Human resource managementLesson 4 of 5 in the course Performance Appraisal and Rewards

Reward Systems: Allocation, Motivation, and Pay Transparency

5 flashcards · 5 quiz questions · 5 match pairs · 4 fill-in sentences · English

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Summary

Reward systems do more than determine employees’ pay. They influence effort, attendance, retention, commitment, satisfaction, and decisions about where to work. This lesson explains why organizations connect rewards to appraisal outcomes and reviews four common principles for distributing rewards.

A reward system is the collection of rewards an organization makes available and the rules or practices used to distribute them. Once an organization has appraised performance and provided feedback, it can consider how appraisal outcomes should relate to rewards. Research on behavior indicates that performance tends to be highest when employees believe that rewards are contingent on performance—that is, when better performance can lead to valued rewards.

All flashcards

Reward system
The rewards an organization offers and the rules or practices it uses to distribute them.
Equality in reward allocation
People in the same job classification receive the same or similar rewards.
Distributive justice
A reward-allocation approach in which at least part of a reward reflects an employee’s contribution.
Money as a conditional reinforcer
Money reinforces behavior when its receipt depends on achieving a specified level of performance.
Pay secrecy
The practice of restricting employees’ access to information about pay rates or increases.

Quiz questions

  1. Which statement distinguishes extrinsic rewards from intrinsic rewards?Answer: Extrinsic rewards are administered by others; intrinsic rewards arise from doing the work.
  2. What is one possible effect of closely tying an external reward to performance?Answer: It may reduce a person’s intrinsic interest in a task in some circumstances.
  3. When does money function as a conditional reinforcer?Answer: When receiving it depends on achieving a specified performance level.
  4. Which conditions can strengthen pay as a motivator?Answer: High trust, accurate measurement, meaningful reward differences, and few perceived penalties for strong performance.
  5. What may employees do when pay information is restricted?Answer: They may overestimate what coworkers and higher-level employees earn.

Based on Organizational Behavior by J. Stewart Black, David S. Bright, Donald G. Gardner, Eva Hartmann, Jason Lambert, Laura M. Leduc, Joy Leopold, James S. O’Rourke, Jon L. Pierce, Richard M. Steers, Siri Terjesen, Joseph Weiss (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.

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