplo%ee Involvement Pro!rams

$ 4aria,le Pa% Plans9Rewards

(62)

Organizational Organizational Objectives Objectives Divisional Divisional Objectives Objectives Departmental Departmental Objectives Objectives Individual Individual Objectives Objectives

(63)

6inkin+ M*4 and

7oal8#ettin+ Theory

P!rtici(!ti#n

in &#!. Settin

S(eci)icit

#) &#!.s

Fee%-!c7

#n Per)#r+!nce

Di))ic*.t

#) &#!.s

(64)

mployee Reco+nition /ro+rams

9linkin+ with Her:"er+ two factor theory; 9linkin+ with Her:"er+ two factor theory;

Rec#niti#n !n%

Rein)#rce+ent

De)inin

Rec#niti#n

Rec#niti#n P.!ns

in Pr!ctice

(65)

mployee -n,ol,ement

/ro+rams

/articipati,e

Mana+ement

Representati,e

/articipation

mployee

#tock 4wnership

<uality

ircles

(66)

Piece

R!te

Piece

R!te

2aria"le /ay

/lans=Rewards

Pr#)it

S'!rin

Pr#)it

S'!rin

&!ins'!rin

B#n*s

P.!ns

B#n*s

P.!ns

(67)

(68)

What comes to your mind

when you think of the

word

(69)

0'!t is ! C!reer

A career

@ is a pattern of wor).related e'periences tat span te co&rse of a personDs life

@ reflects an% wor)> paid or &npaid

@ is a ,road definition elpf&l in toda%Ds wor)

environment were emplo%ees and or!ani(ations ave diverse needs

(70)

2ill performance increase or declineF

Tr!%iti#n!. C!reer St!es

Hi!  _8 _8 _< _< _ _ _K _K _ _ _ _ _ _ A!e Low &ettin )irst 8#- !n% -ein !cce(te% T'e e.%er st!tes(ers#n Pre(!rin )#r retire+ent

E'ploration Est,lsment Mid career Late Career "ecline

Tr!nsiti#n )r#+ sc'##.

t# $#r7

Go, Performance

(71)

Tr!%iti#n!. C!reer St!es

this stage is least relevant to HRM because it occurs prior to employment

e'ploration

incl&des scool and earl% wor) e'periences> s&c as internsips*

involves5

tr%in! o&t different fields

_{discoverin! li)es and disli)es}

(72)

esta,lisment

Tr!%iti#n!. C!reer St!es

incl&des5

searcin! for wor)

!ettin! first ?o,

!ettin! evidence of s&ccess or fail&re

ta)es time and ener!% to find a nice and to ma)e %o&r mar)

(73)

mid.career

Tr!%iti#n!. C!reer St!es

$$ callen!ed to remain prod&ctive at wor)callen!ed to remain prod&ctive at wor) $$ emplo%ee ma%5emplo%ee ma%5

@

@ contin&e to !rowcontin&e to !row @

@ platea& :sta% competent ,&t not am,itio&s;platea& :sta% competent ,&t not am,itio&s; @

(74)

late career

Tr!%iti#n!. C!reer St!es

$$ s&ccessf&l elder states persons can en?o% ,ein! respecteds&ccessf&l elder states persons can en?o% ,ein! respected for teir

for teir ?&d!ment* ?&d!ment* =ood =ood reso&rce for reso&rce for teacin! oteacin! otersters $$ tose wo ave declined ma% e'perience ?o, insec&rit%tose wo ave declined ma% e'perience ?o, insec&rit% $$ plateauing plateauing is e'pectedQ life off te ?o, increases in is e'pectedQ life off te ?o, increases in

importance importance

(75)

Tr!%iti#n!. C!reer St!es

$$ ma% ,e most diffic&lt for tose wo were mostma% ,e most diffic&lt for tose wo were most s&ccessf&l at earlier sta!es

s&ccessf&l at earlier sta!es

$$ toda%Ds lon!er life spans and le!al protections fortoda%Ds lon!er life spans and le!al protections for older wor)ers open te possi,ilit% for contin&ed older wor)ers open te possi,ilit% for contin&ed wor) contri,&tions> eiter paid or vol&nteer

wor) contri,&tions> eiter paid or vol&nteer

decline

(76)

En'!nc

in Y

#

*r

C!ree

r

1o& are &ltimatel% responsi,le for %o&r own career* 1o& are &ltimatel% responsi,le for %o&r own career*

mana!e %o&r mana!e %o&r rep&tation rep&tation )now %o&rself )now %o&rself

,&ild and maintain ,&ild and maintain

networ) contacts networ) contacts )eep c&rrent )eep c&rrent )eep %o&r )eep %o&r options open options open doc&ment %o&r doc&ment %o&r acievements acievements ,alance %o&r ,alance %o&r specialist  !eneralist specialist  !eneralist competencies competencies /&ccessf&l /&ccessf&l Career Career Tips Tips

(77)

Career mana!ement

$ Te process for ena,lin! emplo%ees to

,etter &nderstand and develop teir

career s)ills and interests> and to &se

tese s)ills and interests more effectivel%*

$ Career mana!ement  career plannin! 

(78)

Career plannin!

@ Te deli,erate process tro&! wic

someone ,ecomes aware of personal s)ills>

interests> )nowled!e> motivations> and oter

caracteristicsQ and esta,lises action plans

to attain specific !oals*

(79)

(80)

Career development

$ Te lifelon! series of activities tat contri,&te to

a personDs career e'ploration> esta,lisment>

s&ccess> and f&lfillment*

(81)