Chapter 10: Motivating and Rewarding Employees

Section 10.3 - Contemporary Issues in Motivation

Key Terms

Pay-for-performance programs
Competency-based compensation
Broad-banding
Stock options
Flextime
Job sharing
Telecommuting

Summary

Contemporary motivation issues facing today’s managers include motivating a diversified workforce, pay-for-performance programs, motivating minimum wage employees, motivating professional and technical employees, and flexible work schedule options. To maximize motivation in today’s diversified workforce, management needs to think in terms of flexibility. Employees have different personal needs and goals that they’re hoping to satisfy through their jobs. A diverse array of rewards is needed to motivate employees with such varied needs. Managers must be flexible enough to accommodate cultural differences.

Motivation tells us that people act in order to satisfy some need. Because pay is an important variable in motivation, we need to look at how we can use pay to motivate high levels of employee performance. Pay-for-performance programs pay employees on the basis of some performance measure. Piece-rate plans, gain sharing, wage incentive plans, profit sharing, and lump sum bonuses are examples of pay for performance programs.

A recent extension of the pay for performance concept is called the competency based compensation program. A competency based compensation program pays and rewards employees on the basis of the skills, knowledge, or behaviors employees possess. Preset pay levels, called broad-banding are established on the basis of the degree to which these competencies exist.

A variation of pay-for-performance programs in organizations today is the offering of stock options. Stock options are represented by programs that allow employees to purchase company stock at a fixed price. Options have been a common incentive offered to executives.

How can managers motivate minimum wage employees? Many companies use employee recognition programs such as employee of the month, quarterly employee performance award ceremonies, or other celebrations of employee accomplishment. Rewards are only part of the motivation equation. There are other elements such as empowerment and career development assistance.

In addition to an increased use of temporary and contingent workers, contemporary companies are looking at other options including flextime, job sharing,and telecommuting.

Flextime is a scheduling option that allows employees, within specific parameters, to decide when to go to work. Employees have to work a specific number of hours a week, but they are free to vary the hours of work within certain limits. Potential benefits of flextime include improved employee motivation and morale, reduced absenteeism as a result of enabling employees to better balance work and family responsibilities, increased wages due to productivity gains, and the ability of the organization to recruit higher-quality and more diverse employees.

Job sharing allows two or more individuals to split a traditional 40-hour-a-week job. Job sharing allows the organization to draw upon the talents of more than one individual for a given job. Job sharing is growing in popularity, with 57 percent of large organizations offering it.

Telecommuting is a system of working at home on a computer that is linked to the office. Telecommuting offers an opportunity for a business in a high-labor-cost area to have its work done in an area where lower wages prevail. Organizations still have a responsibility to ensure the health and safety of the off-premise work site. For employees, the two big advantages of telecommuting are the decrease in time and stress of commuting in congested areas and the increase in flexibility in coping with family demands.

Employee empowerment means giving employees the power to make decisions and take actions on their own—is an important motivational approach. Empowered employees can provide flexibility and speed. They often display stronger work motivation, better work quality, higher job satisfaction, and lower turnover.

Section Outline

Contemporary Issues in Motivation
What is the key to motivating a diverse workforce?
Should employees be paid for performance or time on the job?
How can managers motivate minimum-wage employees?
What’s different in motivating professional and technical employees?
What can management do to improve work/life balance?
How does flextime work?
Can employees share jobs?
What is telecommuting?
What Do Entrepreneurs Do to Motivate Employees?