Unit IV Sustaining Employee Interest

UNIT IV  SUSTAINING SUSTA INING EMPLOYEE INTEREST 

by  Ramya Rajendran  Asst Professor  VIMS 

CHAPTER OUTLINE ∞ Compensation plan ∞ Reward ∞ Motivation ∞ Application of teories teories of motivation ∞ Career mana!ement ∞ "evelopment of mentor Prot#!# relationsips

CHAPTER OUTLINE ∞ Compensation plan ∞ Reward ∞ Motivation ∞ Application of teories teories of motivation ∞ Career mana!ement ∞ "evelopment of mentor Prot#!# relationsips

COMPENSATION PLAN

!AT IS COMP COMPENS ENSA ATION ION"  "  $ "eals wit ever% t%pe of reward individ&als receive in e'can!e for performin! or!ani(ati or!ani(ational onal tas)s* $ Cief reason w% most individ&als see) emplo%ment* $  An e'can!e e'can!e relationsip* relationsip*

OBJECTIVES OF COMPENSATION $  Ade+&ate $ E+&ita,le $ -alanced $ Cost.effective $ /ec&re $ Incentive.providin! $  Accepta,le to te emplo%ee

COMPENSATION METHODS/PLANS $ 0LAT RATE/ $ PA1MENT 0OR TIME 2OR3E" $ 4ARIA-LE PA15 INCENTI4E COMPEN/ATION $ O2NER/HIP $ PEOPLE -A/E" PA1 $ E6ECUTI4E PA1

0lat rates $ $ $ $

Uniform wa!e rates E'5 Administrative assistants . 7889o&r  -on&s9incentives :sales professions; 0or satisfied wor)force

Pa%ment for time wor)ed S# NO

AGES

SALARY  

8

Pa% calc&lated at o&rl% rates

 Ann&al or montl% rates

<

Overtime pa%

No overtime

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;

$ /eniorit%

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.

VARIABLE PAY: INCENTIVE COMPENSATION Variable Pay: Key Design Factors

VARIABLE PAY: INCENTIVE COMPENSATION

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

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%  @ Te si(e of te merit award as little effect on performance

VARIABLE PAY: INCENTIVE COMPENSATION INDIVIDUAL INCENTIVES:

 @ Piecewor) $ Pa% fl&ct&ates ,ased on prod&ction &nits9time $ E!5 sewin! mills @ !ain sarin! form&la $ Commonl% &sed !ain sarin! plans5 $Lincoln Electric Plan $/canlon Plan $R&c)er Plan $Impro/are

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

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 $ "oes not !&arantee e+&ita,le treatment of emplo%ees

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

People ,ased pa% $ $ $ $ $

/)ill.-ased Pa% 3nowled!e.-ased Pa% Credential.-ased Pa% :+&alifications; 0eed,ac) Pa% Competenc% ,ased pa%:s)ill> )nowled!e  credential;

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

RE0ARDS

2HAT I/ A RE2AR"F $ /ometin! !iven or received in ret&rn or recompense for service> merit> ardsip> etc*

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* $  ?o, enricment

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

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

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)

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

• What makes people do what they do? • Why do some people succeed while others fail?

MOTIVATION

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*

T1PE/ O0 MOTI4ATION $ $ $ $

Positive vs ne!ative Rational vs emotional Intrinsic vs e'trinsic 0inancial vs non.financial

THEORIES OF MOTIVATION

Maslow’s Hierarchy of Needs

Selfactualization Esteem Social needs

Safety and security needs Physiological needs

Mc&re#r4s T'e#r 1 9 T'e#r Y

Litt.e A+-iti#n

T'e#r 1 0#r7ers

Dis.i7e 0#r7 Av#i% Res(#nsi-i.it Se.)6Directe%

T'e#r Y 0#r7ers

En8# 0#r7 Acce(t Res(#nsi-i.it

Her(,er!Ds Two.0actor Teor% $ Go, dissatisfaction and Go, satisfaction are not opposite to eac oters

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

$ C!reer A%v!nce+ent

Hi'

J#- Diss!tis)!cti#n

$ Pers#n!. r#$t' $ Rec#niti#n $ Res(#nsi-i.it $ Ac'ieve+ent ;

J#- S!tis)!cti#n

Hi'

McC.e..!n%4s Nee%s T'e#r

Need for   Acievement Need for  Power  Need for   Affiliation

S(eci)ic &#!.s

&#!.6Settin T'e#r

C'!..enin &#!.s

&#!.s !n% P!rtici(!ti#n

Effective =oal /ettin! /pecific Relevant Callen!in! Commitment Participation Callen!in!

T!s7 E))#rt

T!s7 Per)#r+!nce Per)#r+!nce

Effect of =oal "iffic<% on Performance Hi'

  e   c   n   !   +   r   #    )   r   e    P    7   s   !    T

L#$

Are! #)  O(ti+!. &#!. Di))ic*.t

M#%er!te

C'!..enin

=oal "iffic<%

I+(#ssi-.e

Reinforcement Theory Re$!r%s

C#nse s&c as internsips * involves5 tr%in!

o&t different fields discoverin! li)es and disli)es formin! attit&des toward wor) and social relationsip patterns this stage is least relevant to HRM because it occurs  prior to employment 

Tr!%iti#n!. C!reer St!es esta,lisment

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)

Tr!%iti#n!. C!reer St!es mid.career 

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

 @ contin&e to !row  @ platea& :sta% competent ,&t not am,itio&s;  @ deteriorate

Tr!%iti#n!. C!reer St!es late career 

$ s&ccessf&l elder states persons can en?o% ,ein! respected for teir ?&d!ment* =ood reso&rce for teacin! oters oters $ tose wo ave declined ma% e'perience ?o, insec&rit% $  plateauing  is  is e'pectedQ life off te ?o, increases in importance

Tr!%iti#n!. C!reer St!es decline

$ ma% ,e most diffic< for tose wo were most s&ccessf&l at earlier sta!es $ toda%Ds lon!er life spans and le!al protections for older wor)ers open te possi,ilit% for contin&ed wor) contri,&tions> eiter paid or vol&nteer 

En'!ncin En'!nc in Y# Y#*r C!ree C!reer  r 

1o& are <imatel% responsi,le for %o&r own career* mana!e %o&r  rep&tation )now %o&rself 

,&ild and maintain

networ) contacts

/&ccessf&l Career  Tips

,alance %o&r  specialist  !eneralist competencies

)eep c&rrent

)eep %o&r options open doc&ment %o&r  acievements

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!  development

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*

Career plannin! process

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*

Roles in areer >e,elopment