This article is about the professional discipline that oversees compensation and benefits in an organization, and the policies involved. For types and levels of compensation, see Remuneration.
Compensation and benefits (C&B) is a sub-discipline of human resources, focused on employee compensation and benefits policy-making. While compensation and benefits are tangible, there are intangible rewards such as recognition, work-life and development. Combined, these are referred to as total rewards.[1] The term "compensation and benefits" refers to the discipline as well as the rewards themselves.
Employee compensation and benefits are divided into four basic categories:
Guaranteed pay – a fixed monetary (cash) reward paid by an employer to an employee. The most common form of guaranteed pay is base salary. Guaranteed pay also includes cash allowances (housing allowance, transport allowance, etc.), differentials (shift differentials, holiday differentials) and premiums (night shift, etc.)
The Variable pay – a non-fixed monetary (cash) reward paid by an employer to an employee that is contingent on discretion, performance, or results achieved. The most common forms of variable pay are bonuses and incentives.
Benefits – programs an employer uses to supplement employees’ compensation, such as paid time off, medical insurance, company car, and more.
Equity-based compensation – stock or pseudo stock programs an employer uses to provide actual or perceived ownership in the company which ties an employee's compensation to the long-term success of the company. The most common examples are stock options.
The basic element of guaranteed pay is base salary which is paid on an hourly, daily, weekly, bi-weekly, semi-monthly or monthly rate. Base salary is provided for doing the job the employee is hired to do. The size of the salary is determined mainly by 1) the prevailing market salary level paid by other employers for that job, and 2) the performance of the person in the job. Many countries, provinces, states or cities dictate a minimum wage. Employees' individual skills and level of experience leave room for differentiating income levels within a job-based pay structure.
In addition to base salary, allowances may be paid to an employee for specific purposes other than performing the job. These can include allowances for transportation, housing, meals, cost of living, seniority, or as payments in lieu of medical or pension benefits. The use of allowances varies widely by country, as well as job level and the nature of job duties.
Variable pay is a non-fixed monetary (cash) reward that is contingent on discretion, performance, or results achieved. There are different types of variable pay plans, such as bonus schemes, sales incentives (commission), overtime pay, and more.
An example where this type of plan is prevalent is how the real estate industry compensates real estate agents. A common variable pay plan might be the sales person receives 50% of every dollar they bring in up to a level of revenue at which they then bump up to 85% for every dollar they bring in going forward. Typically, this type of plan is based on an annual period of time requiring a "resetting" each year back to the starting point of 50%. Sometimes this type of plan is administered so the sales person never resets or falls down to a lower level. It also includes Performance Linked Incentive which is variable and may range from 130% to 0% as per performance of the individual as per his key result areas (KRA).
Benefits
Benefits consist of the non-wage compensation that form the total remuneration package for an employee.
While there is less research in this field,[2] it is an important field, as benefits can create significant costs for employers,[3] be they through compulsory means (e.g. compulsory pension schemes), or by the discretion of the employer (e.g. childcare allowances).[2] Benefits can also be seen as an attractor for potential employees and can reduce turnover.[4]
Employers can offer a wide range of benefits, these generally fall within the categories of:
Health and wellbeing - Employee Assistance Programmes (EAP), or a 'wellbeing allowance'.[3]
Special leave - Leave to attend to matters outside of work such as sporting commitments, volunteering, or meeting cultural commitments.[3]
Career development - Support of study in both payment of fees and paid time to study, and secondment or shadowing opportunities.[3]
Retail discounts - Discounts in a retail setting (e.g. Cost plus sales tax offers, for certain retailers).[3]
Financial product discounts - Discounts on services such as loan interest rates or insurance policies.[3]
Flexible work - Includes working from home (WFH), flexible start and finish times, and reduced hours of work[3] (e.g. the 4 day week[5]).
Reciprocity theory is an important theory underpinning benefits, as it builds a social norm whereby an employer provides a 'positive' benefit, which is warmly received.[4] In return the employee is inclined to provide positive workplace behaviour, strong productivity, and strong organisational commitment which is the bond or attachment that an employee has towards their employer, and subsequent levels of involvement.[4]
Social exchange theory is another relevant theory which suggests that employees weigh up the total benefits and costs of their relationship with the employer.[4][6] If an employee feels the costs of their work or employment relationship outweighs the benefits received from their work, the employee will be more likely to choose to end the employment relationship, to pursue an employment relationship that provides greater regard for benefits and social exchange theory.[4][6]
The motivation for an employer to provide benefits can vary. While the overall intent of benefits is to keep employees satisfied with their employment,[2] employers may provide benefits to mitigate disruption caused by increased union density and increased bargaining power.[2] In other instances, employers may provide benefits as a result of a union bargaining for strengthened benefits.[2]
When an employer provides benefits, it is critical to note that benefit systems must adhere to the principles of organisational justice.[7]Organisational justice is seen as ‘the extent to which employees perceive workplace procedures, interactions and outcomes to be fair in nature’.[7] The principles of organisational justice include:
Procedural justice - How fair policies and procedures are perceived.[3]
Informational justice - How fair rationale for benefit policies, procedures, and outcomes are perceived.[3]
Interpersonal justice - How fair interactions are regarding benefits perceived.[3]
Distributive justice - How fair access to benefits are perceived.[3]
If an employee perceives that the benefits system lacks organisational justice, the perceived or actual satisfaction with benefits is undermined.[3]
The overall satisfaction with the system of benefit administration is called the benefit system satisfaction,[4] while benefit level satisfaction refers to the satisfaction an employee has 'with the amount of benefits they receive'.[4]
It is important to note that benefit satisfaction can be viewed as actuarial value benefit satisfaction and perceived level of benefits.[2] it is interesting to note that some employees are more satisfied with the perceived value of benefits.[2] This could include an employee having the potential benefit of flexible working, which may not be utilised. The employee will still note satisfaction with the potential benefit.[2]
However, benefit system satisfaction, is based on the:
Benefit systems which are seen to be of value and managed well, will result in satisfied employees.[8] These employees will feel that their employer is supportive of them, and their ‘perceived organisational support’ will increase.[4] This is important as perceived social or organisational support can be one of the most significant factors in building resilient employees and reducing unplanned turnover.[4][9]
Employees will also build a sense of emotional commitment towards their employment which will foster in them a willingness to perform highly.[4]
While an employer may establish benefits, it is worth considering the importance of demographics on benefit satisfaction.[2] For example, a workforce with a significant number of parents may value a benefit package which is centred around supporting them and their children. However, those without children, may perceive these benefits as unfair, irrelevant, and a financial disadvantage as they cannot gain the same financial benefits as employees with children.
Vertical Pay Dispersion
Pay dispersion is defined as the ‘differences in pay levels between individuals within (i.e., horizontal dispersion) and across (i.e., vertical dispersion) jobs or organisational levels.[10] Vertical pay dispersion is specifically the difference in remuneration between the most senior employees of an organisation (e.g., Executive Directors of Chief Executive) and an average employee.[11]
Vertical pay dispersion has recently become a topic of political, social and news media discussions. In particular, special attention is paid toward cases where the difference of an executive director of an organisation is seen to be disproportionately high, when compared to the rest of the workforce and the difference in pay is visible within the organisation.[11] Whether an organisation is in the public sector or private sector, research shows people care about the difference between what they are paid and what those at the highest level are being paid – it is important to an employee.[11]
There can be short-term and long-term effects of vertical pay dispersion. Research suggests some short-term effects of vertical pay dispersion can lead to increased outputs and productivity in employees. This is based on the idea that competition is a driver of human motivation, and prizes such as a change in status or remuneration in an organisation (e.g., promotion to a higher-paid position) or other extrinsic motivators can encourage employees to perform better within their role.[12] Research on the long-term effects of higher vertical pay dispersion in an organisation are commonly negative, and usually are associated with dysfunctional behaviour in employees,[13] increased employee turnover,[14] short-sightedness,[15] reduced teamwork and lower intrinsic motivation.[16]
There are academic theories which help to explain why vertical pay dispersion exists within an organisation, and how it can have both positive and negative effects.
Tournament theory
Tournament theory is based on the idea of “tournaments” or “competitions” in an organisation, where there are clear winners and losers.[11] Tournament theory states individuals are best motivated to perform well when any prizes available to be won are based on winning or failing, rather than just a monetary value. Employees within an organisation will compete against one another to win higher-level positions, which are usually associated with higher pay.[11]
The theory is based in economics, which assumes an individual is a rational economic actor who will aim to maximise their individual utility, with the prize as the main motivator for the performance.[11]
Tournament theory relates to vertical pay dispersion because it suggests organisations where executive directors have a much higher level of pay will motivate other high-performing employees to work toward achieving the “prize”, and has the additional organisational benefit of increased work effort and higher commitment to organisational goals.[11]
Equity theory
Employees are interested and motivated to understand what the differences in pay are between themselves and their colleagues in an organisation, and to understand the difference between themselves and those in executive director positions.[11] Equity theory is a more socialised approach toward understanding the effects of vertical pay dispersion in an organisation, than tournament theory.[17]
Equity theory is based on the idea that individuals will evaluate the perceived fairness of their workplace or job by assessing the ratio of their work inputs to the outcomes they receive. They then compare their ratio to the ratio of others within the organisation.[11] The research on equity theory suggests when individuals perceive the ratio of their work inputs as equivalent and fair in comparison with the ratio of others, pay equity is present in the organisation.[11]
From the perspective of equity theory, vertical pay dispersion is a matter of a fair and equitable distribution of resources and a sense of justice in how the resources have been distributed within the organisation.[17]
Equity-based compensation is an employer compensation plan using the employer's shares as employee compensation. The most common form is stock options, yet employers use additional vehicles such as restricted stock, restricted stock units (RSU), employee stock purchase plan (ESPP), performance shares (PSU) and stock appreciation rights (SAR). A stock option is defined as "a contract right granted to an individual to purchase a certain number of shares of stock at a certain price (and subject to certain conditions) over a defined period of time."[18] Performance shares (PSU) awards of company stock given to managers and executives only if specified organization performance criteria are met, such as earnings per share target[19]
Intangible benefits
An employee may receive intangible benefits, such as a desirable work schedule. That could be a schedule that is controlled by the employee and can be adjusted to accommodate occasional non-work activities, or one that is highly predictable, which makes it easier for the employee to arrange childcare or transportation to work.
In New Zealand, many government[20] organisations offer flexible work arrangements as part of their benefits. This may include flexible workplace arrangements or flexible time. Flexible workplace may include working from a remote workplace (usually a home office) for anything from 2 – 5 days per week. Flexi-time arrangements are beneficial for employees who have school going children or other commitments. These could include reduced hours, hours completed outside of normal work hours i.e. 40 hours per week but just not between the traditional 8am to 5pm. Other flexi-time arrangements include what is known as an 80 hour fortnight – usually a 9 hour day for 9 days and then the 10th day taken as time in lieu.
Access to training programs, mentorship, opportunities to travel or to meet other people in the same field, and similar experiences are all intangible benefits that may appeal to some employees.
Intrinsic and extrinsic rewards
Self determination theory (SDT) [21] suggests that people in the workplace are generally motivated by either intrinsic or extrinsic rewards or rather lie on a continuum between the two.
Extrinsic rewards are tangible or visible rewards and can include financial compensation (salary, wages, bonuses etc.) and promotion.
In their book “The 5 Languages of Appreciation in the Workplace”,[22] Gary Chapman and Paul White suggest that employees have preferred or dominant “language” when appreciation is expressed extrinsically. They identify the following extrinsic rewards:
1. Words of affirmation – this can be praise for an accomplishment, affirming character or praise for a personality trait. These can be given very publicly, within a team or privately depending on the recipient.
2. Quality time – This is giving of your most precious commodity - time – to express appreciation.
3. Acts of service – doing something for an employee, or colleague to express your appreciation for them.
4. Tangible gifts – this can be as simple as buying an employee or colleague a cup of coffee or giving them some time off as a gift for work well done.
5. Physical touch – this can be a high five or handshake (be careful!!!)
In all of these they caution on the need to maintain the appropriateness of the interaction.
Intrinsic rewards refer to internal factors that motivate a person to undertake work or a task. These can include a sense of accomplishment, learning and personal growth, creativity or work that gives one purpose and meaning.
Research[23] shows that public employees placed higher value on intrinsic rewards, particularly if they elevated or high levels of Public Service Motivation (PSM). PSM can be defined as “an individual's predisposition to respond to motives grounded primarily or uniquely in public institutions and organizations”. This concept has been correlated with numerous variables such preferences for reward, job satisfaction, commitment and performance. Literature suggests that an increased level of PSM is associated with an individual's desire to serve in the public interest. Public employees placed a significantly higher value on work that is helpful to society over their private sector counterparts. They also valued interesting work and job security. A significant positive correlation exists between PSM, job satisfaction, performance and commitment. Despite this, research[23] has found that extrinsic rewards can be important in both public and private organisations.
Extrinsic rewards can be effective in motivating people, especially in situations where the task or behaviour may not be inherently enjoyable or when a specific outcome needs to be achieved. However, relying too much on external ort extrinsic rewards can actually lead to a decrease in internal or intrinsic motivation,[24] or the desire to do something because it is enjoyable or rewarding in itself. If people come to expect external rewards for everything they do, they may lose their natural interest and internal drive for the task itself. However, it's important to note that overreliance on extrinsic rewards can sometimes lead to a decrease in intrinsic motivation[5]. If people come to expect external rewards for everything they do, they may lose their natural interest and internal motivation for the task itself.
Balancing extrinsic and intrinsic motivation is often essential for promoting sustained interest and engagement in activities and behaviours. Effective motivation strategies take into account the individual's unique needs and preferences, while also recognizing the role that both types of rewards play in influencing behaviour. It is important to achieve the right blend of intrinsic and extrinsic rewards within the overall compensation and benefits offered to an employee.
Various combinations of the above four categories are referred to as pay aggregates. Common aggregates are explained below.
Together, guaranteed and variable pay comprise total cash compensation. The ratio of base salary to variable pay is referred to as the pay mix. For example, a person receiving a bonus equal to 25% of base salary would have an 80/20 pay mix. Organizations often set the total cash compensation for sales people at a market level, then they split the total cash compensation into the base salary component and the incentive component following a 70/30 pay mix, while other (non-sales) employees may have a 90/10 pay mix.
Total guaranteed package or fixed cost to company are aggregates that include guaranteed pay and benefits. This represents the total fixed cost of the reward package and is useful for budgeting. All forms of variable pay (annual bonus and equity compensation) are excluded from this aggregate.
Total direct pay refers to total cash compensation plus equity compensation. Benefits are excluded from this aggregate. Total direct pay includes all the elements that may be negotiated by a job candidate, especially for senior executive positions where annual and long-term incentives are more substantial.
Total compensation would include all four categories: guaranteed pay (salary and allowances), variable pay, benefits and equity compensation.
Remuneration is a term often used to refer to total cash compensation or total compensation.
As noted above, total rewards would include total compensation as well as intangible benefits such as culture, leadership, recognition, workplace flexibility, development and career opportunity.
External equity
External equity refers to the similarity of the practices of other organization of the same sector. If perceived like this, it can be said that the program is considered competitive or externally equitable. Usually, these comparisons are done in external labor markets where the wages vary. There are various factors that contribute to create these differences, for example, geographical location, education and work experience.
Internal equity
Internal equity is employees' perception of their duties, compensation, and work conditions as compared with those of other employees in similar positions in the same organization. As this comparison is always made within the company, problems with internal equity can result in conflict among employees, mistrust, low morale, anger and even the adoption of legal actions. Workers can make the evaluation of internal equity regarding two main points. On the one hand, procedural justice is the person's perceived fairness of the process (assigned tasks) and procedures used to make decisions about him/her. On the other hand, distributive justice refers to the perceived fairness in the distribution of outcomes (salaries). The classic objectives of equity based compensation plans are retention, attraction of new hires and aligning employees’ and shareholders’ interests with the long-term success of the company.
In most companies, compensation & benefits (C&B) design and administration falls under the umbrella of human-resources.
HR organizations in large companies are typically divided into three sub-divisions: HR business partners (HRBPs), HR centers of excellence, and HR shared services. C&B is an HR center of excellence, like staffing and organizational development (OD).
Employee compensation and benefits main influencers can be divided into two: internal (company) and external influencers.
The most important internal influencers are the business objectives, labor unions, internal equity (the idea of compensating employees in similar jobs and similar performance in a similar way), organizational culture and organizational structure.
Bonus plans are variable pay plans. They have three classic objectives: 1. Adjust labor cost to financial results – the basic idea is to create a bonus plan where the company is paying more bonuses in ‘good times’ and less (or no) bonuses in ‘bad times’. By having bonus plan budget adjusted according to financial results, the company's labor cost is automatically reduced when the company isn't doing so well, while good company performance drives higher bonuses to employees. 2. Drive employee performance – the basic idea is that if an employee knows that his/her bonus depend on the occurrence of a specific event (or paid according to performance, or if a certain goal is achieved), then the employee will do whatever he/she can to secure this event (or improve their performance, or achieve the desired goal). In other words, the bonus is creating an incentive to improve business performance (as defined through the bonus plan). 3. Employee retention – retention is not a primary objective of bonus plans, yet bonuses are thought to bring value with employee retention as well, for three reasons: a) a well designed bonus plan is paying more money to better performers; a competitor offering a competing job-offer to these top performers is likely to face a higher hurdle, given that these employees are already paid higher due to the bonus plan. b) if the bonus is paid annually, employee is less inclined to leave the company before bonus payout; often the reason for leaving (e.g. dispute with the manager, competing job offer) 'goes away' by the time the bonus is paid. the bonus plan 'buy' more time for the company to retain the employee. c) employees paid more are more satisfied with their job (all other things being equal) thus less inclined to leave their employer.
The concept saying bonus plans can improve employee performance is based on the work of Frederic Skinner, perhaps the most influential psychologist of the 20th century. Using the concept of Operant Conditioning, Skinner claimed that an organism (animal, human being) is shaping his/her voluntary behavior based on its extrinsic environmental consequences – i.e. reinforcement or punishment.
This concept captured the hearts of many, and indeed most bonus plans nowadays are designed based on it, yet since the late 1940s a growing body of empirical evidence has suggested that these if-then rewards do not work in a variety of settings common to the modern workplace. The failings of the bonus plan often relate to rewarding the wrong behaviour. For example, managers who keep to the status quo, fire valuable (expensive) employees, and engage in immoral business practices can achieve better short-term financial outcomes (and therefore a bonus) than a manager who is attempting to innovate his or her way to higher profits. When bonus plans are poorly thought out, they have the potential to damage employee performance and cause regulatory headaches.[25] However, despite their failings, employees (and many employers) still view an effective bonus plan as the single greatest motivator in the workplace.[26][27]
Job satisfaction, employee satisfaction or work satisfaction is a measure of workers' contentment with their job, whether they like the job or individual aspects or facets of jobs, such as nature of work or supervision. Job satisfaction can be measured in cognitive (evaluative), affective, and behavioral components. Researchers have also noted that job satisfaction measures vary in the extent to which they measure feelings about the job. or cognitions about the job.
In general, incentives are anything that persuade a person to alter their behavior in the desired manner. It is emphasized that incentives matter by the basic law of economists and the laws of behavior, which state that higher incentives amount to greater levels of effort and therefore higher levels of performance.
Equity theory focuses on determining whether the distribution of resources is fair. Equity is measured by comparing the ratio of contributions and benefits for each person. Considered one of the justice theories, equity theory was first developed in the 1960s by J. Stacey Adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others. According to Equity Theory, in order to maximize individuals' rewards, we tend to create systems where resources can be fairly divided amongst members of a group. Inequalities in relationships will cause those within it to be unhappy to a degree proportional to the amount of inequality. The belief is that people value fair treatment which causes them to be motivated to keep the fairness maintained within the relationships of their co-workers and the organization. The structure of equity in the workplace is based on the ratio of inputs to outcomes. Inputs are the contributions made by the employee for the organization.
The two-factor theory states that there are certain factors in the workplace that cause job satisfaction while a separate set of factors cause dissatisfaction, all of which act independently of each other. It was developed by psychologist Frederick Herzberg.
In industrial and organizational psychology, organizational citizenship behavior (OCB) is a person's voluntary commitment within an organization or company that is not part of his or her contractual tasks. Organizational citizenship behavior has been studied since the late 1970s. Over the past three decades, interest in these behaviors has increased substantially.
Personnel economics has been defined as "the application of economic and mathematical approaches and econometric and statistical methods to traditional questions in human resources management". It is an area of applied micro labor economics, but there are a few key distinctions. One distinction, not always clearcut, is that studies in personnel economics deal with the personnel management within firms, and thus internal labor markets, while those in labor economics deal with labor markets as such, whether external or internal. In addition, personnel economics deals with issues related to both managerial-supervisory and non-supervisory workers.
The overjustification effect occurs when an expected external incentive such as money or prizes decreases a person's intrinsic motivation to perform a task. Overjustification is an explanation for the phenomenon known as motivational "crowding out". The overall effect of offering a reward for a previously unrewarded activity is a shift to extrinsic motivation and the undermining of pre-existing intrinsic motivation. Once rewards are no longer offered, interest in the activity is lost; prior intrinsic motivation does not return, and extrinsic rewards must be continuously offered as motivation to sustain the activity.
Managerial psychology is a sub-discipline of industrial and organizational psychology that focuses on the effectiveness of individuals and groups in the workplace, using behavioral science.
Quality of working life (QWL) describes a person's broader employment-related experience. Various authors and researchers have proposed models of quality of working life – also referred to as quality of worklife – which include a wide range of factors, sometimes classified as "motivator factors" which if present can make the job experience a positive one, and "hygiene factors" which if lacking are more associated with dissatisfaction. A number of rating scales have been developed aiming to measure overall quality of working life or certain aspects thereof. Some publications have drawn attention to the importance of QWL for both employees and employers, and also for national economic performance.
Despite a large body of positive psychological research into the relationship between happiness and productivity, happiness at work has traditionally been seen as a potential by-product of positive outcomes at work, rather than a pathway to business success. Happiness in the workplace is usually dependent on the work environment. During the past two decades, maintaining a level of happiness at work has become more significant and relevant due to the intensification of work caused by economic uncertainty and increase in competition. Nowadays, happiness is viewed by a growing number of scholars and senior executives as one of the major sources of positive outcomes in the workplace. In fact, companies with higher than average employee happiness exhibit better financial performance and customer satisfaction. It is thus beneficial for companies to create and maintain positive work environments and leadership that will contribute to the happiness of their employees.
Perceived organizational support (POS) is the degree to which employees believe that their organization values their contributions and cares about their well-being and fulfills socioemotional needs. POS is generally thought to be the organization's contribution to a positive reciprocity dynamic with employees, as employees tend to perform better to reciprocate received rewards and favorable treatment. This idea bloomed from Eisenberger and Rhoades' organizational support theory.
Employee retention is the ability of an organization to retain its employees and ensure sustainability. Employee retention can be represented by a simple statistic. Employee retention is also the strategies employers use to try to retain the employees in their workforce.
Cognitive evaluation theory (CET) is a theory in psychology that is designed to explain the effects of external consequences on internal motivation. Specifically, CET is a sub-theory of self-determination theory that focuses on competence and autonomy while examining how intrinsic motivation is affected by external forces in a process known as motivational "crowding out."
Pay-for-Performance is a method of employee motivation meant to improve performance in the United States federal government by offering incentives such as salary increases, bonuses, and benefits. It is a similar concept to Merit Pay for public teachers and it follows basic models from Performance-related Pay in the private sector. According to recent studies, however, there are key differences in how pay-for-performance models influence federal employees in public service roles. James Perry is one scholar who has conducted such studies. His research reveals that public servants tend to be more intrinsically motivated, and thus, are prone to have a negative reaction to monetary incentives. There is still debate, however, on what exactly makes the public sector different.
Work motivation is a person's internal disposition toward work. To further this, an incentive is the anticipated reward or aversive event available in the environment. While motivation can often be used as a tool to help predict behavior, it varies greatly among individuals and must often be combined with ability and environmental factors to actually influence behavior and performance. Results from a 2012 study, which examined age-related differences in work motivation, suggest a "shift in people's motives" rather than a general decline in motivation with age. That is, it seemed that older employees were less motivated by extrinsically related features of a job, but more by intrinsically rewarding job features. Work motivation is strongly influenced by certain cultural characteristics. Between countries with comparable levels of economic development, collectivist countries tend to have higher levels of work motivation than do countries that tend toward individualism. Similarly measured, higher levels of work motivation can be found in countries that exhibit a long versus a short-term orientation. Also, while national income is not itself a strong predictor of work motivation, indicators that describe a nation's economic strength and stability, such as life expectancy, are. Work motivation decreases as a nation's long-term economic strength increases. Currently work motivation research has explored motivation that may not be consciously driven. This method goal setting is referred to as goal priming. Effects of primed subconscious goals in addition to goals that are consciously set related to job performance have been studied by Stajkovic, Latham, Sergent, and Peterson, who conducted research on a CEO of a for-profit business organization using goal priming to motivate job performance. Goal priming refers to the achievement of a goal by external cues given. These cues can affect information processing and behaviour the pursuit of this goal. In this study, the goal was primed by the CEO using achievement related words strategy placed in emails to employees. This seemingly small gesture alone not only cost the CEO very little money, but it increased objectively measured performance efficiency by 35% and effectiveness by 15% over the course of a 5-day work week. There has been controversy about the true efficacy of this work as to date, only four goal priming experiments have been conducted. However, the results of these studies found support for the hypothesis that primed goals do enhance performance in a for-profit business organization setting.
Employee motivation is an intrinsic and internal drive to put forth the necessary effort and action towards work-related activities. It has been broadly defined as the "psychological forces that determine the direction of a person's behavior in an organisation, a person's level of effort and a person's level of persistence". Also, "Motivation can be thought of as the willingness to expend energy to achieve a goal or a reward. Motivation at work has been defined as 'the sum of the processes that influence the arousal, direction, and maintenance of behaviors relevant to work settings'." Motivated employees are essential to the success of an organization as motivated employees are generally more productive at the work place.
A job attitude is a set of evaluations of one's job that constitute one's feelings toward, beliefs about, and attachment to one's job. Overall job attitude can be conceptualized in two ways. Either as affective job satisfaction that constitutes a general or global subjective feeling about a job, or as a composite of objective cognitive assessments of specific job facets, such as pay, conditions, opportunities and other aspects of a particular job. Employees evaluate their advancement opportunities by observing their job, their occupation, and their employer.
Reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.
Employee recognition is the timely, informal or formal acknowledgement of a person's behavior, effort, or business result that supports the organization's goals and values, and exceeds their superior's normal expectations. Recognition has been held to be a constructive response and a judgment made about a person's contribution, reflecting not just work performance but also personal dedication and engagement on a regular or ad hoc basis, and expressed formally or informally, individually or collectively, privately or publicly, and monetarily or non-monetarily.
Employee motivation, also known as work motivation, is a feature of employees that refers to how motivated they are to work. It has a significant impact on employee productivity and efficiency." While motivation is defined as why individuals do or participate in certain behaviors.
References
↑ WorldatWork certification course GR1: Total Rewards Management defines total rewards as "the monetary and nonmonetary return provided to employees in return for their time, talents, efforts and results."
↑ Finkelstein, S.; Hambrick, D. C; Cannella, A. A (2009). Strategic Leadership: Theory and Research on Executives, Top Management Teams, and Boards. New York: Oxford University Press.{{cite book}}: CS1 maint: multiple names: authors list (link)
↑ "Bonus time". The Economist. Retrieved 1 December 2014.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
