What does the expectancy theory explain about employees quizlet?
Terms in this set (9)Describe the relationship between pay and individual employee behavior from the following three perspectives: reinforcement theory, expectancy theory, and agency theory Reinforcement Theory —In Thorndike's Law of Effect, a response followed by a reward is more likely to recur in the future. Expectancy Theory —says that motivation is a function of valence, instrumentality, and expectancy. Expectancy Theory focuses on the link between rewards and behaviors and emphasizes expected (rather than experienced) rewards and on the effects of incentives. Behaviors (job performance) can be described as a function of ability and motivation. Motivation is a function of expectancy, instrumentality, and valence perceptions . Agency Theory —focuses on divergent interests and goals of the organization's stakeholders and the ways that compensation can be used to align these interests and goals. Explain the differences between the following incentive rewards: bonus and raise A raise is an incentive that is added to the base of pay while a bonus is a reward that is given on top of pay Describe how a merit pay plan works and explain merit pay using the merit increase grid : Merit pay programs are annual pay increases that are usually linked to performance appraisal ratings. The size and frequency of pay increases are most often determined by performance rating (since betterperforming employees should be rewarded more than low performers) and position in range (comparatio). A merit increase grid combines an employee's performance rating with employee's position in a pay range to determine size and frequency of his or her pay increases. Discuss the criticisms of merit pay plans : Focus on merit pay discourages teamwork, measurement of performance is unfair and inaccurate, too much emphasis on individual performance, and merit pay does not really exist - high performers paid more than marginal and poor performers. Describe individual incentive plans and discuss their pros and cons : Can be effective when work is designed for individuals, simple and repetitive, stable, and no need for integration. Problems occurs because it creates competitive environments, it is costly to maintain, and can hurt organizational culture. List and describe the following individual incentive plans: profit sharing, stock options, employee stock ownership plans: Profit sharing , payments are based on a measure of organization performance (profits), and payments do not become a part of base pay. Ownership encourages employees to focus on organization's success, but may be less motivational the larger the organization. Employee stock ownership plans (ESOPs) give employers certain tax and financial advantages when stock is granted to employees. Stock options- plan that give employees the opportunity to buy company stock at a previously fixed price. Discuss the pros and cons of each of the individual incentive plans: Profit sharing advantages- profit sharing may encourage employees to think more like owners, labor costs are automatically reduced during difficult economic times and wealth is shared during good times, symbolic value, helps educate employees about firm performance. Disadvantage-workers may perceive their performance has less to do with profit than top management decisions over which they have little control. ESOPs can carry significant risk for employees. Discuss the basic premises of gainsharing as a group incentive plan Gainsharing - form of compensation based on group or plant performance rather than organization wide profits that does not become part of the employee's base salary. 9 conditions for effective gainsharing : management commitment, need to change/commitment to continuous improvement, management's acceptance and encouragement of employee input, high cooperation and interaction, employment security, information sharing, goal setting, commitment of all involved, agreement on performance standard. Explain the major differences between team compensation plans and individual incentive plans Individual has solo performance and rewards while team has cooperative performance and rewards Sets with similar termsChapter 12 Review23 terms Mandie07 Chapter 12 - Final Exam - MIE 33031 terms lucky4what99 MGMT 365 Chapter 1265 terms ParapuppyPLUS Chapter 10- Compensation 236 terms kasiaban Sets found in the same folderOrganizational culture, socialization & mentoring32 terms Harvey_Kaleb Mod 712 terms pratiksha_singh Mod 827 terms pratiksha_singh MOD 911 terms pratiksha_singh Other sets by this creatorThe Role of Exchange in Managing Social Relationsh…5 terms pratiksha_singh A Spirit in the Rice Field (5 questions)13 terms pratiksha_singh Fasting to the Death: Is it a Religious Rite Or Su…8 terms pratiksha_singh "We Belong to the Land: Samburu People's Legal Bat…6 terms pratiksha_singh Recommended textbook solutions
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What is the expectancy theory quizlet?Expectancy theory (or expectancy theory of motivation) proposes that an individual will behave or act in a certain way because they are motivated to select a specific behavior over others due to what they expect the result of that selected behavior will be.
What does the expectancy theory say?Expectancy theory suggests that individuals are motivated to perform if they know that their extra performance is recognized and rewarded (Vroom, 1964). Consequently, companies using performance-based pay can expect improvements. Performance-based pay can link rewards to the amount of products employees produced.
How does expectancy theory impact employee motivation?The expectation of a reward increases motivation, even if the outcome differs slightly from the original reward. The theory focuses on rewards and achieving goals. It promotes the idea that more effort should lead to increased performance, meaning the desired outcomes are met.
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