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NETA PowerPoint® Slides

to accompany

Prepared by
Cheryl Dowell,
Algonquin College,
and
Greg Cole,
Saint Mary’s University

Chapter 3

A Behavioural Framework
for Compensation

Copyright © 2014 by Nelson
Education Ltd.

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Chapter Learning Objectives
1. Identify the three main types of reward
problems that can afflict organizations.
2. Define the three key employee behaviours
desired by employers.
3. Identify three key job attitudes and explain
their roles in determining employee
behaviour.
4. Describe the causes and consequences of
reward dissatisfaction.
5. Explain how to generate membership
behaviour.
Copyright © 2014 by Nelson
Education Ltd.

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framework for designing effective reward 3-4 .Chapter Learning Objectives 6. Discuss the role that managerial strategy plays in determining the type of employee attitudes and behaviour needed by an organization. 7.Describe the implications of the behavioural Copyright © 2014 by Nelson Education Ltd. 9. 8. Explain how to generate organizational citizenship behaviour. Outline the process through which task behaviour is motivated. Explain how to generate membership behaviour. 10.

Types of Reward Problems Failure to produce desired behaviour Production of desired behaviour and undesirable consequences Production of reward dissatisfaction Copyright © 2014 by Nelson Education Ltd. 3-5 .

Task behaviour occurs when employees perform the specific tasks that have been assigned to them. Copyright © 2014 by Nelson Education Ltd. 2. 3-6 . Membership behaviour occurs when employees decide to join and remain with a firm. 3.Three Key Employee Behaviours 1. Organizational citizenship behaviour occurs when employees voluntarily undertake special behaviours beneficial to the organization that go beyond simple membership.

Job satisfaction. either positive or negative 2. Work motivation. 3-7 . either positive or negative. the attitude one holds toward good job performance. the attitude one holds toward one’s job and workplace. Copyright © 2014 by Nelson Education Ltd. Organizational identification consists of three interrelated elements: a sense of shared goals and values with the organization. it is the strength of an employee’s desire to perform his or her job duties well. 3.Three Key Attitudes 1. a sense of membership or belongingness. Essentially. and an intention to remain a member of the organization.

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Perceived Inequity • Equity theory: employees’ base perceptions of equity (fairness) on a comparison of their contributions/rewards ratio to the ratios of others perceived as being similar Copyright © 2014 by Nelson Education Ltd. 3-11 .

Copyright © 2014 by Nelson Education Ltd.Relative Deprivation Crosby Theory • Employees experience dissatisfaction with pay when: 1 there is a discrepancy between the outcome they want and what they actually receive. 5 they feel that they are entitled to more. 6 they absolve themselves of personal responsibility for the lack of better outcomes. 3 past experience has led them to expect more than they now receive 4 future expectancies for achieving better outcomes are low. 3-12 . 2 they see that a comparison “other” receives more than they do.

3-13 .Organizational Justice Distribu tive justice Procedu ral justice Copyright © 2014 by Nelson Education Ltd.

which are given serious consideration by the organization Copyright © 2014 by Nelson Education Ltd. 3-14 .Procedural Justice: The Pay System Must Be … consistent procedures are applied uniformly to different jobs and time periods free of bias personal interests do not enter into application of the procedures flexible there must be procedures for employees to appeal pay system decisions accurate application of procedures must be based on factual information ethical accepted moral principles must guide application of the procedures representati all affected employees must have an ve opportunity to express their concerns.

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Consequences of Reward Dissatisfaction: Attempt to Increase Rewards Find more rewarding job Acquire illicit rewards Demand higher pay / unionize Increase effort / performance Demand improved job duties Copyright © 2014 by Nelson Education Ltd. 3-16 .

3-17 .Consequences of Reward Dissatisfaction: Attempt to Reduce Contributions Demand reduced job duties Reduce effort / performance Increased absenteeism Find less demanding job Copyright © 2014 by Nelson Education Ltd.

63% Copyright © 2014 by Nelson Education Ltd. 3-18 .Membership Behaviour: Statistics Canada Canadian Labour Force not interested. 30% employed.

3-19 .Causes of Membership Behaviour Job satisfaction Job attitud es Organizational identification Copyright © 2014 by Nelson Education Ltd.

Copyright © 2014 by Nelson Education Ltd.Organizational Commitment • Affective commitment. 3-20 . • However. attachment to an organization based on perceived lack of better alternatives • Research shows no relationship between continuance commitment and affective commitment or between continuance commitment and job satisfaction. affective commitment and job satisfaction are related. attachment to an organization based on positive feelings toward the organization • Continuance commitment.

Theories of Motivation Content Theories  theories that focus on understanding motivation by identifying underlying human needs Copyright © 2014 by Nelson Education Ltd. Process Theories  theories that focus on understanding motivation by determining the process humans use to make choices about the specific actions they will take 3-21 .

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Two-Factor Theory Job content Hygienes Extrinsic Copyright © 2014 by Nelson Education Ltd. Job context Motivators Intrinsic 3-23 .

Job Characteristics Theory Task identity the extent to which a worker performs a complete cycle of job activities Task significance the perceived importance or social value of a given task Skill variety the variety of skills required for task completion Job autonomy the degree of freedom workers have in deciding how to perform their jobs Job feedback the extent to which the job itself provides feedback on worker performance Job enrichment the process of redesigning jobs to incorporate more of the five core dimensions of intrinsically satisfying work Copyright © 2014 by Nelson Education Ltd. 3-24 .

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Copyright © 2014 by Nelson Education Ltd.Reinforcement Theories A behaviour will be repeated if valued outcomes flow from that behaviour or if performing the behaviour reduces undesirable outcomes. • Negative reinforcement takes place when an undesirable consequence occurs whenever the valued behaviour does not occur. 3-27 . • Positive reinforcement takes place when a reward follows a valued behaviour.

3. 2. 3-28 .Expectancy Theory 1. • Is the task worth doing? • Do the rewards exceed the costs? Is net valence positive? • Will I actually receive the rewards if I accomplish the task? • Is the instrumentality clear? • Will I actually be able to accomplish the task if I exert the effort ? • Is my expectancy strong? Copyright © 2014 by Nelson Education Ltd.

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Attribution and Economic Theories of Motivation • Attribution theory: theory of motivation arguing that humans often act without understanding their motives for their behaviour and afterward attempt to attribute motives for their actions • Economic theory: assumes that people are motivated only by extrinsic (economic) rewards. 3-30 . and they will always seek to maximize these rewards while minimizing their contributions to the organization Copyright © 2014 by Nelson Education Ltd.

Agency Theory and Money as the Motivator • Agency theory: Agents (employees) will pursue their own self-interests rather than the interests of their principals (employers) unless they are closely monitored or their interests are aligned with the interests of their principals. 3-31 . • Noncash employee recognition program: a program that provides noncash rewards to employees in recognition of employee accomplishments or actions that are valued by the organization Copyright © 2014 by Nelson Education Ltd.

Feelings of membership 3-32 .Causes of Citizenship Behaviour Shared organization al goals Copyright © 2014 by Nelson Education Ltd.

3-33 .Creating Citizenship Behaviour Trust Security Copyright © 2014 by Nelson Education Ltd.

3-34 .Behavioural Implications Define the necessary employee behaviour Determine the necessary employee attributes • Task • Membership • Organizational citizenship • Personal competencies • Values • Characteristics Identify salient employee needs • Demographic characteristics Ensure a positive reward valence • Tangible. physical • Psychological and opportunity Copyright © 2014 by Nelson Education Ltd.

Discuss how reward systems can be used to generate task behaviour. Discuss the three main types of reward problems. Copyright © 2014 by Nelson Education Ltd. Discuss how employee job attitudes serve as the link between reward systems and employee job behaviour. 3.Discussion Questions 1. membership behaviour. 3-35 . and citizenship behaviour. Have you ever encountered any of these problems? 2.